1974 Legislative Session: 4th 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, NOVEMBER 7, 1974

Night Sitting

[ Page

4555 ]

CONTENTS

Routine proceedings

Public Schools Amendment Act, 1974 (No. 2) (Bill 175). Hon.

Mrs.

Dailly.

Introduction and first reading — 4555

Municipal Amendment Act, 1974 (No. 2) (Bill 174). Hon. Mr.

Lorimer.

Introduction and first reading — 4555

Landlord and Tenant Amendment Act, 1974 (No. 2). (Bill

169).

Second reading.

Mr. Bennett — 45S5

Mr. Phillips — 4565

Mr. McClelland — 4569

Mr. Gibson — 4573

THURSDAY, NOVEMBER 7, 1974

The House met at 8:30 p.m.

Introduction of bills.

PUBLIC SCHOOLS

AMENDMENT ACT, 1974 (No. 2)

Hon. Mrs. Dailly presents a message from His Honour the

Lieutenant-Governor: a bill intituled Public Schools Amendment

Act, 1974 (No. 2).

Bill 175 introduced, read a first time and ordered to be

placed on orders of the day for second reading at the next

sitting of the House after today.

MUNICIPAL AMENDMENT ACT, 1974 (No. 2)

Hon. Mr. Lorimer presents a message from His Honour the

Lieutenant-Governor: a bill intituled Municipal Amendment Act,

1974 (No. 2).

Bill 174 introduced, read a first time and ordered to be

placed on orders of the day for second reading at the next

sitting of the House after today.

Orders of the day.

Hon. E.E. Dailly (Minister Of Education): Public

bills and orders, Mr. Speaker. Adjourned debate on Bill

LANDLORD AND TENANT

AMENDMENT ACT, 1974 (No. 2)

(continued)

Mr. W.R. Bennett (Leader Of The Opposition): When we adjourned for the dinner hour I was making the point

that the rent controls that were introduced were discriminatory

in nature against a certain segment of society. Perhaps I

should just refresh the memory of the Attorney-General (Hon.

Mr. Macdonald), Mr. Speaker, who may not have got the message

or may have forgotten it over the dinner hour.

I was saying, Mr. Speaker, when we adjourned the debate that

when you expect one segment of society to accept the

responsibility for society as a whole and subsidize one

particular problem, no matter how acute it may be, justice is

not being met, nor is justice being served. In this bill, we

are asking those landlords, those people who may have invested

in the past in rental accommodation, people who because of the

timing just happened to have that as an investment when the

Attorney-General finally became aware, two years and some odd

months after assuming office, that we had a crisis in this

province and that perhaps people were being hurt….

Instead of making up for the action that hadn't been taken,

the action of constructing new accommodation, they've passed

this bill and asked these people to accept a penalty to

subsidize on behalf of all of us, to make up for the failure of

his government to act earlier. He's asking them to aid those

who are having difficulty paying for their rental accommodation

in this time of under-supply in our market.

The point I was making earlier was that rent control,

control such as is advocated in this bill, while it may meet

and may give some temporary relief, has become part of the

problem and historically is part of the problem in every

jurisdiction where rent control has been offered as a cure-all

or a cure for rental difficulties of people with modest

incomes, and even all of us, in obtaining rent at a reasonable

rate.

Now I was quoting from a report that mentioned the

discriminatory aspect, and I'd like to go on. The point I was

making is that in discriminating we've asked these people, in

this one section, on behalf of society to accept the

responsibility of all of us. Just through happening to have an

investment at that particular time, they are carrying the load,

or attempting to carry the load, for the failure of this

government to act.

Now, we've talked about rent control as being a problem in

New York. We've talked about rent control that has created

problems in Newark, New Jersey. Extensive studies have been

made on this problem and the other problem over and above that

of not creating a new supply. Over and above penalizing a

certain segment of society, rent control has created other

sociological problems relating to the abandonment of tenants'

supply of rental accommodation in the downtown cores.

Studies have been done, such as the study that was done by

Rutgers University — in the centre for urban policy research,

Rutgers University, the University of New Jersey, in 1973.

That's ample time to have made this part of any research of

this government and this Attorney-General and the Housing

Minister, in fact all of the Members of the government

responsible for meeting the needs of the problem. Yet we

realize that the amendment that we have before us is merely

another bit of legislation brought in to deal with the

inadequacies of legislation that was introduced earlier this

year, legislation that was presented to this Legislature with

no accompanying report, no research, no thought, hastily

brought in because they finally woke up to the reaction of the

public to the non-activity of this government in providing

accommodation. The government is not a government of

initiative; it's a government of reaction. This government

reacts to events in which you've helped author part of the

problem. Your inactivity in not providing accommodation has

made you part of the

[ Page 4556 ]

problem.

Interjections.

Mr. D.M. Phillips (South Peace River): You are the

problem. You are the problem; you're the whole problem. You

created the problem.

Interjections.

Mr. Speaker: Order, please! The Hon. Member is

speaking; he doesn't need any help. Do you?

Mr. Bennett: From either side.

Mr. Speaker: Quite right.

Mr. Bennett: The point I was making, Mr. Speaker, in

discussing this subsidy is the failure of the government. It

was a cover-up bill. The first bill was an initiative taken in

reaction to the lack of their own initiative in creating

housing and rental accommodation in this province. Rather than

assessing those areas that have had difficulty with rent

controls and the problems they've created, this government is

stumbling from one piece of legislation to another, neither of

which will solve the long-term problems or meet the needs of

the tenants.

The Attorney-General, in presenting this bill, gave a very

shallow speech, an emotional speech — something about some of

the letters that he received. Well, we've been receiving

letters from tenants and I've talked to the tenants in my

constituency. Those people are fully aware of where the

responsibility lies, where the blame lies. They know that they

are going to be tenants not just this year but other years, and

if B.C. has the continuing growth rate that we've had in recent

years and have now, this problem will become more acute,

because this bill, coupled with other national and

international problems, has made this problem more acute than

is necessary.

Now I talked earlier about rent control and some of the

failures of rent control in other jurisdictions, how more than

just not meeting the long-term needs, they create other

problems for society. In quoting from the research that was

done at Rutgers, where they talk about residential abandonment

and where they've done research into the results of rent

control, they've come up with some very shocking results.

The Minister responsible for the redecoration of the

building gave us some very interesting photographs and slides,

for the reason that he had to spend money in renovating the

buildings. We had pictures of rotting rafters. We had pictures

of buckets and we had pictures of plastic. I thought that when

he showed the decay in this building it was a very graphic

illustration of how he wanted to present a problem.

Well, when we consider the decay of a building, we've got to

consider the decay in cities and the decay that may be created

because of rent controls creating residential and downtown core

abandonment.

I have some interesting pictures to pass around that show

the results of the decay in some of the areas of the City of

Newark, a city that has had rent controls for 10 years. The

results of the study….

An Hon. Member: How about Montreal?

Mr. Bennett: Montreal hasn't had rent controls for

any length of time. Three years is not an adequate time to

measure the results that are presented from this study.

Interjections.

Mr. Speaker: Order!

Mr. Bennett: These pictures indicate the decay and

the abandonment of buildings that create other social problems,

that create problems of crime, that create problems of fire

hazard where they've had whole neighbourhoods abandoned. I

would like to quote the results as I pass around these very

interesting photographs.

Hon. A.B. MacDonald (Attorney General): Quote

Canadian, eh.

Mr. Bennett: The problem of people isn't just a

Canadian problem and it isn't just related to British

Columbia.

Interjections.

Mr. Bennett: You haven't done better; you've done

worse.

Interjections.

Mr. Bennett: I never cease to be amazed by this

government who, to rationalize bringing some of the experts

that they have hired from outside this country, always say they

are willing to bring research and experts from anywhere. But if

you quote any sort of study that doesn't happen to agree with

the conclusion they already developed…. It's very

interesting how this Attorney-General arrives at a conclusion

and then goes out and looks for supporting data to prove

himself right — just exactly the wrong approach to solving this

problem.

If I might proceed, studies everywhere have clearly shown

rent control to be not only a failure but extremely dangerous.

In more practical terms, specific studies of two major cities

bring into focus a

[ Page 4557 ]

horrifying picture resulting from rent control. The fact is

that rent control inevitably leads to residential abandonment

and all the serious consequences of such abandonment.

The process comes in stages: declining average income in

affected areas of the city; security for low-income families

declines; tenant rent payments decline, followed by less

maintenance on the housing parcel or the accommodation parcel;

normal mortgages become unavailable; physical deterioration

develops, and we get what is commonly called inner-city

blight.

Then we get a declining tenancy. Then we get what is called

psychological abandonment by the landlords. And we get final

tenancy decline and departure and complete physical abandonment

of the structure.

In the City of New York, the inevitable process of decay has

had the following results, and this isn't just on a three-year

measurement of a new programme. In just 10 years of rent

control, 400,000 units have been abandoned. Eighty per cent of

the house-building industry has left New York City and, in

1973, only 3,300 housing units were built for a city that

serves 10 million people. Entire neighbourhoods have been

abandoned; crime has soared. The New York experience is one we

would not want to encourage here.

The experience in Newark, New Jersey, a city with an equally

lengthy time of experiencing rent control, is as equally

illuminating. I have at hand the pictures which I have passed

around. But there are some tables I have taken from the study

that deal with the results of residential abandonment and

neighbourhood abandonment, a problem that is directly related

to rent control under these studies. We have crime soaring in

these particular neighbourhoods and incidences of fire in

abandoned buildings and fire as a resultant danger to the city

breaking out and wiping out whole blocks all because of the

residential abandonment and neighbourhood abandonment that

comes about through rent control.

These units in these areas are lost for any sort of accommodation to people;

they're lost as a tax base for the city. They create many additional problems,

all directly related to the type of controls that are being introduced as a

long-term step in this House, Let's take a look at fires in vacant buildings

by type in Newark, New Jersey in 1971. From the table, 49 per cent of these

areas of vacant buildings have some incidence of fire. They become a danger.

In many cases. we have whole blocks wiped out. Those people who move into those

neighbourhoods of abandonment or that are covered under tax liens create a tremendous

problem in the city. Fire incidence is directly related to the rise of crime

in the areas and crimes in the core of the city. The crime problem is related

to these cities that have chosen rent control as the answer. It has destroyed

their cities.

Canadian cities that haven't been subject to rent control — let's take Toronto — have done a tremendous job at redeveloping

their downtown core. You haven't seen this type of abandonment,

This can only be a long-term prediction if this is maintained

as the ultimate solution.

Is it not true to argue that abandonment is a result of

so-called rich landlords leaving the city. A myth has been

created that much housing stock is held by ripoff landlords who

are seeking a ripoff of the tenant group. The facts are

otherwise.

In a sample area of Newark involving 562 residential

buildings, it was found that the facts work out to be thus:

47.9 per cent of the residential buildings were owned by simple

husband-and-wife joint ownership arrangements — almost half

were owned by just couples who had these limited rental

buildings as their only investment. In fact, only 4.6 per cent

of the units sampled were owned by real estate corporations.

This isn't guesswork; this is a study related to the results of

this programme. Financial institutions owned only 1.2 per cent.

It is clear, then that it is the small holder who contributes a

major part of the rental housing stock.

If we put it another way, it was discovered, out of a total

sample in the City of Newark, that 55.2 per cent was being

abandoned by owners having incomes of less that $20,000 a year

as their total investment in relation to an investment package

in an economy that is wealthier than ours. Over 55 per cent,

and almost half the housing stock, was owned by just couples

-not corporations, not banks, not mysterious landlords, but

just people, people who had it as their only investment. It's

hardly the picture of the rich greedy slum landlord that many

people wish to present as the owner of all rental housing and

that has been presented in this Legislature.

In putting it another way, it was found that 78 per cent of

the residences abandoned contained between three to six units — not gigantic buildings but rental accommodation that was

probably meant to serve the people on modest incomes but had

been abandoned because they couldn't get a return to maintain

it. The people who needed accommodation most were being denied

the most affordable type of accommodation because they'd taken

away the ability of these people to even continue ownership.

Not sell it but abandon it.

We must conclude that abandonment in the face of rent

control is a decision which is being made by relatively

moderate — income, landlords Yet the myth that I've heard

presented here tonight by the Attorney-General, that landlords

are rich and greedy and grasping and ripoff and gouging, is

always presented when we're presenting these facts.

It's hard to have a debate in which we're looking for a new

solution. The Attorney-General at one

[ Page 4558 ]

point said he was prepared to look for new ideas. Then let's

be prepared to discuss them here in the House tonight. And

let's get rid of the old myth because all of us here are trying

to find out a way to solve the accommodation shortage in

British Columbia and find the supply that should be available

to the people of this province and of all Canada.

Other figures are even more startling. It was found in the

Newark case study that, of the structures abandoned, 54.2 per

cent of the structures were abandoned by landlords who owned no

other buildings or no other real estate. The study has found

that 50 per cent of the owners were just husband-and-wife

owners, that they were three, five to six units, and that they

owned no other real estate. Yet they were forced by rent

controls to abandon the one asset they had, the one asset that

could be maintained under reasonable conditions to provide

low-cost rental units, and that would have allowed them to

maintain those units, a system that should have allowed them to

keep them in repair. Yet they were forced by unrealistic

economic controls to abandon the very accommodation that could

serve the city. It's sitting there and it's been lost from the

tax base.

Interjections.

Mr. Bennett: Not the way you're going at it.

Interjections.

Mr. Bennett: Mr. Speaker, the Attorney-General keeps

forgetting that we no confidence in you to solve the

problem.

Interjections.

Mr. Speaker: Order, please!

Mr. Bennett: No confidence in you.

This is the very same programme that created these

situations that you have advocated in this Legislature in

desperation, because you haven't been able to come to grips

with the problem of undersupply.

The price paid for introducing then continuing rent control

has been tragic. The figures that I presented on both fire and

crime would indicate the extra problems that are created

because of this initial approach that rent control can solve

the problems of our people, and solve the problem of rental

accommodation.

An even more devastating situation faces the community in

terms of the total destruction of the community's ability to

finance and maintain public services in the face of rent

control. In the case of Newark the tax base has literally

melted away. Their public buildings have become dirty and

unkempt.

Their schools have become dirty; their parks have become ill

kempt; streets have become cluttered, and fire and police

protection has disappeared. Why?

Interjections.

Mr. Bennett: Because, Mr. Speaker, the abandonment of

the downtown core has created the fact that of the tax base,

the city collects less than 86¢ on every dollar of property tax

that is assessed. The city is caught with a 14 per cent

uncollectable tax base.

If the Members who were yelling about mob control would

realize that the very conditions of downtown abandonment have

led to the conditions of lawlessness, and the conditions that

cause this condition. We're saying that you're talking about a

future of not just lack of housing accommodation, you're

discussing the eventual social problems that are created

because of the downtown abandonment that allows and creates the

atmosphere and the climate for this type of attitude and this

type of difficulty to come and take over a city.

As I say, in Newark now the tax base has shrunk. Only 86 per

cent of the assessed tax is collected every year; 14 per cent

is uncollectable. That is adding a further price in the city;

they are not able to maintain standards, and the city is on a

downhill run. Yet this is a city that has had a history of rent

control. These aren't my findings, these are the findings of an

independent. study.

An Hon. Member: It's had a history of mob

control.

Mr. Bennett: I'm trying to say that the attitude of

crime….

Hon. L. Nicolson (Minister of Housing): Crime didn't

start here two years ago.

Mr. Bennett: Mr. Speaker, when the Attorney-General

and the Housing Minister, particularly, are looking for new

solutions, I don't know why they would argue with the study

just off the top of their head when they're not prepared to

look for solutions and not prepared to discuss the difficulties

that we may come into from the problems that have resulted in

other cities. We haven't got any city in Canada that has a long

history of rent control.

The Attorney-General has mentioned Montreal, but he's talking about less than

three years. Those cities in North America and those cities in Europe that have

a history of rent control all have these very same serious problems that I brought

up tonight. The very same problems. New York, Newark, in fact their example

has been a very strong argument why other cities haven't gone for this quick

and easy solution —

[ Page

4559 ]

a quick and easy solution as a cover-up for inaction in

solving the rental accommodation picture for our people.

These cities are paying a devastating price for having

chosen and opted for rent control as a way out — a way out of

the housing crisis, a way out of the shelter crisis, Mr.

Speaker. This is the problem we face in British Columbia. It

could be the future of some of our urban centres if we don't

attack the problem of undersupply.

I want to get back, because my basic point tonight is: let's

not look on rent control as a panacea or a complete answer to

the housing crisis; let's look at the basic root of the problem — undersupply of accommodation.

The Attorney-General would admit that.

Interjections.

Mr. Bennett: Mr. Speaker, rather than get into the

sloganeering that the Attorney-General wishes to, I'd like to

continue further in attempting to arrive at a solution for the

problem in British Columbia.

None of us want to see hardship continue on our people,

particularly those people in limited circumstances. We have in

this province many people who must have aid in housing.

Now, rather than ask the landlords to subsidize them,

perhaps the government, rather than distributing a rental grant

indiscriminately, one that hasn't even been picked up by the

people — $30 whether you're a struggling pensioner, or whether

you have a penthouse in the West End of Vancouver — perhaps

that money could be allocated to those people in genuine need.

Rather than an indiscriminate distribution, why not allocate it

along with those programmes of subsidization where we have

federal/provincial programmes — federal/provincial programmes

that have already been working to meet the needs in some sort

of subsidized housing? Use those standards as a criteria for

making the allocation of that money.

Why give it to the people in the $600 or $1,000 a month

penthouses? Does $2.50 a month mean so much to them? Yet that

money, added to the rest of the money on meeting the needs of

the people in genuine need, would go a long way, Mr.

Speaker.

Hon. Mr. MacDonald: It would; it would go right in

the pockets of the landlord.

Some Hon. Members: No!

Mr. Phillips: They would respend it to build more

accommodations.

Hon. W.L. Hartley (Minister of Public Works): Bring

back, the Social Credit means test.

An Hon. Member: Well, where did he come from?

Mr. Speaker: Order, please.

Mr. Bennett: Mr. Speaker, the rent control bill the

Attorney-General has placed before this province really is just

what he says; this is still just an interim solution. It is a

solution that has become part of the problem. His approach is

not realistic. The history of this approach since it was first

passed in the spring would bear out the problems we're having

in British Columbia. In Esquimalt there has not been one new

rental unit constructed since this bill was introduced in this

House, since people lost confidence in creating rental

accommodation in this province.

They have created the initial bill in haste and confusion;

they created the department of rentalsman which was going to

solve all the problems, and now they've had to back off it Mr.

Speaker — had to back off this department, spread it out,

adjust it, change the initial rental rate, change almost

everything from the first premise, because they were wrong then

and they are just as wrong now. Here we have even the

rentalsman admitting that he cannot do the basic job the

Attorney-General asked him to do. He can't administer rent

control. He almost admits it's unworkable.

Hon. Mr. MacDonald: So we're loose.

Mrs. P.J. Jordan (North Okanagan): Yes, from the neck

up.

Mr. Bennett: He says in news reports and in the

rentalsman's own report: "Rent Raise Up To Government." He

says: "I can't do the job as the government set it out; I

can't meet the conditions. I can't serve the people of British

Columbia because the first premise in creating the office of

rentalsman as a means to control rents in this province just

won't work.

At his news conference the rentalsman was asked to comment

on suggestions that government critics will condemn his

proposal for a rent-review commission as merely another idea

for enlarging the government bureaucracy. He says:

"Fortunately, that isn't my decision to make." He said: "I have

said the implications of rent review or full scale rent control

are one of the key issues that will face this government. In my

view, it's a very significant matter." But he can't deal with

it. He can't administer it.

His office as it was created and dreamed up on the spur of

the moment by the Attorney-General can't do the original

suggestion of rent control in this province because the

rentalsman knows it can't be done. He knows it's

inapplicable.

[ Page 4560 ]

He commissioned a study by Professor Cragg. And Professor

Cragg after much deliberation and hiring Clarkson Gordon….

We have two reports full of statistics, full of data — the type

of research, British Columbia research, which says that the

rent controls will not work; they will penalize a segment of

society. They will become part of the problem; they will cause

new construction not to be developed, new suites not to come on

the market. We will be facing a long-term problem in this one.

That's exactly what they said.

Interjection.

Mr. Phillips: Don't you believe black and white

facts'! You can't even read your own report.

Mr. Bennett: He says that solutions to the hardships

being caused by inflation — right from Professor Cragg — lies

completely outside the bounds of this report.

Using rent controls for this purpose on a more stringent

basis than recommended runs the danger of encountering all the

problems that have arisen from rent control elsewhere.

We're not just advocating our position in isolation; this is

the position that Professor Cragg says will happen. He has been

commissioned to study the problem.

Hon. Mr. MacDonald: Do you want to apply that

report'? Do you want to apply that 30 per cent? Just say yes;

just nod your head.

Mr. Bennett: I'm saying that he says that rent

control won't work. You're trying to fuzzy your way out of a

situation that you've authored yourself.

An Hon. Member: Oh, there's the man that's going to

Interjections.

Mr. Speaker: Order, please!

Interjections.

Mr. Bennett: They said that the Housing Minister

Mr. Phillips: There's $6.8 million for Dunhill which

has done nothing since.

Mr. Bennett: There's the Housing Minister. He's the

man who has the responsibility for creating the very units that

would have solved this problem; the man who has done

nothing.

You've heard about Nero who fiddles while Rome burns. Well, he's Mr. Zero that

fiddles while the tenants burn in British Columbia. No rental accommodation

has been created while he's had the responsibility to create new accommodation

in this province.

Interjections.

Mr. Bennett: It must be difficult for the Attorney

General to pull that Minister's chestnuts out of the fire. That

Minister had the responsibility to initiate accommodation. If

it had been done, it would not have created the necessity for

this type of debate in this House.

Our tenants would be happy; they would be housed. Our people

would be able to afford houses. There would be accommodation in

this province rather than the acute problem of no

accommodation, no availability, and, because of under-supply,

high prices depending on the market. Zero vacancy rate in

British Columbia.

I quote the Attorney-General where it says: "Rent Jump Fixed

at 10.6." He said:

"He disagrees with Professor Cragg on part of his

report.

"He said Cragg had taken current inflationary values of

land, interest rates and construction costs and applied them to

the old stock of residential premises.

"'He has come up with the result that the landlord should

receive more than they're asking,' Macdonald said.

"He said he believed Cragg had made a fundamental error.

'These people, because they happen to invest and build and

construct this type of accommodation when we were in a

different economy, should relate their investment value to the

price they built it at then, not in relation to escalating

costs for taxes."'

Hon. Mr. MacDonald: That's right.

Mr. Bennett: Not in relation to escalating costs when

most were on renegotiable mortgages on five-year terms where

they may go from 9 per cent to 12 per cent.

Not where they're faced with the rise in heating, where

their interruptible supply of gas has gone up to 50 per

cent.

Not where they're faced with more costs for just even

maintaining the standards of the apartment in normal repairs — not major renovations but normal repairs.

And here are these people, under this premise who have at

value…. Say it was created in 1964, 10 years ago; say two

people, a husband and wife, sold their farm and came to B.C.

and bought a small

[ Page 4561 ]

apartment for $40,000. That $40,000 in 1964 dollars

shouldn't be frozen at that value because the Attorney-General

decides that he wants them to subsidize the tenants.

In 1974, with inflation, with that value being frozen, those

people have had their savings overnight, at the stroke of a

pen, at the whim of the Attorney-General, reduced to 1964

values and have had their guarantee against keeping up with

inflation removed by the Attorney-General of this province.

Mr. Phillips: How come it's your legislation anyway?

Your Minister of Housing he couldn't handle it.

Mr. Bennett: With that sort of argument, I suppose

that a lawyer — and you perhaps would be familiar with this — who got his law degree 20 years ago when it was less expensive

would be worth less than the lawyer who got his law degree just

recently. Do you agree with that, Mr. Speaker? I don't.

Interjections.

Mr. Bennett: I don't, Mr. Speaker. I don't.

Mrs. Jordan: Why don't you listen'!

Mr. A.V. Fraser (Cariboo): You're backing out.

Mr. Phillips: There's the pious piper.

Mr. Bennett: That type of reasoning has no basis in

fact. You're still asking one segment of society to subsidize

another when it's an obligation of all of us and an obligation

of government.

And yet they've chosen these particular landlords to

subsidize those tenants because that happened to be their

investment at that time. Not major landlords, not big real

estate companies, not major financial houses, but people with

small investments. In the case of Newark, we found out that

most of the rental accommodation isn't in the large highrises

but is owned by just ordinary people who've invested maybe,

from those statistics, their only investment in providing them

an income in their own retirement years. Yet you would penalize

those people. That's not fair.

Hon. Mr. MacDonald: Fair return but no ripoff

profits.

Interjections.

Mr. Bennett: This is the very thing we're saying. The Attorney-General

wants us to believe that he knows what's fair, that he has some superpower to

say what's fair, that he's sole dispenser of economic justice in this province.

You want that type of authority? No way.

An Hon. Member: What's a fair return in your

profession?

Mr. Bennett: It must be difficult for that

Attorney-General to rise and try to advocate these controls

when every authority, every jurisdiction and even every

responsible

article in newspapers has come out with the dangers

of rent control and the problems with them. Editorial after

editorial;

article after article; people with no particular axe

to grind; people who are just presenting a case for public

responsibility of government. They're not concerned with the

government looking for an excuse because of its own failure to

solve this problem. They're not interested in helping you to

sweep it under the rug. They are interested in presenting the

facts to help you develop a proper and just solution for this

problem, a solution that should be more accommodation and more

supply for our people. No quick, easy, unworkable solutions.

That won't solve the problem and will become a major part of it

in the future.

Hon. Mr. MacDonald: What about Robert Stanfield? You

supported him in the federal election.

Mr. Bennett: I beg your pardon? Mr. Speaker, would

you ask the Attorney-General to withdraw that remark?

Interjections.

Mr. J.R. Chabot (Columbia River): What happened to

your party in the federal election?

Mr. Bennett: In the federal election. I understood it

was still a secret ballot.

Interjections.

Mr. Speaker: I would advise the Hon. Member that it's

not a question of withdrawal. You have the floor and you can

correct any of his statements….

Mr. Bennett: Certainly my personal preference in the

other political arena is not the question here tonight. The

question is that economic control can't be taken in

isolation.

Many people have pointed out the problems. Many authorities

and many studies have indicated that this type of action won't

work.

(1) What we need are initiatives to create more rental

accommodation, initiatives to create the

[ Page 4562 ]

serviced lots that will allow for the development of this

accommodation. We need provincial funding along with the

municipalities to encourage and initiate the full provisions to

immediately provide those serviced lots available for

construction. We need to do this in concert with the federal

government serving its traditional role of providing financing.

Mr. Speaker, this can be done, and it must be done.

(2) We must make the office of rentalsman work. Instead of a

separate review board, I would say that I agree with those

members of the Vancouver city council like Alderman Rankin who

suggest that rental review should be done on a municipal and

city basis, not a regional basis.

I say that there is a place for a rental review handled

either by the regional districts or, where you have a major

urban population like the City of Vancouver, by the rentalsman.

Hon. Mr. Macdonald: That's worth looking at, eh?

Mr. Bennett: Yes, and I'm advocating it.

I would say that these municipal and regional offices,

utilizing the expertise and the experience of local officials

dealing with the immediate problem, a problem that can't be met

by a provincial office….

The office of rentalsman now has been unable to cope with

those complaints that I've had from my own constituency. We've

had phone call after phone call to that office and they don't

have the local knowledge or the ability or the staff to be able

to do anything about the immediate problem. And no provincial

authority, without utilizing the present local and regional

governments, can do the job effectively.

Hon. Mr. MacDonald: Like Peter Vander Zalm, eh?

Some Hon. Members: Who? Who?

Mr. Bennett: The Attorney-General is always wrong.

He's always wrong.

I just quote what the City of Vancouver says, because it

says in the newspaper: "City Wants Own Rent Bureau." It

says:

"City council wants power to establish its own rental

accommodation bureau with the same powers as the B.C.

rentalsman. Council voted Tuesday to ask the provincial

government for a change in the Landlord and Tenant Act that

would allow the city to establish such a bureau to deal with

landlord and tenant disputes.

"At the same time, council took no action on a request from

the city's existing rental accommodation grievance board that it be disbanded

because of the rentalsman's office.

"Alderman Harry Rankin said: 'A city rental authority with

the same powers as the rentalsman could do a better job than

the provincial office.' He described the rentalsman's office as

being in 'chaotic condition' and said: 'You can get as many

interpretations of the Act down there as you want because

nobody knows….'"

[Mr. Liden in the Chair.]

Interjection.

Mr. Bennett: Alderman Rankin. He goes on further.

Rankin said: "The city should take the lead in decentralizing

authority, because no other municipality faces the same

crisis."

I agree that Vancouver faces a major crisis and their

government should be able to deal with it. In those areas of a

smaller population it could become part of the regional

structure. The province could pay for those regional offices

and the city offices on, say, a 90-10 formula of

cost-sharing.

Hon. Mr. MacDonald: Are you favouring rent

controls?

Mr. Bennett: I'm talking about a rental review

office.

Mr. D.M. Phillips (South Peace River): He's talking

about the solution to the problem which you aren't interested

in. Neither is your Minister of Housing (Hon. Mr. Nicolson)

interested in it. All you want to do is back further into the

gluepot.

Deputy Speaker: Don't interrupt the speaker.

Mr. Bennett: I'm saying that….

Some Hon. Members: Oh, oh!

Mrs. Jordan: The dictator's back.

Mr. Bennett: I'm saying, Mr. Speaker….

Interjections.

Mr. Bennett: No, I'm advocating our proposal. If

you'll continue to listen, we're saying that these offices

under regional and municipal control could make the office of

rentalsman useful instead of being the waste it is, and the

waste it has been. We have this rentalsman that has been so

inefficient and who has spent thousands of dollars and wasted

thousands….

Interjections.

[ Page 4563 ]

Mr. Bennett: Well, Mr. Attorney-General, I wondered

how you would mention it, because here we have the rentalsman,

and you talk about taking out the appeal procedure, and what do

we have? We have thousands of forms printed for the refund of

rent….

An Hon. Member: How many thousands?

Mr. Bennett: Thousands — 500,000 forms…

Some Hon. Members: No, no!

Mr. Bennett: …stored in a warehouse in Burnaby.

Mrs. Jordan: Shame!

Mr. Bennett: Mr. Speaker, 500,000 forms. There are

2,000 boxes of these forms alone in a warehouse in Burnaby.

Other forms, Mr. Speaker…. How many other forms and

brochures and literature and material are made obsolete by this

sudden change in the rentalsman Act? How much other waste?

Have we spent $100,000? Have we spent $150,000 on materials

and forms that have been made obsolete overnight?

Yet these forms were just mailed out recently all over the

province…mailing them out while the ink is still wet.

Mr. Phillips: You need a Philadelphia lawyer to fill

them out.

Interjections.

Mr. Bennett: 500,000! How many other pamphlets and

posters and material and propaganda, created perhaps by the

Dunsky advertising agency, are in this warehouse in Burnaby,

Mr. Speaker? Yet the ink isn't even dry on the new

proposals.

Here's more evidence of the government reeling from crisis

to crisis, passing up its own inadequate legislation, looking

for supporting data — not because they want the answers, but to

support a conclusion that they developed in haste and in a

hurry in the spring because they hadn't handled the problem of

the lack of accommodation and rental accommodation in this

province since they came to office.

It's more proof positive of this Attorney-General, Mr.

Speaker, being….

Interjections.

Mr. Bennett: Here's what they say. It says:

"rentalsman's office use only." He's abandoned the

responsibility of taking the….

Interjections.

Mr. Bennett: These were mailed out, as I said, and

they're still being mailed out. And there are 2,000 more cases

still in a warehouse in Burnaby.

Mr. Phillips: He wants to save them so he can make

carbon copies of his failures.

Interjections.

Deputy Speaker: Order!

Interjections.

Mr. Bennett: Here's the postage and here's the

mailing address….

Mr. Phillips: How much for postage?

Interjections.

An Hon. Member: It's 60 cents for postage.

Mr. Bennett: It's 60 cents for postage to mail it to

Victoria, to mail obsolete material to Victoria — 60 cents

postage.

Mr. Phillips: You're making the federal government

fat.

Interjections.

Mr. Bennett: Mr. Speaker, in looking for the solution we

talked about making the rentalsman's office more efficient.

We've created the rentalsman; we've given him a contract. Let's

make his work meaningful. Let's allow him to do something.

Let's have him work in conjunction with the municipalities

instead of creating a whole now set of authorities that we may

be amending in the spring when they find out that they can't do

the work and when they come in with another authority and

another authority and another commission and some more people

to try to bail out this government on a non-acceptable solution

to a problem — a non-acceptable solution to the problem dealing

with the people of this province who suffer from lack of rental

accommodation, and whose problem is increasing daily.

Mr. Speaker, in Victoria we have a zero vacancy rate now in

rental accommodation. We have a zero vacancy rate in the

Province of British Columbia. The people of the province know

full well that the problem can't be solved by more commissions

and more boards and more authorities. The people of this

province know full well that it can only be met by the

construction of more accommodation. They know that they can't

live under the piles of paper and

[ Page 4564 ]

directives that are put out by this government. That won't

provide one bit of accommodation for anyone, no matter what

control or what authority.

The answer is supply. The answer is subsidization to those

in genuine need — and take away the subsidy for the people who

don't need it, that $2.50 a month rental grant that isn't

needed — $9 million and, if need be, more money available for

the people in genuine need.

This grant isn't working as it is now, because just under

100,000 have applied for it. The grant isn't working. It was a

political gimmick that failed, a gimmick that's helping no one.

Why not make this money meaningful? For the people in genuine

need we could establish a set of conditions and have it locally

administered, and the grant eligibility could be the same rules

as apply to the residents of sponsored projects, Mr.

Attorney-General.

Hon. Mr. MacDonald: And it goes right to the

landlord, eh? Right to the landlord.

Mr. Bennett: The same rules as apply to residents of

sponsored projects. The same rules as apply to residents of

provincial-federal partnership projects for limited-income

tenants.

We already have a set of conditions to help those people in

need. We have their qualifications spelled out. Why not use

that information? Use the municipal offices. Make the office of

rentalsman workable and provide the money to the people in

genuine need. Provide accommodation. Work with the

municipalities in creating serviced lots. Work with them in

creating more units but, for goodness' sakes, Mr.

Attorney-General, don't come into this House with all the phony

arguments that you're going to do it with rent control, because

we just won't buy it. It just won't work. It hasn't worked

anywhere else and it won't work here.

Here were some surveys that were sent out to canvass the

opinion of those very tenants, surveys in which they had the

opportunity to respond. I've only brought a few of them into

the House.

On them, after giving all the information, they've also,

many of them, chosen to write comments. Some of those comments

are very illuminating. They tell us, Mr. Speaker, that the

Attorney-General is not correct when they say that the tenants

of this province don't understand, and can't identify the

problem, and will be caught up in his sloganeering and slick

tricks, because they won't.

A tenant in Fulton Street in South Burnaby says: "We do not

want Bill 169 to come in. We are satisfied with the way this

building is being run." A tenant in Langley states: "These

controls and giveaway programmes reduce production."

In fact, I won't go through these comments myself because other Members speaking

in this debate will wish to present these opinions — opinions of the tenants,

the tenants whose opinions you so flippantly present to this House, which are

inaccurate.

We get mail; we get letters. In fact, most of us actually

live in our constituencies which we represent and are in

contact daily with those people and were able to identify and

deal with their needs.

Mr. Speaker, this bill will not meet the needs of the

tenants in this province. This bill will become and has become

a major part of the problem of rental accommodation in this

province. The only answer is new and more construction. The

only answer is a climate that will allow the confidence and the

programmes that will create the incentives, both for the

municipalities and the builders, using provincial and federal

help to create accommodation in the province. The only answer

in the way of rent subsidy is to the people in genuine need,

people who can be identified by other qualifications spelled

out in other programmes.

Mr. Speaker, this is the alternative to this rent control

bill, a bill that isn't going to meet the needs of tenants in

this province, a bill that isn't acceptable to us in the

opposition.

Deputy Speaker: The Minister closes the debate.

Hon. Mr. Macdonald: Mr. Speaker, in closing this

debate on second reading of Bill 169, I would like to reply to

the arguments of the opposition leader (Mr. Bennett).

Interjections.

Deputy Speaker: I looked around the room and there

was no one on his feet.

Hon. Mr. MacDonald: Nobody else was up. He wasn't on

his feet. Nobody else was up.

Interjections.

Deputy Speaker: Order!

Interjections.

Deputy Speaker: Order, order!

Hon. Mr. MacDonald: We looked through the whole

assembly and no Mr. Thirty-percenter rose to his feet. I want

to reply to the debate.

Interjections.

[Mr. Speaker in the chair.]

Hon. Mr. MacDonald: Mr. Speaker, I defer,

[ Page 4565 ]

because I think there are useful comments that could be made

in the course of this debate by some of our own

backbenchers.

Mr. Speaker: May I ask who would like to speak? Is

anybody next'?

Interjections.

Mr. Speaker: Is nobody going to speak on this

bill?

Interjections.

Mr. D.M. Phillips (South Peace River): It is certainly a

pleasure for me to stand up and be counted in this debate.

Hon. Mr. MacDonald: You were awfully slow about

it.

Mr. Bennett: Not as slow as you are in getting rental

accommodation.

Mr. Phillips: I want to tell the Attorney-General

that I certainly am used to the courtesy extended in this House

in allowing the minority parties to have their say.

Interjection.

Mr. Phillips: But since they don't wish to be counted

and don't wish to put anything on record in this debate, I

certainly will stand up and be counted and so will the rest of

the Members in this party.

The legislation that we have seen introduced here this

afternoon, in my words I will have to say, is election catch-up

legislation. This government, by bringing in this legislation,

has proven once again that it really doesn't know where it is

going, that it really doesn't know where or how to find the

answers.

This legislation reminds me of a companion piece of

legislation that has been recently introduced with regard to

taxation and assessment — on the same theme. Election year

catch-up legislation!

Ms. R. Brown (Vancouver-Burrard): Order!

[Mr. Liden in the chair.]

Mr. Phillips: Do you have something to say, Ms. Member?

You know, Mr. Speaker, this government reminds me of a scene I had once when

I was a kid. I was responsible for letting a pig out of a cage, and I tried

to catch that pig. Mr. Speaker, I had a great deal of difficulty in catching

that pig because it kept darting in different directions. I never knew from

one moment to the next what direction that pig was going to head in.

An Hon. Member: That's no way to refer to the

Attorney-General.

Mr. Phillips: Well, the Attorney-General certainly

wants to wear the shoe, and I know that it fits.

But that's exactly the way this government operates. They

dodge in this direction, and then they turn around and they

dodge in that direction. We in opposition cannot really tell in

what direction they are going. But the problem is, Mr. Speaker,

that the people of this province can't really tell in what

direction they're going. That's the reason that the much-needed

dollars for investment in this province have taken wing.

An Hon. Member: Flying to Alberta.

Mr. Phillips: They are flying away. Those dollars

that are needed to provide the much-needed rental accommodation

in this province are fleeing on wings from this province. They

are going to a safer, harbour, a safer harbour where the rental

needs of the people will be met. And the responsibility rests

firmly on the shoulders of this government.

You know, Mr. Speaker, when I was talking about that pig, I

said that I couldn't trust the direction in which it was going.

Trust is the key word.

Interjection.

Mr. Phillips: Do you have a point of order, Mr.

Attorney-General?

Trust is the key word with this whole government. Trust is

the key word. What it says today it reverses tomorrow, Mr.

Speaker, and this legislation is another prime example.

I would like to refer for just a moment to some

Hansard transcripts from when the Attorney-General

introduced this legislation — and this is the reason I say that

this government can't be trusted. I would just like to read to

you Hansard , page 2316, dated April 8, 1974, introducing

Bill 75, Residential Premises Rent Stabilization Act, where

most of the debate took place in this Legislature over that

particular Act. Mr. Speaker, I want to draw to the attention of

the assembly here this evening the words of the

Attorney-General when he introduced what he called an interim

Act.

Interjections.

Mr. Phillips: The Attorney-General is anxious to hear

his own words. The Attorney-General said:

… because in a short-term rent stabilization such

[ Page 4566 ]

as the present, you may do more to injure the

economic position of somebody who has been good to his tenants over a

period of time than the gouger himself….

Mr. Speaker, the Attorney-General admitted when lie brought

in what he called that interim piece of legislation, that

interim legislative measure of rent control that it would do

more to injure the tenant over a period of time than the

gougers, who are few and far between.

Mr. Speaker, these are the words of the Attorney-General — that it would do more to injure the renter than the actions of

the gougers.

Now the Attorney-General seems jumpy. If I were in his shoes

I would be jumpy also tonight, because the very measure that he

brought in, that he himself condemned, a measure which we were

told in this Legislature would be short-lived, when he brought

in the Landlord and Tenant Act rent stabilization and rent

control were to go out the window.

When he brought in rent controls, he himself said that it

would do more damage to the tenants of this province than what

he termed "the gougers."

Mr. Speaker, this is the whole point that we are

questioning, because rent stabilization, rent control, in the

long run, in the Attorney-General's words, "will do more to

injure the economic position of the renters than the gougers."

He goes on to say that it's true, this period should be an

interim one, and we should move as quickly as we can toward a

kind of general review that heralded the new Landlord and

Tenant Act that has been filed here today.

What did he do? He takes a complete about-flop and brings

in the same kind of measure that he, in this Legislature,

condemned. He brings it back again after the Landlord and

Tenant Act, and the rentalsman that he created, failed. You

wonder, Mr. Speaker, why we can't trust this government.

The Hon. Attorney-General said that we have to throw out a

lifebelt, so that's what Bill 75 is, a lifeboat.

I'm quoting from Hansard again:

It was our duty and remains our duty in an interim

way, and within the powers that are granted to us to answer these

requests for help….

But it will do more damage to the renters of this province

than the gougers themselves.

The ironic part of this legislation is that it will do more to hurt the very

people whom the Attorney-General…. And I believe in all sincerity that the

Attorney-General is working in all sincerity, misguided but sincere. He's stuck

in his own glue pot and he doesn't know which way to move. I feel sorry for

the Attorney-General, because it shouldn't be his legislation at all. Mr. Speaker,

this legislation should be the responsibility of the man who was given such

a fantastic budget not over six months ago, the Minister of Housing (Hon. Mr.

Nicolson). It should be his responsibility, and not the responsibility of the

Attorney-General. But the leader of the government, the lion. Premier, who,

in his wisdom knew that the Minister of Housing could not carry the responsibility

placed on his shoulders, foisted that responsibility onto the Attorney-General

because the Hon. Premier knows that the Attorney-General can sit there, and

with that winning smile of his, try and smile away all the problems. Unfortunately

the Attorney-General is in deeper than he knows.

The results of the mismanagement of rental accommodation and

housing in this province is working hardship on thousands and

thousands of young students in Victoria and Vancouver who

cannot find proper accommodation while trying to receive their

education in those two cities.

I hope, Mr. Speaker, that those very students, who were

sometimes having to take illegal accommodations in those cities — I won't say it's substandard because many people have given

up their basements and their extra bedroom, but it's illegal

accommodation in those cities — in order to receive their

education. I certainly hope that those young students, who in

some instances are being ripped off by this illegal

accommodation…. Students from the northern part of this

province, students from the northern part of Vancouver Island,

students from the Kootenays, who have to come to these cities

to receive some of their post-secondary education are paying

exorbitant rentals for accommodation because there are no

suites available, no housing available.

These students are being ripped off. Not only do they have

to come and pay their own accommodation, but in many instances

they are being ripped off by the people who supply this illegal

accommodation.

The result of the policies of this government is driving

mortgage money to the neighbouring Province of Alberta where

there already exists a renter's market. In the Province of

Alberta, in the City of Calgary, there is a 7.9 per cent

vacancy rate. In the City of Edmonton, there is a 5.2 per cent

vacancy rate, but still they are continuing to build. Why'?

I'll tell you why, Mr. Speaker, because the government of the

Province of Alberta is not taking over the business that people

are investing in.

Hon. W.L. Hartley (Minister of Public Works): How

about Pacific Western Airlines?

Mr. Phillips: Well, Mr. Speaker, the Minister of

Public Works talks about Pacific Western Airlines. I'll tell

you something about Pacific Western Airlines: your Minister of

Finance would have purchased Pacific Western Airlines had he

had the surpluses that were left to him when he became Minister

of Finance, had he not squandered them. Had you, Mr. Minister

of Public Works, not wasted them on going out and buying new

buildings, buying land.

[ Page 4567 ]

Interjections.

MR, PHILLIPS: We used to have at one time in this province a

buyer's market, a renter's market in rental accommodations, and

it was a happy situation. Now the times have changed and the

responsibility for those changes must rest directly on the

shoulders of the Attorney-General.

I want to tell you that if I know anything about business at

all, I would suggest that where we have a shortage of

accommodation like we have in the Province of British Columbia,

that people should be tripping over themselves to supply that

vacancy and to fill that need. But we have the entire opposite.

Nobody in the Province of British Columbia is tripping over

themselves or rushing in to fill this vacuum, to fill this

need, to supply the demand. Why? Because of the negative

policies of this socialist government, that's why. What has

happened in the last year?

It seems to me that in the province where there is

unemployment — and the unemployment is growing faster than it

is in any other province in Canada — where construction is

needed, that you would think that the much needed construction

to provide rental accommodation in this province would take

place immediately. But no, this isn't happening. Our

unemployment is climbing and still that construction isn't

taking place.

Mr. Speaker, the ironic part of it is that while people are

out of work, while there is a lack of rental accommodation,

cabinet Ministers sit on the opposite side and smirk and laugh

while we have an overrun in the Department of Human Resources

of $103 million.

I think that the situation in British Columbia has reached

an all-time low. The situation is not going to be corrected

immediately because we need at least 18 to 36 months lead time

for construction of new rental accommodation.

Every day that we wait to start construction of the rental

accommodation needed, the situation will grow worse and more

intolerable. The entire question is the responsibility of this

government. They are responsible for the intolerable situation

that we are facing in this province this evening.

The Attorney-General said that people are flocking into the

province. They have been flocking in for years because of our

climate. The Attorney-General stands and takes credit for us

having the lowest percentage of housing starts of any province

in Canada this year.

Hon. Mr. MacDonald: You've got it mixed up.

Mr. Phillips: No, I haven't got it mixed up, Mr. Speaker. He forgets

about the tremendous increase in population. People aren't coming here to work;

people are coming here to retire. The certainly aren't coming here to work

in the last two years.

Because of the fact that the price of rental accommodation

has not increased as fast in the last 10 years as housing, the

situation will again grow more intolerable. In the last 15

years the price of rental accommodation, a two-bedroom

apartment, has increased 100 per cent. In the last 5 years it

has only increased 28 per cent. In the years 1959-69 it only

increased 56 per cent.

Housing in that same period increased in price 482 per cent

and the price of a lot increased 641 per cent. What I am

pointing out is this: individual housing is becoming so

expensive that it is going to be available only to the very

rich. This is going to place more pressure on rental

accommodation.

What is going to happen? Those who could maybe afford to

build are not going to build because of inflation; they are

going to put more pressure on rental accommodation. They are

going to take up that much needed rental accommodation that

should become available to those in the lower-income bracket.

This is going to make the situation in Vancouver Centre and in

Vancouver East and in Vancouver-Burrard graver. It's the very

situation that the Members, in all sincerity, are concerned

about in their own ridings. The responsibility is going to be

on the government of which they are a part.

These people will not be able to afford rental accommodation

because it will be taken up by those who should be building

homes.

What is going to happen? A black market in rental

accommodation will develop. No offence. It is a terminology

which has been used for quite some time.

Those who can afford it will be paying under the table;

these rent controls will be out the window. With the situation

we have today, this is exactly what will happen and it has

happened elsewhere. Your low-rental accommodation will

deteriorate; the half-decent rental accommodation and the

better class rental accommodation will not be subject to rental

controls because those who want that better accommodation will

be paying for it under the table. I don't care how large a

police force you have, how many regulations you have, there is

no way you will ever control it.

Who will suffer? It will be the elderly people and the young

people with families who can't afford to build their own homes.

The situation will grow worse daily. The situation must rest

squarely on the shoulders of this government. Construction has

dipped to an all-time low and it is declining.

We pointed out these very facts in the spring session of

this Legislature not over six months ago. The things which we

forecast during the debate on Bill 75 have come to be a

reality. Yet this Minister in

[ Page 4568 ]

charge of rent control wants to perpetuate that situation

and keep it going, while our unemployment grows.

Where are those jobs which this government was going to

create in the Province of British Columbia?

The policies that this government has brought in have caused

a housing shortage. The policies that this government has

brought in have caused uncontrolled rent, condominiums and

housing to skyrocket.

The Premier seems to be a little concerned when I say

uncontrolled rents. He evidently doesn't know the legislation.

There are certain houses with fewer than three suites that are

not controlled. This is the type of rental accommodation which

will skyrocket and which students attending the university have

to have.

The policies of this government will build slums in the

lower mainland and will result in no choices of accommodation.

They will freeze people to low-rent accommodation. When their

jobs move, they will not be able to move with them because they

will not be able to get new accommodation.

The policies of this government will freeze people to the

accommodation they have even though they can afford better.

They won't move into better because it won't be available. It

will take off with the bottom market — the rental accommodation

where it is most needed by the people of this province. Young

families will be the people who will suffer most, along with

elderly couples.

The policies of this government in the field of housing are

slowly but surely pushing us into a quagmire of problems from

which there is no escape and no return. The Attorney-General

practically admitted that when he introduced this legislation

tonight.

While this is happening in this province, our Premier is

asking for leadership from Ottawa. Well, maybe he is asking for

quite a bit. But how much longer can the Premier of this

province, who was elected to lead this province, continue to

abdicate his responsibilities and try and foist the blame on

somebody else'?

It is time that the leader of this province, the Premier,

the Minister of Finance, stood up to the problems that are

facing the people of British Columbia tonight. It is time he

brought in some concrete solutions instead of patchwork

legislation. He was elected to lead this province.

Suggestions have already been laid out here in this chamber

this evening by our leader (Mr. Bennett).

Interjection.

Mr. Phillips: They are concrete. suggestions, but you

have your ears and mind closed. You always have had and you

always will have.

Nobody ever taught a socialist anything in their life because they have all

the answers. They run on a theory. It doesn't work but looks good on paper.

It doesn't work, but they continue blindly and madly on their way.

Interjection.

Mr. Phillips: Yes, I was just going to mention the

Petroleum Corporation.

While we face an intolerable situation, the Premier

addresses the B.C. Federation of Labour. What does he have to

say about the problems that face British Columbia? What does he

offer in the way of solutions? What does he ask organized

labour to do?

Did he ask them to cooperate? Not on your life, Mr.

Speaker. What did he do? He goes on a tirade of blaming the oil

companies, blaming the mining companies and blaming MacMillan

Bloedel for the problems that exist in British Columbia

tonight.

I would have suggested that the Premier, had he been

constructive, would have gone to that B.C. Federation of Labour

convention and asked for their cooperation and the

cooperation of the labour unions involved in the construction

industry and asked them to cooperate with management to solve

the problem. There was a perfect opportunity for our Premier to

have been constructive.

Hon. Mr. MacDonald: You're supposed to be attacking

my bill.

Mr. Phillips: I'm talking about your bill and what

should have been done by your government, Mr. Attorney-General.

There was a perfect opportunity for the Premier to go before

that convention in a constructive way to ask for cooperation,

to ask the B.C. Federation of Labour to cooperate in building

the much-needed accommodation for this province. But what did

he do? Up to his old political gimmickry, up to his old

buffoonery. Blaming Ottawa, asking them for leadership, blaming

the ills of this province on the oil companies and Bloedel.

I'll tell you, Mr. Speaker, that the people of Canada and

the people of British Columbia have had enough of this

politicking on behalf of our leaders. It was tried in an

instance by David Lewis, the last leader of the federal NDP,

and what did the people of Canada say to him? They said,

"Out!"

You can't blame the ills of this province, you can't

overshadow the problems that this government has created by

going around and attacking big corporations.

I'm not in love with big corporations, Mr. Speaker, nor was

the government that I represent. Absolutely not.

An Hon. Member: Oh, oh.

[ Page

4569 ]

Mr. Phillips: We're not in love with big

corporations; we feel they should pay their way. And the

Premier knows that. But he abdicated his responsibility when he

stood before that convention of labour leaders in this province

and went on with his old political gimmickry. I'm sure that if

that convention along with this government had really wanted to

solve the problems that face the Province of British Columbia

tonight and today, they could have sat down to a workshop and

worked out some way with the construction union to get together

to solve these problems.

But no, not the Premier. He won't be constructive.

Absolutely not. He's too interested in going on a joy junket to

China. I notice that he wants to get all of these joy junkets

to China and all around and everywhere in while he's Premier,

because it will be short-lived.

Our leader offered alternatives in a construction manner.

While people in this province tonight are unemployed, while

people in this province tonight have no accommodation, our

Premier sits over there and smiles and smiles and smiles and

says that I don't like him. It isn't that I don't like him;

it's that I fear for the people of this province who have

placed the responsibility for their future and well-being in

his hands. Unfortunately, that Premier is not living up to his

responsibility.

An Hon. Member: What's the matter, do you feel

deserted?

Interjections.

Mr. Phillips: It's a sorry situation when the

Attorney-General of this province, who initiated this

legislation, who brought it in, who said it was going to be the

end-all, stands in this Legislature and makes light of the

very, very grave and serious situation which I have brought

before this House tonight. He knows full well that I am

discussing his legislation. He knows full well that it is

really the Minister of Finance who must help to solve the

problem.

I don't know how the people of this province can really have

any faith in an Attorney-General who would make light of such a

grave situation.

When the Attorney-General brought in his legislation, the

new Landlord and Tenant Act, he said it was going to be the

end-all. But what do we have?

He created in that bill the office of a rentalsman. It was

going to be the responsibility of that rentalsman in the

Landlord and Tenant Act to solve the problem. He was going to

have an escape clause where landlords who wanted more that the

agreed-to rate increase could have the opportunity of appearing

before this rentalsman to state their case.

What has happened less than four months later? The rentalsman in the Province

of British Columbia is running like a scared rabbit. Why? Because this government

didn't have the foresight to see the end result of the legislation that they

were bringing in.

Deputy Speaker: I would like to draw to the speaker's

attention that he is drawing near the end of his 40

minutes.

Mr. Phillips: I regret, Mr. Speaker, that the time

allotted to me is drawing to a close because there are several

other points that I would like to make. But I want to finish on

this point: I hope the people of British Columbia realize the

way that this government is mismanaging their affairs.

Legislation after legislation has been introduced into this

chamber, and sometimes before it's even passed its third

reading it is amended.

The Landlord and Tenant Act was to be the cure-all. Less

than four months later the rentalsman created in that Act is

running scared. Portions of that Act have been completely

deleted and the situation grows daily worse. Is this the type

of government, the type of legislation that the people of this

province voted for in 1972?

I think, Mr. Speaker, that those very same people tonight in

British Columbia are somewhat dismayed and disenchanted.

Deputy Speaker: Your time is up, Mr. Phillips: My time is up and democracy has died in

British Columbia.

Mr. R.H. McClelland: (Langley): I wanted to defer to

any of the other Members of this House who wished to speak on

this bill which is a very important bill before this House.

Mr. Speaker, I know that some of the Members, like the

Member for Vancouver-Burrard (Ms. Brown) and those grand and

glorious Liberals, one of whom still happens to have missed the

float plane, find it too hot to handle and are not prepared to

stand up and speak for the people who see the shelter industry

in the province going down the drain. They sit there and say

nothing. They haven't got the backbone to stand up and speak in

this debate. No backbone.

Interjection.

Mr. McClelland: I'd just like to warn some of those

Members that that

section of the anatomy that gets affected by

sitting on the fence is very tender and they had better be

careful.

Deputy Speaker: Order! Please deal with the bill.

Mr. McClelland: Mr. Speaker, I only want to

[ Page 4570 ]

make a plea to the Attorney-General and to the other people

who are responsible for this bill to bring some sense back into

the shelter situation in British Columbia.

This government should act now to listen to all of the

available evidence which has been presented to them, and not

ignore it, as they have obviously done — as the

Attorney-General has obviously done — ignored all the evidence

from all of the people who have told you over and over again

that rental controls lead to chaos. Yet you continue to persist

in that folly and in that course of action.

I'd like to ask the Attorney-General if he really wants to turn

Vancouver and Victoria into a Hong Kong. Do you really want to turn

Vancouver and Victoria into a Moscow? Do you really want to turn

Vancouver and Victoria into a Sweden? I'll tell you that that is what

you're doing, Mr. Speaker, through you to the Attorney-General. You're

creating a chaotic situation in rental housing in this province and

it's going to get worse because of your rental controls. People are

going to be jammed family upon family in inadequate shelter facilities.

All you have to do is take for an example a recent incident

of a fire — a disastrous fire — in the municipality of Surrey

in a housing development there. When the investigation was

underway, Mr. Speaker, it became apparent that much of the

accommodation was being used by multiple families — not only

two families in each unit, but sometimes three in each unit. Do

you know why? It was because they couldn't find anyplace else

to live, because of the kind of situation that's been created

in this province by your government. That's why.

People jammed family upon family in inadequate shelter

accommodation: that's what rent controls do.

Is the Attorney-General really prepared, Mr. Speaker, to

have Vancouver and Victoria, particularly, go through the kind

of experience that we've seen in New York, Baltimore, St.

Louis, Washington?

Hon. Mr. MacDonald: How about Stockholm?

Mr. McClelland: How about Stockholm, where there's a

terrible black market situation, a terrible black market

situation? People are lined up, key money…. Is that what you

want — people passing money under the table so they can get a

suite, people signing up when they're born, Mr. Speaker, so

they can get a place to live, and then selling that right to

somebody else because they need the money to eat? Is that what

you want? Well, I say shame on you. Shame on you, Mr.

Attorney-General, if that's what you want.

The kind of rent controls that you're talking about have given birth in those

cities that I mentioned — cities like Washington, D.C.; New York City; Newark,

New Jersey; Baltimore, Maryland — to instant slums, Mr. Speaker. That's what

they've given birth to. Rent controls have turned over hundreds of thousands

of apartment units to the rats — to the rats, and to the vandals, and to the

drug addicts and to the slum gangs. That's the kind of thing that rent controls

generate, Mr. Speaker. Is that what you want for British Columbia? Well, it

sure isn't what I want for British Columbia. I wouldn't accept that for British

Columbia.

In New York, where rent controls have been in effect now for

30 years, 10,000 apartments a year are abandoned — 10,000 a

year to the looters.

The same is true in England. In other parts of the world

where government has attempted to impose control the shelter

supply is a total disaster, the black market is rampant — and

that includes the places the Attorney-General holds up for our

edification — and families are herded together like cattle in

these apartment units. Is that what you want for British

Columbia, Mr. Attorney-General? If you do, I think you should

be ashamed of yourself.

I must repeat, as I've said on earlier occasions in this

House, that rent controls only hide the symptoms of a rental

accommodation shortage. They do nothing to alleviate that

shortage. They just put it under the rug while the shortage

gets worse day by day. Controls mean chaos. Supply, inventory,

is the only answer, Mr. Speaker; and nobody — I mean nobody — is building anything in this province today.

In the City of Victoria right now there is one apartment

unit under construction, and that's only because it's been

under construction for about two years. The people who are

building it are locked into that construction project.

One apartment unit in the whole city of Vancouver is being

built today, and do you think anybody's going to go in and

start building any more? Not on your life they're not.

In the lower mainland of British Columbia I doubt that

you'll find more than 10 apartment units under

construction.

The Member for South Peace River (Mr. Phillips) pointed out

that because we sit here today with a zero vacancy rate — a

zero vacancy rate — people should be flocking into this

province to build apartments. They should be falling over

themselves attempting to put up apartment units.

Yet what do we see? We see in the City of Edmonton, which

not too many months ago had a 20 per cent vacancy rate, and as

late as this past summer had a 10 per cent vacancy rate, that

developers are moving from British Columbia to Alberta to put

up apartment units. Here we have a zero vacancy rate in this

province and 10 per cent in Edmonton. Yet they're going from

here to there to invest their money.

[ Page 4571 ]

In Los Angeles the vacancy rate today is something like 12

to 15 per cent. The apartment builders are leaving here to go

there to build apartments, and yet we have a zero vacancy rate

in this province. Doesn't that tell you something'?

Hon. Mr. MacDonald: To rip off tenants.

Mr. McClelland: To rip off tenants! How long is your

memory Mr. Attorney-General? Don't you even remember that

when we had a 1 or 2 or 3 per cent vacancy rate in Vancouver a

tenant could get his moving job done free, the first month's

rent free, and the landlords were begging in the streets to get

them to come in and rent their apartments? Begging in the

streets. You say that's being ripped off? My God, they never

had it better.

Now they're being ripped off. I can show you examples in

Vancouver of new apartments that are going up that are paying

$300 a month; yet there are other apartments sitting there

exactly which have come on stream in the last year. They've

come on stream in the last year. They've stopped now.

Hon. Mr. MacDonald: You said there were none.

Mr. McClelland: You stand up and tell me how many

apartments are being built today. You can't name me any. But

I'll tell you, there is a difference of hundreds of dollars a

month between those units that came on a year ago and other

ones which have been locked in for a while. It's your kind of

rent control legislation that's ripping off tenants, Mr.

Attorney-General, through you, Mr. Speaker, and nothing else.

Just hark back to those days when we had some vacancy rate in

this province. You have to admit that.

[Mr. Speaker in the chair.]

There's a serious shelter shortage in this province and

we're doing nothing to alleviate it — not a thing. The Minister

of Housing (Hon. Mr. Nicolson) over there has been a total

disaster in attempting to provide new shelter

accommodation.

We've bought a defunct company for $6 million. We made rich

men out of the principals of that company. We gave them fat

management contracts as well, and didn't build a single house,

didn't build a single apartment, didn't build a single

condominium. Instead of that, what are we doing in this

province? We're running around and buying up housing

developments which have already been put on stream by private

developers. What kind of sense does that make?

I don't know whether, Mr. Speaker, I had hoped for….

Hon. Mr. MacDonald: Are you making this speech

up'?

Mr. McClelland: Mr. Speaker, it was $6 million and we

haven't got one new house; we haven't got one new apartment

building; we haven't got one new unit for senior citizens…

Some Hon. Members: Oh, come on!

MR. McCLELLAND: … for $6 million that we would have had by

private industry anyway. I had hoped that when we got ripped

off for $6 million, Mr. Speaker, that we would have done

something different, that we would have filled some kind of

vacuum that the private industry wasn't filling. Instead of

that we got nothing. We're just running around and breaking

over the same trail that private industry has already broken.

What kind of nonsense is that?

Then, of course, the Attorney-General stands up and says…. You know, it's funny…we've had, I don't know, five or

six pieces of business put before this House since we first met

last Friday.

Interjection.

Mr. McClelland: Yes, supposedly to deal with

assessments only. Five or six pieces of business put before

this House, and of those five or six pieces of business we've

already seen three of them which call for some kind of a new

commission or board or secretariat, or whatever you want to

call it — three of those five or six pieces of business. And

this piece of business is no different because now we're going

to have a Rent Review Commission, which the Attorney-General

said tonight will be just a little commission. It won't be very

big — maybe a part-time chairman, and maybe sit once in a

while. Baloney! That will be, well….

Interjection.

Mr. McClelland: They're on your list, Mr.

Speaker?

When that Rent Review Commission was announced, we were told

that it was going to be patterned along the same lines as the

one in Quebec. We even brought one of the people from Quebec,

whom the Minister described as the foremost economist in

housing today in the whole world, or someplace.

Mr. Speaker, the Rent Review Board in Quebec has how many

offices — 30? How many staff, Mr. Speaker — 300? That's 300

staff in 30 offices for that little commission we're going to

have to review rents — on top of the fantastic bureaucracy that

we already have in the rentalsman's office that was supposed

[ Page 4572 ]

solve all of the rental accommodation problems in this

province. That's 30 offices,300 staff — and it doesn't work.

It doesn't work. It's a total mess. It's a mess, and we're

going to pattern ourselves on that kind of a mess that's

already proved to be a failure in Quebec. Well, it doesn't

surprise me, because this government has taken failures from

all over the world and attempted to transplant them into

British Columbia.

The shelter shortage has got to be solved, and the kind of

action that this government has taken won't do anything to

solve it. If you frighten the private sector out of this vital

area of shelter — and that's what you're doing, right now — you're going to strike a blow to the tenants, the renters of

this province, that will take years and years to heal.

I still don't understand why this government initiated rent

controls when they had so much evidence against rent

control.

I'd like to quote again from Dean Philip White of UBC, who

had a very good case against rent controls. He said, in a major

report to this government:

"First of all, the quality of the total housing stock is

reduced by inefficiencies in its use, and is reduced again by

the lower standards of repairs and maintenance in the

controlled sector of the market. In other words, rent controls

lead to slums."

That's as inevitable as night and day, and you have the

example of places all over the world to choose from. Yet you

chose close your eyes. Dean White goes on to say:

"Although rent control is intended to alleviate the housing

problem, in the long run it makes it more acute by increasing

the housing shortage and distorting the supply of new houses.

Rent control seriously damages confidence in housing as a

private investment and, if it continues for long enough, it may

destroy it entirely."

Mr. Speaker, that's exactly what we're seeing in British

Columbia today. We have destroyed the confidence of the private

investors. They are not building any new rental developments.

They are moving out of this province into Alberta, into the

United States, and they won't come back.

Hon. L.T. Nimsick (Minister of Mines and Petroleum Resources): They're

not building in the United States either. They won't buy any more lumber.

Mr. McClelland: Mr. Speaker, I'd like to continue and

just point out that rent controls do lead to the destruction of

the housing industry. Dean White also says:

"As a method of granting relief to low-income families rent

control must be regarded as an economic or as a social service.The

fact that it fails from either of these quite different points of view

ought to be sufficient to dismiss it from serious discussion of housing

problems."

It ought to be sufficient to dismiss it from serious

discussion of housing problems. It fails in every way to meet

the needs of a modern solution to the shelter crisis which we

feel in his province today. Dean White adds that the fact that

it fails ought to be sufficient to dismiss it from serious

discussion of housing problems.

We've made a number of suggestions to this government. I

wish that some of the Members of this government would open

their ears and listen to the kinds of suggestions we've made.

And as for those suggestions that we've made, and which the

Leader of the Opposition (Mr. Bennett) made to you tonight, if

you'd only had your ears open, if those suggestions would be

followed by this government, you would find that the supply of

housing would begin to flow again, the inventory would build up

and the renter would be better off. You can take your rental

controls and do with them what you want, because they certainly

aren't doing any good for the kinds of people that you say

you're trying to help. and that person, while you think you're

helping him, you're driving into the ground, and you're going

to force higher and higher rents on him.

You know, this government says: "Okay, we're going to allow

these apartments to have a 10.6 per cent rent increase every

year." You're going to get a 10.6 per cent rent increase every

year; there isn't any doubt. Yet we've seen years go by where

landlords increase their rent 4 per cent or 5 per cent or 6 per

cent — and some years not at all. You think that'll ever happen

again? Not as long as you have these stupid rent controls on

it won't, because every year you're going to see the increases,

and the renter is going to pay for it.

What's the matter with the heads on the other side? Mr.

Speaker, it's only common sense that we're asking the

government to adopt so that we can get on with the job of

providing inventory. Inventory in housing stock is the only

answer to the question. Inventory, Mr. Speaker.

What did this government's own Law Reform Commission

recommend? Perhaps before I ask that question I could just

point again to the ineptitude of this government. Probably one

of the reasons we're stuck in the muddle that we're stuck in,

Mr. Speaker, is that the government has had a knee-jerk

reaction to almost every crisis that it's faced. It has reacted

with sloppy legislation, badly drafted legislation, and the

kind of legislation that, rather than alleviating the problem,

inevitably compounded the problem. Then, of course, we've had

to step in and have some more sloppy, badly drafted

legislation. So we've piled

[ Page 4573 ]

mistake upon mistake.

It was incredible when someone brought these boxes in here

this evening with these rental forms in them. I couldn't

believe it. Did they really say a half-a-million of these

forms? Half a million forms are totally useless, and we're

told now that there are 2,000 boxes of forms of one kind or

another, sitting in a warehouse in Burnaby, which are totally

useless.

You know, maybe it doesn't seem like much of a deal…. And

they're paying storage on them, storage on those 2,000

boxes.

Hon. Mr. MacDonald: Who told you that'?

Mr. McClelland: Oh, are you saying they're not

there?

Hon. Mr. MacDonald: Fairy tales!

Mr. McClelland: Are you saying they're not there, Mr.

Attorney-General? Are you saying they're not there?

Half-a-million forms, and six pages of paper, Mr. Speaker,

in these half-a-million forms. That's three million pieces of

paper. How much does that cost — $100,000? That's $100,000

wasted. Is that funny, Madam Member, when you throw away

$100,000, when people don't have rental accommodation in this

province? When people are burned out in Surrey and we find that

they are living two and three families to a suite — is that

funny, Madam Member? Is that funny? You can't even use the

backs of these papers for scratch pads because they're written

all over.

An Hon. Member: Full of instructions.

Mr. McClelland: Yes, full of instructions — about what

not to do.

Mr. Speaker, I just pointed that incredible fiasco out to

point out: again the incredible ineptitude of this government, which stumbles along from disaster to

disaster in attempting to solve the serious problems of this

province.

What did this province's own Law Reform Commission say about

rent controls?

To quote in the writing of Professor Donnison, excerpted

from the report on landlord/tenant relationship, it says:

"Since the supply of housing in the inner city is inelastic in

the short run, i.e., unresponsive for a while to changes in

price, and since tenants have more votes" — and since tenants

have more votes than landlords — "it is always tempting to

impose rent controls as a temporary solution to an urgent

problem." What would you call that, Mr. Speaker? Cheap

politics? Expediency?

In the name of attracting votes rather than attempting to solve problems, short-term

alternatives for political purposes, Mr. Speaker…. That's what this bill

is all about. It's a political bill, designed to capture some votes, while you

take the tenants of this province and force them into impossible situations

and out of any shelter. That's the important thing, Mr. Speaker.

I must repeat that those aren't my words that I've quoted

there, but the words of the Law Reform Commission of British

Columbia, which describes this kind of action as cheap

politics.

Interjection.

Mr. McClelland: Mr. Speaker, I don't know. Are you

saying that that's an incorrect quote'?

Hon. Mr. MacDonald: Right.

Mr. McClelland: You are disputing the actual report

from your own law commission. It's a quote directly from

Professor Donnason, Mr. Speaker, and if the Attorney-General

will sit down, I'll continue my talk.

Mr. Speaker: Order, please. I think we all

understand, I hope, that the last of the quotation was not from

the law reform report; it was your

summary of what your

opinion is.

Mr. McClelland: Oh, the cheap politics part. Yes, of

course.

Mr. Speaker, I've suggested that this whole bill is cheap

politics, and I don't have to hide behind anything because I'm

saying it. I mean it and that's what it is. I'll stand on that

quote, okay'?

I don't know how much landlords should raise their rents. I

don't know, but neither does the Attorney-General know. He

doesn't have any idea. He picks some magic figure, 10.6 per

cent, out of some magic bag that he had somewhere. I don't know

where he got it; he picked it out of the air. He doesn't know

how much landlords should be allowed to increase their rents — the economic indexes will dictate to that. But if you don't

remove the shackles, if you don't stop interfering with the

orderly supply of housing in this province, there will be

needless and heartless suffering by the people in our province

who are looking for a decent place to live at a decent price.

That's the shame of this bill; that's the shame that the

Attorney-General should feel as well.

Mr. G.F. Gibson (North Vancouver–Capilano): Mr. Speaker it's

a pleasure to take my place in this debate after the Hon.

Attorney-General, the Hon. Members for South Okanagan (Mr.

Bennett), South Peace River (Mr. Phillips) and Langley (Mr.

McClelland).

I have been listening carefully to the Social Credit

spokesmen. I have listened carefully to three of the

[ Page 4574 ]

Social Credit spokesmen in the hope of hearing some thought

or idea which might have a useful bearing on the problem we are

discussing tonight. Not having heard any, I thought that it was

about time for a Liberal to speak.

The Social Credit Party has been notably silent on the

questions of what they believe to be an appropriate percentage

of rental increase, if any, and what they would do about the

vexatious problem of rent control.

Would they remove the rent controls over night? The Social

Credit Party has not dealt with that problem. It's a very

serious problem, and I think we in this House should recognize

that the government is on the horns of a dilemma which, in all

fairness, they did a considerable amount to create, but which

nevertheless exists here and now.

There being not enough in the Social Credit statement to

comment on, Mr. Speaker, I want to say a little bit about what

the Attorney-General (Hon. Mr. Macdonald) said in his opening

remarks, He made an impassioned plea that this legislation is

protecting the little people of British Columbia. I think he

believes that. But I ask him why he doesn't proceed to protect

the little people of British Columbia by humane and reasonable

distribution of the moneys available for the resource renters

grants — instead of the insulting and useless quantity of $2.50

a month which is currently paid out to all those persons

whether they are in need of it or not.

I congratulate his government in the point he made, that

they have at least recognized tenants.

Mr. Speaker: Excuse me. The Hon. Member for North

Okanagan has a point of order.

Mrs. Jordan: I believe it's against the rules of the

House to be tedious and repetitious in one's debate. And what

the Member for North Vancouver–Capilano says has already been

repeated twice by the Social Credit Members before him. Perhaps

he would decease and desist and come up with some new

debate.

Mr. Gibson: Mr. Speaker, we've just heard from one of

the experts in this House on tedium and repetition.

The Attorney-General did not in his remarks comment on the

ordinary people of this province who can't get a place to live,

because a controlled-rent premise does you no good if you can't

get in the door. The critical issue, therefore, in addition to

cost, is that of new construction.

In the question of capital gains, the Attorney-General made reference to Dr.

Cragg — at page 85 — where he mentioned that increased costs of providing accommodation

imply that large windfall capital gains can be expected to accrue to the present

owners of rental accommodation.

Professor Cragg goes on to say — and I think the

Attorney-General read this statement as well: "Whether the

present taxation of such gains is adequate goes far beyond any

questions of dealing with rental accommodation." But I do think

it is one to which this government and the federal government

ought to be addressing themselves.

Capital gains are, of course, currently taxed, so to some

extent apartment owners who make capital gains do pay tax on

them. I would just point that out to the Attorney-General.

I would suggest to him as well that he has to be cautious in taking

that theory too far, because it would presumably then apply to all

homeowners, not just the single-family detached dwelling but the

condominium homeowners who have made capital gains in our society. Many

of whom have made capital gains, being the only savings they have — the

only kind of savings the ordinary person is able to accumulate in a

home. So it's important that he consider in the application in this

principle where it might take him.

The Attorney-General mentions that owner-occupied is exempt,

as, of course, it is under the federal capital gains taxation

laws. Many economic studies, unfortunately, have recently shown

this is one of the reasons for the high price in that field. I

point this out just to indicate that all of these things are an

interwoven web of complications that we have to face.

The Attorney-General stated that 10.6 per cent is made up of

an allowance of two things: one of them being current costs,

the other being capital payment, and cited it. as a fair

return. I would ask him at this time if he would agree to table

the studies by the two expert consultants from eastern Canada

which he cited in reaching the figure of 10.6 per cent. The

Attorney-General indicates that he might elaborate on that at

the time of his….

Interjection.

Mr. Gibson: The Attorney-General indicates that it

was the result of a conference. I hope then that he might

elaborate on that conference when he closes debate on second

reading — exactly what quantity of the 10.6 per cent is current

cost, exactly what is capital return, and on what capital base

it is predicated.

The Attorney-General agrees to table the conference, Mr.

Speaker. I think you will have to consider the precedents in

that regard.

Finally, on the Attorney-General's remarks — in spite

of promptings from the Hon. Second Member for Victoria (Mr.

D.A. Anderson) he said nothing about the five years rental

holiday; that this legislation proposes, which certainly is

among its important

[ Page 4575 ]

features, and will bring about one of its most important

consequences, namely the creation of a two-price system in the

rental field, to the extent it is successful. The extent that

it is successful is in itself questionable, and I will get on

to that subject later.

In debating this bill we are continuing the pattern of a

session of crisis legislation, because there can be no doubt

that we are debating a crisis in the B.C. housing field, and

particularly in the B.C. rental-housing field. We have here the

sad situation of a government responding to two kinds of

pressures. It's responding to the pressures of its own Members

and backbenchers who don't represent British Columbians at all

adequately any more.

Interjection.

Mr. Gibson: The Hon. Minister asks why they don't

represent British Columbians anymore. Because of what you've

done since you were elected, Mr. Minister. You came in on a

wave of good feeling, and you haven't got it anymore.

Hon. Mr. Nimsick: That's just one man's opinion.

Mr. Gibson: Mr. Minister, we'll see how many persons'

opinions it is at the time of the next election.

The government is responding to the pressures of a so-called

tenants council that doesn't do much to represent tenants. It

hasn't well represented the interests of tenants in this rental

crisis.

Let's look at the existing situation. The vacancy rates are

virtually zero — there's no point in saying point-what per

cent. They are booked up for weeks ahead. People are going

around to apartment managers, saying: "Would you consider me

when the time comes when it looks like somebody might drop

dead, or there's a vacancy for some reason in this building?

Would you look after me?"

It's a crisis because with that kind of vacancy rate, we are

having, as the Attorney-General cited, a growth of 3.5 to 4 per

cent per year in British Columbia. We're getting just about to

that point where that growth is going to be regulated because

people won't be able to live anywhere in British Columbia when

they come here. Maybe that's the policy of the government

Interjection.

Mr. Gibson: Wait for the budget, Mr. Member. Maybe that's the policy

of the government to keep people away. Somehow I can't really believe that's

the policy of the government because that ends up in chaos for the whole society.

There have to be more orderly ways of planning growth than just saying that

you can't live here.

It's a crisis because there is nothing being built in terms

of rental accommodation. Virtually nothing. An Hon. Member

earlier on cited statistics which were accumulated by the

Victoria Real Estate Board.

First of all, vacancies in the greater Victoria apartment

area, 0.2 per cent, but suites now under construction — and

this is as of October 1, 1974, going through the entire greater

Victoria area — 198 suites under construction, which I am

informed relates to one apartment building, which was

commissioned a year ago, before these forms of government

regulation began. That's in an area which currently has 13,658

rental suites. Only 198 are under construction now and that's

because they are holdovers from a previous era.

Look at the CMHC statistics for the whole of the province.

The Attorney-General is on record as of a couple of days ago as

saying that we in British Columbia have something to be pleased

with because our housing starts are down less than the rest of

the country. I don't know what figures he was referring to, but

I do have here some figures for August and September. Of

course, because of our growth we should be starting a great

many more houses than the rest of the country. But I'll ignore

that for the moment.

These are figures up to August, 1974, from CMHC in 19 urban

centres about British Columbia. This is an important point:

completions continue well ahead of last year, up 11 per cent.

But the total number of units under construction at the end of

August was lower than 12 months earlier, down 9 per cent.

Mr. Speaker, the fact that completions were up is important.

This again is a holdover from previous days. If anything has

made the situation relatively less intolerable, it's been the

fact that these previously started units are now being

completed. But the starts are down.

Listen to this: the overall decline in the number of starts

this year is largely caused by a sharp fall in multiple starts.

Single starts in metro Vancouver and in the other urban centres

are down about 5 per cent, as you'd expect with the mortgage

money problem. But multiple starts are down 17 per cent in the

Vancouver area.

In Victoria total starts are down 28 per cent, the result of

a small drop in single starts, and there is a 40 per cent

decline in multiple starts. Now, Mr. Speaker, multiple starts

can't entirely be used as a proxy for rental accommodation, but

they are one way of measuring the situation.

The Hon. Member for South Okanagan (Mr. Bennett) asks about

the crisis in North Vancouver. The problem is very difficult

there: there is almost no rental accommodation being built in

North Vancouver. Almost all of the things being built in North

Vancouver now are condominiums. Many of

[ Page 4576 ]

them started out as rental accommodation, and are now

converted to strata title.

Let's look at buildings under construction. Housing units

under construction as of the end of September in Greater

Vancouver: a 13,000 total. Of these, 9,100 were

multiple-family accommodations — these are CMHC figures — of

those 2,600 are what is called social housing; 4,500 were

definitely identified as condominiums. And in the estimate of

knowledgeable statisticians, much fewer than 2,000 were

unsubsidized rental accommodation.

We have the word of Al Koelhi, president of the B.C. branch

of the Housing and Urban Development Association of Canada — and he's not talking, apparently, about the figures the

Attorney-General was talking about, because he has this to

say:

"Housing starts have been down 50 per cent in B.C. these past two months. Last year we built 37,000

units in the province. This year the total will be around

28,000. The province needs at least 11,000 more units

immediately to stay even with current needs, and they're

nowhere in sight."

Mr. Speaker, that's a rough evidence of the dimensions of

this problem: 11,000 units down over what we had last year, and

that wasn't enough because last year the vacancy rates were

creeping up.

I suggest to you, Mr. Speaker, that most of that 11,000

shortfall over last year relates to the rental side of the

market. In other words, the owner-occupied accommodation is not

down nearly as seriously as the accommodation being built for

the renters.

Why should this be? The Attorney-General suggested that's

true all over Canada. It is now here so disastrously true as it

is in British Columbia.

I'll suggest to the Attorney-General, through you, Mr. Speaker, that the vacancy

rates in Alberta, particularly in the two large urban centres of Alberta, are

now in excess of 3 per cent. I don't believe they are as high as the previous

speaker said, but they are in excess of 3 per cent right now. There is a lot

of money that should be building apartments in British Columbia which is now

going to Alberta to build apartments there. This is a unique situation in British

Columbia which is caused by the actions of this government.

Let's listen to what a columnist for the Vancouver Sun has

to say about the situation in an

article dated August 22 of

this year:

"Rent control in British Columbia has done what its critics said it would — it has killed off

construction of new apartments to rent by private developers.

The provincial government has yet to make up the shortfall. No

one in his right mind would build a rental apartment under

today's conditions because of rent control." So says this

columnist, quoting the Chairman of the B.C. Rental Housing

Council.

He quotes Mr. Robin Burns, regional economist of the federal

agency, CMHC: "There is virtually no new rental accommodation

being started by private developers." That is from a government

statistician to support this argument that the policies of this

government have killed rental housing construction.

If I may just finish to quote from this article. In a survey

done July 1, the city planners found 3,400 apartment-type units

being built or just completed during a survey as of July 1, but

1,400 were condominiums; 1,300 were for senior citizens; 270

luxury units; another 270 for hotels and motels, with only 142

normal rental units left for the thousands of single people,

young couples and young families that need them.

Mr. Speaker, on that sad note I move adjournment of this

debate until the next sitting of the House.

Hon. Mrs. Dailly moves adjournment of the House.

Motion approved.

The House adjourned at 10:58 p.m.

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