1973 Legislative Session: 2nd Session, 30th 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, MARCH 6, 1973

Afternoon Sitting

[ Page 1007 ]

CONTENTS

Routine proceedings

An Act to Amend the Stock Brand Act (Bill No. 108)

Hon. Mr. Stupich. Introduction and first reading — 1007

An Act to Amend the Coroners Act (Bill No. 115)

Mr.

Gardom. Introduction and first reading — 1007

Guarantee of Natural Justice Act (Bill No. 116)

Mr. Wallace. Introduction and

first reading — 1007

Oral Questions

BCR as shareholder in private mining company.

Hon. Mr. Bennett — 1007

Mr. Wallace — 1008

Mr. Williams — 1009

Amalgamation of Kamloops municipalities. Mr. Gardom — 1010

Increase of fares on B.C. Ferries. Mr. Morrison — 1010

Automobile Insurance Act. Second reading, continued.

Mr. Smith — 1011

Mr. Gardom — 1017

Mr. Wallace — 1020

Mr. Lauk — 1024

Mr. Williams — 1027

Hon. Mr. Cocke — 1030

Mr. Schroeder — 1032

Mr. McClelland — 1034

Hon. Mr. Hartley — 1037

Hon. Mr. Barrett — 1040

TUESDAY, MARCH 6, 1973

The House met at 2 p.m.

Prayers.

MR. SPEAKER: The Hon. Minister of Health Services and

Hospital Insurance.

HON. D.G. COCKE (Minister of Health Services and Hospital Insurance):

Mr. Speaker, I would like to draw to the attention of the House that there are

a number of people from New Westminster, as a matter of fact a bus load, over

here to check on what we are doing in Victoria. I would like the House to welcome

this group from the royal city.

MR. SPEAKER: The Hon. Member for West Vancouver–Howe

Sound.

MR. L.A. WILLIAMS (West Vancouver–Howe Sound): Mr. Speaker,

in the galleries today we have representatives from Squamish

and the Pemberton Valley; Mr. and Mrs. Fougberg and Mrs.

Marchant of the school board, Mr. Ross the secretary and Mr.

Cullis the superintendent of schools.

MR. SPEAKER: The Hon. Member for North

Vancouver–Seymour.

MR. C.S. GABELMANN (North Vancouver–Seymour): Mr. Speaker, I

would like the House to join with me in welcoming a group of

students from the North Vancouver Secondary School in North

Vancouver together with their teacher Mr. Rosetti.

MR. SPEAKER: The Hon. First Member for Vancouver Centre.

MR. E.O. BARNES (Vancouver Centre): Mr. Speaker, somewhere

in the buildings is a group of students. I don't see them in

the chamber at the moment but they will be in I believe around

2:30. I would like the House to join me in welcoming a group

from King George High School in my riding of Vancouver Centre

and I hope they will enjoy their experiences. I hope it won't

be too much like yesterday when we had the question period. If

they can get in in time to hear some of these interesting

comments, I think they will remember it for awhile.

MR. SPEAKER: The Hon. Member for Fort George.

MR. A.A. NUNWEILER (Fort George): Thank you, Mr. Speaker, I

would like to have the House join me in welcoming today the

city planner of Prince George, Des Parker and his family.

MR. SPEAKER: The Hon. Second Member for Vancouver–Point

Grey.

MR. G.B. GARDOM (Vancouver–Point Grey): Mr. Speaker, I would

very much like to welcome everyone in the House who has not yet

been welcomed.

Introduction of bills.

AN ACT TO AMEND THE STOCK BRAND ACT

Hon. Mr. Stupich moves introduction and first reading of

Bill No. 108 intituled

An Act to Amend the Stock Brand

Act .

Motion approved.

Bill No. 108 read a first time and ordered to be placed on

orders of the day for second reading at the next sitting of the

House after today.

AN ACT TO AMEND THE CORONERS ACT

Mr. Gardom moves introduction and first reading of Bill No.

115 intituled

An Act to Amend the Coroners Act .

Motion approved.

Bill No. 115 read a first time and ordered to be placed on

orders of the day for second reading at the next sitting of the

House after today.

GUARANTEE OF NATURAL JUSTICE ACT

Mr. Wallace moves introduction and first reading of Bill No.

116 intituled Guarantee of Natural Justice Act.

Motion approved.

Bill No. 116 read a first time and ordered to be placed on

orders of the day for second reading at the next sitting of the

House after today.

Oral questions.

BCR AS SHAREHOLDER IN

PRIVATE MINING COMPANY

HON. W.A.C. BENNETT (Leader of the Opposition): Mr. Speaker,

I wish to direct a question to the Hon. Premier (Hon. Mr.

Barrett). The Hon. Premier is the president of the British

Columbia Railway Company. Has the Premier, as president of the

British Columbia Railway, considered the federal corporation

tax solution on the government-owned railway by becoming a

substantial shareholder in a private

[ Page 1008 ]

mining company?

MR. SPEAKER: On a point of order. Under Beauchesne it is not

permissible on a question of this kind to seek the opinion of

the Government on a matter that is merely of theoretical

importance. If you are asking a question about a fact that

exists or some plan that was under way, it would be different.

The mere seeking of an expression of opinion on a matter of

theoretical importance is not admitted in question period at

page 147 of Beauchesne.

HON. MR. BENNETT: I think the Premier would be glad to

answer the question, Mr. Speaker. I think it is of public

interest.

MR. SPEAKER: I may say that you can rely upon my clerks to

clear every question before the House meets and it would save

me the embarrassment of having to rule them out of order. I

would appreciate that help whenever you can do it.

If the Premier wishes to answer the question, I still say it

is not in order but it is entirely up to the House whether we

follow the rules or not.

HON. D. BARRETT (Premier): On a point of order, Mr. Speaker,

I think the question is in order because the negotiations are

under way.

MR. SPEAKER: Well, that is fine. It was not indicated in the

question.

HON. MR. BENNETT: Oh, but it is in the Press.

HON. MR. BARRETT: I am rising on a point of order suggesting

the question is in order, Mr. Speaker, and the answer, if I may

be permitted…I don't think I need leave. I think the

question is in order.

MR. SPEAKER: If it is a fact that it is stated in this

House, not in the Press; I don't read the Press so far as my

rules are concerned.

HON. MR. BARRETT: It is a fact. Thank you, Mr. Speaker. In

my opinion, the question is in order. The whole matter is at

phase one of negotiations. If you will check correctly — and I

will clarify — we have come to an agreement in principle with

Brameda Resources. Now we enter stage two in our negotiations

with Brascan. All economic factors, including taxation, are

under complete consideration in these negotiations.

MR. SPEAKER: Are there any supplementaries? The Leader of

the Opposition.

HON. MR. BENNETT: I would like to draw your attention, Mr.

Speaker, to the difficulty when these statements are public — if they are made outside the House.

It is very difficult for the Leader of the Opposition — and to

not bring it before the attention of the people…that is not

said by criticism because that is done by all governments.

MR. SPEAKER: Perhaps we can discuss that at another time.

Any supplementary questions?

HON. MR. BENNETT: A supplementary question directed at the

Premier, as Minister of Finance, Mr. Speaker. Will the proposed

investment in the mining corporation be made through interest

bearing bonds of the British Columbia owned railway?

HON. D. BARRETT (Premier): There are a number of methods of

financing through the B.C.R. that have not been finalized. But

in terms of making a statement — the question has been raised

and it's a valid question. I prefer to make statements through

leave in this instance, because it was transaction with a stock

that was trading on the market.

Once a transaction was made in terms of the principals of

the company having accepted an offer to take to their

directors, it was absolutely essential that there be a stop

trading on that stock. I'm sure that the Leader of the

Opposition appreciates that. Once the deal was made and signed

at 6:05 in my office, I immediately released the information

because by law it should be known publicly and there was no

time to wait until the House opened to stop the trading in

those stocks.

MR. SPEAKER: The Hon. Member for Oak Bay.

MR. G.S. WALLACE (Oak Bay): With respect to the same

subject, Mr. Speaker, could the Premier answer the degree to

which the negotiation is contingent upon his statement that the

B.C. Railroad would not expect as part-owner of Brascan to pay

royalties.

HON. MR. BARRETT: The royalties in that are a separate item

from the business deal in terms of partnership. When we came to

office the royalty agreed to with 25 cents a ton. Now, I said

on a number of occasions that no deal would be concluded on

that royalty. It would be substantially higher. A royalty

charge will be on top, above and separate, from the

negotiations between the B.C.R. and Brascan.

MR. SPEAKER: Is this on the same subject?

MR. WALLACE: Could the Premier try and clarify for my simple

brain, how you can be a partner in a company which pays

royalties on coal — whether they're 25 cents or 125 cents a ton

and one of the

[ Page 1009 ]

in the enterprise not pay the royalties,

HON. MR. BARRETT: The question is that the company, in which we will

be partners when the deal is consummated, pays a royalty — the company pays

a royalty. That's correct. We're faced with a situation where we are part of

the company. But the obligation is the same.

What we're saying is that instead of just a simple royalty

procedure, we feel that the people of British Columbia are

entitled to an equity position on a competitive basis with

other industries. We've taken an equity position — there will

be no favoured position because we've taken an equity position.

We want a return on royalty on the same basis as every other

company. We'll stand or fall on a competitive basis.

MR. SPEAKER: Any further supplements? The Hon. Member for

South Peace River.

MR. D.M. PHILLIPS (South Peace River): Is the Government

giving any consideration in view of the proposed investment in

the Peace River coal deposit to a further investment in coal

mining operations — such as Fording Coal, Scurry Rainbow, Pine

Pass, Dennison, MacIntyre, Utah International, Amex? I could go

on…

MR. SPEAKER: Order please. That question is definitely out

of order under page 147 as irregular. It need not be

answered.

Interjection by an Hon. Member.

MR. SPEAKER: Because you're asking the Government to

consider future policy and one is not obliged to answer that

question under the rules of Beauchesne page 147. I don't have

to…

Interjections by some Hon. Members.

MR. SPEAKER: Order, Members. Under the rules that have been

adopted by this House I do not have to go into long

explanations of the rules. I hope that you rely upon my

judgment not to rule out a question that is in order.

MR. PHILLIPS: Well, practically every question that's asked

is ruled out of order.

MR. SPEAKER: No, we've only had two ruled out of order in

two days. That's not bad, considering. (Laughter). The Hon.

Member for West Vancouver–Howe Sound.

MR. L.A. WILLIAMS (West Vancouver–Howe Sound): A

supplemental question on the same subject, Mr. Speaker. Would the Premier indicate whether the

agreement in principle to which he refers contemplates the

outright purchase of an equity position in this operation? Or

is it to be a grant of an option to purchase shares?

HON. MR. BARRETT: It's an outright equity position that

we're negotiating — outright equity position. It's dependent on

the completion with Brascan. And I want to be as candid as I

can at this stage of negotiations.

Brascan and Brameda Resources had a deal. We have made a

separate deal which has been accepted by two of the officers. I

understand that there's a wire saying that the Brameda

directors have now accepted the offer and they are going to

take it to their shareholders. We take an equity position in

the whole project if Brameda accepts our offer and exits. Then

we are at the next stage of dealing with Brascan. However, if

we are unable to complete a deal with Brascan then we go back

to square one again. We're aiming for an equity position and we

have taken the first step in that equity position.

MR. SPEAKER: We are sort of milking this subject dry. But is

it an important supplemental?

MR. PHILLIPS: It's a really big subject.

MR. WILLIAMS: Well it arises directly out of the answer, Mr.

Speaker.

MR. SPEAKER: Proceed.

MR. WILLIAMS: Mr. Speaker, the Premier indicated that the

proposition has been agreed to by the directors of Brameda and

must go to their shareholders. Obviously when that takes place

the information will be placed before those shareholders on

which they can make the decision.

May I ask the Premier if he will provide at least the same

information to the Members of this House so that we can

determine on the same basis as the shareholders of Brameda

whether this is a good idea or not?

HON. MR. BARRETT: Yes, certainly the information that will

be placed before the shareholders of Brameda is the offer that

we've made to the Brameda Company which has been tentatively

accepted now by the board of directors. The offer that we made

was for $7 million.

MR. SPEAKER: The Hon. Second Member for Vancouver–Point

Grey. Same subject? Anybody else on the same subject who has

something really worthwhile to contribute in the way of

questions?

[ Page 1010 ]

MR. G.B. GARDOM (Vancouver–Point Grey): No takers, Mr. Speaker.

I'd like to ask the Hon. Minister of Municipal Affairs (Hon.

Mr. Lorimer) a question, Mr. Speaker…

MR. SPEAKER: This is now the next subject?

MR. GARDOM: Indeed it is.

MR. PHILLIPS: I have a further question on the same subject.

Interjections by some Hon. Members.

MR. SPEAKER: Order, I think the Hon. Second Member for Point

Grey has the floor. Order, order. We are on another

subject.

AMALGAMATION OF

KAMLOOPS MUNICIPALITIES

MR. GARDOM: Would the Minister of Municipal Affairs please

indicate to the House that in view of the decision of the

Supreme Court of British Columbia, will it be his intention to

grant the citizens of Kamloops and neighbouring municipalities

the right to a democratic vote to determine the amalgamation or

not?

HON. J.G. LORIMER (Minister of Municipal Affairs): Up to now

I haven't seen the decision. I've been told by the Press that

it has been made. I mentioned earlier that there would be some

amendments brought in under the Municipal Act to the House for

consideration. These amendments will be brought in in due

course, at which time we will review the situation.

MR. GARDOM: Just a supplemental, Mr. Speaker…

MR. SPEAKER: May I point out to the Hon. Member that what

the Member has been doing is asking a Minister to tell what

advice he proposes to give to the Crown in the future. If it's

on such a course, I would indicate it was out of order. Is it

on that course?

MR. GARDOM: It's on that course.

MR. SPEAKER: Well, I would say it would be out of order — on

page 148 of Beauchesne. Any other pertinent questions? The Hon.

First Member for Victoria.

INCREASE OF

FARES ON B.C. FERRIES

MR. N.R. MORRISON (Victoria): Mr. Speaker, I'd like to

address my question to the Hon. Minister of Highways (Hon. Mr.

Strachan).

With respect to the many statements of the Minister of

Highways expressing concern about the so-called deficit on the

Vancouver Island runs of the British Columbia ferries — has the

Minister of Highways any plans to increase the fare structure

of the British Columbia ferries?

HON. R.M. STRACHAN (Minister of Highways): Mr. Speaker, I

don't know what the Member means by the "many statements"

about the operating deficit on the ferries. But as the Member

knows, there has been no increase in the ferry rates since the

ferry system started. As a matter of fact there was a reduction

in the mid-week period some years ago. Costs have increased

continuously since that date and will probably continue to

increase — to the point where this year I expect there will be

an operating deficit between $5 million and $10 million plus a

capital requirement. But despite that fact, the present

Government is not considering any increase in fares.

MR. SPEAKER: Supplementary?

MR. MORRISON: Yes. Could I also ask him — in arriving at the

decision not to proceed with night ferries, has the Minister of

Highways not considered even a pilot experimentation?

HON. MR. STRACHAN: A pilot experimentation is always under

consideration. I explained outside the House what the problem

was…

Interjection by an Hon. Member.

HON. MR. STRACHAN: Pardon? Well that was before the session

started. While you were away, Mr. Leader of the Opposition,

while you were away I was asked the question and it was in the

Press. But the fact remains that when I investigated it, I

found that there were several major problems:

(1) Very few of the existing crew were prepared or were

anxious to go on the later shift.

(2) The Federal Department of

Transport requirements indicated very clearly that you must

have a ratio of lifeboat licensed crew rated to the passenger

capacity of the ship.

(3) You must have a sufficient number of

mates, masters and so on available.

There is a shortage of mates. And there's a shortage of the

crews with their lifeboat certificates.

One requirement of the lifeboat certificate is a very

lengthy period of experience on the ships themselves.

As you know, we have a reserve crew out of which come the

replacements for crew as they leave. This is

[ Page 1011 ]

the big factor, this lack of lifeboat-trained crew, and

the fact that they have been unable to build up a back-log of

people in that area. Unless you took on a considerable number

of extra personnel on the ship just as sort of — I don't know

what you'd call it — super-cargo or something, just to give them

the right to say they've travelled so many miles. Those are the

problems that face us.

MR. SPEAKER: The question period is finished.

Orders of the day.

HON. MR. BARRETT: I move that we proceed to adjourned debate

on public bills.

Motion approved.

AUTOMOBILE INSURANCE ACT

(continued)

HON. MR. BARRETT: Adjourned debate on Bill No. 35, Mr.

Speaker.

MR. SPEAKER: The Hon. Member for North Peace River (Mr.

Smith) adjourned the debate.

MR. D.E. SMITH: (North Peace River): Thank you, Mr. Speaker.

Rising in my place to comment on Bill No, 35, the Automobile

Insurance Act for the Province of British Columbia, I would

like to first of all suggest that the Government must be a

little bit confused, or perhaps they are playing a cheap

political game with the Opposition. Because without debating

Bill No. 35, which is the bill which allows the Government to

go into the insurance business in the Province of British

Columbia, and before that bill is passed in the House, you have

no authority to set up a vehicle or to go into insurance in the

Province of British Columbia.

AN HON. MEMBER: We're on Bill No. 35.

MR. SMITH: Pardon me. Before debating Bill No. 34 — my

mistake — which is your B.C. Insurance corporation you have

no authority to go into the Automobile Insurance Act or

the auto insurance field in the Province of British

Columbia.

It would seem to me, Mr. Speaker, that really you can debate

Bill No. 35 all you like, and you can pass it. But it has no

force or effect until such time as you pass the Insurance

Corporation of British Columbia Act .

If I might be permitted to just quote one item from the Act "…subject

to the approval of the Lieutenant-Governor-in-Council to operate and administer

such plans of insurance as may be authorized under any other act including a

plan of automobile insurance." In other words until Bill No. 34 has been before

this House for second reading and committee and finally passed, you have no

authority.

You have no authority to be in the auto insurance field in

the Province of British Columbia. I think that it is important

that the people of the province should know that and that it's

perhaps the intention of the Government to coerce the

Opposition into supporting government auto insurance before

presenting the bill for second reading that allows you to

actually be in that business.

I repeat, Mr. Speaker, it was a cheap political game as far

as I'm concerned. I think it was a socialist ploy designed to

create public support for the first step down the road to

complete state control in this province.

Section 8 of the bill tells a story in three words:

"Corporation sole insurer." In other words, complete monopoly

in the Province of British Columbia in the auto insurance

business.

Now, tell me, Mr. Premier, do you consider the auto insurance

business a utility for the benefit of all the people in the Province of

British Columbia? Do you consider the auto insurance business to be in

the same category as the supplying of electricity to the homes of

British Columbia? Do you consider it to be in the same category as

supplying groceries to the people in the Province of British Columbia?

No.

HON. MR. BARRETT: Is that your bill?

MR. SMITH: You don't consider it to be in the same category

as groceries. It would seem to me that the staff of life is

more important than providing insurance for a car. Really. Now

if this is the position of the Government, and it seems to be

by the way they applaud, they feel that the car insurance

business is in the same category as supplying a public utility

such as electricity to the people in the Province of British

Columbia.

Once you get this complete monopoly set up, Mr. Speaker,

who's to be the commissar? Who's to be the commissar for the

province?

AN HON. MEMBER: Mr. Strachan.

MR. SMITH: The Hon. Minister of Highways. Perhaps he has

someone, if not himself, in mind to head up the corporation.

Would the Hon. Minister tell us before he closes debate on

second reading who he has in mind as commissar of the

Automobile Insurance Act for the Province of British

Columbia?

Section 16 of the bill — I'm only going to comment briefly

on a certain number of sections, Mr. Speaker. In my opinion

section 16 is one of the most Fabian socialist devices that any

government has ever perpetuated on the Canadian public.

(Laughter). Perpetrated on the Canadian public, that is.

[ Page 1012 ]

I will tell you what it does. You don't destroy the present

licensed agents or force them out of business immediately. On

the contrary, you take them in by allowing them, in the first

instance at least, to act as your agents, provided of course

that they are successful in obtaining an appointment by the

corporation.

The Act points out that you may appoint as many persons as

it considers necessary to be agents. Tell me, Mr. Minister of

Highways (Hon. Mr. Strachan), how many people do you consider

necessary to be agents for the Crown corporation?

It also provides for the payment of appointed agents, on a

commission-for-service-rendered basis.

So now you've lulled the insurance agents in the Province of

British Columbia into a feeling of temporary security by

appointing them as agents. Therefore you take away a little bit

of the sting and perhaps some of the fire that you would have

been subjected to had you phased them out of existence

completely in the initial installation of this business in the

province.

But now we come to the real sleeper. It says that you have

the power to "increase, reduce or otherwise vary commissions."

That is a very interesting statement, Mr. Speaker. So what do

you do? In my opinion, first of all you license all agents in

possession of a valid licence as of February 1, 1973. At least

you license all of those who applied for a licence. And why

not? It costs you nothing to use their expertise and experience — expertise and experience that they have gained over many

years operating in the competitive world of insurance business,

and learning well how to handle claims, how to adjust claims,

how to underwrite on a proper basis.

So why shouldn't you take advantage of their services?

Certainly they're more experienced and have training far above

and beyond what we would find in the ordinary course of events

working within the civil servants of the Province of British

Columbia who will also be licensed, apparently.

After all, whatever expense is involved — and there will be

expense involved — what difference does it make? It will

ultimately, by one means or another, be passed on to the

public. So the premiums will reflect whatever expenses are

initially involved in providing the service either through

existing insurance agents or through other people that you may

appoint to represent you as agents in the province.

But then we get to step No. 2, Mr. Speaker. That will be the gradual reduction

of the commissions payable to these agents, so that over a period of time those

who accepted the appointments will be in a position of insolvency. So what do

you do then? You then cancel their right to sell insurance for the corporation

section 16(5)(b). Just in case at that time your corporation happens to be

short of qualified agents, or for whatever reason, you still have an ace in the

hole — you can toss these poor devils a few crumbs, offer them a job with the

insurance corporation of British Columbia, in the auto insurance division of

that corporation.

I presume that like a benevolent government you feel that

for this they should be eternally grateful. I presume that you

hope that they will show their appreciation accordingly and at

the next election vote for the party who provided them with a

job when the job was really taken away by that party

initially.

Another matter that I would like to point out in second

reading of this bill, Mr. Speaker, is the fact that I can see

nothing in the way of compassion for the little man — the one

who lives on a below average income or the person on social

assistance, whose only relaxation quite often is to take the

family for a drive once a week.

Where is the compassion that the NDP talked of so proudly?

Where is the compassion when you demand premium payments a full

year in advance? Put up or forget about using your car. What

happened to the Government that cares about people?

MR. J.R. CHABOT (Columbia River): Heartless.

MR. SMITH: Heartless. Bureaucratic. The heavy hand of

socialism falling on these people, without compassion. Surely,

if you are as compassionate and you care as much about people

as you like to say, you would have made provision in the Act to

allow them to pay the premiums on some other basis than

annually.

You know that the money that you collect is not going to be

paid out immediately for claims. The money collected will come

in to the coffers and go out again continuously over a 12 month

period. There is no reason, Mr. Speaker, for the government to

collect an annual premium in advance from these people.

MR. CHABOT: None whatsoever. The heavy hand.

MR. SMITH: There's not reason for it at all. Surely, if we

have any feelings for people who have a limited amount of

income available to them, we can give them a break, the same as

the insurance industry is prepared to do today, and allow them

to pay their premiums on some basis other than annually.

While I'm on that subject, Mr. Speaker, is the government

prepared to extend credit to the people who have had insurance

with them faithfully for a period of four, five, six years, and

then find themselves in trouble and can't afford to pay the

premium? What are you going to do? I imagine the government

will cut them off.

AN HON. MEMBER: Stop driving for a month or so.

[ Page

1013 ]

MR. SMITH: I'll tell you what the average…

AN HON. MEMBER: Save up your money.

MR. SMITH: …private agent in the insurance industry does

today. He says, "O.K., Joe, I won't cut your insurance

off. Pay me when you can. That's part of the service that you

bought when you started buying your insurance from me a few

years ago."

Sometimes he's probably lucky enough to collect all his

premiums; other times he may not be. But regardless of that, if

the person has been a good customer and, through no fault of

his own, falls into unfortunate circumstances, I don't know of

any insurance agency today that would cut that man off without

so much as saying, "Thank you."

AN HON. MEMBER: Strachan would.

MR. SMITH: The only agency that will operate on that basis

is a government that says, "We want your money now. In advance.

Pay up or we cancel your insurance."

In initiating this monopolistic enterprise you have

forgotten all about people. You are prepared to grab them by

the throat and say, "Pay up now. 'Big Brother' is doing this

for your own good. This is one of the fringe benefits that you

were entitled to and one of the fringe benefits that we are

giving to you for being so fortunate as to elect us as your

Government in the fall of 1972."

While on the subject of bucks, what will the plan cost the

average person who drives a vehicle in the Province of British

Columbia? For that matter, what will the plan cost the person

who has no vehicle but still has to pay an insurance premium if

he retains a driver's licence?

I suggest, Mr. Speaker, that the Minister (Hon. Mr.

Strachan) knows the answer, that he knows at this time very

close to what the premium will be, but he's not prepared to

tell the public before the bill has been through second

reading, committee, third reading and passed by this House.

MR. CHABOT: Open government.

MR. SMITH: What you're asking for at this particular time is

"blank-cheque" approval. You don't know what the premium will

be? I say "Poppycock!" Any competent actuary given the facts

presently known can produce a rate and be very close to what

you will have to charge.

After all, what are the facts? You said it will be a complete monopoly plan.

You said that the plan will be operated on a non-profit basis. You said that

all vehicles in the Province of British Columbia must be insured for the basic

coverage. You said that you're going to include a surcharge on all drivers'

licences and drivers, regardless of whether they own a vehicle or not.

MR. STRACHAN: A fee.

MR. SMITH: A fee, if you'd like to call it that. What is the

difference in semantics, Mr. Minister, between a "surcharge"

and a "fee"? It all means the same number of bucks out of the

fellow's pocket. So don't waffle on the thing. Don't waffle on

it. You can call it a "surcharge," or I call it a

"surcharge," or you call it a "fee." It's the same

thing.

MR. SPEAKER: Order. Would the Hon. Member address the Chair

and not have a direct conversation with the Minister.

MR. SMITH: I'll try to remember that, Mr. Speaker. Thank you

for reminding me.

You have a fee on all licensed drivers within the Province

of British Columbia, whether they own an auto or not. I'll use

the terms of the Minister of Highways, since he seems to prefer

them. You've said that "all government vehicles will be

included in the plan."

Well, Mr. Speaker, given these facts, calculation of a

premium should not be difficult. I suggest, Mr. Speaker, that

the Hon. Minister of Highways knows the answer to the question;

that the Hon. Minister of Finance (Hon. Mr. Barrett) knows the

answer to the question. But they have decided that this

information will not be released; it'll not be released because

they would have to backtrack on some of the statements that

were made before the election.

There is no such thing, and there will be no such thing as

insurance for $25 per year in this province, a

suggestion that was inferred before and during the election. It

is impossible to provide a reasonable level of basic coverage

at rates in effect even in the Provinces of Manitoba or

Saskatchewan. Believe me, there's not one there that is

receiving insurance for $25 a year or anywhere close

to it.

Let me refer for a moment to the study done by a royal

commission in Nova Scotia, published January, 1972 — a

royal commission on automobile insurance for the Province of

Nova Scotia. They're talking about loss ratios in this

particular instance, on private passenger automobiles,

excluding farmers in this particular graph.

We find when we look down the graph that every province has a slightly different

ratio of accidents and accident frequencies. I am sure that the Hon. Minister

of Highways has read this report. We find that the average of accident frequencies

per $100 of vehicles registered — and this is all vehicles, I presume — for

Canada is 6.45 vehicles per 100 of registrations. In the Province of British

Columbia we're higher than average at 6.96. The Province of Manitoba is a little

[ Page

1014 ]

under the national average at 5.177 vehicles per 100 of

registrations.

Another interesting figure is the average cost of claims in

all the provinces of Canada, including Manitoba and British

Columbia. The average cost on an across-the-dominion basis is

$731. The average cost for the Province of British Columbia is

$748 — above the national average.

The average cost in Manitoba, a province where salaries are

not as high as our own, $532 average cost per claim.

Well, Mr. Speaker, I am no actuary, but I believe that if

you take a look at some of the figures prepared not only in

this royal commission report but in other reports of a current

nature, it doesn't take an actuary to give you a "ballpark"

figure of what the cost of insurance will be to the average

driver with a vehicle in the Province of British Columbia.

Interjection by an Hon. Member.

MR. SMITH: I'll give you a figure right now, Mr. Minister.

I'd suggest that if you take the rates presently in existence

for the Province of Manitoba for comparable coverage and add 40

per cent, you'll be very close to a figure that will apply to

the insurance rates in the Province of British Columbia. It

didn't take an actuary a week to calculate that. I'd be very

surprised if that figure is not very close to the figure you

will have to have if you expect the plan to be operated without

hidden charges or hidden subsidies involved.

It would seem to me that if anybody in the Province of

British Columbia wished to take my advice today, they would

take a look at the auto insurance premiums and the rates

applicable in the Province of Manitoba for a comparable

vehicle. Add 40 per cent to that rate and they would come very

close to what will probably be charged by the insurance plan in

the Province of British Columbia.

Many people have indicated that the auto insurance industry

makes a substantial profit, that the claims ratio is not really

too bad. I'd like to refer now to a letter that I received from

the Co-operative Insurance Service dated February 21, 1972.

This is a co-op organization, a principle certainly subscribed

to by the NDP. Here in this letter, the Pacific regional

manager and the general manager is speaking about the auto

insurance business in the Province of British Columbia.

For the record, I'd like to read it. It's addressed to Mr.

Dean Edward Smith, MLA, Parliament Buildings, Victoria, British

Columbia, dated February 21, 1972:

"Co-operative Fire & Casualty is an all Canadian

insurance company owned and controlled by credit union, co-operative, farm and labour organizations. It

is incorporated under federal government legislation and, in British

Columbia, operates within the regulations established by the

provincial government. The overall experience of Co-operative

Fire & Casualty Company in British Columbia during 1971 was

as follows: 60,838 auto policy holders were insured during the

year which resulted in a premium volume increase of 90.9 per

cent."

I would think that any company, regardless of whether it was

a cooperative casualty company, a co-operative auto insurance

company or any company in the insurance business, would feel

very proud of themselves when they increased their premium

volume by 90.9 per cent in one year.

"In the same period, over 84.3 per cent of premium dollars

were paid out in claims. Claims settlement costs represented an

additional 4.6 per cent."

In other words, Mr. Speaker, 88.9 per cent of the total

premiums collected in that year went back to policy holders in

payment of claims and servicing those claims.

"In view of these results and the fact that we had expanded

our position to the British Columbia Auto Insurance Board, we

were astonished when notified that we would be required to

reduce the premium on no-fault benefit coverage by $7 as of

March 1, 1972. On a Canada-wide basis, it costs Co-operative

Fire & Casualty about 20.9 per cent of the premiums to

administer, market and service automobile insurance — well

below the industry average and competitive with any government

operated complete service. Motorists insured with our company

received 82.9 per cent of their premiums in claims and claims

expenses in 1971."

I presume this is on a Canada-wide basis

because the figure they show here is 82.9 per cent in 1971;

the experience in B.C. was that they paid out 88.9 per cent of

total premiums on claims.

"While pursuing our policy to provide the best insurance

service possible at the lowest net cost consistent with sound

operating principles, Co-operative Fire & Casualty has

innovated to increase service while striving to hold the line

on controllable costs. Among the changes and improvements

introduced recently in British Columbia are: — Canada's first

no-fault collision coverage for all our insured in British

Columbia who have a $25, $50 or $100 deductible collision or

all-perils policy. — telephone adjusting, which improves

adjusting services and effects greater economy. — immediate

payment of claims. Staff adjusters have authority to issue

claims payment cheques in the field.

— sales and service offices for better service throughout

the co-operative insurance operating territory. — premiums not

increased because of accident. Co-op insurance waives the first

accident regardless of the dollar value for all drivers

[ Page 1015 ]

with a three-year clear record — field insurance Policies

which result in policies being received and reviewed at the

time of purchase — the payment of agents on a fee-for-service

basis — offers an open market to ensure that everyone who

qualifies for a licence can obtain insurance. Frequently, the

effectiveness of insurance programmes is measured on the basis

of the ratio of premiums returned by the way of claims

payments. Using that criterion, we can conclude that the

insurance service provided by Co-operative Fire & Casualty,

which can now return over 80 per cent of its auto insurance

premiums in claims and direct claims costs, is the most

effective yet devised in comparison with any other, including

the insurance plans in Manitoba and Saskatchewan. As

co-operators, we believe that the auto insurance needs of the

motoring public can best be served by a free enterprise system.

Competition between a strong co-operative organization in the

private sector, both regulated by government legislation,

should result in satisfactorily meeting the best interests of

consumers. We recognize the responsibility government has to

regulate this activity in the interests of the motoring public.

However, we seriously question whether government should become

actively involved in the provision of insurance services. The

enclosed brochure further clarifies our position in this

issue."

There is a company that provided, by their own

admission, a very adequate service in the Province of British

Columbia — perhaps a little too adequate because I know that in

some areas they've had to quit writing.

Interjection by an Hon. Member.

MR. SMITH: That's right.

HON. MR. STRACHAN: Who was the government then?

MR. SMITH: It's addressed to D.E. Smith. It's not addressed

to the Government of the province, Hon. Minister of Highways.

It's still up to date, as complete and factual as any

information that you will receive today because the picture

will have changed very little, except perhaps the claims ratio

in relation to premium collections is even higher today than it

was at that time.

The interesting brochure that the Co-operative Insurance

Service turns out points out a few things.

"Claim: Government insurance gives control over investment

dollars so that a larger portion can be invested in socially desirable investments

such as housing. Not true. The major source of funds invested in auto insurance

operations is premiums paid in advance. Under private insurance, auto insurance

premiums are paid according to dating of each policy which means that moneys

are received on a uniform basis throughout the year. Therefore substantial sums

are available for long-term investment. Under government insurance, premiums

come due on one date and will be used for claims or expenses during the next

12 months."

So this was the same regardless.

"There is no long-term investment capital available out of

the auto insurance business."

No long-term investment-capital — short-term perhaps — but

no long-term.

"Claim: Government insurance gives superior claim service

through drive-in claim centres. Drive-in claim centres are a

great convenience for the insurance company. A government

monopoly can force every claimant to drive to a centre for

service thus eliminating travel for claims adjusters and

appraisers. It is not so convenient for the motorist who waits

in line on a busy morning.

"Claim: Government auto insurance is a natural extension of

a programme of social security."

This was applauded here. They seem to think that government

auto insurance is in the same classification as the supply of

electrical energy to the houses in the province.

"Sweden, with the most advanced social security system in

the world, has rejected the idea of government-operated auto

insurance.

"There, a company owned jointly by co-operatives and labor

unions, Folksam, is the leading auto insurer. It is a very

progressive company and has set the pace in Sweden in recent

years. While its share of the auto insurance business has not

increased during the past five years, other companies are

forced to match its performance in order to maintain their

position."

I'll repeat that:

"…other companies are forced to match its performance

in order to maintain their position. Folksam thus brings its

benefits to all motorists in Sweden without having a monopoly

or exercising compulsion."

Question, Mr. Minister, through you, Mr. Speaker: Why is it

necessary for the Province of British Columbia to go into the

insurance business on a monopoly basis? Is it just because of

your socialistic policies, or is there any real need to do

that?

I suggest to you, Mr. Speaker, that the real need is to

advance socialist policies in the Province of British Columbia

and it is not backed by a reduction in premiums to any

appreciable extent for the people who purchase auto insurance

in this province.

Not one figure, not one fact, has been brought before us in

this debate that would indicate the size or the amount of the

reduction in insurance premiums. As a matter of fact there's

been a great

[ Page 1016 ]

reluctance on the part of the Government to discuss that

side of it at all by suggesting to us that they don't know the

answer, that they haven't got all the figures compiled, that no

actuary can give them this particular information without some

more research being done into the matter. In my estimation,

that's nothing but a smoke screen.

I'm as sure as I stand here that that figure is available.

It's known to the Government at this particular time; it's just

a matter of Government policy not to release it before they get

this bill through the House because it might provide an

embarrassment they would rather face after the legislation is

through than before.

A few questions concerning auto insurance. Question: Will

there be any means by which a motorist can appeal the decision

of an appeal board? Will the motorist have the right to go to

court?

Question: Under present insurance laws in British Columbia,

the absolute liability provision guarantees that an innocent

victim will be compensated at least up to the minimum limit

even if the insured driver was impaired by alcohol or drugs at

the time of the accident. Under the new plan, will victims

still have this guarantee or will they be limited to the

no-fault

section of the insurance?

Question: It has been indicated that premiums for the new

insurance plan will be collected in two ways — a $1 surcharge

on the driver's licence and a surcharge on the cost of the

vehicle licence. Will either of these charges take into effect

the accident record of the insured as opposed to his conviction

record?

For example, if a driver has many claims during the year but

no convictions, will he pay more than other drivers with a

clear record? I understand that in Manitoba the charges are

assessed only on the basis of convictions. In Saskatchewan,

both claims and convictions are taken into consideration. Does

the Government intend to follow the Manitoba system, the

Saskatchewan system, or some new system, Mr. Speaker?

Question: If the Government intends to levy surcharges on

the basis of claims, will it only do so if the driver was

responsible for the accident? If so, by what means will

responsibility or fault be determined?

Question: Could the Government explain how it intends to

prohibit people from purchasing insurance, other than the

licence plate insurance, other than from the government? For

example, if a company with its head office in Seattle wishes to

make arrangements with an insurance company in Seattle for

excessive insurance on vehicles which are used in British

Columbia, how does the government intend to discourage such

practice?

I see, Mr. Speaker, that the Hon. Minister of Highways doesn't seem to wish

to respond to these questions, but I'm sure that as he sits there he is listening.

HON. MR. STRACHAN: Sit down.

MR. SMITH: No, I'm not going to sit down as I would lose my

place in debate. You'll have an opportunity to answer the

question; just note them then. You'll have your chance to

answer the questions, Mr. Minister.

HON. MR. STRACHAN: Don't make remarks like that.

MR. SMITH: At the present time, insurance premiums in

Victoria and the general capital area are among the lowest in

Canada, if not the lowest. Vancouver rates, on the other hand,

are much higher and compare with other large cities in Canada.

Will the Government guarantee to the people of Victoria that

their rates will not be increased to subsidize residents of

Vancouver and other high-risk areas in the province?

Question: In both Manitoba and Saskatchewan, there is a

minor change in wording which works to the definite advantage

of the government. In those provinces, a driver must be capable

to drive and licensed to drive before the government will pay

claims. In other provinces, the phrase is "capable or

licensed."

In other words, if I lend my car to my father-in-law at the

moment and he gets into an accident, the insurance company will

pay even if he has neglected to get his driver's licence

renewed. In Saskatchewan or Manitoba, the government could

wiggle out of this particular situation. Does the Government

propose to change the wording in the standard policy in British

Columbia?

Question: The Act indicates that a driver who wishes to

appeal his insurance rate will be required to post a bond of

$25. Will the Government make exceptions in cases where the

drivers do not have $25 — for example, an unemployed person or

a person on welfare?

If a motorist is obliged to take time off to appeal his

premium and his appeal is allowed, will the government

reimburse him for the time off? Will the government pay legal

fees or provide legal aid to people appealing their

premiums?

Question: Many large companies in British Columbia operate

large service garages to keep their fleets in running order.

The British Columbia Telephone, Hydro, and the large department

stores come immediately to mind. If these companies buy

collision insurance at all, it is generally with high

deductibles because the companies can repair most of the damage

in their own shops. Will these companies be able to purchase

insurance that meets their own require-

[ Page 1017 ]

ments, or will they be forced to buy a standard package

from the government — a package that has been designed for

persons who own only one car or one truck?

Mr. Speaker, I would hope that the Minister, when he closes

debate on second reading, will give answers to some of these

questions because all I have done this afternoon is paraphrase

the questions that are asked by the motoring public in the

Province of British Columbia.

Mr. Speaker, we strongly opposed the total monopoly concept

on the grounds that it is not necessary. If the government plan

is as good as you would have us believe, let it stand on its

own merit and compete for business in the marketplace against

private insurers.

We reject the autocratic approach to premium collections.

"Pay up now; in advance; cash on the barrelhead." Where is your

concern for people?

We reject the all-embracing power to take unto yourself as

government to cancel an agent's contract without notice and

without compensation.

We reject the suggestion that premium rates have not been

calculated and therefore are not available to us at this

time.

We reject your bulldozer tactics in wishing to push this

bill through the House before revealing premium rates or

debating Bill No. 34 which is the bill necessary to give you

the authority to finance and set up the auto insurance company

in the Province of British Columbia.

Mr. Speaker, we demand answers to the question that I have

posed this afternoon and we recommend that the Government

follow the course of action set out in motion 23 by placing

Bill 34 and 35 before the Select Standing Committee on Public

Accounts and Printing.

Mr. Speaker, to paraphrase a remark that we've heard the

Hon. Attorney General (Hon. Mr. Macdonald) make often in this

House, "Let the sunshine in." Prove that the phrase "Open

Government" is something more than an election gimmick. Thank

you, Mr. Speaker.

DEPUTY SPEAKER: The Hon. Member for Vancouver–Point Grey.

MR. G.B. GARDOM (Vancouver–Point Grey): Delighted to see you

in the chair, Mr. Speaker. I note that you're retaining

absolute decorum in the House.

DEPUTY SPEAKER: Well, thank you very much, I'm sure.

MR. GARDOM: An excellent job.

You know, Mr. Speaker, there has been a few classified advertisements in the

papers over the last couple of days and I saw one in the "For Sale" section.

It said: "For sale, 100 tons of small type. Signed, the B.C. Insurance industry."

Then I looked in the "Wanted to Buy" side, Mr. Speaker, and

I saw this: "Wanted to Buy, 200 tons of small type."

Signed, "The Minister of Highways."

I think that this pretty well is the direction that we're

going to be taking here.

I much enjoyed the Hon. Minister of Highways. He delivered

his talk very well yesterday, right to the letter — even to the

spontaneous responses to non-existent interruptions. I think

this was quite an accomplishment on his part. (Laughter).

It really wasn't, Mr. Speaker, the Member for

Cowichan-Malahat (Hon. Mr. Strachan) of old, because try as

hard as he did, Mr. Speaker, he couldn't get quite enough straw

in his dragon to make it combustible — particularly when he

knows that the alternative dragon that he's creating with this

Bill No. 35, with its totality of power, will produce a bigger,

badder and worse dragon than the one that he considered that he

had to eradicate.

Mr. Speaker, in considering this bill we also have to

consider the Speech from the Throne. The Speech from the Throne

listed the Government's legislative priorities; the very first

legislative priority of your Government, Mr. Speaker, was a

British Columbia bill of rights.

Now conceivably a British Columbia bill of rights, Mr.

Speaker, would have included the right of a citizen to redress

from wrongs at the hands of his government — the right of the

private sector for redress for wrongs committed by the public

sector. It would have provided protections against excesses of

the state. Conceivably, Mr. Speaker, it would have enshrined

the right of fair compensation for public expropriation.

Conceivably, Mr. Speaker, it would have enshrined the right of

the citizen to proceed to the impartiality of the courts of

this land and to seek equity and justice and damages for

injuries that are sustained and loss occasioned as the result

of abuses or omissions of the state.

But no. No word of it, Mr. Speaker. No word concerning those

rights, Instead we have for second reading today this Bill 35,

which I say is the first in a long line to come of the

"expropriation without compensation" measures that are

contemplated by and are the definite policy of the B.C.

socialists.

They call themselves the New Democratic Party. I would

think, Mr. Speaker, if you take a look at this bill and the

concept that it raises, that a better term would be the

"Non-Democratic Party." Because with this bill they will be

obliterating the private sector; they will be totally

prohibiting its operation in due course.

I would suggest to you, Mr. Speaker, that surely in a

democratic society one should be entitled to carry on a lawful

vocation. But no. For all practical

[ Page 1018 ]

purposes there has been with this bill government seizure of

a legitimate, taxpaying, non-polluting and regulated vocation

and occupation, without any right whatsoever to it to seek

compensation or any kind of legal redress — no checks, no

balances, no rights, no powers for anyone to find remedies or

redress and no mention of there being any democratic necessity

for these things.

There's no word, either in the policy direction of this

takeover government or in the manifesto which it follows. I

don't think, Mr. Speaker, that we should ever for one moment in

the Province of British Columbia be quieted or lulled by the

very innocuous title "Waffle," for it contains some of

the most dangerous doctrines ever advanced in this country — and

I'm going to refer to three quotations from it — not only for

what it says but also for what it does not say.

Here is something that it does say, and I quote:

"A socialistic society must be one in which there is democratic control of all institutions which have a

major effect on men's lives and where there is equal

opportunity for creative, non-exploitive self-development. It

is now time to go beyond the welfare state."

One can well

question in that statement the socialistic concept of the word

"democratic," when they make no provision to pay for the

harm of the so-called "democratically" obtaining of control,

such as is contemplated by this legislation, and no provision

for offering freedom of choice for a system other than the

government system, such as we have here.

The second quotation is this:

"Capitalism must be replaced by socialism, by national planning of investment and by the public ownership

of the means of production in the interests of the Canadian

people as a whole."

Well, that's an awfully broad premise. There's no indication

in that statement of any regard for the due process of law or

of equity being followed.

The third and final quotation is this one — and they are

talking about the control in order to bring the Canadian

economy under Canadian ownership and control:

"They include extensive public control over investment and nationalization

of the commanding heights of the economy, such as the key resource industries,

finance and credit, and industries strategic to planning our economy."

That's

what this thing says, Mr. Speaker, but there's not a single, solitary word in

here about providing any redress for the emasculation of individual rights.

There's not a single, solitary word in this Waffle manifesto as to whether socialistic

excesses can be tested by our courts.

The 14th Amendment of the United States Constitution says that "a citizen cannot

be deprived of property without due process of law." Without due process of

law.

But what we have here in Bill 35 is something that is

tantamount to confiscation by virtue of a 40 per cent vote of

the citizens of this province. That's what this bill amounts

to.

I say this because it's just seizure for the Province of

B.C. Insurance has been confiscated; it's been emasculated;

it's been guillotined without any chance to compete and without

any opportunity for redress.

I'd like to put this question, and I do hope the Minister

will talk about this when he does close the debate: Who's going

to be next? The farmers? The miners? Who's going to be after

them? The loggers? The fishermen? All of the primary products

people? Natural gas?

MR. G.V. LAUK (Vancouver Centre): The lawyers.

MR. GARDOM: The lawyers, the gentleman suggests? The

chartered accountants? The doctors? The teachers? And on into

every profession? B.C. Telephone?

There is no question, Mr. Speaker, that this "left hook"

Government's course is to total bureaucratic monopoly with the

most enormous, inflexible and expensive bureaucracy that anyone

in this province has ever dreamed of — I think a better word

would be "nightmared" of.

We've got stateism running wild. We'll have an

administrative cost of this programme that will be

mind-boggling.

Saving to the consumer? Well, as the first speaker today

mentioned, there's not a word about what the saving to the

consumer is going to be, Service to the consumer? It seems to me that the dollars

here are going to take one route. They're going to pour into

the maintenance of another bureaucratic elite. Because there's

not been any offers, Mr. Speaker, of any kind of consumer

plowback with the existing structures that this Government has

and which they inherited from the former administration and in

which they could insist upon a consumer plowback today if they

saw fit.

Take the profits of Hydro in natural gas. Hydro buys it for

$20.5 million and sells it to Vancouver and Victoria customers

for $51.7 million. Where is the saving to the consumer

there?

There's no indication of savings insofar as the Liquor

Control Board profits are concerned. They buy the stuff for

$176 million and they sell it to the general public for $280

million. We don't find any consumer breaks there.

I would say, Mr. Speaker, it's very seriously open to

question that government insurance will ever be cheaper,

economically, philosophically or any other way, for that

matter. Because there are going to be hidden charges. There's

going to be overlapping of agencies, of personnel, supplies,

desks, typewriters,

[ Page 1019 ]

buildings and all other governmental fixed assets and

certainly, as I have stated, the administrative personnel to

run and operate this behemoth.

It's very fallacious to suggest otherwise. Any government,

irrespective of the government, has really never operated and

never ever will operate so that one particular administrative

function is in economic isolation to another.

Apart from anything else, Mr. Speaker, Parkinson's Law and

the Peter Principle would prevent that.

In B.C. we have living proof that we've been unable to

isolate a tax and use it for a specific purpose. The former

administration designed the 3 per cent tax, which went up to 5

per cent, as being only labelled for hospitals. That was the

initial concept. That didn't prove to be the case and I would

tend to say that there's been well over $200 million collected

which never found its way into the hospital programmes. Without

an auditor general in B.C., which we don't have, Mr. Speaker,

it would be very difficult at any time to impartially determine

what really does go on.

I know when the Hon. Minister closes this debate he's going

to indicate some gross saving. But I doubt very much whether

there will be any net saving. And I certainly couldn't see that

there will be ever any overall net increase.

I'll tell you why. We're going to find the taxpayers of this

province indirectly contributing to the insurance programme.

And you know I can't really and truly see why the one million

people in British Columbia who don't have cars should be

concerned about anyone else's fenders. That's beyond me.

It's going to be another bureaucratic monster. We're going

to have more civil servants. We're going to have more

centralization. They're going to have more buildings, more red

tape, more rigidity, more control, more socialism, more

bureaucracy, and with no power, Mr. Speaker, to choose or try

to opt out of the system.

Now let's look at the loss factor. This is a big item.

There's a loss factor too. There's a loss factor in taxes to

the B.C. Government — premium taxes, income taxes, sales taxes

and land taxes. All of these taxes are an operational cost

today within the private sector industry. And all of that

revenue will go right down the drain.

You know it's very difficult to come up with an exact…

Interjection by an Hon. Member.

MR. GARDOM: I'll come to the savings in a moment. It's very

difficult to come to any kind of an exact figure. But with a

gross premium income of roughly $ 150 million, I would say,

Mr. Speaker, as a reasonable guesstimate that British Columbia

could face a $7 million loss in provincial tax revenues by

virtue of the proposed takeover of the insurance industry.

That is apart from the purchase power and spin-off loss in the

complementary services.

Also, why in heaven's name, when we have 95,000 people in

the province out of work — why come up with a proposal which in

all likelihood could well put another 10,000 people out of

work. And that can happen — that can happen. Because this is

not a measure that's being debated in front of the Province of

British Columbia. Everything that you're going to be doing in

this bill you're going to be doing behind the red door of

cabinet, my friend, and you know that. I'll come to that in a

moment.

Now when there's an abuse there's no question that one has

to advocate change. But I think in advocating change you should

have thought through the consequences of change. With every

respect I think the Government has given very shallow

consideration to that aspect.

There was not too much warning in your election. Now,

everyone is going to start pooh-poohing that, I suppose, but

oddly enough we don't find your statements and policies

concerning automobile insurance in your election material. In

the main election material you can't find the words anywhere at

all. I'll show you a copy my friend.

MR. G.V. LAUK (Vancouver Centre): I'll show you a copy

too.

MR. GARDOM: Well, you might have had it in some, but you

certainly didn't have it in the central ones. Not a word in

your policy statement.

When you ran for election last summer you talked about

similar plans to Manitoba and to Saskatchewan, Mr. Speaker.

Both of those provinces allow the right of choice to policy

holders as citizens to select additional coverage from either

the government or private carriers. But this crowd of 38 has

closed the door to that completely, Mr. Speaker.

I'd like to say a word or two about the mandatory collision

coverage. That in itself is ridiculous. There are all sorts of

people who do not want to have a mandatory collision coverage.

Their car may not be worth $200. Why do they have to pay that

for their fenders.

We favour private carriers, and not public, because we

believe in the free competitive enterprise system. But it's got

to be free; it's got to be competing, and it has to be

enterprising. And the mechanisms are available today in the

Insurance Act that we have in our statute books already

to enforce that. I am referring to the Automobile Insurance

Board.

I don't believe for one minute in governments administering

everything. Less, and not more, government is the philosophy

that I accept, Mr. Speaker. I think that government should keep

out of the facility as much as it possibly can. Sure, go ahead

and set the

[ Page 1020 ]

guidelines, provide the incentives; but don't do the job

itself. As an Hon. Member stated, and very well stated,

in debates in the House, February 1, 1973. And he said this, at

page 138:

"You know one of the jobs I feel that Government has is to

finance, to set standards and to supervise. I think that that's

necessary. Now, you don't necessarily have to deliver the

service. As a matter of fact I think it's rather bad when the

government does deliver the service."

I say hear, hear. Do you agree with that? Do you agree with

that? That was the Minister of Health (Hon. Mr. Cocke). That

was the Minister of Health. And it's going to be very

interesting to see whether or not he will subscribe to his

philosophy or vote for legislation in the dark — which we have

under Bill No. 35.

I can't see, Mr. Speaker, why the general public cannot have

the right to choose government or free-enterprise insurance.

Give them the choice. Even the New Democratic Party in Manitoba — the Municipal Affairs Minister, Mr. Howard Paulley, admits

that three private enterprise companies quoted lower rates. He

says this — this is reported in the January issue of the

Financial Post : "There are only three private companies

with rates lower than our own."

Well, B.C. citizens are entitled to that break. If the B.C.

private sector can come in and provide better service at lower

cost, the B.C. citizen should be entitled to receive the

break.

You know, Mr. Speaker, not withstanding that we have Hydro

as a public utility, there's nothing to prevent an individual

producing his own power. Individuals and corporate structures

in B.C. do produce their own power. And they produce it at a

lower rate than Hydro.

An example, say, in Vancouver is Finning Tractor Company

which does exactly that. It makes its own power right on the

site, and it makes it cheaper than can be provided by the

public facility. I say do the same thing in this field — do

exactly the same thing in this field.

In Saskatchewan and Manitoba comparisons have shown, Mr.

Speaker, the difficulty of proving if a government monopoly is

offering cheaper or better service. But, surely to goodness,

competition makes it possible for the consumer to compare each

time he makes a purchase. I say, to the Hon. Minister of

Highways (Hon. Mr. Strachan) and to the New Democratic Party,

give our B.C. citizens the right to make that kind of

decision.

This bill, Mr. Speaker, is a veritable Hydra of regulation. It's an abdication

of legislative performance. It's not a bill; it's a sluice box of power to cabinet.

There's no mention of the kinds of coverage. There's no mention of the costs

of premiums. There's no mention of the cost of administration. There's no mention

of the kinds or terms of policies.

These things aren't being debated in front of the Province of British Columbia today. No Member in the House

has that information. Any vote for this bill is a vote for

legislation in the dark. And it's just a rubber stamp to the

authority of cabinet.

The last speaker said, "let the sunshine in." There's none

here at all. We don't see any economic projections. There's no

indication whatsoever of what kind of a package or treatment

the people who will suffer losses in B.C. will receive. No

indication. They say, "Pass the bill. Leave the whole thing to

regulation." The area in a democratic society where the

people's work should be done is in front of the people, not

behind a secret door of cabinet — and that's what the concept

of this bill is.

We intend to oppose it, Mr. Speaker.

DEPUTY SPEAKER: The Hon. Member for Oak Bay.

MR. G.S. WALLACE (Oak Bay): Thank you, Mr. Speaker. I'll try

not to be repetitious. The former speaker has made many of the

points which the Conservative Party would certainly agree

with.

When any system has to be changed we feel that society

should be reasonably certain that the solution that's proposed

is an improvement over what we have. It's quite clear in all

our experiences in life that sometimes the cure can be worse

than the disease.

I think, Mr. Speaker, it's fair to say that an objective

person would admit that in some cases the service and the

attitudes of some private companies have been unsatisfactory. I

don't think we can dispute that. But in the eyes of our party

the question is: should the only alternative to the existing

system be one that is operated by government, controlled by

government and is, in effect, a complete and total

monopoly.

This bill leaves the individual — and it's the individual

we're certainly concerned about in society — with no choice

whatever as to the source of his insurance or the terms of the

premium, and indeed with no opportunity to shop around if he's

unsatisfied with the service which he receives.

Interjection by an Hon. Member.

MR. WALLACE: We're not talking about telephones, my friend.

We're talking about cars, so let's get that idea straight.

We believe that if there is one principle that non-socialist

parties stand for — and certainly the Conservative Party — it

is freedom of choice. It would come as no surprise, Mr.

Speaker, since this is the heart and soul of the principles on

which we function in the Conservative Party, that we will

certainly be opposing this bill with all the strength we can

muster.

[ Page 1021 ]

The point to be made is that we also believe in competition.

This party would not in any way try to oppose a government auto

insurance plan which entered the market in fair competition

with the presently existing private companies. I would just

make this point, Mr. Speaker, that if the private companies are

as unfair in their practices and as inflated in their premiums

and as poor in their service to the client as the Minister

would have us believe, then surely the Government should have

not fear about entering the marketplace in competition with

such poor service and such high costs.

Frankly, if the Minister is so confident, as he says he is,

about the supremacy and excellence of his plan, then why not

compete with these dreadful companies that he tells us are

doing such a bad job for the client? It seems to make only

common sense that if the price and the service provided by the

private companies are so bad, and the plan to be produced by

the Minister is so good, consumers in this province are not

stupid. It would very simply result in the fact that if the

choice is as clear as the Minister has suggested, then of

course the private companies would go out of business, in which

case the Government plan would indeed be a monopoly. But at

least it would be by virtue of its own efforts and its proven

excellence and supremacy in relation to presently existing

plans.

Mr. Speaker, it really interests me, that now we have this

picture of a total complete monopoly, and yet I have a letter

here which the then Leader of the Opposition, now the Premier,

wrote in reply to a lady in my constituency in February of

1970. I'd just like to read what the Premier said to this lady:

"Our proposal for a Crown-owned automobile insurance agency

would include the sale of British Columbia auto insurance

through existing agents in competition with any other company

that wished to stay in the field in British Columbia." February

17, 1970, to a lady, and I'll be happy to file a copy of the

letter, if need be. Signed by David Barrett, Leader of the

Opposition.

At least three years ago the Premier was in favour of the

competitive approach that if agents wished to remain in

competition with government auto insurance, this would be

permitted.

AN HON. MEMBER: He changed his mind.

MR. WALLACE: Well, it's very obvious, yes, that the Premier

has changed his mind. I wonder why? Perhaps the Minister can

tell us when he winds up the debate — why? His smile is so

softening and so alluring that I'm sure he has an excellent

explanation. Peace. (Laughter).

AN HON. MEMBER: Blood is thicker than water. (Laughter).

MR. WALLACE: We won't get into the question of our

respective origins, Mr. Minister. (Laughter). I've got to

mention a little later some of the difficulties of being a

Scotsman in a foreign land.

AN HON. MEMBER: What kind of land? A foreign land?

MR. WALLACE: No, I'm regarded as a foreigner by my accent.

Well, I'll just tell you a story a little later about that.

When we went to Winnipeg to look at the Manitoba…

Interjection by an Hon. Member.

MR. WALLACE: Anyway, the people in Winnipeg had trouble

understanding what I said.

Interjections by some Hon. Members.

MR. WALLACE: With some difficulty, I'll get back to the

subject.

Of course, we don't think that we should simply despise what

the Government is producing without suggesting alternatives.

I've already stated that we think it would be reasonable and

certainly we would not oppose a Government plan which competed

in the marketplace and, if it became a monopoly, would do so on

the basis of fair competition and by giving better service at a

better price and with better satisfaction to the customer.

We feel that the deficiencies that presently exist could

quite readily be controlled by regulation through a regulatory

body. I would contest, Mr. Speaker, the Minister's opening

statement, when he introduced second reading, that there is no

competition at the present time. There is competition. As

recently as just two months ago, I was dissatisfied with car

insurance on my own car and sought other prices elsewhere.

There was a variation of 15 per cent between the cheapest and

the premium I was then paying. I think there aren't too many

areas in the marketplace where you can find 15 per cent

difference in rates or prices and claim there is no

competition. I would submit that there certainly is

competition.

Beyond that, Mr. Speaker, we would feel that it is fair to

examine the basic reasons given for this bill and to wonder if

these basic reasons are valid. Premier Barrett stated at

Terrace on August 21, 1972, that government auto insurance

would save drivers 20 per cent on their premiums. I have a

clipping from the Vancouver Sun somewhere, but it was August

21, 1972. With such definite promises of a 20 per cent

reduction in premiums, I'm really just posing the question: how

is it that we have a complete absence of figures with this bill

as to what kind of premiums the customer can expect?

[ Page 1022 ]

I would like to support the comments of the former speaker

from Vancouver (Mr. Gardom) that it is indeed rather amazing

that a bill which the Minister has said involved something in

the nature of $175 million should be brought to this House

with the claim that it will reduce premiums for the individual

driver. Yet we have not a single figure mentioned, even in

terms of an approximation. But back in '72 apparently, the

Premier was quite willing to promise in his election campaign,

nine days before the election day, that the rates would be

reduced by 20 per cent.

I would also like to pose the question that the figure

quoted by the Minister as being the total of premiums is $175

million and the present estimated income by companies doing

business is $135 million. Perhaps in closing the debate the

Minister would care to explain where this $40 million is to

come from. It seems to me that if you reduce the premiums, if

anything should happen, one would assume that the total of the

premiums would go down and not up.

In talking about the main reasons for the introduction the

bill, I think we should perhaps also quote the Minister in

Manitoba, the Hon. Sidney Green, who at that time was the

Minister of Mines in Manitoba. He said that possible premium

reduction was not the real reason for the take-over in

Manitoba. He said it was merely a justification for

transferring the bulk of the premium money which in Manitoba

was $35 million from the private sector of the economy to the

government.

This, as has been pointed out by former speakers this

afternoon, of course is the socialist approach to government.

This is inherent in their philosophy. I think perhaps we should

look at the situation today in British Columbia and wonder very

seriously whether the claim that lowering of the premiums is

the main reason to introduce a monopolistic auto insurance

plan. It looks to me as though the Government's access to cash

flow of $175 million is a much more attractive motive than the

espoused motive that they will reduce premiums to the

individual consumer.

Mr. Speaker, these are two main reasons that the Government

has given — that it would lower premiums and it would improve

the service. I think it's quite reasonable, in trying to debate

this contentious bill, to took and find out what is in fact

happening to the most recent province to introduce such a

bill.

The publicity in Manitoba, following the introduction of

their bill, was very similar to British Columbia. I have read

much of the newspaper comment that it would reduce the premiums

and the customer would get a better deal.

As I mentioned earlier, we spent some time in Winnipeg to try and meet a wide

cross-section of the citizens of Manitoba to find out what, in effect, their

feelings are about Autopac, which is the title given to the plan there.

It's rather interesting, Mr. Speaker, that we got to the

airport and we got in a taxi — the first thing we did was ask

the taxi driver what he thought of Autopac. He said that he had

been involved in three accidents in the last six weeks and he

thought Autopac was great. At that point we weren't too sure

that we were even going to make the hotel.

He felt that the deal which the taxi companies had been able

to work out was indeed an improvement on pre-existing

plans.

We did meet with many people everywhere we went. We went

down Portage with a tape recorder and asked questions just at

random of the different people who were on the street, without

any selection. We taped their answers and I have the

transcripts since I got back.

Someone comments on Portage and Main. I'll tell you it's no

fun standing with a tape recorder on Portage when the

temperature is zero. This was when the problem of my accent

arose. (Laughter).

The other problem, Mr. Speaker, was that I was wearing a

very big, long, heavy coat that I hadn't worn since 1958 in

Northern Ontario. My leader suggested that I was just about to

be arrested as being a Russian spy. (Laughter).

AN HON. MEMBER: Were you?

Interjection by an Hon. Member.

MR. WALLACE: Oh, he's the big fellow. I'm the little

guy.

Mr. Speaker, we did spend a hectic two whole days. We

visited the depots which have been set up to deal with car

inspection after accident. Everywhere we went we spoke to

individuals completely at random, from all walks of life and in

different locations, in the hotel and on the street.

I would like to just make a few specific points because they

relate very much to what has been promised of the B.C. plan

which I think in context has not been achieved in Manitoba.

The first specific point — and I think it is to be emulated

here in British Columbia, but the figures again have not been

quoted and this again I think is a tremendous defect of this

bill, that general policy is outlined in the bill without any

figures — but the first thing the Manitoba government did was

to increase the amount of money that a person pays for his

licence. It used to be $5 for two years in Manitoba and now a

male under 25 pays $25 for his licence. A male over 25 pays $10. I don't have the figure for the female, but she pays

slightly less than the male.

The point I am trying to make is that an additional fee has

been inserted which should be added on to any premium rates

that we are quoted, because it is

[ Page 1023 ]

indeed an additional fee associated with Autopac.

One principle I would agree with is that if this is to be

done, the Manitoba plan certainly adds on the fee, depending on

convictions. I understand the licence can go up to $300 in

Manitoba if someone has had several convictions. I see nothing

wrong in that at all.

The other very interesting thing is that the general

impression that we have been given, both here in British

Columbia and in literature from Manitoba, is that everybody had

had lower premiums. Surely if there's one central claim about

this particular bill here in British Columbia, it is that

people are going to have cheaper insurance, period. I haven't

heard anyone from that side of the House even suggest for a

moment that at the inception of the plan at least, disregarding

future inflationary costs or otherwise, that anybody will be

paying more for their insurance under the Government plan. If I

am mistaken on that point, I would like the Minister to answer

that question. Is it likely that anyone will have his premium

raised under the new plan?

The fact of the matter is that time and time again, when we

spoke to people in Manitoba, the one theme which came through — and as I say, I'll be happy to table transcripts if anyone

doubts this — is that certainly the people under 25 are getting

cheaper premiums. But, Mr. Speaker, you should talk to the

people over 25 in Manitoba. It seems to me that a very

substantial percentage of people over 25 are paying more for

their premiums than they did before Autopac.

The kind of comment I have here, and I won't bore you with

all the details, but this one answer we got here is from a

couple we met on the street.

"I am a young fellow, younger than the man you were just talking to, and my insurance is $160 a year.

It has gone up for me after the age of 25. I was just getting

down to paying a lower rate of insurance when all of a sudden

I'm now paying at least $30 more than I was paying before. The

money has gone into the over-25 bracket now. All the rates that

the people are paying now are covering the people that are

under 25 who seem to have and are not noted for having more

accidents all the time."

Another comment from another person, when we asked if people

under 25 were being subsidized by those over 25, he said:

"I don't feel that's right. Like I said before, we who have been without accidents for 15 years, our rates have

gone higher. With the ones that are just beginning, you know,

at one time they were higher but now they are lower. I don't

feel they should…"

this is a bit of a garbled answer, I

guess, but —

"…be like that $300 under 21."

I think he's meaning that it was certainly extortionate before, but I think

there should be some kind of levelling of the process.

We have many comments along this line.

Another person said that, "older people are footing the bill

for the younger people's accidents."

The other point that came across was that the drivers over

25 are pretty unhappy in Manitoba about not receiving credit or

consideration for a clean driving record. They felt, and many

of them said, that under private insurance from year to year,

as their record was clean and they had no accidents, they did

receive some consideration which no longer is granted under the

government plan. Of course on this question of at least having

some choice in regard to additional coverage, the interesting

thing was, when we looked into this, that the government does

compete with the private industry for additional coverage but

the rates from the government are higher than the rates

available under private insurance. I couldn't quite understand

that.

The fact of the matter is that, taking these many points

into account, there are many people paying more for their

insurance after Autopac than before.

I think in context I would say that we got the impression

that people were either pleased with it or displeased with it.

There were very few people we spoke to who were neutral. If

they were neutral, it was because they had had no experience of

accidents or they didn't drive very much. But it would seem to

me that about 50 per cent of the people seemed to think that

Autopac is a good plan and they were ready to praise it; and

there were almost as many — I think it was maybe 60/40 — who

said that they were displeased for the reasons I've

outlined.

I feel that there are two or three other principles which

are worth mentioning — which perhaps former speakers have

mentioned. But the question of the agent and the attitude of

government to the agent, I think is an unfortunate one. The

agents in Manitoba were told at the outset that there would be

no compensation whatever. But there were several agents who had

put out money to buy businesses not too long before the

inception of Autopac, and the government in Manitoba finally

agreed to pay some compensation.

I think the same situation certainly applies in British

Columbia. It's a tremendous dislocation for people, some

persons of middle or later years who have spent their life in

this particular business, to be suddenly told that their

business really is gone and that they can continue to work at a

reduced commission and under a situation where the government

can fire them without notice or without compensation.

Regardless of whether we agree or disagree with the basic idea

of the plan, it would seem to me if this is a socialist

government and really believes, as it says, in fair play and

respect for individuals and for small business, I would really

feel that it should take a second look at the idea of

[ Page 1024 ]

granting some compensation to agents.

AN HON. MEMBER: You don't think this government believes in

fair play, is that it?

MR. WALLACE: Well I'm just responding to the number of times

the present Premier has talked from this side of the House

about his concern for the little man, for the businessman — for

the individual person who is just trying to remain independent

and do his work well and contribute to society. That is the

image I have of many honourable agents in the insurance

business who are presently about to lose their livelihood.

AN HON. MEMBER: Don't pay attention to him, he's against

fair play.

MR. WALLACE: One other point which came out in Manitoba was the whole

question of service. I think I would try and lean over backwards to be fair

and say that many of the troubles which were described to us were the troubles

from the initiation of such an extensive plan. But there certainly were some

terrible examples of maladministration and confusion and long waits.

I think that the public of British Columbia should know that

once this plan begins, if it's modelled on the Manitoba plan,

they are then obligated to get the damaged vehicle to the

government centre. And there is not the same kind of service

where an adjuster can presently come to the vehicle. We learned

of lots of cases where it is very inconvenient or impossible

for the husband or wife, or both, to get the vehicle down to

the centre and therefore they have to be without the vehicle

for several days. This was a comment that we came upon

repeatedly, that the citizens felt that there had been, in

terms of convenience of service, a change which was to the

consumer's detriment.

The stations themselves seem to work well now that they've

got the initial wrinkles straightened around. But in terms of

financing, and I don't think we should keep mentioning this

fact that this bill which we're discussing in principle gives

no details about an enormously large financial enterprise. In

Manitoba, and certainly in Winnipeg alone, they built three

vehicle centres, and each one cost $1 million. If our

population in British Columbia is double Manitoba's, we must be

looking at several millions of dollars to create the centres

where the vehicles are taken to be surveyed and damage

appraised.

So that once again, we have no figures on premiums; we have no total figures

on whether it's $175 million or $135 million. We have no, even approximate,

costs of what the plan will be — what the cost of the plan will be to get it

started. In terms of dislocation of skilled people in the industry, we've had

no statement as to how many people the Minister expects to have to change their

job or be unemployed as a result of this plan.

One point I will make in fair play to the Minister. I'm

delighted to hear that there will be accurate, open financial

accounting, because I can assure the Minister that certainly

doesn't exist in the Manitoba system. I met people there who

have tried very hard to get a clear financial accounting of

Autopac, but there's something similar to the system that

exists in relation to B.C. Hydro in this province. You can

never really find out exactly what is happening.

The last point I think worth making is, Mr. Speaker, this

question of convenience to the customer. Some people in society

like to have their choice of paying more if the kind of service

they receive in return seems to them worth the extra money.

Even at this late stage of this bill, I still think that

society's wish in this respect should be considered by the

government. If there is some competition and some choice, there

are citizens who would be willing to pay more for what they

believe to be better service.

The overall plan we reject because of the basic principle I

mentioned at the outset. It leaves absolutely no choice to the

individual citizen. Furthermore, we reject the promise that it

will reduce premiums by 20 per cent. We reject the idea that it

will give better service to the consumer for the reasons I have

mentioned. We will continue to oppose this kind of legislation

which is based so much on giving the state complete, total

control over the affairs of individuals, whether it be auto

insurance or otherwise.

MR. SPEAKER: I recognize the Hon. Second Member for

Vancouver Centre.

MR. G.V. LAUK (Vancouver Centre): Thank you, Mr. Speaker, I

rise to support this bill.

Interjection by an Hon. Member.

MR. LAUK: That's right. Well he's expecting an appointment

to the bench soon and he's just practising.

MR. SPEAKER: Order please.

MR. LAUK: I'm sorry, Mr. Speaker.

You know we had a choice, or I suppose the Government had a

choice of not monopolizing the automobile insurance field, and

lowering rates only slightly, or monopolizing and lowering

rates substantially.

AN HON. MEMBER: How much?

MR. LAUK: Substantial. Mr. Speaker, the Member

[ Page 1025 ]

for Columbia River (Mr. Chabot) since Monday, since the Hon.

Leader of the Opposition (Hon. Mr. Bennett) returned, has been

unusually quiet. Have you noticed that? I think it's the old

saying "when the cat's away" and all that, you know.

Interjection by an Hon. Member.

MR. LAUK: I would say that the newspapers, Mr. Speaker, are

really substantially in favour of this legislation. I've been

going through my clippings in the last few months. The

Vancouver Province for example, and I'm only reading

editorial pages, where you get a good picture of the expression

and feeling of newspapers. The Vancouver Province ,

Thursday, January 11, 1973 says:

"It's stretching credulity for the industry to suggest it be

allowed to compete with the government on an equal footing so

the people can decide which is the more efficient. The

possibility of a clear comparison would be remote. Business has

always considered it unfair for government to compete with it

in specific enterprises because it has built-in advantages over

private enterprise. It doesn't need to make a profit, for

instance.

"Why should the auto insurance industry now consider it fair

for the government to compete against it? Too frequently the

industry did not meet the public's desire for reasonable rates

and service. That's why the government is moving in. Only in

wonderland can time be put back."

That's the Vancouver Province , January 11, 1973.

The Vancouver Province , Saturday, February 17, 1973,

the editorial:

"At a time of high unemployment in this province, it's good

to know that the government monopoly on auto insurance won't

leave present agents out in the cold. They will have until

October to apply to sell…"

Interjection by an Hon. Member.

MR. LAUK: It's right here, my friend, here's the evidence,

Here's the evidence of public support right here.

"They will have until October to apply to sell government

insurance. The huge amount of money that will be paid into the

fund indicates the hundreds of millions the government will

have to invest in public projects.

"The public safeguard in this, however, will be the provision

that all premium income and investment incomes will all stay in the auto insurance

corporation. The Crown's entrance into other insurance fields in competition

with private companies may, in time, offer interesting comparisons on rates,

service and so on. But the auto insurance is the focal point of interest. Its

success would do more to consolidate the Government in public opinion than anything

it has tackled to date. Its failure would be politically fatal."

"Insurance verdict awaits road test" — the Vancouver

Sun , Friday, February 23, 1973 — even the Liberal Party

organ, Mr. Speaker. It says: "Most people will probably accept

the Government's new scheme on trial. They have not been

satisfied with the performance of the private companies or with

the previous government's patchwork of ineffective regulatory

legislation. The proof will come in a year or so, when the

Government's insurance is on the road."

That's just a little tour of the local publications in

Vancouver as to the attitude that they have toward this car

insurance legislation. I can say quite clearly, Mr. Speaker,

that from my riding I've received several letters; and it's

almost 95 per cent in favour of government-run auto insurance.

I'm sure that my friends in the Opposition would have the same

effect.

Interjection by an Hon. Member.

MR. LAUK: Several letters, my friend. Mr. Speaker, we're

considering legislation today that is classic social

legislation. I'm proud to be a Member of the Government side

that is bringing in this legislation. I believe it demonstrates

clearly this Government's courage. It demonstrates our

commitment to bringing down rational and socially responsible

and progressive legislation.

All the aspects of this legislation in the field of

insurance are going to be well covered in discussions later on,

and so I'm going to take a different tack. The legislation has

been drawn, as I say, with great skill. Instead of talking

about the character of the legislation itself, I would like to

draw the attention of the House and the people of British

Columbia to something else.

I want to pay tribute to one of the great legislators of

British Columbia's history. The people of British Columbia owe

a debt of gratitude to this man for a monumental job of work

carried out in less than six months. I wonder if we appreciate

what a moment this is for him. I want to tell you a few things

about this man. At the same time, of course, I will be

recounting some important facts about the political and

intellectual struggles of the past 20 years — struggles this man

has shared in and played a central role in.

The way that he has contributed to our political life in

British Columbia is a tribute to the quality of life in this

province and to his own philosophical resources, his commitment

to the ideal of service in power and of service in the role of

loyal Opposition. Let me take this moment to inform the

Opposition of the day that when our Government was in

Opposition, they were profoundly aware of the significance

[ Page 1026 ]

of the ideal of loyal Opposition. I recommend that ideal for

the consideration of each Member of the Opposition today.

The legislation before us has been coming on for a long

time. Its birth in this session must make us think back over 20

years to the appearance of the man that I am talking about. It

makes me think beyond that point to the life that he led before

entering politics. He was born in Glasgow in 1914. He completed

his formal schooling there. He came to Canada in 1931. He

worked in several provinces before coming to British Columbia

in the midst of the Depression. He worked in mines and mills

and in the construction industry.

MR. SPEAKER: Excuse me, Hon. Member. Which part of the bill

does this relate to?

MR. LAUK: The

preamble, Mr. Speaker.

MR. SPEAKER: I hope you can cut the

preamble short because

the bill is now the property of the House and not of the Member

to whom you refer.

MR. LAUK: I wish to raise these important points, Mr.

Speaker, because I think they're long overdue.

MR. SPEAKER: Well, I think a general encomium is always

welcome by any side of the House, but not to a prolonged

degree. Because it's very hard then later to attack the Hon.

Minister. (Laughter).

MR. LAUK: All right. In conclusion, then, I say…

MR. SPEAKER: Well, bring it up to date at least.

(Laughter).

MR. LAUK: Well, I don't know how I can bring it up to date

without describing something about the man that I wanted to

talk about. Anyway, I'll succumb to your ruling, Mr. Speaker,

with a great deal of regret, I must say.

He once said, "I like building. It gives you a sense of

accomplishment. You start with a hole in the ground — sometimes

not even that — stake it out and then build something." He took

a fling at a business, by the way, Mr. Speaker, that gives him

at the surface glance something in common with his arch-foe

throughout his political career. He started a hardware business

at Commercial Street in Vancouver — a rather successful one. "I

found it interfered with my politics," he said later. It

was a great deal of an understatement.

Well, in any event, to make a long story short, he investigated the parties

of the day, Mr. Speaker, and he joined the CCF. He said that he felt the CCF

had a rational approach to our problems. We had just been through a depression

and a war. "I felt that we needed a firm object and a plan to get there." Now,

of course, everyone accepts the need for economic planning.

I raise these points, Mr. Speaker, because they have a great

deal to do with this bill that's before the House today. The

legislation before us now reflects the belief in the need of a

rational approach to politics and economic planning. There's

been a great hue and cry from the Opposition in the past few

days about how rigid and unbending this Government is.

I'm reminded of a statement given by the Hon. Minister of

Highways (Hon. Mr. Strachan) some time ago. He said, "Any

government or the people in power have to take a pragmatic

attitude. You shouldn't be tied to a set of ideals established

50 or 100 years ago. You make your decisions on the basis of

social and economic need. You keep an open mind and judge the

situation on the conditions and needs which exist at the

time."

That, Mr. Speaker, is not a definition of rigidity. He is a

man committed to what is rational, to what is just socially,

and to what is pragmatic. His political philosophy appears to

be grounded on one fundamental political belief: that men can

work together to improve the human condition, with patience,

with goodwill, with reason and with hard work. His great

example has made him respected by everyone who has come in

contact with him.

It is with that in mind that I have risen to give that kind

of speech today, Mr. Speaker. I would not choose anyone else

that I know of that is held with such a wide respect in this

community by politicians on all sides of the House. To him, the

word "politician" means a person who has studied the art and

science of government.

We do not always see the personal backgrounds of

politicians, Mr. Speaker, or those visions or events in a

personal history that lead to political conviction. I was

motivated to draw this conjunction of biography and political

history to your attention in a genuine belief that this

province has been fortunate in its politicians. None deserves

higher praise, in my opinion, than the Hon. Minister who brings

this legislation before this House.

Perhaps the most meaningful thing that could be said is what

he himself said many years ago in relation to this legislation.

He says he likes building — "It gives you a sense of

accomplishment to start with a hole in the ground — sometimes

not even that — stake it out and build something." This is what

he has done by bringing this legislation as one of the first

steps

[ Page 1027 ]

that he, as highways Minister, has achieved in this

House.

This man, who held out against impossible odds in the 1950's

and 1960's as Leader of the loyal Opposition as it then was and

provided — even admitted by the Premier of the day — a very

strong Opposition at a time when it was badly needed — we may

be permitted the humble observation that that sounds like what

he has built over the years has culminated in the Automobile

Insurance Act .

MR. SPEAKER: The Hon. Member for West Vancouver–Howe

Sound.

MR. L.A. WILLIAMS (West Vancouver–Howe Sound): Thank you,

Mr. Speaker. I intend to oppose this motion — there's no doubt.

But before directing my remarks specifically to the motion, I

would like to say to the Hon. Second Member for Vancouver

Centre (Mr. Lauk) that any of the remarks that I made during

the course of his contribution to this debate must not be taken

in any way to suggest that I hold the Hon. Minister of Highways

in any less esteem than does the Second Member for Vancouver

Centre. (Applause). No, I haven't got to the "but" yet.

I have watched him in this House. I have tried to emulate

some of his qualities. He is a person who understands politics

and he is a person who understands the science of government. I

suppose it is because of that that I express some surprise that

he would have brought forward a bill such as we are debating

today.

He said, in the course of his remarks yesterday, and I have

Hansard "blues" to refer to, a couple of things which I

think indicate how this Government has got off the track.

When dealing with the report of the Wootton commission on

automobile insurance, he said:

"Although the commission recommended revolutionary changes in the method

of compensating victims of automobile accidents and in premium writing, its

most significant recommendations were not enacted into law. Instead, motor vehicle

was made compulsory. This meant that the motorists were compelled to obtain

insurance from institutions that were entirely out of control of the public,

aside from the regulatory commission." And for the benefit of Members I repeat

"aside from the regulatory commission."

Again, on page 107 of the "blues," the Minister, when

speaking about the giving of service, said:

"Only Government has the clout and is willing to undertake the burden of overcoming these

difficulties."

Mr. Speaker, this is where I depart from the Minister in the approach that

he has taken to the problem as shown in the words of the bill. It is the responsibility

of government to govern. That was the mandate, Mr. Speaker, that was given to

this Government on August 30, 1972 — to govern this province and to use the

regulatory powers of government to ensure, if the insurance companies were indeed

not carrying out the responsibilities under the law, that they be made so to

do.

That's the responsibility of government. That's

governing.

It has been suggested in the course of this debate and

outside of this House that somehow or other this Government in

August of 1972 was given a mandate to bring in this kind of

legislation. That is not true. Your mandate was to govern, and

truly the Government had the clout to do what needed to be done

in carrying out the recommendations of the Wootton commission

report.

Certainly it was not a mandate to do what the Government

under this legislation is doing to the insurance agents, to the

employees of insurance agents, to the employees of insurance

companies in this province — little people that each Member of

this assembly knows in his or her own community. Insurance

agents who have worked diligently and responsibly in providing

the service that they can give with the skills that they can

bring to that particular task who have raised their families,

served on hospital boards, on municipal councils and on school

boards, taken their full role in each of the communities of

this province, are the ones who are directly affected by this

legislation.

The Minister says, "Oh, we're going to provide lower

premiums and better service." The Government could have ensured

that if the premiums were too high they could be lowered under

the regulatory powers the Government has.

The Government could have ensured, if proper service was not

being given, that it be given. They could have ensured at the

same time that these small independent businessmen in the

Province of British Columbia were not faced with extinction as

they are now. People who have worked, many of them for a

quarter of a century or more, in establishing their businesses,

providing for the day when they would no longer be able to

actively perform their employment, providing for their

retirement — this legislation wipes all that out.

Completely.

Any goodwill, any assets in the capital sense that they may

have created through their own efforts, through the service

that they have given to the community through their business,

is now destroyed by this legislation. They are faced with the

responsibility of continuing their operations; yet they know

that they do not have the revenue potential necessary for that

purpose.

What faces them? You have a small agency with two men

working and three or four employees. Which

[ Page 1028 ]

ones do they fire? How many do they put out of work over the

entire province? 1,000? 3,000? 5,000? The Minister doesn't

know. All the Minister knows is that he is going to create a

bureaucracy which may employ 1,000 or 1,200 people. In how many

locations, one doesn't know. Mainly, I suspect in the City of

Victoria.

What about all those employees of agents throughout this

vast province who will suddenly find their livelihood

terminated because of the effect of this bill? That's why we

oppose it — because the Government has moved in solidly to take

over a commercial enterprise, when all the Government had to do

was to do what the former government would not do, and that is

to regulate this industry, as the Wootton royal commission

recommended be done. That's all they had to do.

The insurance agents, the insurance companies function in

British Columbia, Mr. Speaker, under licence from the

government. That's where the government has its control over

the industry, and not to exercise that control is an abuse of

power. It derogates from the kind of responsible government

which I thought we would have had whenever the Minister of

Highways (Hon. Mr. Strachan) speaking in this House in

Opposition recommended what should be done to improve the

condition of the citizens of this province.

In the course of the Minister's remarks yesterday, he said

it was impossible to indicate in any way what the real

advantage would be to the…

Interjection by an Hon. Member.

MR. WILLIAMS: O.K. When you close the debate. I notice you

making notes. If I don't read you correctly then you can

correct it.

He said it wasn't possible to say what the premiums were

going to be, and that no insurance company ever could say in

advance what the premiums would be. Mr. Speaker, that indicates

that the Hon. Minister doesn't know what he is talking about.

He simply doesn't know what he is talking about.

If the Minister had taken the time to study the insurance

business and the actuarial practices that have to be employed

in the fixing of rates, he would recognize that it is not one

year, not two years, but three years after the accident rate is

known before the full implications of the loss resulting from

those accidents can be employed accurately in any actuarial

calculation.

Therefore, all the Minister has to do to forecast what the

rate will be in 1974 is to turn his staff to work on the

accident rate of 1970-71. That will clearly indicate what the

premiums will be starting next March, 1974.

Mr. Speaker, the Members should know that all of the computer facilities of

this Government are at the disposal of the Minister and his advisers who are

dealing with this insurance problem. They have in their control all of the facts

and the means of translating those facts into a clear indication of what the

rates will be; yet he said to us yesterday, "No one can tell you in advance."

I suggest to you, Mr. Speaker, that the reason the Minister

will not tell us now what the rates will be in 1974 is because

he knows that they will not be significantly lower than the

rates that are currently charged. Why is that?

The Minister, in his remarks yesterday, spoke about what

happens to the premium dollar in British Columbia — how much of

it goes for losses, et cetera. I don't intend to repeat those

statistics, which are in Hansard for everyone to

read.

Then he said that aside from profit there were wastes of

money in senseless advertising programmes; yet what do we find

that the Government programme is going to do? Well again

Hansard says, and the Minister's words are:

"The plan will be self-sustaining. All services rendered

by any department of government or otherwise will be paid for from moneys belonging

to the plan. There's item of expenses number one. Payment of all losses. Item

of expenses number two. And expenses of administration, number three."

Does the Minister suggest that he doesn't know what the

expenses of administration will be?

"In administering any plan of the Act…." Hansard goes on to quote the Minister,

"…the corporation will assume responsibilities relating to the reduction

and the frequency of accidents as well as the cost." So this is another service.

We are going to get into assuming responsibilities of reducing the frequencies

of accidents as well as the costs which flow from accidents. Another item of

expense.

"It will be concerned with highway safety and with a joint carrying out

of safety programmes and education with the Motor Vehicle Branch and others."

Another expense to the plan.

Next. "There will be a continuing programme of research into

more effective ways of distributing the economic loss

consequent upon traffic accidents." Another expense of the

plan.

"The corporation will be authorized to construct and maintain one or more

repair shop to study repair techniques "Another expense of the plan. A testing

facility by which the Minister hopes to gauge the performances of those who

are in the private business of repairing automobiles.

Of course, the corporation, with that experience, will be

authorized to negotiate with repair shops for the purpose of

arriving at fair and reasonable rates. Based upon some of the

other examples of the programmes of this Government, we can

probably

[ Page 1029 ]

assume that they will take over the repair shops if they

can't negotiate fair and reasonable rates.

All of these expenses are going to be taken out of the

premium dollar. I suggest that you consider the existing losses

over which the Government and its plan have no control. The

losses paid for personal injuries — the Government and the plan

have no control over that. The losses in the cost of repairing

motor vehicles — the Government has no control over that. They

will continue and all of the other expenditures will be taken

out of the remainder. Additional expenditures, administrative

costs, costs to run the whole bureaucracy which will be built

up around this, will all come out of this self-sustaining

plan.

That's why the Minister doesn't want to tell us what the

rates will be next year, because there will be no significant

reduction.

The Minister was talking at length yesterday about what the

situation was in Saskatchewan and Manitoba. If the Minister has

devoted himself to this subject, as he must have, in bringing

forward this bill — or maybe he didn't. Maybe this sort of

rubbed off a little bit on him on the way past. Maybe the

remarks he read yesterday in this House were prepared by

somebody else in his department and he doesn't really

understand.

If he doesn't understand, he should know that there is no

method of comparison between the rates which are charged in the

Provinces of Saskatchewan and Manitoba with what will be

charged in the Province of British Columbia. We have different

factors, far more motor vehicles — and the Minister knows the

difference — far different accident frequency rates, far

different costs of repairs, a different standard by which

personal injury claims are resolved.

AN HON. MEMBER: Right on.

MR. WILLIAMS: All of which affect the losses which must be

paid by this plan. All, Mr. Speaker, which affected the private

sector when it was involved, as it is today, in the operation

of the insurance programme in British Columbia. There is no way

they can avoid those fixed cost factors in this plan.

But the Member is quite right, maybe it will be hidden

someplace. Maybe it will be possible, in spite of what the

Minister said yesterday, that moneys will need to be made

available to carry some of these responsibilities outside the

plan. I'm sure the Minister, when he rises to close this debate

later tonight or early tomorrow, will be sure to restate that

it was going to be self-sustaining.

Well, it was to be self-sustaining in the Province of Saskatchewan. But they

found ways. In the remarks yesterday, it seems to me, Mr. Speaker, some of the

ways of shoving off some of the costs from the plan itself, to be paid for out

of general revenue, are also disclosed in what the Minister said. I refer to

it again: "All services rendered by any department of government or otherwise

will be paid for from moneys belonging to the plan."

If the Department of Highways, responsible for this

insurance plan, engages the service of the Department of the

Attorney General, truly will the plan pay for all of those

services? Truly will it pay? How are you going to determine the

extent to which the services that are rendered by other

departments contribute to the plan and are therefore paid for

out of the revenues of the plan?

Expensive administration. How much of the general government

administration expense will be charged to the plan? We have

another bill dealing with the insurance corporation which is to

be debated sometime soon. That is where the big administration

expense is going to be. Is that going to be paid for from the

plan? We are not certain. But it is a way, Mr. Speaker, of

ensuring that all costs involved with insurance are somehow or

other dealt with outside the plan.

Therefore, it is not really possible for the Minister to

stand in this House and assure the Members here and citizens at

large that this will be a self-sustaining plan, and that all of

the costs, in order to keep the premiums down, will be paid for

out of the plan. Mr., Speaker, this might not be of such great

concern, except that you understand the tremendous power that

will be vested in the Insurance Corporation of British Columbia

and therefore in the Minister, who at the moment would appear

to be playing a major role in the functioning of that

corporation.

If it is possible to slide some of the costs out of the plan

and therefore make rate reductions, could it be that some

months in advance of an election there could be an announcement

of reductions of premiums for certain classes of drivers by

reason of the successful operation of the plan?

AN HON. MEMBER: Oho!

MR. WILLIAMS: Is that a possibility? That is a possibility,

Mr. Speaker, a possibility which would not exist if government

merely exercised its regulatory power over private insurance

companies and private insurance agents.

It is for that reason that I oppose this legislation. It

places the Government in the position of controlling a plan and

utilizing the plan for narrow political purposes such as we

have never seen in this province before.

As I said at the beginning of my remarks, I have the

greatest respect for the Minister and I know that this would

never cross his mind. He has made "politician" into an

outstanding word in this

[ Page 1030 ]

province. But maybe others might be able to encourage the

abuse of the power which this type of legislation places in the

hands of government.

I don't hold any brief for the insurance companies. None at

all. I believe they have improperly discharged their function,

and that they have failed the people of British Columbia. They

have been encouraged, however, Mr. Speaker, in that failure by

the failure of the former government also to exercise the

regulatory powers to govern in this respect. But this new

Government came in, I would have thought we would have seen

government and regulation brought to bear upon this particular

problem. As I said, that was their mandate. I oppose this bill

because they have denied that mandate.

MR. SPEAKER: The Hon. Minister of Health Services and

Hospital Insurance.

HON. D.G. COCKE (Minister of Health Services and Hospital Insurance):

Mr. Speaker, I rise briefly in this debate, particularly in view of the fact

that I had the pleasure of listening to a very fine debater across the floor,

who indicated that he was surprised when the NDP got in power that we would

automatically exercise control of the insurance industry and thereby carry out

our obligations to those who voted us in, Mr. Speaker.

Well, if naivety is the height of the performance this

afternoon, that was the height of his performance, because of

the fact that the voters voted us in to do this very thing that

we are doing in this particular bill, and that was to provide

them with government car insurance. Mr. Speaker, we know the

words. We've attended the conventions. The people in this…

AN HON. MEMBER: It's in the programme.

HON. MR. COCKE: It's in the programme. It's been discussed

by everyone…

Interjections by some Hon. Members.

MR. SPEAKER: Order, please.

HON. MR. COCKE: It's been discussed on every platform that

every NDP candidate and Member has been on for the last number

of years.

Last year in this House all those Members were here, even at

5:30 in the morning, when we were discussing the Attorney

General's estimates and we discussed this whole question of

just exactly what we would do. There was no misunderstanding

out there. No misunderstanding whatsoever.

Eighty-four per cent of the people of this province demanded government car

insurance, and do you know why they did? Just because of what that Member sa