1985 Legislative Session: 3rd Session, 33rd

Parliament

HANSARD

The following electronic version is

for informational purposes only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

MONDAY, JUNE 3, 1985

Afternoon Sitting

[ Page 6381 ]

CONTENTS

Vital Statistics Amendment Act, 1985 (Bill 44). Hon.

Mr. Nielsen

Introduction and first reading –– 6381

Notaries Amendment Act, 1985 (Bill 47). Hon. Mr. Smith

Introduction and first reading –– 6381

Cooperative Development Act (Bill M213). Mr. Blencoe

Introduction and first reading –– 6381

Employment Cooperatives Act (Bill M214). Mr. Blencoe

Introduction and first reading –– 6381

Oral Questions

Advertisement for student employment at Expo. Mr.

Skelly –– 6382

Hazardous chemicals. Mrs. Wallace –– 6382

Victoria Mortgage Corp. Mr. Blencoe –– 6383

Mr. Lauk

Student mental health services. Mr. Barnes –– 6383

Tabling Documents –– 6384

Consumer And Corporate Affairs Statutes Amendment Act,

1985 (Bill 40).

Committee stage –– 6384

Mr. Lauk

Third reading

Low Interest Loan Assistance Revolving Fund Act (Bill

27).

Committee stage –– 6384

Mr. Williams

Third reading

Industrial Development Incentive Act (Bill 46).

Committee stage –– 6385

Mr. Williams

Mr. Lockstead

Mr. Passarell

Third reading

Committee of Supply: Ministry of Consumer and Corporate

Affairs estimates. (Hon.Mr. Hewitt)

On vote 15: minister's office –– 6389

Hon. Mr. Hewitt

Mr. Lauk

Mr. Williams

Ms. Brown

Mr. Macdonald

Mr. Cocke

Mr. Reynolds

Mrs. Wallace

Mrs. Johnston

Mr. Michael

Mr. Barnes

Royal assent to bills –– 6405

Appendix –– 6405

MONDAY, JUNE 3, 1985

The House met at 2:05 p.m.

Prayers.

HON. MR. GARDOM: Mr. Speaker, I would ask all members to bid

a very cordial welcome to Mr. Sam Fromowitz, deputy director of the

office of Canadian affairs in the United States State Department, who

is here in company with the U.S. consul, our good friend Mr. George Ogg.

MR. STRACHAN: In the galleries today is an eminent Prince

George broadcaster from CJCI. Would the House please welcome Miss

Mary-Ann McKenzie.

MR. MacWILLIAM: I have a few introductions to make to the

House today. In the gallery today are a number of executive members of

the Licensed Practical Nurses' Association of British Columbia. I'd

like the House to welcome Elinor Turrill, president of the LPNA, from

the town of Vernon in North Okanagan; from a town just south of Vernon

— I think it's Kelowna, a suburb of Vernon — Miss Terri Ambler, who is

corresponding secretary of the LPNA from the city of Victoria, Laura

Lewis, secretary of the Victoria

chapter and the new

chapter convener

of the LPNA; and lastly, Beryl Chapman of Victoria, second

vice-president of the provincial association. Would the House please

welcome these ladies today.

HON. MR. McCLELLAND: I'd like to make an introduction, if I

may. I'd like to introduce two people in the gallery who are here from

Calgary: Mr. Bob Muir and Mr. George Lechner, former chairman of the

B.C. Petroleum Corporation, who works in Calgary but spends his quality

time in Aldergrove in my constituency. They are both attempting to

start an exciting new business in British Columbia.

Introduction of Bills

VITAL STATISTICS AMENDMENT ACT, 1985

Hon. Mr. Nielsen presented a message from His Honour the

Lieutenant-Governor: a bill intituled Vital Statistics Amendment Act,

Bill 44 introduced, 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.

NOTARIES AMENDMENT ACT, 1985

Hon. Mr. Smith presented a message from His Honour the

Lieutenant-Governor: a bill intituled Notaries Amendment Act, 1985.

HON. MR. SMITH: I should make a short statement, if I could,

as to what this is about. There seems to be a great deal of interest in

this chamber, Mr. Speaker.

The notaries' society is one of the many self-governing professions

that provides valuable services in the province, and this bill provides

for the establishment and maintenance of a Notaries Foundation. It

includes several amendments which will improve the effectiveness of

notaries.

The Notaries Foundation will be similar to the Law Foundation,

serving as a vehicle for the collection and disbursement of moneys

earned from the interest of general client trust accounts. These

accounts are used when the amounts being held in trust for clients are

too small or are being placed for short and indefinite periods, making

it impractical to establish separate trust accounts.

The interest from these moneys now, of course, accrues to the

benefit of the chartered banks, which is what my friend from Vancouver

Centre would like. Now these moneys are, under this bill, going to be

used for beneficial public purposes. For instance, about half of the

Notaries Foundation money will be earmarked under the amendments for

legal aid, and the rest for legal education, research, education for

notaries and law libraries. This will be a very beneficial change.

There will be some procedural changes as well, dealing with notaries'

vacancies and making it more possible for disciplinary activity.

Bill 47 introduced, 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.

COOPERATIVE DEVELOPMENT ACT

Mr. Blencoe presented a bill intituled Cooperative Development Act.

MR. BLENCOE: A brief explanation, Mr. Speaker. The bill calls

for the creation of a cooperative development office in the Ministry of

Industry and Small Business Development. This office would assist the

development of worker-owned enterprises through feasibility studies and

advice on incorporation as a cooperative. The office would ensure that

co-ops benefit fully from existing business assistance programs,

especially those which extend financial help through low-interest loans

and loan guarantees.

Bill M213, Cooperative Development Act, introduced, 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.

EMPLOYMENT COOPERATIVES ACT

Mr. Blencoe presented a bill intituled Employment Cooperatives Act.

MR. BLENCOE: In explanation, Mr. Speaker, the bill intends to

facilitate the establishment and viability of employment cooperatives.

The bill refers to employment cooperatives, because the primary

function of those co-ops is to provide employment and profit to the

workers who own and operate them. The bill updates the Cooperative

Association Act, to provide for an employment co-op as a distinct type

of cooperative enterprise. The proposed bill would allow for

distribution of dividends according to labour contributions, and it

will permit employees to serve as the majority of the board of

directors of the enterprise. The bill brings to the workplace the

democratic principle of self-government, combined with the principle of

basing financial rewards on the value of each member's labour.

[ Page 6382 ]

The bills ensure access to development inputs and support equal to

that available to other businesses. The proposed bills create the

climate in which innovative co-op enterprises can develop throughout

B.C. Both bills represent a community-based economic development

strategy, which is very different from the current approach we have in

the province of British Columbia today.

Bill M214, Employment Cooperatives Act, read a first time and

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

next sitting of the House after today.

[2:15]

Oral Questions

ADVERTISEMENT FOR STUDENT

EMPLOYMENT AT EXPO

MR. SKELLY: Mr. Speaker, a question to the Minister of

International Trade and Investment (Hon. Mr. Phillips), or his

temporary replacement. In the weekend newspapers the government placed

a large display ad which appeared to offer job opportunities for

students at the B.C. Pavilion at Expo. The fine print of these ads

reveals that the positions are not available until April 1986. Would

the minister advise the House what the purpose is of running the ads at

this time?

HON. MR. McCLELLAND: Mr. Speaker, on behalf of the minister,

I'll be happy to take that question as notice and make him aware of

that question as quickly as possible.

MR. SKELLY: You obviously have lots of time.

Perhaps, Mr. Speaker, a supplementary to the Minister of Labour. In

view of the serious problem of youth unemployment in this province,

with youth unemployment running at approximately 22.5 percent and

67,000 young people in British Columbia out of work, will the minister

advise the House why he has not increased the funding to student

employment programs this year, rather than making the promise for next

year?

HON. MR. SEGARTY: Mr. Speaker, I understand that

supplementaries to questions taken on notice are out of order.

MR. SKELLY: A new question for the Minister of Labour.

MR. SPEAKER: Now it's a new question, hon. minister.

HON. MR. SEGARTY: Mr. Speaker, I want to say that the

in every way to provide new opportunities to get our young people

employed. It is without question a problem across our province and

across our country, and both governments are working hard to try to

resolve that serious problem at this particular time.

MR. SKELLY: A supplementary to this minister, Mr. Speaker. I

think the evidence of that cooperation is obvious when this government

is spending less than one-third of what the NDP government spent on

student summer employment ten years ago.

Why is the government advertising jobs now that won't even commence

until April 1986? Why are you spending money on ads now when you could

be using that money to create student summer employment, so that some

of those students could work this summer and be able to afford their

tuition fees to go through school next year, so they'll be eligible for

these jobs in 1986?

the province of British Columbia cooperated this year in the summer

employment program and cut out a great deal of the duplication that

existed in previous years. The ad was placed, as I understand it, by

the B.C. Pavilion and not the government of British Columbia. It would

be important, from the B.C. Pavilion point of view, to be able to put

on a training program for people who would wish to seek employment at

this particular time, and be able to plan what they will be able to do

next year in terms of employment opportunities at the pavilion.

MR. SKELLY: A further supplementary. If the government isn't

responsible, why do they have the minister's name on it? I can

understand that that minister might be not directly related to this

government and a bit of a loose cannon. But in view of the cooperation

that the minister is talking about, Mr. Speaker, and the fact that

there are 67,000 young people out of work in British Columbia now — a

22 percent unemployment rate among young people up to the age of 24

years — what impact will the federal and provincial cooperation that

the minister is talking about have on that number? How many young

people does he estimate will be out of work in this province after the

impact of his program, which is one-third the size of the NDP program

ten years ago?

HON. MR. SEGARTY: Mr. Speaker, I think the objective of our

among our young people in British Columbia and across the country. What

we need from the opposition and from their members in Ottawa is support

for the concept and not lip-service.

HAZARDOUS CHEMICALS

MRS. WALLACE: During the past week we have seen a series of

unrelated illnesses and possible death that may have been caused by

spraying with various chemicals: Roundup, MCPA, Amine 64 and

agricultural sprays. What action has the Minister of Environment

decided to take to ensure the safety of British Columbians against

these hazards?

HON. MR. PELTON: I thank the hon. member for the question. I

think two incidents are being referred to — two that I am aware of at

this point in time. I'll deal with them separately.

In the case where a child died in North Vancouver, we in the

ministry do not believe it is linked to the spraying, but we are very

concerned because all of the children who were involved in the little

cucumbers may contain some toxic residue from spraying. We've become

involved in this, as have Health and Welfare Canada and the Ministry of

Agriculture and Food, and we're looking into the matter. I'll be

pleased to bring further information back to the House when it becomes

available to me.

[ Page 6383 ]

The other matter that the member referred to is under investigation

in my ministry at the moment, and I'll take that one as notice and

bring an answer back later on.

MRS. WALLACE: Last night I watched a television feature which

indicated that the fish in the Great Lakes are subject to cancer —

cancer of the liver, cancerous tumors — because of chemicals in the

water. My question to the minister concerning all of these problems

with chemical use — it's becoming just a proliferation of chemicals —

is: has he decided to appoint or establish some kind of review body

which will look into both research and licensing of chemicals in

British Columbia, rather than allowing the haphazard situation that's

presently in existence in Canada and the United States?

HON. MR. PELTON: The answer is no at this time.

VICTORIA MORTGAGE CORP.

MR. BLENCOE: I have a question for the Minister of Consumer

and Corporate Affairs regarding Victoria Mortgage Corp. Has the

minister determined why Victoria Mortgage Corp. is not registered under

B.C. legislation as a mortgage broker, even though it is publicly

advertising itself as a mortgage corporation?

HON. MR. HEWITT: I believe I followed the question correctly.

It is a mortgage corporation, and it is registered as a mortgage

broker. Maybe he could clarify it for me.

MR. BLENCOE: The question is that it's calling itself a

mortgage broker, but it is not registered under B.C. legislation as

such. I want to know if you have conducted an investigation to

determine why it is calling itself such when it clearly isn't, under

legislation.

HON. MR. HEWITT: I have had no information from our

superintendent of brokers as to whether or not Victoria Mortgage Corp.

is acting in contravention of any legislation or regulation. I assume

that all their necessary filings have been done and that they have met

all the requirements under the mortgage brokers legislation, but I will

take the question as notice and ask my superintendent to report back.

MR. BLENCOE: I think that when you discuss this with your

superintendent you will find that they are not registered in B.C. as a

mortgage broker, although they advertise themselves as such.

On a supplementary, Mr. Speaker. I obtained a copy of the Victoria

Mortgage Corp. pamphlet which advertises as follows: "Secure,

high-yielding debenture certificates: our debentures are similar to

term deposits." The concern is that this could be false advertising in

terms of utilizing the words "secure" and "similar to term deposits."

Is the minister prepared to recognize that these statements are

misleading at best? Has he decided to investigate?

MR. SPEAKER: Is the member seeking a legal opinion, hon.

member?

HON. MR. HEWITT: Mr. Speaker, first of all, just to go back

to the first part of his question, he may find that although the

corporation isn't registered, it may well be that all staff members are

registered as brokers, as employees of the corporation.

As to the other, although the member was in my office last week, he

didn't advise me of these matters, though they may have just come to

his attention. If he'd supply me with them, I'd like to look at them. I

can tell him that there are meetings going on — I believe today or

tomorrow morning — with the auditors of Victoria Mortgage Corp. and the

management, the people who operate it. Some of the questions that he

raised in my office will be answered at that time, I believe.

MR. LAUK: Supplementary to the Minister of Consumer and

Corporate Affairs. Many people who have invested in these so-called

secure debentures have requested of the officers of Victoria Mortgage

Corp. a full accounting, and that has been refused so far. Has the

minister decided to take action with respect to disclosing the real

financial affairs of this corporation so that the debenture holders

know what their position is?

HON. MR. HEWITT: The member for Victoria raised that same

question last week, and he asked if I would investigate it. I did. I

talked to the superintendent of brokers, and he advised me that because

there was a concern about getting audited statements there was a

meeting scheduled with the auditors either late today or first thing

tomorrow morning, and he would be reporting to me immediately following

that meeting.

STUDENT MENTAL HEALTH SERVICES

MR. BARNES: A question to the Minister of Education. The city

health officer in Vancouver has noted that the number of students

experiencing social mental difficulties is sharply increasing: at the

same time, preventive services are being reduced. Has the minister

investigated the virtual disappearance, under the government's

restraint program, of professional help for students with mental health

problems?

HON. MR. HEINRICH: Mr. Speaker, I am not in a position to

give a specific answer to the member's question. I will take it as

notice and bring the appropriate answer back to the House when it is

available. To date I have not been advised of any particular problem.

It seems to me there is a fair amount of money in the Vancouver School

District budget to handle some of these matters. I know they are being

addressed by the official trustee.

MR. BARNES: While the minister is investigating, I would

point out to him that students whose families are facing the crunch of

poverty are being left high and dry by the government's restraint

program, which has cost thousands of jobs, has frozen welfare rates and

has now eliminated professional care for students in trouble. I hope

that when the minister does his investigation, he will restore the

funding for mental health services.

After his investigation, will the minister undertake to assure the

House that the funding for mental health programs will be restored?

HON. MR. HEINRICH: Mr. Speaker, I took the question as

notice. The budget has been set. The amount of money available to the

district is adequate. It's ample, as a matter of fact. I told the

member that I would look into the particular

[ Page 6384 ]

concerns that he raised with the first part of his

question, which I took as notice. I don't know what the ramblings were

on the second part.

[2:30]

HON. MR. BRUMMET: Mr. Speaker, subsequent to my estimates

debate last week, I would like to table a list of the board of

directors of Gibson Pass Resort Inc., the operators of Manning Park.

I've been given to understand that one of the directors is a member of

the NDP executive. Perhaps the opposition could check that out for me.

Leave granted.

Orders of the Day

HON. MR. GARDOM: Committee on Bill 40, Mr. Speaker.

CONSUMER AND CORPORATE AFFAIRS

STATUTES AMENDMENT ACT, 1985

The House in committee on Bill 40; Mr. Strachan in the chair.

section 1.

MR. LAUK: There's a phrase in

section 1, Mr. Chairman, that

causes me a modest amount of concern, and that is the phrase:

"seriously misleading." I wonder if the minister has received a legal

opinion with respect to that phrase, and whether or not it has been

judicially defined. What does he understand the courts will find, under

these curative provisions, as seriously misleading?

HON. MR. HEWITT: Mr. Chairman, the curative provisions are

designed to ensure that minor errors in the completing or filing of the

documents do not invalidate the documents or impair their effects in

any way. It's only when in the court — I assume, Mr. Member, it would

be a situation where the court had to deal with this matter — the

statement of particulars was challenged that such an error was

seriously misleading. Then, of course, if that was the case the court

could rule that it be put aside.

I think you asked about legal opinion. Yes, we had that legal

opinion, and it was the response from the learned people who do the

advising of politicians — namely the lawyers — that it would be an

issue which the court would decide whether it was seriously misleading

or not.

MR. LAUK: Arising from that, could the minister indicate

whether it is the policy of the government, with respect to the

introduction of that phrase, that the Legislature does not intend to

preclude a court from finding that a mortgage document fails if it is

misleading on any one of its major terms or, to put it another way,

that it would fail if the statement of particulars misled on one of the

major terms — in other words the normal legal terms — of a mortgage?

HON. MR. HEWITT: Mr. Chairman, I'm not sure I can respond to

the member's question in the detail he would like, but I am aware that

it is uniform with other legislation in the western provinces and that

it also follows the recommendations with regard to these matters from

the Canadian Bar

Association. Whether or not it sets aside a contract on one of a number

of items contained within the statement of particulars, I cannot say. I

think the test is in the court. If the individual who is affected wants

to challenge it, and he does and it's found to be seriously misleading,

then the document fails.

MR. LAUK: The problem that I have, Mr. Chairman, is that the

court, in deciding whether or not the intention of the legislation was

to uphold a document even though one of the major terms was seriously

misstated within the particulars filed with the document, looks to the

intention of parliament. All I'm trying to get from the minister is: is

it the intention of the government to allow a document to stand, even

though there's a misstatement in the particulars, unless that

misstatement is to a fundamental term of the mortgage document?

HON. MR. HEWITT: Mr. Chairman, I think we're approaching the

same problem, only from different ends. I'm saying that if the mortgage

document, the statement of particulars, that is now looked to is in

error — but a reasonable error; not one that is seriously misleading —

the statement of particulars and the mortgage document stands. Where it

is determined, first of all by those affected, that it is so serious

that they wish to challenge it, then they challenge it, and if the

court finds it seriously misleading, then the document can fail. I'm

not sure, Mr. Member, how much further you want to go beyond that, but

it does indicate that we don't want to see these documents fail, if you

will, or the mortgage to be put in jeopardy because of a minor error.

So we've said it must be identified as a serious error and it must be

determined by the court.

Sections I to 12 inclusive approved.

Title approved.

HON. MR. HEWITT: Mr. Chairman, I move the committee rise and

report the bill complete without amendment.

Motion approved.

The House resumed; Mr. Speaker in the chair.

Bill 40, Consumer and Corporate Affairs Statutes Amendment Act,

1985, reported complete without amendment, read a third time and passed.

HON. MR. NIELSEN: Committee on Bill 27, Mr. Speaker.

LOW INTEREST LOAN ASSISTANCE

REVOLVING FUND ACT

The House in committee on Bill 27; Mr. Strachan in the chair.

section 1.

MR. WILLIAMS: On the question of the fund, could the minister

advise us of the details in terms of the amount of the fund, Mr.

Chairman?

[ Page 6385 ]

HON. MR. McCLELLAND: Mr. Chairman, as of March 31, 1985, the

fund will have a value of approximately $25.3 million.

MR. WILLIAMS: So that was $25 million unallocated and

available. Is that correct'?

HON. MR. McCLELLAND: It was certainly available. As the

member will know, this program was set up, first of all, as a straight

loan program. It was decided that it would be put into a revolving fund

so that the program could take advantage of the repayments that were

coming in. We ran into some difficulty with the auditor-general. This

really makes the fund legal under the new Financial Administration Act.

It has been operating for some time. But that money is certainly

available to be allocated.

Section 1 approved.

MR. CHAIRMAN: It is the Chair's opinion that

section 2 will

include the schedule, since that's where it's mentioned.

section 2.

MR. WILLIAMS: We're dealing here with low-interest loan

assistance for business in the province. One should really stop and

reflect on the state of small business in British Columbia at this

time, and on the unavailability of funds for small business generally.

You check with any small businessman; they'll check with your

department, ask about help in terms of small business, and generally it

just isn't there. The pattern is really there to see. The fact that we

haven't made funds available to the small business sector on any scale

is apparent. It's apparent in our unemployment figures; it's apparent

in our bankruptcy figures, and the like. The projections this year for

bankruptcies are something like....

HON. MR. McCLELLAND: This sounds like second reading.

MR. WILLIAMS: This is second reading?

Interjection.

MR. WILLIAMS: Oh, I see.

The question of a low-interest revolving fund, and having it

available for those who need the funds, is certainly the core of the

statute.

Interjection.

MR. WILLIAMS: That may be, but it is the core of the statute.

The fact is that this administration has not been providing the

funds that are needed in this sector — throughout a period of high

interest, and throughout a period of slack demand created by government

policy; through the spinoff problems of a restraint program that has

been disastrous for the small business community, as much or more than

anything in the province.

HON. MR. McCLELLAND: On a point of order. Mr. Chairman, I

know that member thinks that he can come in at any time during debate

in this House and just do anything he wants, but it gets a little

tedious after a while. This is not second reading. We are not debating

the principles of this bill; that was done last week. The member had an

opportunity last week to make the speech he's making now. I won't make

any further point of this, but I believe he is totally and irreparably

out of order.

MR. CHAIRMAN: The point of order is well taken, hon. members.

In Committee of Supply we deal with a statute clause by clause, and our

debate must be strictly relevant to the clause before us.

Section 2

specifically deals with the purposes of loan programs and how they will

be dealt with. Really, that is as far as we can go in this debate.

MR. WILLIAMS: You could have a loan program for half the

citizenry of British Columbia at this stage in time, as a result of

this administration's economic programs. Since 1983, since the last

election, 39,000 more people have gone on UIC. There are 33,000 more on

welfare. We could extend this lending program to tens of thousands of

British Columbians, and that might make more sense than some of the

government's other programs. While this is a housekeeping statute in

some ways — dealing with problems that the auditor-general has brought

to the surface in earlier reports to the Legislature — nevertheless,

the question here is a major revolving fund in terms of low-interest

loans for business.

We in British Columbia have pretty well the lowest success rate in

the nation in the growth of retailing. Clearly we could have a range of

programs, an expansion of funds like this, to deal with the kind of

wreckage there is in the economy. It's clearly a need in the community,

and it's the result of previous policies.

Another problem of our lending in the past has been that the bias

has too often been in favour of the large companies rather than

smaller-scale operations in the smaller communities. There has been a

bias in funding toward the large, and no look at regional questions.

Smaller-scale regional needs tend to have been ignored in terms of

these and other funds that the government has had to allocate. I think

the economic strength of the province has lost in such circumstances.

[2:45]

Sections 2 to 8 inclusive approved.

Title approved.

HON. MR. McCLELLAND: Mr. Chairman, I move the committee rise

and report the bill complete without amendment.

Motion approved.

The House resumed; Mr. Speaker in the chair.

Bill 27, Low Interest Loan Assistance Revolving Fund Act, reported

complete without amendment, read a third time and passed.

HON. MR. NIELSEN: Committee on Bill 46.

INDUSTRIAL DEVELOPMENT INCENTIVE ACT

The House in committee on Bill 46; Mr. Strachan in the chair.

[ Page 6386 ]

section 1.

MR. WILLIAMS: One should compare the approach of this statute

with the venture capital statute that the House considered earlier.

It's interesting to see how this one was formed versus how the other

was formed. It's clear that this has a very simple, limited style, with

none of the checks and balances one sees in the other statute. We have

here funding, piece by piece, of some $125 million in terms of the

range of programs. This one is the small manufacturers' incentive

program. Of course, that's to be desired, and there is a need for these

kinds of programs in British Columbia, particularly with the economy in

the state it is and unemployment at the levels it is.

Again, there aren't the checks and balances. The statute that this

is replacing essentially just said that this is in the hands of the

minister, and this is little different. There is a need for regional

input, in terms of the various economic regions of the province, in

terms of need, and in terms of communication with business people and

manufacturers in the various regions of the province. The biases will

be toward the lower mainland, because it's going to be handled out of

the lower mainland and southern Vancouver Island. We're all losers when

we don't have regional participation built into the statute. Our areas

of greatest unemployment in British Columbia are outside the lower

mainland. The need is greater in places like Kamloops and the

Kootenays. So there is a need for regional input, and for some kind of

consultative process in terms of how lending policies are established.

None of that is built into this statute at all. It's essentially carte

blanche for the minister to allocate $125 million. In this day and age

that's really not good enough.

The idea that the minister has full discretionary powers to allocate

$125 million is really quite disturbing. There is a need for a

consultative process, for checks and balances, and for participation in

the process by manufacturers. You know, how can one measure one project

against another? How can one measure one loan against another, unless

there has been some kind of consultative process and some kind of

benchmark established in terms of how one is going to lend? It is

totally open to all kinds of dangers, and it isn't good enough to bring

legislation before the House that doesn't have the checks and balances

within it. The chance for discrimination and political bias is there.

There's nothing built into the statute in terms of letting fresh air in

throughout the process, and that's a danger.

Who can vote readily against a $125 million package for a range of

useful projects, particularly small manufacturers and the like? That's

a very real need. But at the same time, all we've got is a very

simplistic bill that allocates money and puts it in the hands of the

minister. Elsewhere, I just don't think this would happen any more. In

an earlier day and age you'd get legislation like that, but in most

provinces of the land and in most states in the U.S. you'd have a

pattern of participation and checks and balances and involvement by

people in that particular sector in the process and review and

recommendation aspect of this. I would think most politicians in this

day and age would want that kind of thing for their own peace of mind

in terms of avoiding charges of discrimination and problems of

political patronage and favouritism. I for one would want that in the

statute if I were the minister.

Maybe the minister can advise the House in terms of something else —

whether there's something outside the statute wherein he might set up a

consultative task force to advise him by sector and to review

proposals, so that we have some assurance that there will be an outside

breeze in terms of this allocation of a tremendous amount of money.

HON. MR. McCLELLAND: This program is not new. It's been

operating for a number of years now. It has allocated a lot of money.

It's created something in the nature of 4,600 full-time jobs in the

province in this fund alone, and in all of the time it's been

operating.... As a matter of fact, it is achieved as a result of a lot

of consultation with the sectors, with the manufacturers in the

province. We have a very close relationship with the Canadian

Manufacturers' Association, which represents most of the small business

people, small manufacturers of British Columbia. So it hasn't been done

in isolation.

It has the checks and balances of the Financial Administration Act,

which doesn't allow the ministry to stray beyond the boundaries, which

are quite strict and quite inflexible. It also, of course, has the

checks and balances built into the ministry that allocates the loans. I

don't allocate the loans, and in all of the time that this fund and

others like it have been operating I challenge the member to cite even

one instance of even a charge of political interference or some other

kind of interference. There just hasn't been any. You might not like

the nature of the program, but it has been quite successful.

MR. WILLIAMS: I guess I'm willing to accept that the bulk of

these things are in fact administered by the BCDC and agencies within

the department, but at the same time it does seem to me that there is

an automatic bias in it that avoids the regional nature of British

Columbia. The availability of these programs in other regions is a

serious lack, and while I don't think it's conscious at all, I think

it's the end result of being focused in the lower mainland. The bias in

manufacturing certainly is toward the lower mainland because there are

certain advantages in locating within the lower mainland. But at the

same time it excludes a lot of players that might well be significant

players and innovative people in developing new programs and new

processes. I think that's inherent in this kind of structure, or lack

of structure, and I think that's something the minister might consider

in terms of review in the near future if the program is to be more

meaningful in the areas of higher unemployment in the province.

HON. MR. McCLELLAND: I'd be happy to give that member an

assurance that I would send to him, the first time I can put it all

together, a geographical list of where our programs have gone. I have

it all ready for BCDC, but I'm not sure that I have it all together for

the other parts of the programs. I think the member would be quite

surprised at how money has been disbursed around the province in the

various regions, certainly outside the lower mainland. I would

certainly give that assurance to the member. As soon as I possibly can

I'll put it together and send it to him.

Section I approved.

section 2.

MR. WILLIAMS: Again I appreciate the offer of the minister

and took forward to the material.

[ Page 6387 ]

The agricultural incentive program is something that I think

everybody in the House would commend. But I've been talking with people

just back from Japan — we have some on their way, or just arriving —

particularly with respect to Hokkaido, which is their northern island.

and less populated, with some 5.5 million people. It strikes me that we

are again maybe at least a generation behind. I don't know if the

minister is aware of their "technopolis" program in Japan: 15 major

science cities, with universities and corporations attached, are

proceeding now in Japan under MITI — the Ministry of International

Trade and Investment. We have a somewhat different ministry here. These

are tremendous. The new technopolis in Hokkaido, proposed by people in

that region of Japan, will represent the twenty-second university in

Hokkaido — 5.5 million people, 21 universities now, university No. 22

coming up. What will it specialize in? It will specialize in

aquaculture, oceanography and related studies.

Here in British Columbia we have the beginnings of a modest

assistance program in this field. We're a generation behind the

Norwegians, who have done great things in this field. We're going to be

a generation behind the Japanese. In terms of having the moxie and the

kind of planning and macroeconomic analysis that's necessary to keep up

in the modern world, we are at least a generation behind our

competitors. It's frightening stuff.

The perspective one gets is that we, 20 years from now, will be a

dismal backwater in too many ways. In too many fields, because of the

lack of competence of this administration, which has been in power for

a decade. In aquaculture we have significant physical advantages beyond

these other societies, beyond the Norwegians or the Japanese, and yet

we really haven't got it together. We have only now the beginnings of a

modest program in this field. Compared to our competitors, the Japanese

and the Norwegians, we are indeed a generation behind. It doesn't bode

well for the employment for people in the future of British Columbia as

well.

MR. LOCKSTEAD: 1, too, under this

section want to address a

few remarks through the Chair to the minister. My colleague from

Vancouver East, I think, has said we're a generation behind. Because of

the nature of my riding and the budding aquaculture, mariculture and

fish-farming industry in my riding, I think that in some instances,

compared to what's happening in Norway, Sweden, Finland and Japan, we

could be more than a generation behind at this point.

Part of the problem has been that various governments of this

province, but particularly those in the last few years, did not

recognize the importance of the industry on the coast of British

Columbia. I might add that in my riding we have one of the prime

potential mariculture and aquaculture areas in all of the world: the

Jervis Inlet area, Okeover, Desolation Sound, and on and on. I

recognize that governments have assisted some of these people

attempting to get into the industry. The provincial government has

extended outright grants — through your ministry, as a matter of fact,

Mr. Minister — and/or long-term low-interest loans to others. So I know

that the government has taken an interest recently in these activities.

I know that some of these businesses have gone under, have been

unsuccessful. Others are successful and hopefully will improve and grow.

[3:00]

The only question I really have for the minister at this time is:

will these funds...? I'll back up a bit. One of the things that has

bothered me a bit is that it seems like if you are a very large

company, it's easier to get these long-term low interest loans than if

you are a small oyster farmer, for example, with a single lease

somewhere, barely surviving, trying to make a living. A lot of these

people do go under, by the way, and do not survive as oyster farmers.

They have to take on other jobs. I know people who perhaps work in the

woods or do other things in order to survive. I would like the minister

to tell me if some of these funds will be made available to the smaller

operators who are attempting to get into the business — you know, have

a single lease, say, in Okeover or wherever.

I know that the minister may or may not know this. I know that some

of the larger companies are getting larger. In one form or another

they're taking over leases currently held by individuals here, there

and everywhere. I know that your ministry sends around the sheet once

or twice a year, telling us who received what in terms of grants or

loans and these kinds of things. So I know who is getting the money to

date. I'm just asking, Mr. Chairman, if the minister could perhaps

clear that up for me.

HON. MR. McCLELLAND: Well. Mr. Chairman, as far as we're

concerned, the program will be available more to smaller producers than

it will be to large ones. Most of our programs are geared.... One of

the prime criteria is: does the company need our assistance? Or can it

go ahead without? That's the same with the federal government. Any

programs that are shared by the federal government have the same

criteria. So we're geared to help people who need our help, and

primarily they'd be the small businesses.

These loans are at a maximum of $100,000, so that really means it's

a small operation in terms of.... I guess $100,000 doesn't sound small

to us, but in terms of business it's a small operation. So the program

is geared primarily to the smaller shellfish operators and aquaculture

operators.

Sections 2 and 3 approved.

section 4.

MR. WILLIAMS: On

section 4, again, I think there is a need

for significant regional input in this area. Is the minister prepared

to pull together consultative groups in the region and share the

benefits? Try as various regions might, the prospect in the coming year

is a focus on the lower mainland of British Columbia. Let's not kid

ourselves.

In terms of tourism in British Columbia next year, some university

studies have indicated that there won't be the spinoff in the regions

at all. In fact, it will be the opposite. The focus will be on the

lower mainland, not the regions of British Columbia which have so much

to offer. So there's no doubt there will be a surge in tourism next

year. You can't spend $40 million in advertising and $1 billion on a

world's fair and not have some kind of blip on the graph. But the focus

will be the lower mainland. The lower mainland, in many ways, until

currently, has avoided some of the worst of the Social Credit

depression that we've been living through over the last couple of years.

But next year, as tourism increases, the need will be greater than

ever for help in terms of support in the various regions of the

province.

[ Page 6388 ]

HON. MR. McCLELLAND: I guess there are some other studies

that say that there will be some spinoff benefit. We're going to do our

very best to ensure that there is. But I want to say that this

particular program is an example of private sector input into the

changes that will be in this program this year. We did a private sector

study of the tourism industry, with the tourism industry providing us

with information, and came up with the new program as a result of that.

So I think that answers at least one of the member's questions.

Section 4 approved.

section 5.

MR. PASSARELL: Just a quick question regarding the message my

colleague from Vancouver East brought up concerning regions. Under

section 5 is the industrial incentive fund, the establishment of new

industry. Is the minister going to meet regionally under this program?

Will you be be travelling, for instance, to Stewart, a depressed area

with the mines closing down, and meeting directly with the new industry

proposals coming out of Stewart, Cassiar or Telegraph Creek? Or will it

be done on a regional aspect? Will it come right through, for instance,

to Terrace or Prince Rupert?

If the minister doesn't meet with specific areas instead of regions,

then the program could be lost in the paper shuffle, and the north will

be left out again. Just a quick question to the minister on that regard.

HON. MR. McCLELLAND: Mr. Chairman, to the member, you two

have patched up your feud about north versus south, I guess, eh?

I would just comment that I think from my point of view it's useful

for me to do both of the things that the member has talked about: meet

regionally with people and meet individually with people. I can advise

that member that since I've had this job I've met at least twice and

perhaps three times with the mayor of Stewart, and have gone over the

plans that they're talking about for port development and other hopeful

development at Stewart. I would want to continue to do that. The member

will know that I've been in his riding on a lot of occasions, and that

I like it very much.

Interjection.

HON. MR. McCLELLAND: Well, it's a nice riding. I intend to

continue to visit there. But I would not meet with a region, or take

advice from a region to the exclusion of the individual areas having

the opportunity to have their input as well.

MR. PASSARELL: Mr. Chairman, in regard to the industrial

incentive fund, does this act preclude any development on reserves?

HON. MR. McCLELLAND: I'll have to take that as notice, Mr.

Chairman. Providing that the reserve gave the approval and that it met

the other criteria of the fund, I can't see why it would. But I'll

certainly check that out and make sure the member gets the information.

MR. WILLIAMS: Again, it raises the whole grand issue that we

face in British Columbia in terms of rebuilding our forest industry.

Fifty million dollars is the total allocation here in terms of this

industrial incentive fund, part of which might be used for new

technology. We have an industry that's been looked at by many experts,

some from outside. Professor Nilsson from Stockholm has looked at our

forest industry, and tells us that $35 billion is needed in the next 15

years in terms of both reforestation and rebuilding of the industrial

plant. If we assume just 60 percent of that in the industrial plant,

we're talking about something like $20 billion in terms of the need in

the forest sector to move into new technology.

What we've got in this statute is $50 million for that purpose; $50

million versus a $20 billion need. It's an indication of the kind of

scale that this administration operates on, an indication that it

hasn't sunk in how serious our position is in terms of industrial

competence in our major sectors. If we have a $20 billion need and all

we have is a $50 million fund, it tells you that they really haven't

been grappling with the realities of the outside world that are

impinging on British Columbia and on our economy today. It isn't a

matter of sending the Premier to Korea and Japan; it's a matter of

giving him a briefing session in British Columbia in terms of

understanding the problems within our own industry.

MR. CHAIRMAN: To the section, please.

MR. WILLIAMS: To the section, indeed.

All we have here is $50 million. If we were to upgrade one pulp mill

in British Columbia, $50 million would probably be inadequate. If we

were to replace Woodfibre, which desperately needs to be replaced right

now.... The plant at Woodfibre is an old junk piece of antique;

similarly, the one in Port Alice has a limited life. It's just an

inadequate amount in terms of the very real industrial problems within

our major industry. In terms of new technology, even in terms of

sawmilling on the coast, our productivity is now far behind our

competitors. Our productivity in British Columbia is now 20 percent

behind the Scandinavians. That's not a reflection on the workforce of

British Columbia; that's a reflection on management. It's a reflection

on the people responsible for putting the various pieces together in

terms of resources, labour, capital and technology. We haven't been

doing that anywhere near the state of the art that's available to us

today.

The state-of-the-art material that's available in our basic industry

is there. You can tie numbers to it, as some of the professors have

done. All we have in this bill is this modest amount of $50 million,

and without any particular focus — without any focus at all. So it's

$50 million available for all industries in British Columbia in terms

of moving into newer technologies throughout a range of sectors. That's

pitiful and very modest in terms of the very real need that is there.

We're not going to build up productivity of our workforce in British

Columbia until we've retooled the bulk of our plant. This fund won't

really begin to do that at all.

Sections 5 to 8 inclusive approved.

Title approved.

HON. MR. McCLELLAND: Mr. Chairman, I move the committee rise

and report the bill complete without amendment.

Motion approved.

[ Page 6389 ]

The House resumed; Mr. Strachan in the chair.

Bill 46, Industrial Development Incentive Act, reported complete

without amendment, read a third time and passed.

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

ESTIMATES: MINISTRY OF

CONSUMER AND CORPORATE AFFAIRS

On vote 15: minister's office, $208,370

MR. CHAIRMAN: Shall vote 15 pass?

HON. MR. HEWITT: Mr. Chairman, if I thought we'd get away

with it, I'd say "aye," but I don't think we will.

I just have a few remarks prior to responding to questions that I'm

sure will be raised by the opposition. I just want to touch on what

we've done in the past year. I can say that we focused on innovative

ways to improve and streamline our legislation and its policies to make

it easier for economic development in this province while still

ensuring that the public continues to receive a high level of

protection in the marketplace — that high level of protection that

we've come to expect in British Columbia.

[3:15]

During the year we incorporated approximately 14,000 companies and

amended our corporate statutes to improve administrative procedures and

keep our legislation current with the business community. Public access

to our corporate data base will be improved even more with the upcoming

implementation of remote computer terminals for search access by the

private sector. In the central registry we will be introducing a new

on-line computer system to enhance current service levels and increase

productivity in that section.

In the office of the superintendent of brokers we tightened

requirements for companies listed on the Vancouver Stock Exchange and

for companies seeking new listings. You may recall that in the first of

this year we amended the policy to require greater investment by

investors prior to a company going public. We required that more funds

be expended on development of the product or exploration of the mine

before the company was able to go public, and we increased the minimum

share value in which the issue would be introduced. Those efforts

provided further protection to investors without distracting from the

VSE's role as one of the leading venture capital markets in North

America.

Another major corporate innovation during the year was the transfer

of licensing responsibilities to the Investment Dealers' Association

and to the Real Estate Council and the Insurance Council. In a further

move to stimulate the private business and financial sector of the

province, we began extensive studies in conjunction with the Ministry

of Finance, and we've made some recommendations for the establishment

of international banking facilities in Vancouver — an initiative that I

consider most important as British Columbia assumes its rightful place

in the world economy. Those studies are continuing.

Consumer matters also received attention during the year. In our

consumer credit and debtor assistance branch we provided assistance to

more than 5,000 debtors. As a result of our efforts, more than $3

million was returned to creditors who would otherwise have had to write

off these debts. That's as a result of a cooperative effort. I should

explain that our debtor assistance branch basically works with the

debtor, recognizing that the debtor has had difficulty meeting his

commitments.

In having cooperation with the creditor, we're able to work out, if

you will, a payment plan, a procedure by which the debtor can work his

way out of his financial difficulties and at the same time allow the

creditor to recover part of the debt that's owed to that company. To a

great extent that protects the credit rating of the debtor who finds

himself in difficulty and turns to our ministry personnel to ask for

assistance and guidance on how he can work himself out of his financial

problems. It's working quite well.

We also circulated guidelines to the business community with regard

to automatic telephone dialling devices. Partially as a result of our

efforts, the CRTC introduced amendments to their regulations

controlling the use of these devices in the sale of consumer goods and

services.

As an important part of our consumer program we produced a number of

informational and educational materials to help the public deal

effectively and wisely in the marketplace not only as consumers but as

investors, borrowers and renters. For example, during the year we

printed a booklet describing the new Residential Tenancy Act and the

role of the new residential tenancy branch. During the first eight

months of operation of this new office, we conducted more than 1,000

arbitrations. In addition, we interviewed a considerable number of

landlords and tenants with questions regarding the new legislation.

Mr. Chairman, you can go back a year or so when we did away with the

rentalsman's office and brought forward our new residential tenancy

branch legislation and our arbitration procedure. I can say that the

new procedure of the new residential tenancy branch is working well.

Serious disputes between landlords and tenants have been resolved in a

fair and efficient manner. I will, however, continue to monitor the

function and effectiveness of this branch, to ensure that we continue

to provide fair and equitable assistance to both landlord and tenant.

In the area of liquor control and licensing, we conducted the most

complete study of our liquor licensing policies in the history of the

province last year, with a view to making our liquor laws fair and

reasonable, and still promoting moderation and the responsible use of

alcohol. I can report that as recently as a week ago we announced a

number of changes in our liquor policies, changes that have been well

received by the industry and by people concerned about the social side

and the abuse of alcohol. We feel that we have accomplished a number of

things which are well received in the community and which will provide

consumer convenience, but at the same time recognizing that there is a

downside to alcohol consumption — that being the excessive use of it.

I would also like to compliment a group of men and women in this

province who often go unrecognized because "it's just part of their

job," and that's the RCMP. In conjunction with our liquor regulations

and legislation and the need to ensure that alcohol is not abused,

these people — the RCMP officers, both men and women — do on a regular

basis what they call their walk-through of our various licensed

premises. Just their presence, being there. has done a great deal to

reduce the number of under-age drinkers in our licensed premises. I

would just like at this particular point in time to compliment all the

RCMP officers, both men and

[ Page 6390 ]

women, who have assisted us in ensuring that we

have a good handle on the problems related to alcohol in this province.

With regard to legislation, in the past year we proclaimed the

Partnership Amendment Act, which is to encourage increased development

of the province's resource sector. We also brought in amendments to the

Real Estate Act, to streamline development procedures and thereby

reduce costly delays that have in the past held up important new

development projects unnecessarily.

Administratively, during the year we reorganized the Consumer and

Corporate Affairs programs, to give increased recognition to the role

of the residential tenancy matters as an important Consumer Affairs

function, and to the increasing importance of financial institutions to

the future of this province. As a result of this internal

reorganization, our consumer and corporate programs are now known as

consumer and tenancy relations, and financial and corporate relations,

respectively.

Mr. Chairman, these are just a few of the activities that have

occurred and the new initiatives that will be coming before hon.

members in the coming year. As we all know — sometimes all too well —

my ministry primarily acts as a regulator. Since I became Minister of

Consumer and Corporate Affairs in 1982, I have attempted to adopt and I

feel have adopted the policy that the ministry should establish its

programs, its regulations, its legislation and its policies to allow

the private sector to operate without being hampered by excessive

regulations and red tape, while still giving protection to the consumer.

In short, Mr. Chairman, I feel that it is the government's

responsibility to set the rules of the game; to make the public — the

consumer, the promoter, the investor — aware of what those rules are,

recognizing that the rules are established, hopefully in all cases, for

the benefit of the public; and then to allow the marketplace to work.

Should the work in the marketplace fail — should the rules be abused —

then the penalty will be severe. I have a great deal of difficulty, in

this day and age when we're trying to achieve economic recovery.... If

our people who put up the dollars — the investment — to create jobs are

hampered and delayed by excessive regulation, then we are doing nobody

any favour. But I will assure all members, and the public, that my

ministry will keep a watchful eye for those people who would abuse the

marketplace; and if they do, as I said earlier, the penalty will be

severe.

Mr. Chairman, with those remarks, I'd be pleased to respond to any

questions the members may have with regard to the Ministry of Consumer

and Corporate Affairs.

MR. LAUK: Mr. Chairman, the minister has presided over the

last few years of economic disaster for corporations and for consumers

in this province. He's the minister of lack of consumerism; there are

other members of the opposition who will deal with that in due course —

except I'll say that consumer demand has never been lower since 1945,

in relation to our wealth and the number of consumers that should be

there.

What has this minister presided over as well? He mentions 14,000

incorporations. Anybody can incorporate a company. It costs $160 in

government fees and a small nominal fee to the lawyer who does the

incorporation — a token fee. But the chamber should know what most

British Columbians know, that we've had a higher rate of bankruptcy in

this province than anywhere else in Canada. More companies — going

concerns.... Incorporations don't mean a thing. It's estimated that 60

percent of incorporated companies are shell companies or shell-type

companies to be used and abandoned and so on. So incorporations are

just legal mechanisms. How many of these companies are going concerns?

Not very many, and those that have been going concerns over the past

few years have been going broke. Well, I can't blame it all on the

minister. In terms of caretaking a ministry, I suppose he has done a

fair job, but not an imaginative one.

Interjection.

MR. LAUK: Caretakers are caretakers — you know what I mean.

But I want to discuss a couple of important points. The stock

exchange in the city of Vancouver is an embarrassment for many reasons.

There was a day called.... Was it Black Friday or Black Tuesday?

Interjection.

MR. LAUK: Black Friday, yes. Some of us remember it better

than others. The problems presented by that series of events have not

been addressed by this government and this minister. There's a new

Securities Act, and I won't discuss that — it has to be debated. But

nothing in that act addresses the problem that occurred on Black

Friday. It was a problem of inside information. Mark you, I'm not

saying insider trading; that's a question for the exchange and the

ministry to investigate. But inside information, false or correct,

affects the market in an extremely dramatic way, and it's not enough to

throw up your hands and say: "Well, look, there's nothing we can do

about people gossiping on Howe Street or Granville Street or whatever."

Interjection.

MR. LAUK: You know, that shows the Minister of Forests' (Hon.

Mr. Waterland'

s) complete lack of understanding of the situation in the

stock market.

AN HON. MEMBER: We can't wait for his estimates.

MR. LAUK: We'll come to that in a moment.

The major problem with Black Friday is that a small group of people

promoting companies and, really, in stock-trading activities can supply

a great deal of misleading and sometimes false information without

policing and without regulation, to the great detriment of small

investors on the exchange. Black Friday was a classic example of what

can happen when that kind of manipulation and misinformation hits the

exchange.

Part of the problem of the new exchange is the technological advance

— quick buys and sales and information floating around — and the slow

ability of the exchange to correct something that's seriously wrong. It

was three or four hours while stock prices of particular trading

companies dramatically fell to the detriment of investors, apparently

on no public information, demonstrating either a lack of confidence or

a manipulation of the market.

Since Black Friday there has been no adequate explanation from the

minister, his ministry or the stock exchange as

[ Page 6391 ]

to what happened. We've had pious statements of

reform from both the exchange and other people in the financial

community, but nothing publicly verified that this kind of thing cannot

repeat itself in the future.

Wouldn't you know that the major investors in the exchange don't

seem to suffer as greatly as the small investors in the investing

community? It seems to me that the minister could have a close look at

that. Why is it that the minister finds it difficult? Why is it that

the minister regards the exchange as being the temple of free

enterprise and not to be tampered with, when it has such serious

financial effects for individual investors and for the economy as a

whole. It seems to me that in the interests of the exchange, and of

investment generally, the minister should apply his mind to more

effective regulations that would prevent such a disaster recurring.

[3:30]

1 won't name the investment stock, because it's not really

important. In the last year there have been about nine or ten

occurrences; Black Friday exemplified two or three of them. But there

are certain personalities involved in the stock exchange who were part

of.... I don't know whether I can say they were culpable, because we

don't know, and we don't have enough information. But there are serious

implications when one reads press statements from promoters promoting

an investment stock — mostly mining, or a new company or even a new

issue in an intended going concern — where the press releases clearly

indicate misinformation or, at the very best, information that seems to

be designed to deceive the investing public. It starts out by rumours

in the investment community — hot tips, I think they're called. They

generate some interest, and then the promoters hold a press conference

and serve tea and hors-d'oeuvres, and wine and champagne, and, without

producing documentation to support their contentions, release an

official press release that is so worded that it gives the impression

that the hot tips or rumours are correct, and people are deceived in

that way.

Now it's not enough to say "buyer beware" and so on if the scheme

itself — the events — are so designed, looking at the events of a week,

two weeks or three weeks, to give the impression that this is the

coming investment, that there is something behind the rumours, and that

an official release says that there is.... Then the minister and the

exchange can take some action. Because buying or selling in a

marketplace depends upon information, and when it's broadly based in

the stock exchange, which is privileged.... The stock exchange is

privileged. It's not an open market; it's a closed market. It's special.

Only certain people are licensed to trade. Only certain people are

allowed to buy and sell officially on the floor, and through your

brokers. You depend upon your brokers, and you depend upon that network

for information. When it's misinformation and unreliable, it defeats

the purpose of the exchange's attracting investment into the province

and into going concerns. As I say, the minister and his ministry, and

indeed the exchange, to my knowledge, have not really addressed this

problem. The changes that are being proposed, I would say, are minor,

and do not address the serious aspects of investment in the exchange.

I am not asking the minister for an answer. I don't think that he,

because of his style as minister, is interested in taking a more

aggressive approach to these matters, but I think that even from the

point of view of the Social Credit Party, which claims to be interested

in increased investment, he should take a more imaginative and

aggressive approach.

The other point I wanted to raise has to do with the travel

industry, and a news item that appeared in January of this year. It

said that the provincial government has taken control of financial

assets of Century Tours of Vancouver. Stewart Goodings, the travel

registrar, said this. He said he expects and believes the province will

be able to recover all money paid out to bring home passengers stranded

in Hawaii through the company's bookings. What I want to know is: could

the minister now report on the state of affairs of this seizure of

financial assets? What's happened to them? How were they expended? How

were they collected? What's going on? We haven't had a financial report

from the minister, either through Stewart Goodings or him, with respect

to what's happened with these assets.

The reason I ask in this particular case is so the minister can

perhaps explain what procedure is involved when this kind of thing

happens. When the government seizes assets, we should have an

accounting about what happened to these assets and what decisions were

made, because it is an extraordinary measure for a government to take.

I m not saying that they shouldn't have in this case. I would suggest

they should have, and they did, but what I want to know is: what's

happened to them? I think we'd like an accounting today during the

minister's estimates.

I have a series of questions on the new liquor arrangements as they

were announced. First of all, I would like to say that I personally,

speaking for myself. agree that wine and beer in grocery stores need a

lot more careful examination before we jump into that boat. My concern

is law enforcement — with respect to isolated grocery stores having an

increased cash flow — as a result of liquor sales being prime targets

for robbery. When that generally increases, the sophistication of

robbery increases, including hand-guns, masked bandits, schemes whereby

they can design to hit certain grocery stores selling wine and beer in

particular areas — sort of lightning strikes, four or five in a row —

and get quite a haul.

It leaves the storekeepers very vulnerable, and they're pressured

from two ends. One is that they don't want to miss the opportunity to

keep the customers they have by adding this service in their store, and

also the increase in profits that I assume are available in selling

wine and beer. But I think my major concern is that. I have a secondary

concern with respect to selling liquor to minors, although with certain

procedures it will become no more of a problem than it would be in

liquor stores or beer parlours.

But I think the major problem is the vulnerability of the small

storekeeper in a neighbourhood, relatively isolated from a commercial

area, to the lightning-strike bandit. So I'm pleased that the

government has not jumped into that and will examine it more carefully.

The new arrangements that have been announced, however, cause me

some concern. I'd like to know from the minister: what is the projected

revenue effect of the changes? I'm told that a $4 million loss will

arise from hotels buying beer wholesale that they currently buy retail.

Perhaps the minister can elaborate on that. I'm assuming that there

will be no increase in volume. It's not in the interest of the

government to encourage that, and I don't think the industry expects an

increase in volume from our liquor distribution outlet.

The second question I have is: will the municipalities have control

of hotels? Not just the liquor distribution branch, but municipalities

— will they have any input into whether

[ Page 6392 ]

hotels will be adding such liquor outlets? In my

own constituency the downtown east side community groups expended a lot

of effort to get the Main and Hastings liquor store removed. Under the

minister's predecessor it was. But there was a lot of effort over many

years to get rid of that liquor store. It was causing serious social

and law enforcement problems in that area. Once it was removed there

was a dramatic improvement in the neighbourhood. We have been

monitoring that, and we think that was a good move. Has the government

set to naught all of those efforts? Will the municipalities have an

opportunity to express their opinion and provide a veto to a particular

hotel beer parlour expanding to off-premises sale outlet? This is

causing us some concern in particular areas, because it will increase

the social and neighbourhood problems and law enforcement problems

unless the municipality that has a close monitoring of those situations

is included, and included in an official way, with a virtual veto. I

want to ask the minister to express his views on that.

I suppose the government will argue that off-sales are permitted

now, and all the changes do is add a sales area to do whatever they are

doing now with the addition of B.C. wine. B.C. wine in some areas is

the added problem. I won't elaborate on that; I'm sure the minister

knows what I'm talking about. In some areas it will be an added

convenience to consumers, but it will be an added problem to the

neighbourhood in some other areas. That's why I want the municipalities

involved. But in addition to that, there's nothing to say, and there's

not enough information available to say, that an added retail outlet on

hotel premises won't add sufficiently to a problem for the municipality

to be concerned. I don't think there's sufficient information available

to the liquor distribution branch, or to the minister, that says that

all it will be is just adding an area whereby off-premises sales will

be permitted that are permitted now. The changes that I can see as

possible, and even probable in some instances, are the added traffic

and the attraction, depending upon where these new premises are allowed

— people outside of neighbourhoods or communities, even in the

identifiable downtown areas, that will cause social and police problems.

[Mr. Strachan in the chair.]

There's also the question of discrimination between hotels and how

these are awarded and under what circumstances. Additionally, will

hotels be permitted to sell beer at different prices for off-premises

consumption from both the bar and the store? If so, how will that be

policed, if at all? Will stores be required to stay open as long as the

hotel bar? If hotel managers have discretion in this, there is a

potential for further revenue loss to the liquor distribution branch.

There is this whipsawing effect about hours of sale, with respect to

our own liquor store outlets and to the premises on board in hotel

premises. That whipsawing effect will be to the detriment of revenue to

the government, but an additional sort of off-hours windfall to

hotel-owners. The question of competition with respect to the sale of

wine and beer is a question in the government's revenue interests. We

have seen hints in the past that this government will sacrifice its own

revenue interests to benefit.... Perhaps it could be open for some

uncharitable person to say it might be to the benefit of some of the

friends of the party in power — to benefit from the revenue loss to the

government. What measures has the minister contemplated and is going to

put in place that will prevent this whipsawing effect? I ask the

minister if he would reply.

HON. MR. HEWITT: I want to go back and deal with one of the

items the member raised with regard to a comment I made in my opening

remarks about incorporations. He mentioned something about shelf

companies or shell companies or that all you had to do to incorporate

is pay a lawyer a fee to draw up the documents and have it registered,

and it really didn't mean anything. I think that can work both ways,

because if he claims that there are companies being set up, and they're

of no value and no employment, I guess it also applies that those

companies can disappear.

But I want to give him some statistics. In doing so I don't deny

that we've had some economic difficulties in this province and in this

country and, I guess, in the western world. But just to go back in

comparison of incorporations of businesses and bankruptcies recorded in

my ministry, in 1991 we had 23,300 — I'll just give you the approximate

numbers — incorporated in British Columbia, and 8,000 bankruptcies in

that year. In 1982, when things really started to get into a pretty

tough state, we had 11,400 incorporations, 10,700 bankruptcies. In 1983

we had 13,787 incorporations, 10,200 bankruptcies. In 1984 — and this

is a good statistic, I think — we had approximately 14,000

incorporations and 9,600 bankruptcies. So there is a good number of

bankruptcies, but there is a spread there, and in the latest year a

considerable improvement over the number of new incorporations. Mr.

Member, that doesn't include those companies that are extraprovincial;

it only deals with companies that are incorporated within the province.

[3:45]

Interjection.

HON. MR. HEWITT: Mr. Member, in response to your question of

what's the projection for this year, I don't believe I have the figures

right up to date, but I'll do my best to maybe try to get those up to

date this year. Hopefully they'll be as encouraging as I think they

will be.

Black Friday. The member can recognize that I can't comment in too

much detail with regard to what we are doing about it and whether it

will happen again, but I would refer him to the Securities Act, to the

bill, and mention to him that....

MR. LAUK: It doesn't address the problem.

HON. MR. HEWITT: Well, it does in one way, and I just want to

touch on this, and if the Chairman doesn't find me out of order I will.

There is something new in there, which is called a halt-trading order.

If there is a signal that indicates that there may be difficulties,

trading can be halted temporarily until further information is

gathered. That's all I'll say about it, but I'm sure we'll debate that

during the bill. I'm quite confident that that will help. If we're

aware of a problem, we can at least move to do that,

whereas before we

had to have a hearing before we could take any action.

Century Tours. Mr. Member, it's still under review with regard to

the total cost. I think the registrar of travel agents or the fund said

we were hopeful that we would recover. He was being optimistic; I don't

think we'll be that fortunate. There were bank accounts that were

frozen. The Attorney-General's department is carrying on an

investigation with my ministry.

[ Page 6393 ]

I'm just giving you notes that my deputy has

brought forward to me.

The board has approved a number of claims, and it appears that we

will have to look at something at around $300,000, which relates

partially to Century Tours and other ones that have got into difficulty

at the same time, but we are unable to determine the total amount of

the claims at this time. There are funds, of course, possibly, that we

can make recoveries on, and that will reduce the amount. No question

about it: it was rather a tragic event to happen, a very expensive

claim, probably one of the highest claims on the fund to date.

There are a number of things that we're doing in that regard. I've

had meetings with the association of travel agents. We have advertised

for a full-time travel assurance fund registrar, and we look to input

from the travel agents as to where we tighten up the criteria or the

requirements for new people coming on the scene. A lot of them, I

think, in the past have felt that the travel agent business is pretty

attractive. They get the opportunity to see various things, go various

places, but they don't realize that it is a very competitive business,

and if they aren't properly financed, properly capitalized, they can

get into difficulty very quickly. We've got to tighten that up, and

we're working towards that goal.

MR. LAUK: Are any charges contemplated with Century?

HON. MR. HEWITT: I can only tell you that the

Attorney-General is investigating. I can't tell you any more than that.

It's the information I have here.

With regard to the new liquor policy, the member stated that he does

not agree with beer and wine in grocery stores. That was the conclusion

we came to. A number of people would tell you that they can't see

anything wrong with it, and that it does provide convenience to the

consumer. But the member himself has identified some of the areas of

concern I had, and therefore we didn't proceed as far as some would

have liked us to.

Interjection.

HON. MR. HEWITT: That could well be. I don't know where you

get your information, but quite often it seems to come out of our

offices. I think it's just a pure guess, for my part.

The beer stores. We anticipate that there will be some reduction in

revenue. How much that is offset by the operating costs of our stores

and how much that will be offset with regard to increase in

volume.... That's not encouraging excessive drinking; it's just

convenience to the consumer. At the present time if a consumer would

like to purchase a bottle of wine or a case of beer and finds that the

government liquor store is closed or that it's across town.... This

will allow him to be able to go to a local hotel and pick it up at

their convenience.

The municipalities do have input via their zoning and their building

standards. They do not have a veto; it's a provincial liquor policy.

But I can assure you that we certainly request and receive input from

the municipalities, as we have in the past. I'll harken you back to a

court case some time ago — I think it was the Supreme Court of British

Columbia — where it was determined that only the province could set the

closing hours for a licensed premise, and as a result one of the

cabarets or licensed premises in Vancouver was allowed to stay open

later than the city council wanted them to.

That is a decision that the courts.... We have no control over

that. The only control, I guess, is probably to look at legislation and

bring it in and put it back on a municipality. I think the role that

I've taken is that I'd like to know what the municipality feels about

hours of operation before we make the decision.

With regard to B.C. wines and the member's concern, regulations

relating to the beer, wine and cider stores that are now permissible

are being worked out. One of the areas we felt we could assist in with

regard to abusive alcohol is that we would not look at fortified wines

in those stores, nor do I think the hotels would probably want them —

or the large volume 4-litre packages as opposed to a bottle of dinner

wine. Really, it's to serve a consumer who normally may not wish to go

into a liquor store, but if they wish they could go into a nice modern

facility adjacent to their hotel, or part of the hotel, on their way

home and purchase a bottle of wine or a case of beer.

But I would point out that the policy that we announced with regard

to wine shops, wine kiosks and beer and wine stores through hotels, is

permissive. In other words, I don't expect 200 beer stores to mushroom

up overnight. We've said to the hotel association: "Here is an

opportunity for you. If you wish to take advantage of it, if you think

it is of benefit to your clients or to your neighbourhood, fine." The

rules will have to be set so that there is as little abuse of alcohol

as possible, but it is permissive. I think over a period of time we'll

see one or two, or three or five or ten start to show up and then we'll

phase into it.

Where I see the big benefit is in some of the smaller communities

around the province, where you may have a liquor store or you may not

have any store at all, and now the hotel can put in a nice beer and

wine shop and have refrigerated beer. It's a convenience to the

consumer in that community. That's the type of facility I see. I don't

see downtown Vancouver — the Four Seasons Hotel or any of the other

ones — having it, but I do see a big advantage to it in the local

community.

MR. LAUK: Not with B.C. wines, you won't.

HON. MR. HEWITT: I didn't hear any negative comment from that

member from Vancouver Centre about B.C. wines. He knows and I know that

B.C. wines are an excellent product, and the result of a lot of hard

work of good B.C. grape growers in B.C. wineries.

I think I answered most of the questions, if not all of them.

Interjection.

HON. MR. HEWITT: The setting of price. They will purchase the

product at cost, and they can sell it at anything above their cost. We

don't want them to have loss-leaders, but they can be as competitive as

they want to be. The amount of discount or the wholesale price to the

hotel is being established now through somewhat of a negotiation to

determine what is fair and reasonable for them to cover their costs of

operation.

MR. WILLIAMS: I'd just like to raise another subject. The

Credit Union Reserve Board is under the jurisdiction of

[ Page 6394 ]

this minister, is it not? Maybe the minister could

advise us whether

he's reviewed this operation, particularly in the last year, and given

some thought to the structure and its adequacy and the results of the

past year or so.

We presently have a system where the Lieutenant-Governor-in-Council

appoints the reserve board, and the reserve board carries out the

monitoring process with respect to the lending policies and review of

the lending policies of the credit unions within the province.

The adequacy of CURB, I think, is questionable. It's a very

important issue relative to western Canada in these times. I don't

intend to go into details, but as currently established it definitely

needs an overhaul. It's not fair to the larger entities within the

credit union system to live with the situation as it currently is. The

largest of the credit unions is responsible, in effect, for one-fifth

or 20 percent of the operations in the province. I don't think that's

realistic in terms of what's happened in the past year. Clearly there

should have been signals to the minister and his staff at an earlier

stage in terms of this operation. Those signals should have been clear

some time ago. If they had been listening to those signals, we would

have seen legislation by this time to deal with this question.

The question is: what kind of review have you undertaken, and are

you anticipating any changes in the terms of the structure and the

appointments and responsibilities of this whole operation? One can't

look at North America these days in terms of the various institutions

in America and in western Canada and not feelt that you should have had

a handle on it some time ago.

HON. MR. HEWITT: Mr. Chairman, in regard to reviewing the

operation or looking at the policies, we have ongoing discussions. The

board meets with me periodically to keep me apprised of some of the

difficulties in the credit union movement.

Personally, I think the Credit Union Reserve Board has done an

excellent job in dealing with the requests for primarily commercial

loans in the credit union field. Some members may or may not know this,

but under the system that we have, credit unions, should they move into

commercial loans above their exemption, have to apply to the reserve

board to have the reserve board look at the application, at the

security offered and at the ability to repay the loan, and give its

approval or deny the application. If the reserve board in its wisdom

denies the application, that's it. The credit union loan officer or

manager has to go back to the applicant and say: "I'm sorry, we cannot

service you. You will have to go elsewhere."

[4:00]

For the member's benefit, had the Credit Union Reserve Board not

been in place or not been doing — in my opinion — an excellent job, we

would have been in considerable difficulty in this province, because a

lot of loan officers, a lot of managers of medium-sized credit unions,

were influenced by values of property back in 1978-81 and were

convinced that the security was adequate. They were very frustrated and

upset when the reserve board said: "I'm sorry, we won't approve that

commercial loan." Now, looking back, there are a number of managers and

boards of credit unions in this province saying: "Thank God for the

Credit Union Reserve Board. Had we proceeded, our difficulties would

have been far worse than they are at this time."

What we have, Mr. Chairman.... It is evidenced by the Canadian

Commercial Bank and by a number of other lending institutions such as

Victoria Mortgage. It's evidenced by the Bank of B.C., where appraisals

were done, commercial loans were made, and the value of the security

was cut in half because of the downturn in the economy. I think it's

fair to say that the majority of credit unions in this province have

survived very well, considering the particular times we're in.

There was a famous expression — some of my colleagues here might

recall it — with regard to official appraisers and appraisals. They

carry a designation behind their name; I think it's AACI. The

definition

of those initials quite often when I was in the business of granting

mortgages was "Appraisals According to Client's Instructions."

Basically, a lot of financial institutions, banks and others got into a

great deal of difficulty because of those appraisals that were done by

"qualified" people in the heady times of inflation back in 1978-79-80.

Then when the downturn came, there were a lot of lenders caught in a

bind. I named some of them just a few minutes ago.

I think, Mr. Member, that the Credit Union Reserve Board has done an

excellent job. That's not to say that we just let it sit there, and not

monitor it nor have discussions with representatives from that board

and from the credit union movement. But it was there. And for the

member's information, if he already isn't aware of it, I was one of the

people who set it up in the first place. I was one of the

representatives who came to government a number of years ago and said:

"We need to have some type of insurance protection." And we set it up.

Granted, the fund, if you compare it to the total assets, probably

isn't as much as we would like it to be. But it's an ongoing fund. It's

an assessment on the credit unions; it's not an assessment on the

taxpayers of the province. If time permits, and if good management

prevails, I would say that the credit unions will be as stable as any

other financial institution in the province.

MR. WILLIAMS: I didn't raise the question for standard pap,

Mr. Chairman, and that's what I got. If the minister doesn't think it's

standard pap, then he's not in charge of his department.

We can look at a local situation, if you like — projects within a

mile of this building that were funded on a significant scale by and

have created significant problems for the credit union involved.

Interjection.

MR. WILLIAMS: No question about that. And you want to reflect

on the current size of the fund and how the fund has been affected this

year by those kinds of decisions?

Interjection.

MR. WILLIAMS: All I'm saying, if you'd just listen....

Interjection.

MR. CHAIRMAN: One at a time, please.

MR. WILLIAMS: Understand that the member's background is with

respect to a small credit union in the interior of British Columbia and

not the major institutions operating

[ Page 6395 ]

elsewhere, including this community. There are some

lessons there.

The fund has been affected. In many ways CURB is redundant; it does a

lot of work that is done by competent people, certainly in the larger

institutions. It doesn't have the kind of system in place, it seems to

me, to give you the kinds of signals you need early in the game. I'm

saying that with the kinds of problems you faced this year the bells

should have been ringing at an earlier stage. I'm saying that you have

an institution there that is not adequate to the job. I'm saying that

you need some different personnel. I'm saying you need a different

monitoring system, because the fund has been seriously affected. It

isn’t ignorance from which I speak, I assure you.

The minister has some serious responsibilities here. It's not quite

adequate to have this little five-person group appointed on some kind

of basis by the Lieutenant- Governor-in-Council. It is a major

financial responsibility for the entire province of British Columbia.

Whether the legislation says so or not, in effect the responsibility

ends up here; the buck ends up at his desk. I suggest that the system

is inadequate. I suggest that the signals in other provinces have been

clear, indelibly so; that there is some obligation to reflect on the

processes and personnel now in place, and to make sure that the

obligations to the public of British Columbia are not impacted.

HON. MR. HEWITT: Mr. Chairman, the member is eloquent, I

guess, in his attack on the Credit Union Reserve Board and, I guess, on

this minister because of philosophical differences. I did say very

clearly that, yes, there was a need to monitor the Credit Union Reserve

Board and its policies, to make sure that we are up to date and don't

fall behind. I then went on to say what we had achieved and what value

that reserve board has — the board is made up of five people, with a

number of staff, of course — as a good sounding-board. It turned aside

a number of "good" applications at the time, to the dissatisfaction of

member credit unions. In some cases the credit unions were very upset

with the quality of the reserve board's decision. In hindsight it was

an excellent decision, and in many cases it protected credit unions

from getting into serious difficulty.

I don't think the Credit Union Reserve Board is redundant, as the

member said. At the same time, I'll agree with him that we must make

sure we are up to date and don't fall behind — as he seems to think we

are doing now. I can assure him that I will continue to have dialogue

with the people, and if we feel there should be a move to improve

systems.... If he has any suggestions, I'd be pleased to hear from

him.

I'm well aware that he sits as a director of Vancouver City Savings

Credit Union and certainly has the opportunity to hear from credit

union personnel around the province. And yes, Mr. Member, I was a

manager of "a small credit union," in comparison with Vancouver City

Savings. However, I travelled around the province and set up accounting

systems, and worked with credit unions for a number of years before I

went there; and I sat on B.C. Central Credit Union's board for a

number of years thereafter. I had the opportunity to hear submissions

from accountants, lawyers, etc. to make sure that we attempted to

develop a good sound credit union movement in this province. One of the

reasons I'm in this House today is that a government in power between

1972 and 1975 determined to create a B.C. savings and loan company;

they passed legislation for it and didn't have the opportunity to

institute it. In my opinion, that was going to be the first move in the

demise of the credit union movement in this province, because it would

have ended up being a government-owned financial institution, and the

credit unions would have been lost.

MR. CHAIRMAN: We are straying from the estimates, hon.

member. To the current estimates.

MS. BROWN: Mr. Chairman, first I want to make a couple of

comments about liquor. The government talks a lot — and does a lot —

about raising the age for drinking and driving; it designs BATmobiles,

has all kinds of penalties for drinking and driving, but never really

looks at its own role in the distribution and pushing of alcohol. I

don't want to give the impression that I think we should go back to the

days of prohibition, but sometime the minister should look at the role

of the government in making it, as you like to say, more accessible or

easier or more convenient for people to get alcohol.

One of the things I find very strange and almost schizophrenic about

the way in which alcohol is dealt with by the government is that at the

same time as we have laws against drinking and driving, we have a rule

that when a neighbourhood pub is put into place it must have parking

for at least 100 cars. Why would we have parking for cars at a drinking

establishment when we are telling people not to drive after they drink?

This government also allows the sale of alcohol at football games in

the stadium, at hockey games and that kind of thing. Does the

government really think people walk to those games and then walk home

afterwards?

So I want the minister to comment on the role of this government,

which spends very little money on education against the use of alcohol,

or against the abuse of alcohol; very little money on rehabilitation

for alcohol-related accidents. It reaps an enormous amount of money

from the purveying of alcohol and then puts into place these rules that

force people to drive and drink. What's the point of the BATmobile?

What's the point of arguing about raising the drinking age to 21 when

the government itself is insisting that drinking institutions must have

parking spaces attached to them? And the question of beer and wine in

grocery stores — well, I'm certainly glad that the polls indicated that

most British Columbians recognize that that would not have been in the

best interest of the people of this province. So the government has

postponed its decision on that. I also know there have been

recommendations from members on the government benches about permitting

the sale of wine on the ferries, and I certainly hope the government

will poll before making any such decision. I know the polls will

indicate again that the people of British Columbia do not want drunks

rolling off the ferry onto the highways at the end of an hour and a

half of sitting and drinking.

Again, I want to state that I think the government should be upfront

and straight about its role as pusher of this drug — the only person

who sells alcohol in this province. It controls the sale of alcohol in

this province and spends very little of the money raised from the sale

of alcohol on educating young people on the abuses and health hazards

of that particular drug, and certainly spends very little on

rehabilitation.

The other point I wanted to raise with the minister had to do with

his statement about an on-line system. I'm quite interested in that,

because I know that a number of other ministries — Human Resources, for

example, and Health — have that system at this time. I recognize that

the use of

[ Page 6396 ]

computers is really helpful to government; it helps

government to do

its job more efficiently and more effectively. But I'm wondering

whether, in putting these systems into place, anyone is seriously

looking at the privacy aspect in terms of the individual's right to

protecting privacy and private information. Is there going to be an

interface between the on-line system in the Ministry of Consumer and

Corporate Affairs and the Ministry of Human Resources, the Ministry of

Health, the Attorney-General's ministry and other ministries?

I just returned from a trip to Sweden. I was there last week, as a

matter of fact. I brought back with me some of the legislation, which

the minister might be interested in, around this whole business of

privacy and the use of computers and the exchanging of personal

information between various ministries in government. They have a law

against that. They go even further than that: they have a commission to

monitor various ministries to be sure that personal and private

information isn't being exchanged by these different departments. They

have an ombudsman on privacy also to see to it that personal

information is just that.

[4:15]

[Mr. Veitch in the chair.]

I'm wondering whether the minister, in responding, would say whether

the on-line system in Consumer and Corporate Affairs is going to

interface with the on-line system in some of the other ministries, such

as Human Resources, Health, the Attorney-General and whatever other

ministry has a system at this time.

HON. MR. HEWITT: Mr. Chairman, in regard to the liquor

distribution, the fact that we push liquor sales and yet we, the

taxpayer, the government, pick up the cost.... First of all, that's

the old sawoff about privatization and then taxing to get your

revenues, or do you have the government control and government

distribution, or do you get the halfway measure, which I think we're

coming to in trying to resolve these problems.

If we went the privatization route, then it's just a matter

of.... They buy it from the wholesaler, and they sell it, and we

pick up the tax. You know the downside of the abuse of alcohol probably

as well as or more than I do, because of your involvement with the

social side of the community. We have struck that point to say:

consumer convenience, but there's got to be a reasonable amount of

government involvement in the sale.

With regard to neighbourhood pubs and the parking, that's municipal.

That's a municipal requirement, and the zoning bylaw says if you're

going to have X number of seats, then of course you've got to have X

number of parking stalls. I agree with you. The name "neighbourhood

pub" is a misnomer. No neighbourhood wants a neighbourhood pub, but

they don't mind it on 4th Avenue or on Main Street or in the shopping

centre. We try to discourage all this. Someone says, "I'd like to put a

neighbourhood pub in a location," and we allow them to do the survey,

and the people come back and say: "We don't want it there, because we

don't like the noise; we like our quiet area or quiet neighbourhood."

But they wouldn't mind it down in the shopping centre. You do that and

you get the cars and the transportation. So that's a problem. It's not

really the true neighbourhood pub as you know it in England, where you

could walk to it.

The sale of alcohol at sports events, at football games. Yes, we

have a problem there too; there's no question about it. But we've taken

steps and have excellent cooperation with Mr. Renaud, I think, of B.C.

Place. You can't buy an alcoholic beverage there without showing

identification. You can imagine what that does to the efficiency.

Somebody mentioned how it slows things down. You can imagine what it

does to the sales, but the problem is of that concern that they're

demanding identification. We've also got separate sections in B.C.

Place now for non-drinkers and drinkers. That doesn't solve the problem

of excessive alcohol.

I believe B.C. Place has cut off the sale of alcoholic beverages —

the beer and wine — at the end of the third quarter. That doesn't solve

the problem, but at least it gives them a half an hour to get their

mind back in gear so they can drive that car on the way home. We also

have increased security. We've done all those things. I for one can

tell you, because I've been at some of those games and have got very

upset with the guy in front of me splashing everybody, that if we can't

educate the people who go to sports events that drink in moderation is

acceptable but drink in excess is not, and if we can't seem to resolve

the problem, we may end up by not having alcohol in B.C. Place or other

sports events. We've just done it, as you know, over the past year or

so, and I think we have to try to correct the problems and see whether

it will work. As I say, if it's done in moderation, there's no problem

at all. But we'll have to monitor that.

You mentioned something about the poll saying not to put beer and

wine in grocery stores. I can tell you that we use the public opinion

survey as a tool. Interestingly enough, on some of those issues like

beer and wine in grocery stores it's amazing how it sort of just

seesaws back and forth. I'm not an experienced or educated pollster,

but you ask one question and they seem to go all this way — which would

indicate to you that, yes, everybody wants it — and you ask another

question and it goes to the other side, and they're all over the ball

park in regards to what should be done. But we didn't just take the

poll and say: "Oh-oh, if more are opposed than are for it we won't go

with it." Not so. We did a lot of analyzing of the public opinion

survey, but we also talked with the RCMP, the Salvation Army and the

Mothers Against Drunk Drivers to get their feelings as to whether or

not we should go that far. We've talked to the manufacturers, the

wineries and the breweries, and we've talked to the retailers, etc.,

and we came to the conclusion that we weren't prepared to go that far.

Moving on to your last question regarding on-line computers and the

problem of security or privacy. I'm also the minister responsible for

the B.C. Systems Corporation, as you know. I've only been in that

office for a short period of time, but I've quickly become aware that

the Systems Corporation is a very security-minded organization. All its

systems are geared to protect against any cross-use of information, and

will continue to be so. The latest equipment in systems that can be

available to ensure the privacy of the citizen will be maintained.

But what it does allow for — if I can just quickly touch on my

ministry and the on-line aspect — is the turnaround time for

information with regard to chattel mortgages or other things that we

can put on the computer through central registry. We can give

information to people who are interested in whether or not there's a

mortgage against a chattel, etc. We can give that quickly,

whereas you

used to have to wait several days, and maybe the opportunity had passed

to make the loan or sale or whatever. So we're pretty excited

[ Page 6397 ]

about it, and I think the business community would

be as well. But

we'll sure attempt to do our best to make sure that the privacy of the

individual is maintained.

MS. BROWN: The thing about the computer is not that I'm

afraid of someone breaking the code and getting information that they

shouldn't have access to; I'm talking about interfacing, the ministry

deliberately giving information to another ministry. I know, for

example, that the computer in Human Resources is going to be affected

by this on-line system because Human Resources is thinking about using

the electronic banking system. This means that they immediately are

going to have access to recipients' private information as far as their

accounts or lack of accounts or whatever are concerned. But worse than

that, where you are not allowed to garnishee and take money out of a

Human Resources cheque — because in fact the banks are allowed first

dibs when you overrun your account or whatever — we could have problems

with Human Resources cheques going out electronically, where the person

actually ends up getting only a portion of the cheque because they have

overrun and the bank has paid themselves off first.

So I know that the computer is very efficient. There isn't any

question about the efficiency of the computer. That's why governments

use it. The problem we have with it is that the recipients or the

victims or the whatever of this government service have no input into

the system that is being designed and put into place, and often it has

a negative impact on them.

Certainly interfacing and sharing of information about personal and

private matters is something that ministries and departments do do with

each other. I know that Human Resources, for example, is thinking of

interfacing with the WCB and with ICBC. Who knows who else?

Unemployment Insurance? Maybe there's going to be interfacing federally

and provincially with the unemployment insurance information. As

someone who is responsible for B.C. Systems Corporation — and I forgot

that I have a whole different kind of thing to talk to you about when

we get into that — that's what I'm concerned about.

I'm not impressed anyway with the privacy system. When I was in

Oslo, they were sure they had the most absolutely security-proof

system. It turned out that two high school kids broke the code and were

running riot. Let's not pretend that there's privacy.

Interjection.

MS. BROWN: Sure. I mean, let's not pretend that there's that

much security. But that's not what I'm concerned about; I'm concerned

about the legal exchange of information that there shouldn't be. I'm

just saying that if you look at the Swedish model, it's not permitted.

They literally prevent you from giving information from here to there

electronically.

I want to get back to the alcohol thing. I want to establish right

off that I'm not in favour of any form of privatization at all in terms

of the distribution of alcohol. I am saying that the government, as the

body that controls and pushes the stuff, has to take more

responsibility in terms of the damage that alcohol can do. There no

point to starting at the accident level and throwing drunken drivers

into jail when there are rules that say a drinking establishment must

have parking space to it. I recognize, as you pointed out to me, that

that's a municipal law. But as the minister responsible, there is

absolutely no reason why an edict can't go forth from you to the extent

that neighbourhood pubs should be small enough in size that there

should be no parking spaces necessary — maybe one for the person who

works in the pub, and nobody else.

But this business of alcohol at sporting events, why is it

necessary? Aside from the fact that it's another way of the government

raising revenue, there really isn’t any justification for it. Certainly

the tragedy in Brussels last week that forced the Prime Minister of

England, Mrs. Thatcher, to prohibit the use of alcohol at sporting

events.... Do we have to have our own experiences? Can't we team

from the experiences of other countries"

I've had season tickets to the Lions football games for years, and

we used to sit through the games without needing a drink. It became

pretty bad after a while, when the Lions kept losing every single time.

You really needed a drink, but that was precisely the time when you

shouldn't have access to the drink. So I want you to really reconsider

the whole question of drinking at sporting events. Cutting off alcohol

for the last quarter isn't going to do it. What you do is double up and

make sure you have enough to sort of see you through until....

Interjection.

MS. BROWN: No. but let's be honest about it. If you're in a

pub and someone says "last call," you go two instead of one. It

happens. But I really think you should seriously look at the whole

question of drinking at sporting events, because the linking of alcohol

and driving.... The government is the guilty one now where that

happens, so take responsibility for that.

Okay, moving along. I want to bring to your attention, because I'm

sure you don't know.... Do you know that British Columbia is one of

only two provinces left in this country that still throws people in

jail for the non-payment of debts? Yes, it still happens. Alberta and

Saskatchewan and Manitoba and everybody else find more innovative and

humane ways of dealing with debt. Debt is not a crime; it's not a

federal offence; it's not a criminal offence. Yet we still put people

in jail because they don't meet their debts or can't afford to meet

their debts.

I think the time has really come for the minister to look seriously

at the kind of legislation that Alberta, for example, had prior to 1985

that dealt with this issue in a more innovative way, whether it's

garnisheeing of wages, getting a judgment or whatever it is. It seems

to me that there should be other ways that the government can deal with

people who are unable to or who just absolutely refuse to pay their

debt, rather than throwing them into jail.

[4:30]

1 couldn't find anything on the B.C. experience, but the Australian

study of debtors who go to jail indicates that for the most part they

were people on very low income with little formal education who had

been unemployed for a long period of time. I would tend to suspect that

that is the case in British Columbia too, and the reason I do is

because of this evaluation of the debtor assistance program, which

indicates that most of the people who use the program were referred by

the Ministry of Human Resources. So we really are talking about poor

people and unemployed people, and as the Australian research indicated,

people with very low levels of formal education. So I'm hoping that the

minister will bring in an amendment or do something. We've got to stop

this business of debtors' prisons. We're too sophisticated and

civilized.

[ Page 6398 ]

You can't have an on-line system in a province with

a debtors'

prison. It doesn't make sense. Debtors' prisons belong with Charles

Dickens, back in those days.

At the same time, we need a piece of comprehensive exemption

legislation. It should not be possible for a person to lose their

house. It should not be possible for someone who makes their living

fishing to lose their boat, for people to lose the tools that they need

in order to work, because of the nonpayment of debt. We need some

exemption legislation if we are serious about a more enlightened

creditor-debtor relationship. Again I want to recommend to the minister

the Alberta model. I know that we have a $2,000 exemption here in

British Columbia. That's totally inadequate: that's not good enough.

What we really need is to be sure that people don't lose their tools,

their fishing net, the car they need for work; that farmers don't lose

the basic things they need to farm; that people don't lose their family

home because of non-payment of debt.

I want to tell you this story — I'm sure you read it in the Sun

Thursday and Friday, and you'll probably read it again today — about a

75-year-old widow in Burnaby who was evicted just today from her home

for non-payment of debt. This is a widow living on old-age pension,

plus her husband's small Canada Post pension — a maximum income of

about $400 a month. Regional Trust loaned this woman $400,000. They

did! It was a mortgage. She was going to lose her house because she

couldn't keep up the mortgage payments, so they loaned her — on her

$400 a month pension — $400,000. Of course, at that time the 1.5 acre

property in the centre of Burnaby, which as you know is one of the most

pleasant parts of British Columbia to live, was worth $550,000.

Somebody offered to buy it from her for $550,000. She had no intentions

of ever moving; she's lived here all her life.

The trust company loaned her $400,000 and said: "You have a year to

pay it back." On $400 a month income, she had a year to pay back this

$400,000. Well, she said: "I'll sell a part of my land." One of the

lots was about half an acre, so she put it on the market. The bottom

fell out of the real estate market. At the end of the year, come

January 1 this year the lot wasn't sold and the trust company said:

"Now we're ready for our $400,000." In the meantime, the value of the

property had dropped from $550,000 to $450,000.

AN HON. MEMBER: What did she do with the $400,000?

MS. BROWN: She used it to pay off another mortgage company.

She just hadn't met her mortgage payments in the last 20 years, or

whatever.

The reality of the situation is that as the value of the property

began to drop, the trust company became more aggressive in terms of

wanting their $400,000 back. She got extensions; they gave her 10 days.

She appealed to the mayor. The mayor phoned the trust company; they

gave her 10 days. Then she appealed to me and I phoned the trust

company. I said: "Look, it's your house. Let her live there; when she

dies or moves to extended care or whatever, you're going to get it.

It's 1.5 acres in the centre of beautiful Burnaby. The bottom is out of

the market now, but one day that land is going to be worth a heck of a

lot more than $400,000. Leave her alone; she's 75." He said he didn't

have the jurisdiction to make that kind of decision. Her lawyer tried

to get them to let her live there and pay a token rent, but the trust

company said no, and she was evicted this morning.

It seems to me that if we had good exemption legislation in this

province, as it was the family home, she would have been protected. She

would not have lost that house. She could not have been evicted, at 75

years of age, from that house in which she has lived for all these

years. Human Resources now has her, and they're going to try to find a

place for her to live. It raises a number of issues about the

responsibility of trust companies, but I'm just using it as an example

to support my request for some good comprehensive exemptions

legislation to protect the kind of basic necessities of life that

people have. Also, in the meantime the minister can get the trust

company to change its mind and allow her to stay there. Apparently the

sheriff and everyone is there, and she still is refusing to leave.

Maybe the minister could intervene on her behalf.

HON. MR. HEWITT: A number of the items raised by the member

are interesting, and I think it would be worthwhile for me to have

discussions on some of them with the Attorney-General (Hon. Mr. Smith),

because I think some touch on his jurisdiction as well as mine.

The one about the minimum of $2,000 for possessions.... I

believe I'm right in saying it was $500 or $800 a number of years ago.

Not too far back, we raised it to $2,000. I believe that maybe $2,000

is somewhat low, and we should take another look at that. That's one of

the areas.

I don't know any particulars about the 75-year-old lady you talked

about, but with regard to that it's pretty difficult to get involved

between two parties to a contract, with one party getting value of — I

gather from what you say — $400,000 and in return giving a mortgage on

the property and then not being able to meet the commitment. That's

somewhat different than somebody who, you might say, is destitute, has

nothing and just needs a roof over their head. This lady evidently got

a fair amount of value for giving her house and property as a mortgage.

I'd be interested in looking at the material, but I have some

difficulty understanding what jurisdiction or what right we would have

to move on the party to the contract. She received value and gave her

property as security. What she did with that money I have no way of

knowing. If you want to provide me with information, I'd be glad to

receive it.

MS. BROWN: Mr. Chairman, I just want to recommend again to

the minister the Alberta legislation which they had prior to 1985 when

they moved an amendment and took a part of it out. What the legislation

said was exempted were necessary clothing, necessary farm animals, farm

machinery, tools of one's trade, seed and grain for farming, necessary

books of a professional, the homestead and up to $8,000 for one's house

or the cash from its sale. It's not money I'm talking about, but basic

necessities, and the one group that really needs this kind of

protection is people who fish for a living.

Now you know the tragic stories about these people who fish who have

lost their boats. I can't call them fishermen anymore, Mr. Chairman,

because there are a lot of these fishermen now who are women, so I have

to refer to them as people who fish for a living, or fisherfolk.

There was actually a man who submitted a recommendation. He was a

counsellor working with the ministry at one time, but he drew up some

recommendations for these people who make a living fishing, in terms of

what he referred to as an advocate, really. He recommended that there

be a borrower's advocate for these people, but in fact at the same

[ Page 6399 ]

time, linked with the advocate, would be this

exemption of the

fishboat. There is absolutely no way that a person who has lost their

fishboat is ever going to be able to go fishing to raise the money to

meet the debt. So that doesn't make any sense. It's the same thing with

anybody else in terms of the tools of their trade. So it's not the

money I'm talking about.

I want to be clear that Alberta's legislation is not as perfect as

it used to be, because they've now eliminated goods and chattels or

something. I'm not quite clear what they've done.

Okay, mortgages. Is it possible for your ministry to design a

mortgage document that people with a basic average intelligence can

understand? I mean do we always have to have someone to explain the

party of the first part to the party of the second part to the party of

the third part? I understand that the Bank of Nova Scotia has actually

created such a document; that there is a contract that ordinary human

beings can read and understand that says: "You pay this, you get that.

This is your interest payment." Could you encourage your ministry to

draft such a thing?

I realize that you're going to have a heck of a time trying to

educate the lawyers into understanding it once it's been drafted.

MR. MACDONALD: A short form of mortgages, eh?

MS. BROWN: That's right.

Your consumer storefront offices — they're all gone. Not even one

exists any more. I think that's very unfortunate. But I want to extend

some accolades in terms of your debtor assistance offices. They're

hard-working people doing a good job. How many top staff do you have?

Could you tell me something about your administrative positions as

opposed to just straight staff people? I find it appalling that there

is something like $49 billion outstanding in consumer credit in this

country, and that it's the fourth largest industry in B.C. — something

like $4 billion to $5 billion. That's really quite an incredible

statistic.