1973 Legislative Session: 2nd Session, 30th Parliament

HANSARD

The following electronic version is for informational purposes

only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

THURSDAY, APRIL 12, 1973

Night Sitting

[ Page 2669 ]

CONTENTS

Routine proceedings

An Act to Amend the Social Assistance Act (Bill No. 33).

Second reading.

Mr. D.A. Anderson — 2669

An Act to Amend the Vancouver Stock Exchange Act (Bill No.

51).

Second reading.

Mr. Lauk — 2669

An Act to Amend the Vancouver Charter (Bill No. 50). Second

reading.

Mr. Lauk — 2669

Regulations Act (Bill No. 1). Committee and report stages — 2670

An Act to Amend the Constitutional Questions Determination Act (Bill No. 2).

Committee, report and third reading — 2670

Companies Act (Bill No. 16). Committee stage.

Mr. Phillips — 2670

Mr. Williams — 2670

Hon. Mr. Macdonald — 2671

Mr. Gardom — 2671

Hon. Mr. Macdonald — 2671

Mr. Gardom — 2672

Hon. Mr. Macdonald — 2673

Mr. Williams — 2673

Mrs. Jordan — 2673

Mr. Phillips — 2673

Hon. Mr. Macdonald — 2674

Mr. Smith — 2674

Hon. Mr. Macdonald — 2674

Mr. Williams — 2674

Hon. Mr. Macdonald — 2675

Mr. Phillips — 2675

Hon. Mr. Macdonald — 2675

Mr. Gardom — 2676

Hon. Mr. Macdonald — 2677

Mr. Williams — 2677

Hon. Mr. Macdonald — 2678

Mr. Williams — 2678

Hon. Mr. Macdonald — 2679

Bill reported — 2679

An Act to Amend the Securities Act, 1967 (Bill No. 18). Committee, report and

third reading — 2679

An Act to Amend the Infants Act (Bill No. 37). Committee

stage.

Mr. Williams — 2680

Bill reported — 2680

An Act to Amend the Equal Guardianship of Infants Act (Bill

No. 41).

Committee, report and third reading — 2680

An Act to Amend the Coroners Act (Bill No. 46). Committee, report and third

reading — 2680

Debt Collection Act (Bill No. 48). Committee, report and third reading

— 2681

An Act to Amend the Small Claims Act (Bill No. 49). Committee, report and third

reading — 2681

An Act to Amend the Evidence Act (Bill No. 100). Committee, report and third

reading — 2681

An Act to Amend the Landlord and Tenant Act (Bill No.

101).

Committee stage.

Hon. Mr. Macdonald — 2681

Hon. Mr. Hall — 2681

Hon. Mr. Macdonald — 2681

Hon. Mr. Hall — 2682

Bill reported — 2682

An Act to Amend the Mortgage Brokers Act (Bill No. 109).

Committee stage.

Mr. Brousson — 2682

Report and third reading — 2682

An Act to Amend the Land Registry Act (Bill No. 117). Committee, report and

third reading — 2682

An Act to Amend the Government Liquor Act (Bill No.

121).

Committee, report and third reading — 2682

Fair Sales Practices Act (Bill No. 123). Committee, report and third reading

— 2683

An Act to Amend the Strata Titles Act (Bill No. 124).

Committee stage.

Mr. D.A. Anderson — 2683

Hon. Mr. Macdonald — 2683

Report and third reading — 2683

An Act to Amend the Conditional Sales Act, 1961 (Bill No.

128).

Committee stage.

Mr. Gardom — 2683

Hon. Mr. Macdonald — 2684

Report and third reading — 2684

An Act to Amend the Bills of Sale Act, 1961. (Bill No.

129).

Committee stage.

Hon. Mr. Macdonald — 2684

Mr. Phillips — 2685

Bill reported — 2685

An Act to Amend the Supreme Court Act (Bill No. 138). Committee, report and

third reading — 2685

An Act to Amend the Credit Unions Act 1961 (Bill No.

141).

Committee, report and third reading — 2685

An Act to Amend the Motor-Vehicle Act (Bill No. 163). Committee, report and

third reading — 2686

Water Utilities Act (Bill No. 146). Committee stage.

Hon. Mr. Macdonald — 2686

Bill reported — 2686

Telecommunications Utilities Act (Bill No. 147). Committee

stage.

Mrs. Jordan — 2686

Hon. Mr. Macdonald — 2686

Bill reported — 2687

Energy Act (Bill No. 148). Committee stage.

Mr. Smith — 2687

An Act to Amend the Civil Service Superannuation Act (Bill

No. 159).

Committee stage.

Mr. McClelland — 2687

Mr. Chabot — 2688

Hon. Mr. Cocke — 2688

Mr. D.A. Anderson — 2688

Hon. Mr. Barrett — 2689

Hon. Mr. Bennett — 2689

Hon. Mr. Barrett — 2690

Hon. Mr. Bennett — 2692

Hon. Mr. Barrett — 2693

Hon. Mr. Bennett — 2693

Hon. Mr. Barrett — 2694

Hon. Mr. Bennett — 2695

Hon. Mr. Barrett — 2695

THURSDAY, APRIL 12, 1973

The House met at 8 p.m.

Introduction of bills.

Orders of the day.

HON. D. BARRETT (Premier): Mr. Speaker, I move we proceed to

public bills and orders.

Motion approved.

HON. MR. BARRETT: Adjourned debate on second reading of Bill

No. 33, Mr. Speaker.

AN ACT TO AMEND

THE SOCIAL ASSISTANCE ACT

(continued)

MR. SPEAKER: The Hon. Second Member for Victoria adjourned

the debate.

MR. D.A. ANDERSON (Victoria): Yes, Mr. Speaker, we adjourned

the debate the other day because of the fact that the

amendments weren't present. After considerable searching I did

find them in the orders of the day, page 17. The amendments do

not affect the principle of the bill, so we are happy with

them.

The principle of the bill is of course to change what I

would call the Gaglardi

section of the previous Act, where the

Minister had full powers here to change it to the

Lieutenant-Governor-in-Council, which is a step in terms of

less Ministerial control. I guess we can accept it on that,

although of course these things generally are approved at the

request of the Minister. So I really don't know in substance

whether there is a major difference.

At least in the amendments brought forward there is some

provision for appeal, and we support the principle of the bill,

and the bill itself.

We contrast this easy way in which we are able to approve

the principle of this bill after proper amendments, with the

disastrous performance of the government in withholding

amendments on Bill 42. I am quite sure that if you had amended

the bill just as well as you have done in this instance,

perhaps debate on second reading might have been as short.

MR. SPEAKER: The Hon. Minister.

HON. N. LEVI (Minister of Rehabilitation and Social Improvement): Mr.

Speaker, I move the question.

Motion approved; second reading of the bill.

Bill No. 33 referred to a committee of the whole House at the next sitting after today.

HON. MR. BARRETT: Mr. Speaker, may I draw the attention of

the House to the two private bills in second reading. Second

reading of Bill No. 51.

AN ACT TO AMEND THE VANCOUVER

STOCK EXCHANGE ACT

MR. SPEAKER: The Hon. Second Member for Vancouver

Centre.

MR. G.V. LAUK (Vancouver Centre): Thank you, Mr. Speaker. I

move second reading of Bill No. 51,

An Act to Amend the

Vancouver Stock Exchange Act .

MR. D.M. PHILLIPS (South Peace River): Fantastic speech!

(Laughter).

Interjections by some Hon. Members.

MR. LAUK: Thank you very much.

MR. SPEAKER: Order, please.

MR. LAUK: I had prepared a 45-minute explanation of the

bill, but I feel that the bill speaks for itself, Mr.

Speaker.

MR. SPEAKER: The Hon. Member moves second reading. Is there

any further debate?

Interjections by some Hon. Members.

Motion approved; second reading of the bill.

Bill No. 51 referred to a committee of the whole House at

the next sitting after today.

HON. MR. BARRETT : Mr. Speaker, an encore. Second reading of

Bill No. 50.

AN ACT TO AMEND THE

VANCOUVER CHARTER

MR. LAUK: Mr. Speaker, on behalf of the Second Member for

Vancouver–Little Mountain, I move second reading of Bill

No. 50,

An Act to Amend the Vancouver Charter .

Motion approved; second reading of the bill.

Bill No. 50 referred to a committee of the whole House at

the next sitting after today.

HON. MR. BARRETT: Mr. Speaker, I move that the House proceed

to committee on bills.

[ Page 2670 ]

Motion approved.

HON. MR. BARRETT: Committee on Bill No. 1, Mr. Speaker.

REGULATIONS ACT

House in committee on Bill No. 1. Mr. Dent in the chair.

Sections 1 to 12 inclusive approved with amendments. Title

approved.

HON. A.B. MACDONALD (Attorney General): Mr. Chairman, I move

that the committee rise and report the bill complete with

amendments.

Motion approved.

The House resumed; Mr. Speaker in the chair.

Bill No. 1, Regulations Act , reported complete with

amendments, to be considered at the next sitting of the House

after today.

HON. MR. BARRETT: Committee on Bill No. 2, Mr. Speaker.

AN ACT TO AMEND THE

CONSTITUTIONAL QUESTIONS

DETERMINATION ACT

House in committee on Bill No. 2; Mr. Dent in the chair.

Sections 1 and 2 approved. Title approved.

HON. MR. MACDONALD: Mr. Chairman, I move that the committee

rise and report the bill complete without amendments.

Motion approved.

The House resumed. Mr. Speaker in the chair.

Bill No. 2,

An Act to Amend the Constitutional Questions

Determination Act reported complete without amendment, read

a third time and passed.

HON. MR. BARRETT: Committee on Bill No. 16, Mr. Speaker.

COMPANIES ACT

House in committee on Bill No. 16; Mr. Dent in the

chair.

Sections 1 to 52 inclusive approved with amendments.

section 53.

MR. CHAIRMAN: I recognize the Hon. Member for South Peace

River.

MR. PHILLIPS: Section (3) of

section 53. Does this relieve,

in the case of multi-corporations, any of the shareholders in

case they do wrong?

HON. MR. MACDONALD: Oh, no. It would be purely for, as it

says there, "the debts, obligations or acts of the company,"

but nothing to do with any fraudulent dealing or things of that

kind. It says there, "the debts, obligations or acts of the

company," but nothing to do with any fraudulent dealing

or things of that kind.

MR. PHILLIPS: If the company legitimately goes broke then…

HON. MR. MACDONALD: It's just restating the principle of a

limited liability company but does not absolve directors or

possibly even shareholders from extra legal acts that they

might perform.

MR. PHILLIPS: Then, Mr. Attorney General, supposing that the

directors of a company have personal guarantees at a bank or a

finance company et cetera. This section (3) does not relieve

them of that at all?

HON. MR. MACDONALD: In no way.

MR. PHILLIPS: But, if there are no personal guarantees and a

company legitimately goes broke, this will relieve them with

the exception of the Labour Act?

HON. MR. MACDONALD: That's right.

Section 53 approved.

Sections 54 to 64 inclusive approved with amendments.

section 65.

MR. CHAIRMAN: I recognize the Hon. Member for West

Vancouver–Howe Sound.

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

you, Mr. Chairman. I sent to the table

[ Page 2671 ]

today an amendment in my name to

section 65. In the

circumstances it does not appear in the orders which we're

dealing with this evening. Does the Clerk have a copy of that

proposed amendment?

Mr. Chairman, I would move an amendment to

section 65 by

adding to subsection 2 the following words; "The company shall

keep as part of the register a copy of each document creating

the representative capacity referred to in subsection l(a)."

And a procedural amendment thereby renumbering subsections 2

and 3. I'd be happy to let you have this.

"Section 65 (1) (

a) provides that the register of members of

a company shall contain certain information, such as the full

name and address of each subscriber or other person who is a

member and noting, where applicable, his representative

capacity."

That means clearly, Mr. Chairman, that if a person holds

shares in the capacity of a trustee or some other

representative capacity, all that need occur in the register is

that the fact of that representative capacity should be

noted.

I think it is important when one is examining the register

of members to be able to ascertain truly who are the beneficial

members of those shares. The one way in which this can be done

is to oblige the company to keep as part of its register the

document which creates that representative capacity. So that a

person who then, in accordance with the provisions of the Act,

has occasion to look at the list of shareholders of such a

company can, in the course of that search, determine to the

fullest extent who the beneficial shareholders are.

Without this, all one knows is that the person who appears

on the register is himself, not the beneficial owner, and some

idea of the capacity in which those shares are held.

By keeping such a document as part of the register, it means

that a person searching can in fact see and examine the bona

fides of that document.

I move the amendment.

MR. CHAIRMAN: I recognize the Hon. Attorney General.

HON. MR. MACDONALD: Chairman, if the Hon. Member is

suggesting that if someone is, say, an executor of an estate,

that that should show on the register of the company, the

answer is it does. It's now required. This is the point, is it?

If he's a trustee?

MR. WILLIAMS: He may be a trustee under an estate; he may be

a trustee in a number of other ways.

HON . MR. MACDONALD: Yes. That should show.

MR. WILLIAMS: But he may be a trustee under a trust

document, and such a document should be filed so that you can

see who the beneficial owners of the shares are, on whose

behalf that individual is holding the shares. It may be a

voting trust. I think that the document creating that voting

trust should be disclosed on the register.

HON. MR. MACDONALD: Well if the Member is raising the… I'll

let the other Member make his point first.

MR. CHAIRMAN: I recognize the Hon. Second Member for

Vancouver–Point Grey.

MR. G.B. GARDOM (Vancouver–Point Grey): I'd just like

to add one point to the argument of my colleague and friend,

and that is this, that in the very bill that was introduced by

the government tonight, a great point was made of the share

distribution. One of the purposes of the amendment of my friend

is to provide this information to the general public. You've

exemplified this with the British Columbia Cellulose bill

— the number of which escapes my mind — but I think

it would be an extremely retrograde step that we cease to have

any information in a public office in the Province of British

Columbia as to what the shareholders are.

HON. MR. MACDONALD: This is the company's register in this

section.

MR. GARDOM: That's right.

HON. MR. MACDONALD: Not the Registrar of Companies.

MR. GARDOM: No, no, no, I'm talking about this being filed

with the Registrar of Companies.

HON. MR. MACDONALD: It's not under this section.

MR. GARDOM: But file it indeed with the register wherever it

may be. Make it mandatory that this shareholders' list is

maintained completely. In my view that should also be filed

with the Registrar of Companies. Now this is a point that is

really I think best known by the people, Mr. Attorney General,

who practice law in the Province of British Columbia. It is

best known from the area that it does provide some degree of

information whereby public notice can be received of what these

filings are. I think that to destroy that concept in your new

form is bad.

HON. MR. MACDONALD: Well, Mr. Chairman,

[ Page 2672 ]

while I don't know whether it is properly under this

section, the Hon. Members are raising the question of whether

or not beneficial ownership rather than the legal ownership of

shares should be shown, both in the register of the company and

in the filings of the Registrar of Companies. This is the main

point isn't it? This is what we are getting at, because that is

the purport of your later amendments.

MR. CHAIRMAN: I recognize the Hon. Member for West

Vancouver–Howe Sound.

MR. WILLIAMS: We don't quarrel with the right of a company

under a subsequent

section to maintain its register at certain

places. But what is the point of having a register that shows

the person as being a member of the company and notes that the

shares are held in a representative capacity if you can't see

the document which creates that representative capacity?

Why should you have to go and search in a number of places?

If I wish to have my shares in a company held by some person to

represent me, then surely I should be obliged to deposit that

document with the register and make it available for

examination.

MR. CHAIRMAN: I recognize the Hon. Second Member for

Vancouver–Point Grey.

MR. GARDOM: The object of the amendment is to prevent the

situation which has happened so often in the Province of

British Columbia with people who are marginal — marginal

in ethics more than anything else. The object of my friend's

suggestion and which I totally support is the fact that we

should have a beneficial filing as well so that it is possible

to maintain as close as we can the true and the real identity

of a shareholder — the true and the real identity of a

shareholder.

On the proposal that you have, you are making it much more

easy, in my view, for these people to take one step

underground. I think that should not be possible. I think we

should make it much more presentable that they not have that

opportunity to do it.

There's no way of legislating against crime, we appreciate

that. Perhaps there's no way that the measure that is

suggested would ever be 100 per cent effective. We're not

saying that for one minute. But it's certainly a step in the

more correct direction so it's possible for the public to know

that if a person chooses to be a slum landlord, that person

will become identified as a slum landlord as opposed to having

his shares in the name of Mary Ann Smith, secretary, or Joe

Blow, treasurer, as it may be — nominee situation.

HON. MR. MACDONALD: Mr. Chairman, there is a change in the later part

of this Act with respect to trying to define who the beneficial owners of shares

are. That's a later section. This

section represents no change in the Act and

none of the submissions, I am advised, that we have received have made this

proposal, including the Canadian Bar Association.

Now if it's an administrator or executor or that kind of

thing there's no problem. If it's a situation of a slum

landlord who is trying to hide his identity behind a corporate

veil, we have here a problem where we are dealing with it to

the best of our ability in another section. But if this slum

landlord comes in and his shares are held through, say,

Montreal Trust, there's no way that the true beneficial

ownership of those shares can be shown on the register of the

company.

If he comes in through another corporation, there's no way

the true beneficial ownership can be shown and this

section is

not really a change in company law. I'll be glad to consider

representations in the future but we can't accept the

amendment.

MR. CHAIRMAN: I recognize the Hon. Second Member for

Vancouver–Point Grey.

MR. GARDOM: The Attorney General is not accepting the

amendment. Could I perhaps offer as a suggestion to him that

maybe the point could be cured…and pardon me for

transgressing, but this is a very complicated statute and it's

a statute that affects literally hundreds of thousands of

people in this Province.

Maybe the problem could be cured by altering the definition

of member the way that you have included it under

section 2.

Under

section 2, Mr. Attorney General, you say on p. 3, "Member

means a subscriber of the memorandum of a company and includes

every other person who agrees to become a member of a company

and whose name is entered in its register of members or a

branch register of members."

But that doesn't go far enough. Now, I pose this to you as

perhaps a curative measure which would take care of the point

that we are considering at the moment. If that was altered to

read this way, and I do hope that you have received a copy of

this because this is not in the orders of the day:

"Member means a subscriber to the memorandum of a company"

— exactly the same way that you have it, and this is the

difference, Mr. Attorney General — "and includes every

person who becomes the beneficial owner of any share in the

company and every other person who agrees to become a member of

a company" and so forth and so on. Exactly the same as your

definition. Just by including that phrase.

I repeat it: "Member means a subscriber to the memorandum

of a company and includes every person who becomes the

beneficial owner of any share in a company and every other

person who

[ Page

2673 ]

agrees to become a member of a company and/or whose name is

entered in its register of members or a branch register of

members." I think by that approach to it that we have developed

the net that you wish to have and we wish to have.

HON. MR. MACDONALD: Well, Mr. Chairman, I'll be glad to

consider that. That was an amendment to

section 1 that the Hon.

Member was proposing. We'll be glad to consider it in the

succeeding year. I can't say I accept it now. I see real

difficulties in it in the case, for example, that I mentioned

where the shares are really Montreal Trust or a mutual fund. So

until that's worked out that's as far as we can go.

MR. CHAIRMAN: I recognize the Hon. Member for West

Vancouver–Howe Sound.

MR. WILLIAMS: Before we consider the question, Mr. Chairman,

if you have the case of a mutual trust fund, that mutual trust

fund is the beneficial owner of the shares. But if you have a

case where an individual places his shares in the name of

Montreal Trust Company, under the

section as it presently

stands Montreal Trust Company is obliged to note its

representative capacity. If it isn't it's in breach of the

Act.

Now all I'm saying is that as well as noting that capacity

it should file with the company so the register will show a

copy of the document which creates that representative

capacity. What's happening, Mr. Chairman, is that because of

the absence of this requirement the representative capacities

are not today being noted in registers of the company. I would

hope that when we pass this new Act an end would be put to that

practice.

MR. CHAIRMAN: I recognize the Hon. Member for North

Okanagan.

MRS. P.J. JORDAN (North Okanagan): I just want to ask the

Attorney General something in relation to this and I am not a

lawyer.

If the Attorney General does consider imposing in the Act

the suggestions that have been made, recognizing the problems,

I would assume this means you have to do this if we are going

to have a Public Disclosures Act of any meaning, right? So

people in public office couldn't hide behind the same veil that

has been described here.

If this is done is there some way that people can get at the true ownership

of a company as the two Members have agreed should be, that those people could

also be protected against snoopers? If there is a legitimate reason for the

company's true ownership or the shareholder's true ownership to be known, I

think this is quite acceptable and needed. But also there should be a protection

for anybody so that mischief-makers or people with perhaps political reasons

or any other reason, couldn't go and get that information without disclosing

who it was that got that information and why they needed it. So if someone did

go and get it and tried to use it against somebody for mischievous reasons they

could take proper action.

HON. MR. MACDONALD: The Hon. Member will see our procedure

for determining beneficial ownership in certain cases under

section 233 — the whole procedure is set out there.

MR. CHAIRMAN: Shall the amendment to

section 65 pass?

Amendment negatived.

MR. CHAIRMAN: Shall

section 65 pass?

Section 65 approved.

Sections 66 to 74 inclusive approved with amendments.

section 75.

MR. CHAIRMAN: I recognize the Hon. Member for South Peace

River.

MR. PHILLIPS: I do hope the Attorney General will just be

patient with a fellow like me who is a neophyte in politics and

not really a lawyer, but I do have…

MR. CHAIRMAN: Will the Hon. Member please state the

section.

MR. PHILLIPS: In view of Bill 63 and 74, some of these are

very pertinent. Would the Attorney General explain to me

— it says in

Section 75: "change of mortgage may be filed

with the registrar." It goes on in

Section 80 and 81: "register

of mortgages, discharge of mortgages may be executed."

It seems to me, Mr. Chairman, that we could get into a

situation similar to that which happened with Slumber Lodge,

where they file a prospectus, then the mortgages are changed

and the discharge of mortgages is changed, we get new

commitments — pretty soon the original prospectus has

gone down the drain. It doesn't really say that they have to be

filed, it says they "may" be filed.

Section 76. Would the

Attorney General please explain that?

HON. MR. MACDONALD : It must be filed in the Land Registry

Office in any case. These are mortgages.

[ Page 2674 ]

MR. PHILLIPS: Well yes, you could have them filed in the

Land Registry Office, but you go up to the companies…

Interjections by some Hon. Members.

MR. CHAIRMAN: Order please, one person at a time.

MR. PHILLIPS: You haven't answered my question, Mr. Attorney

General. Supposing I'm starting a company and I have a

mortgage, and I change that in the period of a year. What then

happens?

HON. MR. MACDONALD: Of course the mortgage must be filed.

These are changes in the mortgage, so that a person would be

alerted to the fact that there was a mortgage. The change

itself might be a minor matter and might be filed or might not

be filed. So there's no problem about somebody not knowing that

there was a mortgage.

Sections 75 to 92 inclusive approved.

section 93.

MR. PHILLIPS: Explain the amendment.

HON. MR. MACDONALD: That's just a change in punctuation to

Section 93. That may not be important to you, Hon. Member, but

sometimes it's important to lawyers, and sometimes it's

important to judges in the construction of the section. Even

though a lot of input — as the word is — has gone

into it, since it was introduced into the House in its 1973

version, various groups have gone over it again with a fine

tooth comb, legally speaking, and they've said the punctuation

will alter the meaning of this section, or it isn't plain

— and we've even acceded to their proper request for a

change in punctuation, where we've agreed with them. That's all

it is.

Sections 93 to 130 inclusive approved with amendments.

section 131.

MR. CHAIRMAN: I recognize the Hon. Member for North Peace

River.

MR. D.E. SMITH (North Peace River): Just a brief comment, Mr. Chairman,

regarding

section 131. I spoke about the ramifications, as I saw them, of this

particular

section when we were speaking to the bill in principle in second

reading. I appreciate the fact that the Attorney General has clarified the

section

— also relaxed the regulation a little bit in that as long as a person is resident

in Canada, they may qualify to be directors under this section,

whereas before

they had to be Canadian citizens.

It seemed to me that the real crux of the matter is that we

know, in large corporations, the people are who are the

directors of the company. Quite often that has a bearing on

whether you have confidence in their particular ability to

operate that company or not. I was concerned under the previous

wording that we would set up a situation where companies would

do indirectly what they couldn't do directly. In other words,

they'd set up dummy directors in Canada to circumvent the

provisions of the Act. They may still do this in certain

respects, but I think that the chance of that happening is far

less apparent now with them only being resident in Canada. We

have many people from other countries resident in Canada who

could, under this new

interpretation of

section 131, be

directors. I thank the Attorney General for that.

HON. MR. MACDONALD: Mr. Chairman, the Member has made a good

point, but I would just add this. If somebody does try to

satisfy the

section through a dummy director, we have in this

Act generally improved the standards of care that are imposed

upon directors and even a dummy director would be liable. So it

will not be all that easy just to put in a nominal person. From

herein, directors are supposed to exercise real responsibility

for corporate affairs.

Sections 131 to 148 inclusive approved with amendments.

section 149.

MR. CHAIRMAN: I recognize the Hon. Member for West

Vancouver–Howe Sound.

MR. WILLIAMS: Mr. Chairman,

section 149 — the

amendment which is made by the Hon. Attorney General is a very

significant change in the

section from what was originally

produced. The

section as originally introduced provided that

the directors might sell substantially the whole of the

undertaking of the company with such approval of the members as

required by the articles. But now the change is made that you

shall not sell unless you have a special resolution and the

articles might provide otherwise…

Interjection by an Hon. Member.

MR. WILLIAMS: That's right — a special resolution of

the shareholders. Now this means that democracy goes out the

window and that the minority is now in a position to control

the majority.

[ Page 2675 ]

HON. MR. MACDONALD: No, it's the opposite. You must go to

the members if the whole undertaking is being sold.

MR. WILLIAMS: And you have to have a special resolution.

HON. MR. MACDONALD: Of the members.

MR. WILLIAMS: What percentage, Hon. Mr. Attorney

General?

MR. CHAIRMAN: For the benefit of Hansard , I'd ask the

Hon. Minister if he wouldn't mind standing at the mike so that

he can be heard. Otherwise, the procedure is satisfactory.

HON. MR. MACDONALD: Three-quarters.

MR. WILLIAMS: Mr. Chairman, the Attorney General now says

three-quarters is now required. So the majority of the

shareholders of the company may desire to dispose of the whole

or substantially the whole of the undertaking, but if 26 per

cent of them do not, then the action is frustrated. This is

scarcely democratic.

HON. MR. MACDONALD: Well, you go into a company for certain

purposes. Compare this situation with private associations or

societies. If you go into a hockey club you can't by simple

majority convert that into a tennis club if it's an ordinary

society. And in the case of a company, you've got greater

leeway to make various, substantial changes. Sell the whole

undertaking. But we've protected it and this is with the

approval of the groups that have written in about this matter.

We've protected it so that it has to be a special resolution of

all of the Members, and that seems to be acceptable to people

generally.

As I say, if it wasn't an incorporated body but a private

association, changing its objects that substantially or

changing its undertaking could only be done by virtual

unanimity. And this is three-quarters.

MR. CHAIRMAN: Shall the amendment pass?

Amendment approved.

Section 149 approved with amendment.

Sections 150 to 155 inclusive approved with amendments.

On sections 156 to 167.

MR. CHAIRMAN: I recognize the Hon. Member for South Peace

River.

MR. PHILLIPS: Mr. Chairman, would the Attorney General

explain to me what could happen in a case where a director or a

president may file away with one of his lawyers the right for

them to be appointed a director in such cases where the other

directors of a company in the absence of the president who may

be majority shareholder want to call a meeting to vote

themselves a director's fee or take some surplus money out of

the company, et cetera? It says here that a quorum for a

general meeting of a company is two persons unless… However,

does this still allow for the president to leave with his

lawyer and maybe he appoints in escrow the lawyer and the

secretary and maybe somebody else in the lawyer's office to

have a proxy to become a director of the company in case of

need.

Do you understand what I mean?

HON. MR. MACDONALD: You can't appoint a director in your

place by proxy.

MR. PHILLIPS: Yes, but you can file with your lawyer an

affidavit that he is a director — which he will not use

unless required. And supposing that the minority shareholders

of the company decide to get together some afternoon while the

Member might be down in Victoria attending the Legislature or

something and they decide to hold a meeting. Can you leave

these proxies which will not be used by your lawyer unless

there is a need?

HON. MR. MACDONALD: What you need, Mr. Member…

AN HON. MEMBER: Go home, Don.

MR. PHILLIPS: No, but it could happen. It could happen even

in law firms.

MR. CHAIRMAN: Order, please. I recognize the Hon. Attorney

General.

HON. MR. MACDONALD: Well, that can be done if you put in the

articles of the company provision for alternate directors

during which time you as an MLA might be absent from your

company. If that's in the articles, the alternate can act in

your place instead while you are down in Victoria making

speeches.

MR. PHILLIPS: "Aye." (Laughter).

Sections 156 to 196 approved.

section 197.

MR. CHAIRMAN: I recognize the Hon. Second

[ Page 2676 ]

Member for Vancouver–Point Grey.

MR. GARDOM: Well, two things. As a matter of fact, three,

Mr. Chairman. Number one is a very, very short interlude in

this stimulating debate. (Laughter). It would be most

gratifying if the Hon. Members would join me in welcoming to

our public galleries two very fine nine-year-old ladies by the

names of Miss Jessica Crawford and Miss Rita Gardom who are up

there waiting in the section. Thank you.

And the second thing, if I could have the attention of my

Hon. colleague, the Member for West Vancouver–Howe Sound

(Mr. Williams), I'd like his glasses for a minute. (Laughter).

You think you've got troubles in your party. (Laughter).

Mr. Chairman, I would like to move an amendment which

unfortunately has not got to print, but I think Mr. K.M.

Macdonald has been pretty busy these days. I think everybody in

the House as a matter of fact should have a vote of thanks to

the Queen's Printer. We really should. It was very nice of the

Speaker to bow. (Laughter). But I wish you would convey those

sentiments to the Hon. Queen's Printer, Mr. Speaker, from all

of us.

I would like to move an amendment to

section 197 (1), the

substance of which I directed earlier today to the desk of the

Hon. Attorney General and I do hope that he has received it. It

has been filed with the Clerk of the House.

The amendment to this section…

Interjection by an Hon. Member.

MR. GARDOM: Yes, I have a copy here, but the Clerks received

one earlier and I hope they haven't lost it. The amendment, if

you will pardon me groping for a moment, to

section 197 (1) at

the present time reads this way, Hon. Members.

"

(1) Every financial statement, or interim financial

statement, issued, published, or circulated by a company shall

be first approved by the directors, and the approval evidenced

by the signatures of two directors, or, if there is only one

director, by that director."

That is the start of that section, and my amendment adds

these words:

"… and further, at the time of such approval, a director

of a company shall declare under oath that the information

contained in each said approved financial statement, or interim

financial statement, is true to the best of the knowledge,

information, and belief of such director.

Now the purpose of this amendment is pretty obvious to the Members of the House

and more so to the Hon. Attorney General. I'm glad that I have the ear of the

Hon. Minister of Agriculture (Hon. Mr. Stupich) who is a chartered accountant

in the Province of British Columbia, and a well-recognized one indeed.

Every financial statement under the present

section has to

be approved by the directors and it has to be under the hand of

a director. What I've suggested here is just another little

tooth to this section. I am saying not only should it be under

the hand of a director but it should be under the oath of the

director that the contents of that statement are true to the

best of his knowledge, information, and belief. And I would

hope that somebody would ask me, "Why?"

MS. R. BROWN (Vancouver-Burrard): Why?

MR. GARDOM: Thank you very much. The Hon. the lady Member

for Vancouver-Burrard asked me why. Because if we run into the

situation where there are transgressors in balance sheets; if

we run into situation where we happen to have puffed values and

we don't happen to have true and proper values, as for an

example the Commonwealth Trust situation where we had Beach

Gardens included in the balance sheet at $3.2 million if my

memory is correct and the value of Beach Gardens was barely

$200,000.

That statement was under the hand of a director and that

statement unfortunately was also under the hand of a firm of

chartered accountants in the Province of British Columbia. I

would have liked to have seen that under oath to the best of

the knowledge and information and belief of the directors.

Because you do then have at least a better vehicle, another,

shall I say "step in evidence" in the event of prosecution for

people who are turning out bogus phony statements.

Now there is no way that I know that any individual who

happens to turn out a balance sheet that is a proper balance

sheet — and I suppose 99 per cent of them are in the

Province of B.C. — those people have nothing to worry

about. They are just deposing to the truth. But it might give

the people who happen to be defaulters a little bit of pause

and it might make them think a little more carefully before

they go ahead and sign these things.

I think we've got to have, as I've said before in not only

the debates this year but in debates going back four or five

years in this House, that we have got to have much closer

checks and better audits, and that the true value of a

company's assets be shown as opposed to whatever its face value

may be.

As I have said before, the reason for this amendment, if we

go ahead and support these values which we do in the

illustration that I'm giving and the amendment that I'm

proposing — if they were supported by the statutory

declaration of a company director and if they were false, those

people might well have to face the appropriate penalties.

The appropriate penalty could indeed — maybe if it was

serious enough — be a perjury charge; and

[ Page 2677 ]

perjury is an indictable offence and it's punishable by both

imprisonment and fine. I would say that the suggestion that I

have here would give rise to providing a better means of

apprehending those people who should be apprehended and would

not be any kind of hardship or be of any concern to the

literally thousands of people who conduct legitimate business

in the province.

HON. MR. MACDONALD: Mr. Chairman, we've considered the

amendment. Now, mind you, in the case the Hon. Member mentioned

— Commonwealth Trust — somebody did as a director

make misleading statements about the company finances and that

somebody, without having sworn an oath, went to jail.

MR. GARDOM: Yes. But it was pretty tough to get him

there.

HON. MR. MACDONALD: Well, yes. But it wouldn't have been any

easier really…

MR. GARDOM: Much easier, that's the whole point.

HON. MR. MACDONALD: No, I don't think it is easier. If the

Hon. Member will look at

section 364 where directors are liable

for false or misleading statements — and that would

include when they sign the financial statements, the two of

them that may be required to do so. There are heavy penalties

section 364.

MR. GARDOM: But they're not under oath.

HON. MR. MACDONALD: No, they're not under oath. But you

know, to a lot of people — for example to the Scotch…

AN HON. MEMBER: Scots.

HON. MR. MACDONALD: To the Scots …

AN HON. MEMBER: You've been here too long.

HON. MR. MACDONALD: …their word or affirmation is exactly

the same and will be exactly the same whether or not it's under

oath. That makes no difference to them at all.

MR. GARDOM: Don't tell the Campbells. (Laughter).

HON. MR. MACDONALD: So we feel we've adequately covered this point.

You know, convicting somebody of swearing to a financial statement — they've

sworn their oath but they say, "I'm just relying on the accountant;" it's a

pretty tough charge to prove. I think frankly it's easier to prove a case of

signing a false or misleading document under that other

section than it would

be in proving a false oath which is very much a state of mind.

MR. GARDOM: I think in the point that you're making you're

using one barrel and I'm giving you a double-barreled shotgun

with a capacity to pull both triggers at once. I think it's an

added advantage.

HON. MR. MACDONALD: We'll consider it but we won't accept

that at this time.

Amendment negatived.

HON. MR. MACDONALD: I move the amendment standing in my name

on the order paper to

section

Section 197 approved.

Sections 198 to 375 inclusive approved.

First

schedule approved.

On the second schedule.

MR. CHAIRMAN: I recognize the Hon. Member for West

Vancouver–Howe Sound.

MR. WILLIAMS: Mr. Chairman, in the amendment paper that I

sent forward to the table a few moments ago there are two

additional amendments included, to form 17 and form 18. I

believe the Hon. Attorney General has a copy.

To form 17 I propose the addition of a further item which

would call for information regarding members of a company,

their name, their address, and the kind, class and number of

shares held; also an additional amendment to the notes to that

section, which provide that any company which maintains a

register in compliance with sections 67 and 68 of the Act need

not provide that information to the Registrar of Companies.

Now the simple reason for this, Mr. Chairman, is that the

practice currently is that all companies must file with the

Registrar of Companies in Victoria particulars of its

shareholders, including particulars of any changes there may

have been in shareholders since the previous annual meeting. I

fully appreciate that that results in the handling of a

tremendous amount of information by the Registrar of Companies,

and particularly in the case of what are now called public

companies, in the filing of tremendous volumes of paper.

The Act that we presently have under consideration provides

that in such cases a company

[ Page 2678 ]

may have its register maintained at a trust company. I

suggest that in those cases where records are maintained in

that way, the obligation to file in Victoria should not be the

case.

In respect to those other companies who may maintain a

so-called records office at some other place — a lawyer's

office or accountant's office or indeed at the company's own

headquarters — I do not believe that a person who

requires information concerning membership in the company

should be obliged to go to that length in order to find that

information. That information should still be filed with the

Registrar of Companies.

It really is not a great problem as many of the companies

have two or three or four or five shareholders. It is a

questionable process to file these with the Registrar of

Companies so that any person may go and search in a government

office, for the payment of a very moderate fee and get complete

information.

The difficulty, Mr. Chairman, is this: your entitlement to

see these records at a company's records office must take place

during office hours, reasonable times and so on; and I can be

certain that in many cases it will be increasingly difficult to

make searches into the register of members of many so-called

— what we today would call a private company — what will be called

a non-reporting company in the future.

The amendment that I propose will not provide any

significant difference so far as the Registrar of Companies is

concerned. He still must receive the annual report. I just

think that there is other information that should be contained,

except in a case where the company maintains a register in a

trust company.

MR. CHAIRMAN: The Hon. Attorney General.

HON. MR. MACDONALD : Mr. Chairman, what the Hon. Member has

said will be taken into consideration, and I say that because

the schedules that we are referring to here can all be amended

by regulation. That sounds like a fairly major change if we

decided to do that but, in fact, without coming back to the

Legislature, we could accede to this suggestion and require all

shareholdings to be filed with the Registrar of Companies.

But in point of fact, that has not proven to be an effectual

way of determining the true ownership of companies in the past.

For example, on the reporting day somebody has to file an

annual report; and on that particular day there could be a

transfer of shares; and then a day later they could be

transferred back again. The false shareholders would, in

effect, be reported to the Registrar and the Act would have

been complied with.

Not only that, but we have found in the past that the voluminous material that

the Registrar of Companies had to receive was in fact very often badly out of

date, with the company in many cases very close to being in default to the point

of being struck off the register.

So we want to give this a real try in terms of making it

possible for somebody to walk in, in a proper case, to the

company's office itself and say, "We want to look at your books

and see the essential information that is set out in this Act

that has to be held at the records office."

I think it will work. There are very heavy penalties for

anybody who is going to make it difficult for a person entitled

to search in that records office, or to refuse to produce the

records to that person.

So we think it will work. We think the old system, as the

Hon. Member said, led to voluminous paper work but did not

necessarily, particularly in the case of somebody who was a

shyster, really reveal the true state of the shareholders list

of that company over here in the Registrar's office. So we are

prepared to consider it in terms of the fact that we can amend

these schedules, or amend the Act if this is not working out

properly. But we cannot accept the amendment at the present

time.

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

Sound.

MR. WILLIAMS: Mr. Chairman, I'd like to speak further to the

amendment. The Attorney General is neglecting the fact that the

failure to file a return with the Registrar of Companies is a

matter which comes to the notice of the Registrar of Companies

and hence to your office immediately there is no filing, or

within a period of time. But if any one of the tens of

thousands of companies registered in the Province of British

Columbia does not maintain records you will never know, unless

you hire an army of investigators to go around and knock on all

of the doors in the Province of British Columbia where

companies may have their records offices. You'll never

know.

But now you have a system where periodically information

must be filed. If it is not, the Registrar knows within a

matter of days, weeks or months. And he knows. He can then call

upon the company to comply.

Instead of saving money, as I expect that the original

proposal was intended to do, if they are going to police

companies in the Province of British Columbia you're going to

have to have investigators going far and wide throughout the

province in order to see that these registers are

maintained.

Unless you make an actual physical search in the records

office of each company you just won't know. You would know, if

the company said, "We have a register of members at a trust

company." Then there

[ Page 2679 ]

are relatively few places to go and check. If you intend to

proceed in this direction, as I say, you are going to have to

have a squad of investigators going full-time, and the

Registrar of Companies does not have that staff.

MR. CHAIRMAN: The Hon. Attorney General.

HON. MR. MACDONALD: The present situation is that we have

about 60,000 to 70,000 companies in the Province of B.C. and

there is no way, even if we increased a hundredfold the staff

of the Registrar of Companies, that we could actually prosecute

the defaulters when their annual return was overdue That would

be a mammoth task.

On the other hand, if a company turns somebody away from a

records office, that aggrieved person is going to let somebody

know pretty quickly. We think we'll be told about it. We think

the Registrar of Companies will hear about it. If it is a case

of somebody from the media with a legitimate right to search

that company, they'll certainly make it known if they are not

given the proper information in accordance with this Act.

So we think that where the infractions take place we can't

be sure that the records are properly kept, but we can be sure

that whenever anybody entitled to information doesn't get it we

are going to hear about it.

MR. CHAIRMAN: In light of the Minister's remarks, would the

Hon. Member choose to withdraw the amendment?

MR. WILLIAMS: Question. Question on the amendment. I have

moved it.

Amendment negatived.

MR. WILLIAMS: Mr. Chairman, there is a similar amendment

with regard to form 18, which is a form filed by foreign

corporations carrying on business in British Columbia. My

amendment would require that shareholders resident in British

Columbia who own shares in that company also be disclosed. I

move the amendment.

Amendment negatived.

HON. MR. MACDONALD: Mr. Chairman, I had an amendment in my

name in the order paper to this second schedule, and I

understood that was passed earlier, prior to these other

amendments being called. I now move those other amendments

anyway to make sure.

Amendments approved.

Second

schedule approved with amendments.

Third

schedule approved with amendment.

Title approved.

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

and report the bill complete with amendments.

Motion approved.

The House resumed; Mr. Speaker in the chair.

Bill No. 16, Companies Act reported complete with

amendments to be considered at the next sitting of the House

after today.

HON. MR. BARRETT: Committee on Bill No. 18, Mr. Speaker.

AN ACT TO AMEND

THE SECURITIES ACT, 1967

House in committee on Bill No. 18; Mr. Dent in the

chair.

Sections 1 to 14 inclusive approved.

Title approved.

HON. MR. MACDONALD: 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 No. 18,

An Act to Amend the Securities Act ,

reported complete without amendment, read a third time and

passed.

HON. MR. BARRETT: Committee on Bill No. 37, Mr. Speaker.

AN ACT TO AMEND

THE INFANTS ACT

House in committee on Bill No. 37; Mr. Dent in the

chair.

section 1.

MR. CHAIRMAN: There's an amendment standing on the order

paper in the name of the Hon. Member for West

Vancouver–Howe Sound.

[ Page 2680 ]

MR. WILLIAMS: Yes, Mr. Chairman. I move the amendments to

section 1 standing in my name on the order paper.

The first amendment is to add at the commencement of that

section the words "subject to the provisions of

section 3" and

to make a significant change in subsection (3).

HON. MR. BARRETT: How would you define the word

"reasonable"?

MR. WILLIAMS: If any question arises, through you Mr.

Chairman to the Premier, as to whether the practitioner has

made a reasonable effort to communicate with the parents, that

question would arise in the event that any action were brought

against the practitioner for carrying out the particular

procedures or treatment that he did without getting consent.

The reasonableness of his effort would be determined by the

court in the course of those proceedings.

Mr. Chairman, subsection (3) as it presently stands is

really a meaningless section. It says, "Nothing herein shall be

construed as making ineffective any consent which would

otherwise have been effective…" That

section can be left

out.

The purpose of the amendment is this, Mr Chairman: before a

medical practitioner or a dentist carries out treatment upon an

infant over the age of 16, he should first be obliged to

establish that he's made a reasonable effort to obtain the

consent of the parent of that child. If he has made a

reasonable effort and if the consent is refused, then the

second portion of my amendment would permit the medical

practitioner or dentist to give the treatment or undertake the

procedures if he receives the confirmation from another medical…

HON. MR. MACDONALD: Make your motion. We'll accept it.

MR. CHAIRMAN: Shall the amendment pass?

Amendment approved.

MR. CHAIRMAN: Shall

section 1 as amended pass?

Section 1 as amended approved.

Title approved.

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

and report the bill complete with amendment.

Motion approved.

The House resumed; Mr. Speaker in the chair.

Bill No. 37,

An Act to Amend the Infants Act ,

reported complete with amendment to be considered at the next

sitting of the House after today.

HON. MR. BARRETT: Committee on Bill No. 41, Mr. Speaker.

AN ACT TO AMEND THE EQUAL

GUARDIANSHIP OF INFANTS ACT

House in committee on Bill No. 41; Mr. Dent in the

chair.

Sections 1 to 3 inclusive approved.

Title approved.

HON. MR. MACDONALD: 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 No. 41,

An Act to Amend the Equal Guardianship of

Infants Act , reported complete without amendment, read a

third time and passed.

HON. MR. BARRETT: Committee on Bill No. 46, Mr. Speaker.

AN ACT TO AMEND

THE CORONERS ACT

House in committee on Bill No. 46; Mr. Dent in the

chair.

Sections 1 to 6 inclusive approved.

Title approved.

HON. MR. MACDONALD: 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 No. 46,

An Act to Amend the Coroners Act ,

reported complete without amendment, read a third time and

passed.

HON. MR. BARRETT: Committee on Bill No. 48, Mr. Speaker.

[ Page 2681 ]

DEBT COLLECTION ACT

House in committee on Bill No. 48; Mr. Dent in the

chair.

Sections 1 to 22 inclusive approved.

Title approved.

HON. MR. MACDONALD: 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 No. 48, Debt Collection Act , reported complete

without amendment, read a third time and passed.

HON. MR. BARRETT: Committee on Bill No. 49, Mr. Speaker.

AN ACT TO AMEND THE

SMALL CLAIMS ACT

House in committee on Bill No. 49; Mr. Dent in the

chair.

Sections 1 to 13 inclusive approved.

Title approved.

HON. MR. MACDONALD: 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 No. 49,

An Act to Amend the Small Claims Act ,

reported complete without amendment, read a third time and

passed.

HON. MR. BARRETT: Committee on Bill No. 100, Mr.

Speaker.

AN ACT TO AMEND THE

EVIDENCE ACT

House in committee on Bill No. 100; Mr. Dent in the

chair.

Sections 1 to 4 inclusive approved with amendment.

Title approved.

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

and report the bill complete with amendment.

Motion approved.

The House resumed; Mr. Speaker in the chair.

Bill No. 100,

An Act to Amend the Evidence Act ,

reported complete with amendment to be considered at the next

sitting of the House after today.

HON. MR. BARRETT: Committee on Bill No. 10 1, Mr.

Speaker.

AN ACT TO AMEND THE

LANDLORD AND TENANT ACT

House in committee on Bill No. 101; Mr. Dent in the

chair.

Sections 1 and 2 approved.

section 3.

HON. MR. MACDONALD: Mr. Chairman, I'd like leave of the

committee to withdraw the amendment standing in my name on the

order paper on the basis that there is an omnibus amendment

coming in from the Provincial Secretary that catches up what I

was going to do and adds a little bit of its own. My amendment

will be covered in that fashion so I ask leave to withdraw.

Leave granted.

MR. CHAIRMAN: I recognize the Hon. Provincial Secretary.

HON. E. HALL (Provincial Secretary): Mr. Chairman, I'd like

to move the amendment to

section 3 standing in my name on the

order paper.

Amendment approved.

Section 3 approved with amendment.

Sections 4 and 5 approved.

section 6.

HON. MR. MACDONALD: Mr. Chairman, I'd ask leave of the

committee to withdraw the amendment standing in my name on the

order paper to

section 6 so that the Provincial Secretary's

omnibus

[ Page 2682 ]

amendment can be brought in before the committee.

Leave granted.

HON. MR. HALL: Mr. Chairman, I move

section 6, which is a

much shorter omnibus amendment than that suggested by my

colleague.

Amendment approved.

Section 6 approved with amendment.

Sections 7 to 15 approved with amendment.

Form 5 and 6 approved.

Title approved.

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

and report the bill complete with amendments.

Motion approved.

The House resumed; Mr. Speaker in the chair.

Bill No. 101,

An Act to Amend the Landlord and Tenant

Act , reported complete with amendments to be considered at

the next sitting of the House after today.

HON. MR. BARRETT: Committee on Bill No. 109, Mr.

Speaker.

AN ACT TO AMEND THE

MORTGAGE BROKERS ACT

House in committee on Bill No. 109; Mr. Dent in the

chair.

Sections 1 to 4 inclusive approved.

Title approved.

MR. CHAIRMAN: I recognize the Hon. Member for North

Vancouver-Capilano.

MR. D.M. BROUSSON (North Vancouver-Capilano): Thank you, Mr.

Chairman. At this point I can only comment that the additional

amendments that I have suggested in this House would not be in

order. The Attorney General would not bring them into the House

himself. I can only express my deep disappointment in these

pussycat amendments which don't make the bill truly

effective.

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

the bill complete without amendment, as very slightly flawed. (Laughter).

Motion approved.

The House resumed; Mr. Speaker in the chair.

Bill No. 109,

An Act to Amend the Mortgage Brokers

Act , reported complete without amendment, read a third time

and passed.

HON. MR. BARRETT: Committee on Bill No. 117, Mr.

Speaker.

AN ACT TO AMEND THE

LAND REGISTRY ACT

House in committee on Bill No. 117; Mr. Dent in the

chair.

Sections 1 to 15 approved.

Form MN approved.

Title approved.

HON. MR. MACDONALD: 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 No. 117,

An Act to Amend the Land Registry Act ,

reported complete without amendment, read a third time and

passed.

HON. MR. BARRETT: Committee on Bill No. 121, Mr.

Speaker.

AN ACT TO AMEND THE

GOVERNMENT LIQUOR ACT

House in committee on Bill No. 121; Mr. Dent in the

chair.

Sections 1 to 19 approved.

Title approved.

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

and report the bill complete without amendment.

Motion approved.

[ Page 2683 ]

The House resumed; Mr. Speaker in the chair.

Bill No. 121,

An Act to Amend the Government Liquor

Act , reported complete without amendment, read a third time

and passed.

HON. MR. BARRETT: Committee on Bill No. 123, Mr.

Speaker.

FAIR SALES PRACTICES ACT

House in committee on Bill No. 123; Mr. Dent in the

chair.

Sections 1 to 14 approved.

Schedule approved.

Title approved.

HON. MR. MACDONALD: 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 No. 123, Fair Sales Practices Act , reported

complete without amendment, read a third time and passed.

HON. MR. BARRETT: Committee on Bill No. 124, Mr.

Speaker.

AN ACT TO AMEND

THE STRATA TITLES ACT

House in committee on Bill No. 124; Mr. Dent in the

chair.

Sections 1 to 3 inclusive approved.

section 4.

MR. CHAIRMAN: I recognize the Hon. Second Member for

Victoria.

MR. D.A. ANDERSON: One minor matter on

section 4. At the end

of 16A(5)(

c) do you want a comma or a full stop?

HON. MR. MACDONALD: What is it? Would you just repeat the

question?

MR. D.A. ANDERSON: In here you have "strata plan for the

lands affected." Should that be a comma or a full stop? A minor

matter, but…

HON. MR. MACDONALD: Yes. I think that's all one sequence

there, and the Hon. Member is quite right, that "shall, if

satisfied" is reading down right through (

g) and it should

really be a comma and for some inexplicable reason we come to a

full stop. And I suggest possibly with leave of the committee

the law clerk might have permission to correct that.

It's just changing a period to a comma.

Leave granted.

MR. CHAIRMAN: Shall

section 4 pass?

Section 4 approved.

Sections 5 and 6 approved.

Title approved.

HON. MR. MACDONALD: Mr. Chairman, I move that the committee

rise and report the bill complete without amendment.

Motion approved.

The House resumed. Mr. Speaker in the chair.

Bill No, 124,

An Act to Amend the Strata Titles Act ,

reported complete without amendment, read a third time and

passed.

HON. MR. BARRETT: Committee on Bill No. 128, Mr.

Speaker.

AN ACT TO AMEND THE

CONDITIONAL SALES ACT, 1961

House in committee on Bill No. 128; Mr. Dent in the

chair.

Sections 1 to 9 inclusive approved.

On the title.

MR. CHAIRMAN: I recognize the Second Member for

Vancouver–Point Grey.

MR. GARDOM: Just one short word, Mr. Chairman, concerning

the title: this perhaps does transgress into the next statute,

and it also transgresses slightly into a more general field,

but I would ask the Attorney General if he would direct to the

law reform commission that they give some thought and some

study into the use of the word "guarantee."

Now, I've been in the House through three Attorneys General.

We've heard criticism after

[ Page 2684 ]

criticism about the very loose use of that particular word.

It's not in the statute — you don't have to search to

find it. But it's applicable to this bill because we find

conditional sales of goods that are subject to almost infinite

guarantees and absolute sales of goods that are subject to

almost totally unconditional guarantees.

The word "guarantee" has become an exceptionally loose word

and it is a word that has always troubled a legislator. But it

is one where there has been no effort put into it by a

government side, in any government that I know of, to try to go

ahead and inform or educate the general public as to perhaps

the defensive measure that they should take and the things that

they should look out for and be perhaps even suspicious of when

they see the word "guarantee."

Maybe it's only an educative programme; maybe the word

"guarantee" should be used only on certain situations whereby

there is an effective mechanism to the satisfaction of a

government, shall we say, that the guarantor can back

up the guarantee. But I remember most vividly the use of the

word "guarantee" being severely criticized by Mr. Bonner when

he was Attorney General. The time it was brought specifically

to his attention was about three years before the Commonwealth

Trust bubble broke, and they were using that word — that

company was using that word in the loosest sense. He said,

"There's a wrong here; it's something we should look into."

Your immediate predecessor, Mr. Peterson, said, "Aha, there is

a wrong here; it is something we should look into," and

I'm sure you're going to say the same thing. But I'd like for

once somebody to do something about the ruddy thing instead of

just look into it.

I would be most personally pleased, and that's immaterial

— it would be most useful to the general public if you

would perhaps refer to the law reform commission that they

investigate the use of the word and determine how perhaps it

could be better curtailed — that's not the correct

statement — but how at least, if it is used, it can be

used with an indication of the backing behind it, instead of

just saying, "It is guaranteed."

Any fool can guarantee and it doesn't mean that it is an

effective guarantee.

HON. MR. MACDONALD: Well, Mr. Chairman, speaking on the

title, I think it may be considered in its legal context, but

even more particularly in its consumer protection context.

Now, we'll be discussing that subject and I'll try and raise

that matter as to how often this word comes up in the consumer

field and how often people are really deceived after relying on

what seems to be a guarantee.

MR. CHAIRMAN: Shall the title pass?

Title approved.

HON. MR. MACDONALD: 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 No. 128,

An Act to Amend the Conditional Sales Act,

1961 , reported complete without amendment, read a third

time and passed.

HON. MR. BARRETT: Committee on Bill No. 129, Mr.

Speaker.

AN ACT TO AMEND THE

BILLS OF SALE ACT, 1961

House in committee on Bill No. 129; Mr. Dent in the

chair.

Sections 1 to 3 inclusive approved.

section 4.

MR. CHAIRMAN: I recognize the Hon. Attorney General.

HON. MR. MACDONALD: On

section 4 in this seize-or-sue

legislation there is a minor problem with respect to collateral

mortgages that are already outstanding. It's been drawn to our

attention by the Industrial Development Bank that there is a

rule of law, and we could get very technical on this subject,

that if there is a prime security and collateral security you

have to try your collateral security first or you will lose

your collateral security. You will lose it. You can't go

against it. You have to go in the proper order against it.

So I have an amendment here which I would like to recommend

to the committee, which is to amend

section 4, after the last

line, by adding the following as subsection (3):

"For the purposes of subsection (2) of

section 22A, 'instrument'

does not include a mortgage on land granted before this

section comes into force."

In other words, in arguing the amendment, Mr. Chairman, after the Act comes

into force people can protect themselves in this way. They can have prime security,

not one prime and one collateral, and protect themselves. But already where

there are cases where there are the two kinds of securities existing already,

it's rather unfair to bring in this legislation and nullify their security to

some extent.

[ Page 2685 ]

I move the amendment.

MR. CHAIRMAN: Shall the amendment to

section 4 pass?

Amendment approved.

MR. CHAIRMAN: Shall

section 4 as amended pass?

MR. PHILLIPS: I would just like to ask one small question to

the Attorney General. In the case where a mechanics' lien is

executed on a vehicle prior to its being repossessed under the

terms of this new Act, shall the mechanics' lien still have

priority over the repossessory lien?

HON. MR. MACDONALD: Yes. The mechanic's lien still has

priority under the Mechanics' Lien Act .

MR. PHILLIPS: But you really don't give that much

protection. Prior to this Act coming into force, Mr. Attorney

General, if you repossessed a vehicle, or any automobile dealer

repossessed a vehicle, and there was a mechanics' lien on it,

and he suffered a deficiency because of that, then he was able

to go back to the original owner. Now, under this Act he will

not be able to do so. So is there any protection for the

dealer?

HON. MR. MACDONALD: Well, if the person elects to seize

rather than sue — and they can only do one or the other

now — if they elect to seize they are going to be

responsible to pay off that mechanics' lien because that's a

prior charge.

Sections 4 to 6 inclusive approved with amendment.

Title approved.

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

and report the bill complete with amendment.

Motion approved.

The House resumed; Mr. Speaker in the chair.

Bill No. 129,

An Act to Amend the Bill of Sales Act ,

reported complete with amendment to be considered at the next

sitting of the House after today.

HON. MR. BARRETT: Committee on Bill No. 138, Mr.

Speaker.

AN ACT TO AMEND THE

SUPREME COURT ACT

House in committee on Bill No. 138; Mr. Dent in the

chair.

Sections 1 to 3 inclusive approved.

Title approved.

HON. MR. MACDONALD: 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 No. 138,

An Act to Amend the Supreme Court Act ,

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

HON. MR. BARRETT: Committee on Bill No. 141, Mr.

Speaker.

AN ACT TO AMEND

THE CREDIT UNIONS ACT, 1961

House in committee on Bill No. 141; Mr. Dent in the

chair.

Sections 1 to 12 inclusive approved. Title approved.

HON. MR. MACDONALD: 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 No. 141,

An Act to Amend the Credit Unions Act,

1961 , reported complete without amendment, read a third

time and passed.

HON. MR. BARRETT: Committee on Bill No. 163, Mr.

Speaker.

AN ACT TO AMEND THE MOTOR-VEHICLE ACT

House in committee on Bill No. 163; Mr. Dent in the

chair.

Sections 1 to 27 inclusive approved.

Title approved.

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

and report the bill complete

[ Page 2686 ]

without amendment.

Motion approved.

The House resumed; Mr. Speaker in the chair.

Bill No. 163,

An Act to Amend the Motor-Vehicle Act ,

reported complete without amendment, read a third time and

passed.

HON. MR. BARRETT: Committee on Bill No. 146, Mr.

Speaker.

WATER UTILITIES ACT

House in committee on Bill No. 146; Mr. Dent in the

chair.

Sections 1 to 4 inclusive approved.

section 5.

HON. MR. MACDONALD: Mr. Chairman, I move the amendment

standing in my name on the order paper to

section 5.

MR. CHAIRMAN: Shall the amendment to

section 5 pass? I

recognize the Hon. Member for North Okanagan.

MRS. JORDAN: Can the Attorney General just explain what the

amendment means, please?

HON. MR. MACDONALD: Well, in the telecommunications field

the Okanagan Telephone, which the Hon. Member is interested in,

is being transferred so that it will now be…

MR. CHAIRMAN: We're on Bill 146. (Laughter).

HON. MR. MACDONALD: Well, you'll find exactly the same

amendment to the next one under telecommunications. I know the

Member is interested in Okanagan telephones, so I thought that

was it. But all it is saying is that we have a transition

section where water utility regulations of the old PUC are said

to continue in force. All this amendment is saying is that they

continue in force until they expire or are lawfully changed or

amended. So that's all it's doing. It's a technical thing, in a

sense.

MRS. JORDAN: This has nothing to do with the posting of

bonds for water?

HON. MR. MACDONALD: Oh, no.

Sections 5 and 6 approved with amendments.

Title approved.

HON. MR. MACDONALD: Mr. Chairman, I move that the committee

rise and report the bill complete with amendment.

Motion approved.

The House resumed; Mr. Speaker in the chair.

Bill No. 146, Water Utilities Act , reported complete

with amendments to be considered at the next sitting of the

House after today.

HON. MR. BARRETT: Committee on Bill No. 147, Mr.

Speaker.

TELECOMMUNICATIONS UTILITIES ACT

House in committee on Bill No. 147; Mr. Dent in the

chair.

Sections 1 to 4 inclusive approved.

section 5.

HON. MR. MACDONALD: I move the amendment standing in my name

on p. 27 of the orders of the day of April 12, 1973.

MR. CHAIRMAN: I recognize the Hon. Member for North

Okanagan.

MRS. JORDAN: Could you just explain again how this amendment

relates to the underwater telephone company? (Laughter).

HON. MR. MACDONALD: Same explanation.

MRS. JORDAN: Why does this relate to the telephone company?

Would the Minister please explain this amendment?

HON. MR. MACDONALD: Well, it's exactly the same as in the

case of the Water Utilities where an order is outstanding. If

we pass a statute that says that the old orders of the PUC

remain in force, notwithstanding the change from the PUC to the

new B.C. Energy Commission, then they would carry on forever.

You know, as long as our statute was there saying they were in

force. So we say they are in force until they are lawfully

changed, or until they expire. That's all we're doing. It stays

in force at the pleasure of the Crown for three years.

Sections 5 and 6 approved with amendment.

Title approved.

[ Page 2687 ]

HON. MR. MACDONALD: Mr. Chairman, I move that the committee

rise and report the bill complete with amendment.

Motion approved.

The House resumed; Mr. Speaker in the chair.

Bill No. 147, Telecommunications Utilities Act ,

reported complete with amendment to be considered at the next

sitting of the House after today.

HON. MR. BARRETT: Committee on Bill No. 148, Mr.

Speaker.

ENERGY ACT

House in committee on Bill No. 148; Mr. Dent in the

chair.

section 1.

MR. CHAIRMAN: I recognize the Hon. Member for North Peace

River.

MR. SMITH: In speaking to

section 1 of the bill, Mr.

Chairman, we've been going since 9 o'clock this morning and

it's after 10 o'clock this evening. It's been better than 13

hours since we started.

In all due respect to the Premier and the fact that he would

like to get some of this legislation moving along, surely to

goodness at this time of night he could call some of the bills

which he knows will not create a lot of contentious argument or

debate and you could move those along…

HON. MR. BARRETT: Would you move an adjournment of this

bill?

MR. SMITH: Yes. Mr. Chairman, I move that the committee rise

and report progress.

Motion approved.

The House resumed; Mr. Speaker in the chair.

MR. CHAIRMAN: Mr. Speaker, the committee reports progress

and asks leave to sit again.

Leave granted.

HON. MR. BARRETT: Committee on Bill No. 159, Mr.

Speaker.

MR. D. A. ANDERSON: A point of order, Mr. Speaker. It is helpful if

we get a list of the order in which the Ministers are coming up. I was actually

expecting agriculture this evening.

HON. MR. BARRETT: Yes, but, it's my understanding that the

House wishes to go to non-contentious bills at this point.

Interjection by an Hon. Member.

HON. MR. BARRETT: I'm just telling you now — No.

MR. D.A. ANDERSON: Who is after the Provincial Secretary?

The thing is that it's not alphabetical. I'm just wondering

which way you're going.

HON. MR. BARRETT: It can't be alphabetical because of what

the House now wishes. I'll try to find the bills that are

non-contentious. I'll let you know as soon as we're through the

Provincial Secretary's. I'm checking the thing now because I'll

have to change the

schedule at your request. I'll let you know

as soon as I can.

AN ACT TO AMEND THE CIVIL SERVICE

SUPERANNUATION ACT

House in committee on Bill No. 159; Mr. Dent in the

chair.

Sections 1 to 14 inclusive approved.

section 15.

MR. CHAIRMAN: I recognize the Hon. Member for Langley.

MR. R.H. McCLELLAND (Langley): Mr. Chairman, I move the

amendment standing on the order paper in my name.

Once again, I move this amendment for the same reasons that

we've made representation to the government on many other

occasions — because of the possibility of the expansion

of financing to include so many other areas, rather than those

areas which are guaranteed in guaranteed securities, Mr.

Chairman.

We feel that this is a wrong area in which to move. We feel

that even though the government offers guarantees up to a

certain investment limit, if those investments are bad, the

taxpayers' money is lost and it can never ever be regained. We

understand that the civil servants won't lose their investment

because it will be guaranteed by the government, but only to a

certain degree. It's not nearly as much as they would have got

out of it on the basis of guaranteed investments, Mr.

Chairman.

[ Page 2688 ]

For those reasons, and once again because of the danger of

expanding this kind of investment outside of guaranteed

investment funds, I move this amendment.

MR. CHAIRMAN: I recognize the Hon. Provincial Secretary.

HON. MR. HALL: Mr. Chairman, the government does not accept

the amendment. We're voting against it.

MR. CHAIRMAN: I recognize the Hon. Member for Columbia

River.

MR. J.R. CHABOT (Columbia River): Looking at this

section

and the amendment, the amendment is a realistic one. It

protects the present financial position of pension funds in

British Columbia.

We have fully-funded pension funds. It's one of the few

jurisdictions in all of Canada that has the type of financial

resources and stability in pension funds. I would like to see

this maintained, rather than the government having the ability

to invest pension funds in any capital stock of any

corporation, be it in the Province of British Columbia or

elsewhere.

I think it's a very dangerous precedent and one which could

be very costly, not to the people who are receiving pensions in

British Columbia, but to the taxpayers of British Columbia. We

cannot accept

section 15 as it presently reads in this Act.

MR. CHAIRMAN: I recognize the Hon. Minister of Health

Services and Hospital Insurance.

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

Mr. Chairman, the pension business is now in the 1970's. I'm glad to see our

government recognizing at long last the route that pension trust funds have

gone for some number of years.

As you know, I've been connected with pensions and life

insurance for a great length of time. I was pleased to see that

at least the Social Credit Party now understands that there is

no threat to the recipients of the pension plan.

Interjection by an Hon. Member.

HON. MR. COCKE: No, the argument the other day was the

threat to the recipients.

AN HON. MEMBER: The taxpayers.

HON. MR. COCKE: The taxpayers are the only people who could possibly

lose anything in any way. This aspect of this plan indicates that now we have

the freedom to invest that money where it can do better for the taxpayers of

the Province of British Columbia. We don't want to go along that dark street

that we've been in for so long.

Mr. Chairman, this plan is a guaranteed plan for the

recipients. This is a very wise move for the government to make

at this time.

MR. CHAIRMAN: I recognize the Hon. Second Member for

Victoria.

MR. D.A. ANDERSON: We support the suggestion that subsection

(

d) be struck. The reasons are pretty simple. We've mentioned

them before, and I'll go over them very briefly now.

First of all, the statements have been made that it's just

as question of guarantee, and that only taxpayers' money could

be lost. This is perhaps precisely whom we should be protecting

in this instance. Why is it that in this

section we give the

Minister of Finance, in his sole discretion, the ability to use

as much money as he can take out of the pensions funds,

provided the immediate needs are met, and play the market with

it and invest it in any corporation that he likes.

The fact of the matter is that we have other corporations,

one of which is under Bill 102 — and I guess I can't

discuss it now. We have other provisions which allow the

Minister to make investments on behalf of the public in a way

which is much more controllable and observable than this one

is. We fail to see why this should be justified simply on the

grounds that if he makes any mistakes, the taxpayers have to

make up any losses.

This is just a straight open invitation for entering the

market with substantial amounts of money — there will be

many, many millions of dollars — and playing it for

whatever it's worth because, in actual fact, there can be no

losses, according to the Minister, because the taxpayers have

to cough up.

It is the sort of situation which I think would encourage

irresponsible or reckless speculation. The pensioners can't

lose, according to the Minister, so they're not going to be

able to squeal, and in turn eventually…

MR. CHAIRMAN: Order, please. A little more quiet.

MR. D.A. ANDERSON: …according to the Minister of Health

the taxpayers have to pick up the burden. Well, we think that's

not the way the government should get into investments of this

type in this area at all. We think it should be an entirely

controllable situation where it is completely obvious to the

public what's happening. Otherwise we're going to be in a

situation where maybe years later the government is forced to

make good a guarantee on

[ Page

2689 ]

the basis of bad investment decisions by a Minister of

Finance who might be long gone. And it just doesn't seem to be

a sensible provision to put into

an Act of this nature because

there are absolutely no controls whatsoever under this

particular

section or any other

section of this Act.

MR. CHAIRMAN: I recognize the Hon. Premier.

HON. MR. BARRETT: Mr. Chairman, I appreciate the comments

made by members of the opposition, but I assure you that the

idea that there will be reckless investments or investments

made with gay abandon is a little bit much.

There will be an annual report.

Interjection by an Hon. Member.

HON. MR. BARRETT: Oh, I'm not suggesting "trust us." Now,

don't go off on that line. I'm just suggesting that you

understand what the situation is in terms of the existing

controls. All right. Look, it is a decision that the government

has to make. If you're uncomfortable with that, I appreciate

that, but I'm trying to give you our explanation of why we are

taking this choice. You may not agree, but certainly we are on

a route that we'd like to explain.

There's an annual report. There's an auditor. There are

trustees. And then there is the Treasury Board itself.

Now we're not sitting down in the corner playing some kind

of roulette with these funds. The former administration set a

pattern for the investment of funds that was fairly rigid. That

was a cause of concern from the pensioners who claimed that

they weren't getting enough return. All right. So now we're

embarking on this course. We are going to be cautious. We are

going to be very, very careful, and we're guaranteeing it. We

will come back with our annual report, and we'll see what our

experience is in a year's time.

I realize that this is a departure from the rigidity of the

past.

AN HON. MEMBER: The public are guaranteeing it.

HON. MR. BARRETT: O.K. The public are guaranteeing the BCR

bonds, the school bonds and everything else. So we're all in

this as the public.

Interjection by an Hon. Member.

HON. MR. BARRETT: O.K. Look, Mr. Member, I can appreciate

your anxiety, but you don't come with the framework of what

we've gone through to get to this point.

We've had a lot of trouble — and if you were here with the demonstration of

those teachers in terms of the pensions they wanted…and the previous administration's

rigidity. Now, we're trying to move cautiously out of that.

You vote against it, or do whatever you want. But, I am

trying to give you a rational explanation. If you are not

prepared to accept it, vote against it. But it's my obligation

to give you an explanation from our point of view.

The explanation is simply this: we will be cautious; we will

not be making reckless investments in unknown gold mines

— Wing Dam et cetera, or Dry Gulch or anything else. The

procedure will be through the Minister of Finance, through the

Treasury Board, and the investments will be made. We have a

year to review it. And we'll have a chance to look at it.

Interjection by an Hon. Member.

HON. MR. BARRETT: I'm not one of them. We're not investing

there.

So that's our position. And I've listened very carefully to

your concerns, and your concerns are valid, and we'll be

cautious.

MR. CHAIRMAN: I recognize the Hon. Leader of the

Opposition.

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

Chairman, this is a decided departure. I understand the

government's point of view — and that's the beauty of our

democratic parliamentary system, the right to differ, to have

different points of view.

What I mentioned the other day in second reading I would

like to re-emphasize now, that we are dangerously near the top

of the boom that has been in existence since 1945.

Metropolitan Life, one of the largest insurance companies,

has just announced that it's withdrawing mainly from

investments in common shares and going more and more into bonds

because of this "near the top of the boom." And it isn't true.

Therefore I would urge that the government move very slowly on

this — extremely slowly during the next two or three

years during this period of adjustment, because you could have

a bad slump overnight.

You might have success for six months or a year and the

stocks can look good, and, as you know, that could give you the

wrong impression of what can happen. I've mentioned not only

the Penn Railway, but other railways, the CPR and everybody

else — all the good stocks that went bing, bing, bing,

you know. And that could happen. There is no way that a

government can pick the blue-chip stocks that are going to stay

blue-chip, because we're not only in that place in the boom but

in a great period of rising

[ Page 2690 ]

costs.

It is going to be harder and harder for companies to make a

profit, to pay dividends that would then go…you get the

revenue from these investments into the pension funds. Because

as your costs go up, and labour costs go up, and with the

resistance against prices going up — then the profit

squeeze comes on these companies and the common shares where

dividends are being declared, and that's where the squeeze will

come.

It will not come on the bonds because the bond is an

explicit contract and there isn't the danger there. But there

is the danger at this particular time, especially now in our

history in common shares; it's a very dangerous period.

It's

also true that there is some chance that the taxpayers would

lose in this respect, that when the surpluses build up in the

pension funds, then we enlarge the pensions. But, if there's a

drop in the value of the pension fund then there isn't room for

the expansion of benefits to the pensioners. So it isn't true

that the pensioners are not taking a chance with this new

policy. They are taking a great chance indeed.

While the Premier says there was rigidity in the last

government, there was great progress in the pension funds. The

enormous mess that we took over in the pension funds —

the teachers' pension fund was bankrupt; the municipal pension

fund was bankrupt; the pension fund for the civil service

— they were short in their pension fund by millions and

millions. And our pension funds today are in the best shape in

the whole nation.

I would hate to see that destroyed. You know

I'm not a pessimist; I'm an optimist among the optimists. There

used to be times when the Liberal leader in the House called me

"Bennett the Boomer." I was the Boomer.

AN HON. MEMBER: You should sit down there.

HON. MR. BENNETT: Yes, that's right. (Laughter). So you know

that I am not a pessimist, but along with being an optimist one

must also at all times be a realist. I emphasize again, because of reasons of increasing costs

putting the squeeze on dividends and companies, there won't be

the revenue from these dividends that there could be from

bonds. It might be much lower than from bonds, and there's the

double risk of the common shares going down and losing your

collateral as well.

If this should pass, Mr. Minister of Finance, I would, with all sincerity that

I hope that I possess — as a person who is not going to stay a long time in

public life — press on you very strongly not to take the advice of your Treasury

Board — don't refuse their advice either, mind you — and don't take advice of

just your pension people either. They have no magic way of knowing what's happened

in this marketplace in this world period — when the world financial structure

of the world is shaking like that tonight.

In August 1971, nearly all countries were off the gold

standard. Of all the main countries there was only one, the

United States, that was on the gold standard — Fort Knox.

In August 1971, President Nixon faced the situation where he

could no longer pay; he could not longer keep his contracts and

pay n gold. And overnight he took a member of another party

— who had opposed them strongly — into his cabinet.

He sent him all around the world to explain that. And no longer

was the American dollar redeemable in gold or currency; it was

only a piece of paper.

Interjection by an Hon. Member.

HON. MR. BENNETT: All right, different from newspapers

— they're valuable too, but valuable in a different way.

But, nevertheless it was printing-press money. And when the

main financial country in the world, the one great nation in

the world, went off the gold standard and only had the printing

press, then it put the whole world in a spin.

There were meetings overnight. Our governors of the Bank of

Canada, in the middle of the night telephoned internationally

to Europe to get people to back our currency — other

countries phoned them because they have a kind of a club to try

to protect each other a little bit, because if not the whole

thing just collapses. Now, they did patch it up a little, but

they only patched it up on a temporary basis. And in his last

few months, our own federal Minister of Finance, Mr. Turner,

had to go off to Europe and go everywhere to these meetings as

well. So we haven't got a stability in the international

monetary system at all in the world tonight. We haven't got it;

it was destroyed in August 1971.

It came to an end in that period, and we are now in the most

dangerous period in the world's history inasfar as a real

shakedown could come and a real stock market crash could come

— I don't say it will come. I pray to God that it won't

come. I pray that these countries do cooperate, but this is

indeed an experience. I respect him for his sound judgment. I

recognize too the risk not the period to invest trust moneys in

common shares at this time. I hope I've made the point clear,

Mr. Chairman.

MR. CHAIRMAN: I recognize the Hon. Premier.

HON. MR. BARRETT: I want to thank the Leader of the

Opposition, for what I think is perhaps a long overdue exchange

of opinions and ideas. I respect him for his wide experience. I

respect him for his sound

[ Page 2691 ]

judgment. I recognize too the risk that the former Premier

has outlined in terms of the world monetary situation. However,

perhaps there's really no more obvious difference between the

philosophy than what may be related to a generation gap, more

than a philosophy gap. When you describe the 1971 crisis and

the bringing in of Connolly, as you mention, into Nixon's

Cabinet…

Interjection by an Hon. Member.

HON. MR. BARRETT: I appreciate that, but you must relate it

to what could be described as a Connolly syndrome.

If we're to take the absolutely conservative approach and

look at the results of what the Connolly effort was under

Nixon, we will all notice that the downward spiral in terms of

the value of the dollar was affected too. And at the end of

that value deflation is the human equation.

On the one hand is the desire by a good, sound economist and

a good, sound, hard-headed businessman to protect that pool of

funds. On the other hand is the price you pay when you protect

that pool of funds. And the price you pay is that the people

who are caught in the squeeze are relying on this fixed income.

You try to protect their pool of money; you have sums of money

coming into that pool of money and you try to protect that.

These people are held at a fixed income at a time when

inflation is crippling their purchasing power. Now, you can

give them a slight increase, but then you draw on the pool of

funds that are coming in, once you give them the slight

increase. Now what are you going to do? Are you going to stay

with the fixed rates on the safe investments at a time of

inflation, when inflation is eating into that pool of funds? Or

do you open up a bit and go into bonds?

Interjection by an Hon. Member.

HON. MR. BARRETT: No, not carte blanche…

Interjection by an Hon. Member.

HON. MR. BARRETT: All right, common shares. But, I mean even

bonds that pay a higher interest rate. Don't think that the

pendulum goes automatically when there is a change — and

this is a caution that I am trying to raise. The pendulum

doesn't automatically go from one extreme to the other. The

former Minister wasn't in that extreme. He wasn't in that

extreme. He listened, he had good advisers; but in the final

analysis, he has to make the judgment himself. And I agree

exactly with what you're saying in terms of the Treasury Board

advisers inside and outside.

MR. GARDOM: He went to the extreme in 1966.

HON. MR. BARRETT: Well…and he weathered it. He weathered

it. But there were political motives in the extreme he had. And

those political forces that exist in Canada which forced the

former Premier to that extreme, in terms of a tax on British

Columbia, aren't completely dissipated in this country.

That would be a matter of great interest reading, in terms

of political analysis of the development of this province under

Social Credit and now latterly, under the NDP. Both essentially

are western populous movements. They're removed from the

eastern power bases that have the bias against this province.

It's true. It's true, and it doesn't matter whether it's Social

Credit or NDP; the simple fact that it isn't a label of the

old-line parties is enough to raise the emotional hackles

around that bias, and the former Premier agrees with that, I'm

sure.

HON. MR. BENNETT: I don't agree with that.

HON. MR. BARRETT: Oh, you don't agree with it? Well that's

my opinion.

Interjection by an Hon. Member.

HON. MR. BARRETT: It's more than that?

But I'll tell you, my seven months in office have given me

appreciation of that simple fact. I don't expect, or ask the

former Premier to acknowledge that. But he will with a smile,

appreciate what I'm talking about in terms of an eastern

rigidity.

Now, going back to the point.

MR. GARDOM: Industrial central Canada.

HON. MR. BARRETT: Industrial central Canada? O.K. But the

industrial centre of Canada has caused the alienation of the

west to lead to that kind of political rejection of the labels

from that industrial centre. Even the Conservative Premier in

Alberta is Conservative in name only. That is a danger which is

another factor in dealing with this country that rests…

MR. PHILLIPS: Are you calling him a socialist?

HON. MR. BARRETT : No, I'm not calling him a socialist. I'm

calling him a reflection of that western feel in Canada which

Social Credit was a part of, which NDP is a part of, and that

Lougheed and the present Conservative is a part of. Just as the

realm of the Creditiste has a separate and distinct identity in

Quebec which reflects a populous rejection of centralist

Ontario, so was the Social Credit foundation in this province

when it spilled over in the early 1950s into this province and

was captured by a

[ Page 2692 ]

group of conservatives who rejected that rigidity from the

east and catapulted it into power in this province.

Interjection by an Hon. Member.

HON. MR. BARRETT: Well, a great number of Liberals and some

CCFers too. You bet, you bet some CCFers too, because they felt

the momentum of the movement in 1952 that gave it a political

identity that came at that time as a rejection of that

centralist feeling. The same feeling is still here.

I'm sorry that we've digressed to this point, but it does

relate also to the fiscal policies of the central bank. When

that feeling is expressed in political power blocks, as it has

been in the west, then those political power blocks have to

adjust in a way that somehow, understanding the central

government's rigidity and the central power base rigidity, has

to adjust within its own framework to allow people not to

suffer because of that, and let them grow in our framework and

still feel part of Canada.

The former Premier, and his approach, was to protect that

pool of funds. We disagreed with that because the absolute

protection of those funds kept the people who were relying on

those funds for income at a less than acceptable standard of

living. And display of that, you'll recall, was the

demonstration by the teachers walking up and down and asking

for an increase in their pension plan. The teacher pension plan

did go broke, but we pulled it out of the hole by good grace of

that kind of fortune we all welcome, but whatever we label it,

I don't know — the boom, the great progress, the

wonderful things that happened in British Columbia.

We're faced too, with the parity bonds. Now they're a good

buy right now — an excellent buy — you couldn't buy

them without paying a premium for them right now, but you

over-extended pretty heavily on those parity bonds.

MR. PHILLIPS: Lots of funds there.

HON. MR. BARRETT: Lots of funds there. You bet there's lots

of funds now, but if we're faced with a drain…

Interjection by an Hon. Member.

HON. MR. BARRETT: We'll take that risk. But, I think that

it's a good thing that we are having this kind of an exchange

— and I'm pleased that it's happened, because this is

due.

Mark you, the previous administration played it very close

to the vest. The only area that they left was in those parity

bonds. If the run comes — zap, zap. But, we're the

government, we face that.

O.K., having accepted all of your premise, you've got to look at the rising

age groups that are coming on like a wave into that pension benefit area. They're

coming on fast. You can see that curve rising every single year. When there's

more and more drain on those pension funds and you have to make the humanitarian

consideration to raise those standards up, instead of splitting the narrow pot,

you've got to take a broader look on the investments to see that those people

don't suffer. Nobody disagrees with that.

Now we're cautiously looking at that curve coming up. We're

looking at the inflationary cost-price squeeze. We know what

inflation does to the pool of funds, but when you balance that

off with what inflation does to the poor recipients, you've got

to find some middle ground.

I appreciate the help that the former Premier has given to

the House tonight and to the people of this province tonight

with his very valid comments. I humbly accept your caution, but

the decisions we have to make are ones that allow us somehow to

take the chance — not a crazy chance, a wild chance or a

roulette chance — but take the chance to expand the

earnings of that pool of funds so that the people that are

relying on the pensions aren't the victims of inflation.

Now I said we're going to be cautious. You want to give us

any advice? We're open to all advice. I'd welcome your advice.

If you're out of politics and want to come down to my office

some time, we'll have a nice talk. The kind of cautious advice

I get from you is the same as my father's, if I may say…

Interjection by an Hon. Member. (Laughter).

HON. MR. BARRETT: Well, you may be more radical, but you

both start from the same frame of reference — "Dave,

remember the Depression. God help us, I don't want it to happen

again, but remember it did happen once."

I don't want to go through that. You're absolutely right in

terms of the whims of the market. We have no control over it in

this little corner of North America — none whatsoever.

But we do have a responsibility to the people. That's where

we're moving the pendulum a bit. Give us a year.

Our commitment is to those people. I will not, as the

Premier of this province, go to those people and say, "You're

the ones who have to hold the line. You're the ones who have to

suffer because it may happen." I'll take the responsibility on

that basis.

MR. CHAIRMAN: I recognize the Hon. Leader of the

Opposition.

HON. MR. BENNETT: Of course, the Premier and Minister of

Finance must accept the responsibility. It's with him every

hour and every day and will

[ Page 2693 ]

remain with him as long as he has that office.

The point I want to make again tonight is that it isn't a

question of opening it to get more revenue from the pension

funds. It's the danger that you'll narrow the money that will

come in. In this period there's no assurance at all that the

dividend rates of the good companies will be as good as these

high interest rates in bonds. There's no guarantee.

As we mentioned a few minutes ago, what is causing this

great difficulty — and it hasn't been corrected

internationally — is that there are billions of wild

American dollars all over the world. There are billions of

dollars that won't be redeemed with anything else but another

piece of paper. That's what is shaking the whole financial

structure the world over. We must realize that. Mr. Chairman,

if the Minister of Finance moves into a policy like this and is

not as conservative — with a small "c" — as the

former Minister of Finance, then he's got to be very careful.

We made sure that if in the different revolving funds there was

a run on parities, we could take the whole $250 million in. If

it all came in in one week, we could take the whole thing. We

made sure that we had the finances in this province.

There will be a tax on the finances everywhere — on

companies and governments everywhere — when certain

situations develop. Even the great United States wasn't free

from it. Britain hasn't been free from it. Japan is not free

from it. As these people move and attack a currency or a

credit, you must be in that position.

Our policy was this: since we had a quarter of a billion

dollars worth of parity bonds out to our people — mostly

to small people, we allowed a secondary market. On the primary

market, there was a limit to which any person could buy. We

made sure that we were able to take care of them. And we made

sure that we had enough of these funds to take care of our

Crown corporations so that we didn't have to go into the

unsettled conditions of the world marketplace.

When you finance within yourself, Mr. Minister of Finance,

you pay no commission. You pay no other costs. You make

tremendous savings for Hydro in that respect. Millions and

millions of dollars are saved when you do your internal

financing.

You have a little fountain out in front of the lawn here.

You see the water circulating around, Mr. Premier. It's almost like perpetual motion. The same water

is used over and over again. All you have to do is inject a

little new water in there, Mr. Minister of Public Works (Hon.

Mr. Hartley). That's under your jurisdiction. You know that

— how little extra you have to put in there to keep it

going.

We had the finances of our province in such shape that we didn't have to go

to any market in the world — not only in the last four or five years but, if

the policies could have continued, forever. We would never be under the danger

of the financial struggle — never.

Now with interest rates rising, Mr. Minister of Finance,

through you Mr. Chairman, there's a danger in the parity bonds.

As interest rates advance, there is a danger. The interest

rates in the banks went up 1/2 of 1 per cent the other day.

When you go from 6 per cent to 6 1/2 per cent, that is more than

1/2 of 1 per cent. We're in that kind of market. If, to stop

monetary forces again to raise interest rates — and the

Bank of Canada has made the statement — then there is a

danger.

If you plan a change in financial policy from that which we

operated under, you should immediately plan for the long-term

refunding of the parity bonds. Unless the money in your funds

is going to be kept extremely liquid, the parity bonds would be

in danger. And the credit of the province would be in danger

because there could be a raid. If the money wasn't there in a

few years, you would be in trouble.

Mr. Chairman, if the government's policy is not to be as

rigid as ours, then my advice would be to make the parity bonds

long-term issues. Parity bonds are demand money; I've always

said that. It's a contract that the purchaser has. He can keep

it for the five years. As far as the different organizations

like Hydro and the railroad are concerned, it's demand money

for them. They can demand that money in five minutes. Never at

any time have they had to wait five seconds to get their money.

But if there is a change in government's finance policy and if

that money is not available immediately, then there would be a

real run and, bang, away it goes.

So I stress again: if there is a change in financial policy,

get away from the short-term parity bond, which is demand

money, and get in long-term bonds if you want to be safe. But I

again warn you, Mr. Chairman, about these billions of wild

American dollars in the world today and the unsettled financial

conditions in the world, which aren't settled at all tonight.

There is no agreement tonight. It's not based on any sound

international agreement at all.

This is the greatest period in the world's history, but it

is also the most dangerous period in all the world's

history.

MR. CHAIRMAN: I recognize the Hon. Premier.

HON. MR. BARRETT: I think it's important that we continue

this exchange. I know that the Leader of the Opposition would

not want the impression to get abroad that there is any danger

to the security of those parity bonds. I know that you would

not want that impression made.

HON. MR. BENNETT: Oh, no. There's lots of money in the

Treasury to pay them all off.

[ Page 2694 ]

HON. MR. BARRETT: Let's tell all Canadians…

HON. MR. BENNETT: Tell them that. But if you have a change

in policy…

HON. MR. BARRETT: O.K. Let's deal with some of the other

statements you've made. I would point out that the parity bonds

are at a premium right now.

At one time, when you issued parity bonds, you were forced

to compete with the market and increase the interest rate on

those parity bonds.

Interjection by an Hon. Member.

HON. MR. BARRETT: Yes, I appreciate what you're saying. But

let's face the fact that you too had to meet competition, when

you went for funds for those parity bonds.

I don't agree that the wild American dollars are the primary

problem. For British Columbia, what may be even more of a

problem are the $22 billion of foreign currency reserves that

Japan has. As we're on the eastern circuit of the Pacific

trading bloc, that $22 billion…

AN HON. MEMBER: A lot of it is American.

HON. MR. BARRETT: A lot of it is American money but it's in

Japanese hands. The pressure of the expenditure of those funds

to reach out and secure control of resources throughout the

Pacific Rim is a pressure that governments have to be very,

very cautious of.

HON. MR. BENNETT: Europe as well.

HON. MR. BARRETT: Europe as well. Therefore, in terms of

long-term planning of the economy of the Province of British

Columbia, we are in a position at this time to be very, very

cautious of how we handle our resources. We have two

choices.

We can go for the fast buck, which was an attractive thing

to do in the late Fifties and early Sixties. It is not

attractive now because a new form of conservatism has risen.

That is a caution that is looking not only to this generation

but to two, three and four generations ahead. So in terms of

the wild American dollars and what I see as a greater danger,

that huge Japanese surplus…

HON. MR. BENNETT: That's American dollars.

HON. MR. BARRETT: That's American dollars but the Japanese have control

of it. Their need is for the resources.

The European market is exactly why we're going into the

Sukunka coal deal — exactly. In that particular resource,

the former administration left us with the one customer in

Japan through Kaiser. That's why Kaiser has the financing. As

socialists we say that we believe in a nice, healthy dose of

competition. The way of getting a healthy dose of competition

is to get that money market out there competing for these

resources.

With all due respect to the previous administration, it was

on a kick of whoever came by for the resources first got the

first kick at it.

HON. MR. BENNETT: No, it wasn't.

HON. MR. BARRETT: Yes it was. Your coal leasing plans, Mr.

Leader of the Opposition, were a shambles. You created values

overnight just by giving leases on the coal in this

province.

And you did it in the forest industry, too. You remember the

famous Abitibi case when Catermoll was able to get those

licences up north, and overnight went down to New York and

traded them for some $13 million. You created money values

overnight out of resources, and you created a value of exchange…

MR. GARDOM: You're arguing amendment 20 now.

HON. MR. BARRETT: No, no. I'm arguing that we must now go

into two directions in the policy. One, one of caution that the

people who are involved have some share in the resources of the

province, that the value created by those resources is when we

release the potential for the development of those resources.

That potential development of those resources was given away by

the former administration and that's why huge profits were

taken out of this province, except when they fumbled on

something like Kaiser. Super profits!

Now, we are saying that in an era of caution under this

government that must end, and we must turn some of the money

into producing better returns for the people who rely on

pensions. It's the people out there who are relying on us

husbanding that money.

Up to this point, after seven months, all you can say is

that it is a change of theory, and that is a valid statement

because seven months isn't very much to prove anything. Except

that while we believe in your theory of keeping that water

circulating, the ingredient you forgot to add was a little new

water.

HON. MR. BENNETT: We added it all the time.

HON. MR. BARRETT: That's why we had to

[ Page

2695 ]

increase the welfare rates. That's why we had to give

guaranteed minimum incomes to seniors which put $40 million of

water into the water wheel, and that's why it's reflected in

sales tax revenues being up 15 per cent.

Now, those phenomenal climbs can't continue. We intend to

protect the parity bond situation that we inherited, and I know

the former Premier is well aware, as he stated tonight, that

those parity bonds are very secure.

This is a minor, cautious departure from a policy that led

to a conservation of the pool of funds and quite honestly, in

my opinion, a bad judgment, because you were in a boom time in

the last two years. After June of 1969 when the market did go

sour, you were in a boom time. If you had used some of those

funds in the last two-and-a-half years when the market fell

down in New York to just below 800 points when it was predicted

to go up to 1,000 — if you had moved into the market a

bit, we would have had a few more dollars right now.

Interjections by some Hon. Members.

HON. MR. BARRETT: We're having a rational exchange of

opinion. I'm coming back on your own analysis. You and anybody

could say "would've, could've, should've." But I'm only saying

"would've, could've, should've" on the basis of your statement,

not on the basis of what we're planning.

Now, there is no way that this government intends to go into

a massive investment in the open market. None whatsoever. We

want to be free enough to make decisions based on caution and

prudence, to protect those funds and still have a better return

on that money.

That's a decision we intend to take, and only time will tell

if it's effective. Perhaps the best thing to do at this point

is …

HON. MR. BENNETT: I just want to say one word. I wouldn't

want the impression to go abroad on Sukunka coal that we were

going to sell that to Japan. We had meetings with the groups

that were interested in it — the Australians, and so

forth — and it was all based on over half of it going to

Europe, my friend, right from the very start. I know you

wouldn't want to give the wrong price of that.

HON. MR. BARRETT : Well, I still have the floor and I'll say that when

we came into office we found, on the Sukunka deal, that half of it was going

to Europe. Look, there's no question about that. But what we said was, "No matter

what market it is going to, we want a far better share than 25 cents a ton."

We'll leave that because we are in negotiation. But that's a matter of business

acumen. You were prepared to do it for two bits, and I'm only a social worker

but I want a lot more than two bits a ton.

HON. MR. BENNETT: We wanted a lot more but we wanted to get

it in a different way.

HON. MR. BARRETT: Well, you and I …

HON. MR. BENNETT: Quantity royalties, and so on.

HON. MR. BARRETT: Quantity royalties, and that's why we used

to say to the old-age pensioners, "You've got a quantity

increase — it's still coming but it hasn't arrived

yet."

HON. MR. BENNETT: It's only fair to say that the money for

the old-age pensioners that's been given to date by this

government came from the surplus left by the Social Credit.

HON. MR. BARRETT: Please don't go back into a political

vacuum. The fact is that we are in power now. You lost. One of

the reasons you lost was that you didn't transfer some of this

money.

Interjections by some Hon. Members.

HON. MR. BARRETT: O.K. Now back to the amendment. I think we

had a very good exchange and I value your opinions. We will

move with caution with your words in our mind, but our purpose

is slightly different. The goals are the same but the method's

different.

Mr. Chairman, I move the committee rise and report great

progress and ask leave to sit again.

Motion approved.

The House resumed. Mr. Speaker in the chair.

MR. CHAIRMAN: Mr. Speaker, the committee reports progress

and asks leave to sit again.

Leave granted.

HON. MR. BARRETT: Mr. Speaker, the order of business

tomorrow is to continue with the Provincial Secretary, then the

Finance Minister, then the Health Minister. We may do Bill 102

tomorrow as well, afterwards.

Interjection by an Hon. Member.

HON. MR. BARRETT: Yes, I want the House to have a good

rest.

Just a personal note, nothing to do with politics, Mr.

Speaker: I would like to announce that the Port Coquitlam men

have won the B.C. Bowling

[ Page 2696 ]

Championship, 3232, the Burnaby 2969,

and they are now on their way to Calgary for the national

championship. The ladies from Nanaimo won the Women's

Championship.

Hon. Mr. Barrett moves adjournment of the House.

Motion approved.

The House adjourned at 11 p.m.

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