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)

MONDAY, APRIL l, 1974

Night Sitting

[ Page

2067 ]

CONTENTS

Point of order

Request for ruling on discussion of Dunhill Development Corporation. Hon. Mr. Barrett — 2067

Mr. Speaker — 2067

Mr. Phillips — 2068

Mr. Speaker — 2068

Hon. Mr. Barrett — 2068

Mr. Morrison — 2068

Mr. Bennett — 2068

Mr. Gibson — 2068

Mr. Speaker — 2068

Routine proceedings

Committee of Supply: Department of Housing estimates On vote 111.

Mr. Chabot — 2069

Mr. Gibson — 2069

Hon. Mr. Nicolson — 2069

Mr. Gibson — 2070

Mr. G.H. Anderson — 2077

Mr. McGeer — 2078

Mr. Chabot — 2081

Hon. Mr. Nicolson — 2082

Mr. Chabot — 2084

Hon. Mr. Nicolson — 2084

Mr. Schroeder — 2085

Mr. McGeer — 2086

Mr. Morrison — 2087

Hon. Mr. Nicolson — 2088

Mr. Morrison — 2088

Mr. Bennett — 2089

Hon. Mr. Nicolson — 2091

The House met at 8 p.m.

MR. SPEAKER: Hon. Members, this afternoon a matter occurred

that I must apologize profusely to the House for. I did not take the

trouble, unfortunately, to get the message when it was presented to me

in its real terms. It apparently was in Bill 7, amendments to what had

been a message bill. I took it as being a message bill and corrected,

quite improperly, the Premier for introducing the thing, as I took it

at the time, incorrectly. He was right and I was wrong, and I must

apologize.

I might say that I discovered this on my own, which shows you how

important it is to read what you are getting. When you get the message,

get it right. (Laughter.)

Anyway, the Hon. Premier presented amendments by message to Bill 7,

and quite properly asked the House for leave to move that the said

message and the amendments accompanying the same be referred to the

Committee of the House having in charge Bill 7. I thought I was

correcting him and I was really making a mistake.

Consequently, I would ask the House if I could have leave of the

House that the message and the amendments accompanying the same be

referred to the Committee of the House having in charge Bill 7.

Leave granted.

MR. SPEAKER: I want to thank the House for that, and apologize.

MR. J.R. CHABOT (Columbia River): On a point of order, Mr.

Speaker, did I hear you say that you apologized profusely? I don't

remember you ever apologizing profusely. (Laughter.)

MR. SPEAKER: That shows how wrong I was.

Introduction of bills.

Orders of the day.

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

Committee of Supply, I would ask your ruling on a matter related to a

discussion in committee. The item is Dunhill company limited, and its

aspects of purchase by the government and properties it holds.

Apparently there is a court case related to certain statements

around the shares, the assets, dates of purchase and other relevant

material, with which perhaps you are familiar. Before the House

adjourned at 6 p.m. I indicated to the Chairman that I wished him to

discuss this with you. I don't know whether he has or not. I want to

bring it to your attention that we have had decisions in the past by

previous Speakers about discussing matters that are before the courts

as being sub judice, and we are prohibited from discussing them.

I would appreciate a ruling from you rather than forcing the committee Chairman into the same position again.

MR. SPEAKER: I have one question in regard to the request. As

I understand it, and this is, I think, public knowledge from what's

been filed in the Supreme Court of British Columbia, an action of

defamation is in being at the present time, relating to allegations

concerning a radio station. A group of plaintiffs of the company of

Dunhill is suing the defendant radio station and Gary Bannerman with

respect to statements that were alleged to have been made between

certain dates.

This House has knowledge, so far as I know, of a transcript which

was tabled in the House by the Hon. Member for South Peace River (Mr.

Phillips), which deals with very extensive allegations as to

improprieties alleged in that broadcast by the principals of the

Dunhill company, and presumably drawing into that Members of this

Legislature.

I can only go by the scope, the width, of the allegations that were

tabled in this House in considering the width of the area concerned

that is, in effect, sub judice. I have no knowledge of the evidence

that might be adduced in a defamation action, other than the

allegations that were made on a radio broadcast which, by their nature,

appear to be defamatory.

Certainly they may or may not be. That is not for me to say or for

this House to say. On the other hand, we have an equal duty to the

courts of the land. That is that anything that might prejudice either

the plaintiffs or the defendants, or indeed the public good, should not

be discussed when the court which is duly charged with the

responsibility of dealing with the issues freshly and without public

comment from this body is still to discharge its function.

I would suggest to the Hon. Members and to the Chairman that any

matters that have to do with the whole transaction and the matters

tabled by the Hon. Member for South Peace River (Mr. Phillips) should,

I think, wisely be avoided in any discussions in committee.

At the moment that is all I can say. It seems to me that the

Chairman will have to be guided by his own common sense and his

realization that he does not know how wide the allegations may go in

regard to the test of the matters before a court of law.

HON. MR. BARRETT: Mr. Speaker, it is a matter of record, though, that the House does have knowledge of these allegations, because they were

[ Page 2068 ]

discussed in the House and documents were tabled in this House.

MR. SPEAKER: It seems to be the same transaction so far as we can all determine at this stage.

MR. D.M. PHILLIPS (South Peace River): Mr. Speaker, on a

point of order. If this civil suit which is allegedly before the court

never gets to court, debate on this very important public matter will

have been, in effect, stifled.

MR. SPEAKER: Well, no one can assume, until the matter comes

before the court whether the matters that are before the court are

being proceeded with or not, from a standpoint of good faith or bad

faith. It is not for us to say that either. In fact, by merely saying

it we may be prejudicing a proper court case.

HON. MR. BARRETT: Mr. Speaker, I would also like to bring to

your attention that because the matter was brought before the courts,

there are two motions on the order paper that have been withdrawn — because of the sub judice aspect of those motions once the writs were

issued in the case.

MR. N.R. MORRISON (Victoria): Mr. Speaker, on a point of

order. It seems a little strange to me that on Saturday when we

discussed vote 106, which was a very wide-ranging discussion — and a

lot of information was given to us at that point, as well as

information of documents that would be filed with this House — there

was no complaint at that point asking for a stifling of the debate. But

when we get onto another vote today, vote 111, and we ask for the

papers that were voluntarily offered to us on Saturday, suddenly we

find we have a new problem facing us. I would like, first of all, to

find out why you waited until this particular time.

MR. SPEAKER: You mean me? I have no knowledge of what happened in committee until the matter is presented to me in the House.

MR. MORRISON: I would like to know, then, why someone else didn't raise the matter on Saturday when we discussed the subject in great detail.

MR. SPEAKER: I think every Member has the duty….

MR. MORRISON: Now that we are waiting for documents which were volunteered, it seems that they are now looking for a new ruling.

MR. SPEAKER: All I can tell you is what I would say to the

Chairman involved in Committee of the Whole House. As I said, I have no

knowledge, as Speaker, of what happens in Committee of the Whole House.

But the question has been referred to me right here and now in the

House. I can only tell you what my opinion is.

Actually, the decision will rest upon the Chairman in committee when

the matter comes before him. It is up to every Member in the House to

zealously guard the whole principle of sub judice, if he believes in

the British parliamentary system and the courts of law.

MR. W.R. BENNETT (Leader of the Opposition): Mr. Speaker, I would understand that those points dealing with Dunhill that weren't read into Hansard ,

the ones not tabled in this Legislature, but dealing with the

government's use of Dunhill and various aspects of Dunhill as to their

evaluation and appraisals dealing with their evaluation: those are free

for discussion, is that right?

MR. SPEAKER: I don't know that until the Chairman looks at

it. I don't know what questions might be asked. All I can say is that

if a matter of, lets say, appraisals of property had to do with

evaluations placed upon the corporation, and that impinges upon whether

it was a good deal or bad deal, alleged in the allegations in the radio

station broadcast, that is something the Chairman will have to grapple

with when the facts are before him. I don't know anything other than a

hypothetical situation.

MR. G.F. GIBSON (North Vancouver-Capilano): On a point of

information, Mr. Speaker, is the Chair, in making this set of guiding

remarks, following previous precedent in the British Columbia

Legislature? Or is it drawn largely from May ?

MR. SPEAKER: It is drawn from both sources. As a matter of

fact, the matter was dealt with by Speaker Irwin in a decision relating

to a case involving your father. In that instance he said that certain

questions be permissible, but other questions would not be. I could

find you that citation, and I would send it to you on that point. But

it strictly limits it because in many cases in court they may deal in

cross-examination with a wider range than the specific allegations.

This makes it difficult for the Legislature to know when it is

trespassing and when it is not.

There are also the decisions in May ,

in the 17th edition, page 352, page 368 and page 396, all of which

indicate prohibitions against this House dealing with something that

may in time be of great importance in court and may be prejudiced by

our discussions.

MR. PHILLIPS: (Mike not on.) We'll try and abide

[ Page 2069 ]

by your ruling and I guess time is on our side.

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

ESTIMATES: DEPARTMENT OF HOUSING

(continued)

On vote 111: housing and development, $50,000,000.

MR. J.R. CHABOT (Columbia River): Just a few words about

Dunhill Development, that $5.8 million fiasco the government has taken

over. Completely unjustified, completely unnecessary in order to get

housing moving in the Province of British Columbia. They bought some

contracts; the Minister said he has engaged expertise. This is one of

the reasons why Dunhill was purchased by the government: to get this

tremendous amount of expertise at 40-some-odd thousand dollars a year

for those individuals who are principals in Dunhill to be engaged by

the Crown on a two-year contract. What a fiasco!

The first action taken by that little group of experts was an

attempt to negotiate the purchase of a large highrise complex in

Burnaby. They failed on their first attempt to demonstrate that they

had a semblance or some degree of expertise. Once they started

negotiating it wasn't too long until the private developer, Daon

Development Ltd., swooped in and took over the financially-embarrassed

contractor who was anxious to get rid of the problem he was facing by

the construction of this large complex in Burnaby.

What do the principals of Dunhill, these great experts, have to say?

They say they are unable to move fast enough because of red tape. Where

is that red tape? Is it in that new, fledgling little Department of

Housing in Victoria?

MR. D.M. PHILLIPS (South Peace River): That's in the expertise.

MR. CHABOT: Red tape. Bob McMurray, business editor, The Province

newspaper, February 15, 1974. That's the kind of expertise that's been

engaged. Their first attempt at getting into housing, not getting into

it on its own, initiating something constructive, but by their attempt

to take over a financially-embarrassed contractor in Burnaby they

failed. They failed to a private developer. Doesn't that give you a

message, Mr. Minister, that the private sector is more capable and more

flexible in its financial endeavours in providing housing in British

Columbia?

Fiasco No. 2 was in Mission where Dunhill was going to develop 350

acres of OMI land just on the outskirts of Mission and establish a $50

million housing development which would provide a community of about

6,000 people. Dunhill was turned down by that community and, more

embarrassing than Dunhill being turned down, was the fact that the

silent Minister was there. He was there to lend prestige to their

application in Mission to develop these lands controlled by Dunhill.

How embarrassing to a Minister of the Crown to be turned down by a

municipality of this province!

"The Minister was there," it says, "to add weight to the proposal.

The Minister had absolutely nothing to say when he was turned down." He

was told, though, the reasons for its turndown: there has been a failure to

provide or to complete the approaches to the new bridge and the highway network

in that particular area; the extreme pressure a development of this nature would

put on the hospital of that community. The government had not made provisions

for additional hospital facilities to meet the tremendous increase in population

this development would generate. Also the sewage treatment facilities would

grind to a halt, according to the mayor of that community.

And you say you engaged expertise? That kind of expertise we don't

need in this province. It's time you hired some people who understand

the housing field. There was an absolute waste of taxpayers' dollars.

If you suggest the $5.8 million purchase of Dunhill resulted in

acquiring some expertise, I want to assure you that the first two

attempts to move into the housing-development field has been a disaster.

MR. G.F. GIBSON (North Vancouver-Capilano): Just a few

remarks to make to the Minister on the general subject of housing. I

would like to ask at the outset if he has at this stage an answer to

the question I asked him on Saturday afternoon just before adjournment.

I was particularly interested at that time in the total number of lots

municipalities have put forward and the province has agreed to entirely

provide for the cost of servicing with water and sewage, the average

cost of such servicing, and the average cost of complete servicing of

new lots in the Greater Vancouver Regional District. I can proceed

without that if necessary, but it would be helpful to me in some of my

later remarks if the Minister has a response at this time.

HON. L. NICOLSON (Minister of Housing): Well, okay. First of

all, the Member for Columbia River referred to the Zajac property which

is in Burnaby at North Road and Lougheed Highway. We were primarily

interested in seeing that this project remained under active

development. Our primary interest was served when Daon, a very

respectable development company, took it over. They did overbid us by

some $50,000.

The statements about red tape, I believe, were made by Mr. Zajac. He perhaps had some

[ Page 2070 ]

rationalization to do for his actions.

The main interest was served with this project, just as we took

action when 18 units were going nowhere, headed for bankruptcy and

delayed in getting on the market. We took action there. Certainly, we

didn't offer too much; we must have been in the right ball park as Daon

did this.

On the OMI properties, the press might have its

interpretations. I

happened to be present at the meeting. One of the major reasons that

came across to me for being turned down was that the community was

engaging a planner. They felt it would take a couple of months more

before they had a planner in the area. They had been leaning on the

regional district for planning service up until that time and they felt

that the planner, whom they were advertising for, would take a further

two months to acclimatize himself. It would be perhaps four months

before he would have the lay of the land and be able to be of some

assistance to them in this matter.

Two of the people on council, the mayor and the head of the planning

committee, seemed to bear this out. The head of the planning committee

is a professional and has expertise in that area. Discussions are

proceeding with the municipality and we're looking into some

modifications and their primary needs in the area.

The Member for North Vancouver-Capilano (Mr. Gibson) did ask some

questions about servicing. I think it would be very difficult to say

exactly how much it would cost.

We have included in this vote a target figure of about $14 million

for provision of services for lands for residential purposes throughout

the province. It's recognized that this sum of money will not provide

for servicing for all lands acquired or anticipated for acquisition.

Some of the acreages intended for long-range development, funds for

such purposes will be requested from the Legislature as needs and

programmes evolve. It's further anticipated that all the work will not

be completed in the fiscal year and that very large holdings will be

developed in phases to meet local demands.

I'm sure Members are well aware of the varying problems in servicing

raw lands — low-lying ground or solid rock base, clay soils and gravel

base and so on, as well as the cost and availability of material,

equipment and experienced personnel in local areas. Also, the costs of

work relate to the form of housing anticipated, that is whether the

land is to be used for single-family dwellings or multiple dwellings,

or a comprehensive development.

For example: approximate servicing costs at Mackenzie are $13,000

per acre for normal residential development; Williams Lake, $20,000 per

acre; and in Prince Rupert, costs will approach $40,000 per acre. We

get into muskeg situations in some places. I understand it's necessary

to bring in hog fuel and gravel from outside areas in some of the

northern coastal muskeg areas and development costs can be quiet

prohibitive.

So, for initial planning purposes a gross servicing evaluation has

to be used and it is best related to cost per acre rather than cost per

lot, the latter refined as development plans become firmer. The current

estimate for initial calculations is $20,000 per acre. I could send

over to the Member, or make available to other Members, some estimates

for: Prince Rupert, phase 2; Mackenzie, phase 1; Mackenzie, phase 2;

and Williams Lake — where it's broken down — water mains, hydrants,

sanitary sewers, storm sewers, drainage and curbing, roads, grading,

gravel paving, water and sewer connections, street lighting,

underground electrical, clearing, engineering design and supervision,

acreage costs of servicing per acre and so on. I could send over some

ideas on four examples on which we have some estimates. Perhaps if the

other Members would appreciate it, that could be circulated.

MR. GIBSON: I appreciate very much the Minister's comments

there. The reason for my interest in those particular figures will

become evident later in my remarks and it's very helpful to have them.

I would suggest that, without doubt, we are in the middle of a

housing crisis. The Minister used those words on Saturday and I concur

in them. I think there are a number of indices available to us to show

that we are in a housing crisis.

The first of these, of course, is provided by the price of homes.

I'll get to rental accommodation in a moment, but as far as

owner-occupied homes…we were visited with a headline on February 15

saying: "City's Housing Height Tops All." It went on to describe how a

survey of the Canadian Real Estate Association had found prices of

single-family dwellings in Vancouver, as measured by the Multiple

Listing Service transactions, up 32 per cent. That's 32 per cent in one

year, Mr. Chairman, which means at that rate, housing prices double

just a shade over two years. That has to be described as a crisis, I

think. And it seems to be accelerating. That's one of the worrisome

things because it was, if memory serves, about a 23 per cent rise in

1972 and about 20 per cent in 1971, so we have here a very real problem.

I can read the average sale price of Vancouver homes — I won't go

back 10 years, I'll just go back over the last five years: In 1969 the

average sale price was $23,939. In 1970, up just a little bit to

$24,239. Then the rise started in 1971 — up to $26,471. In 1972,

$31,465, and in 1973, that fantastic jump up to $41,505. That's for an

average home sold under the Multiple Listing service, Mr. Chairman.

Very, very worrisome figures.

The next sort of indicator we have as to whether

[ Page 2071 ]

there is, indeed, a crisis or not is the rental

vacancy rates which in the early years of the '70s hovered between 3

per cent and 1 per cent, but always staying above that 1 per cent

figure, and is now down to…the last figures I saw were 0.3 per cent for

the greater Vancouver area.

Now, 0.3 per cent, of course, Mr. Chairman, is virtually a full

house. There's just no room there for people to move around and that

means that rents go up very quickly. Indeed, the trend in rents before

the recent proposed legislation, which we cannot at the moment discuss,

looked as though it was going to surpass the rise in the price of

owner-occupied housing.

Then there is a third piece of evidence. We have the work of a

United Community Services study, which a group of researchers made

public in November of 1973, and which describes the extraordinary rise

in the price of, in this case, an average home in Burnaby over the past

10 years. I'd just like to quote a few words here: "A United Community

Services study in Burnaby showed that in 1973 the average cost of a

typical building lot increased 72 per cent over 1972" — that's the

building lot alone. This reinforces what many members of this chamber

have been saying to the effect that the basic problem is the land cost,

but that's not all. The one year land cost boost was from $14,500 to

$25,000 in this instance, but over the 10 years from 1963 to 1973, the

total cost of similar housing rose 191 per cent, from $16,540 to

$48,064.

Now here's one of the extraordinarily shocking statements: "of this

increase, the survey showed that 87 per cent" — that's 87 per cent of

the 191 per cent — "occurred during the past year." And that counted

that 72 per cent increase in land costs and a 27 per cent increase in

labour and materials. I find that a surprisingly high increase in

labour and materials. It may be that a part of the reason for that is

an escalation in the average quality of the dwellings concerned. The

Minister might have a comment on that.

But over this 10-year period, from 1963 to 1973, the percentage of

total cost of labour and materials to the total cost of the dwelling

has dropped from 76 per cent to 24 per cent. Of course, property taxes

over the 10-year period went up dramatically, 157 per cent in all, with

an average of $43 a year.

This United Community Services investigation pretty well concluded

that by 1973 anywhere in the Greater Vancouver Regional District the

purchase of a single-family dwelling had escalated beyond the cost of

the ordinary household with only one working person. Where two people

are working it's still possible, and it's still possible to own your

own home if you've had the good fortune to live in it for a long time,

or to receive it from your family in one way or another, because your

parents have moved to an apartment, or whatever. But apart from that,

the average young people nowadays find it very difficult to own their

own home. Mr. Chairman, why should this be? There appears to be….

MR. CHAIRMAN: Order, please! Just before the Hon. Member

proceeds, I would point out that the main point of this vote is the

provision of money for housing and development by the Department of

Housing. And therefore I would ask him to relate his remarks to the

vote before us.

MR. GIBSON: Well, Mr. Chairman, I appreciate that. I would

like to draw your attention to the ruling that you made on Saturday

afternoon which I thought was an excellent ruling, if I could just

quote here…my remarks were as follows:

Mr. Chairman, on the assurance which I understand is

available, that it will be possible to discuss factors relating to

housing supply and demand, all factors related, I am quite happy to

postpone my remarks until Vote 111…

Later on the Hon. Member for South Okanagan (Mr. Bennett) said, "Mr.

Chairman, with the same sort of condition to the Minister, I wonder if

we discuss many of these things under other votes."

And the Chairman, yourself, in the chair noted:

Order, please! This is a ruling

of the Chair, and I would rule that any matter pertaining to housing could be

brought up under vote 111.

It was under those conditions, Mr. Chairman, that the House reached

a very amicable agreement which concluded the Saturday session

concerned. And the Minister received his salary vote and we went home

to prepare our remarks confident in the knowledge that it would be

possible to discuss all matters related to housing under vote 111.

So if I may, I will press ahead on that theory, on the feeling that

it's very important to discuss questions of supply and questions of

demand in trying to get at the housing situation….

MR. CHAIRMAN: Order, please! I was absent from the Committee

just prior to coming in and taking the chair at the point that these

remarks came up. However, I must clarify this. The Chairman must rule

according to the rules of the House and rules of Committee. It was my

understanding that under this vote, 111, there is considerable scope

for discussion — as I look at the title of the vote and as I consider

the subject matter covered by it.

I don't think the Hon. Member would have very much difficulty in

relating his remarks to the vote that is before us. But I would ask him

to observe the rules of the House in this matter.

MR. GIBSON: Well, thank you, Mr. Chairman, and I'll certainly do that. As I say, I propose to set out

[ Page 2072 ]

some factors related to supply and demand and that

which brings us to the housing crisis, which is a label both the

Minister and myself have put on this problem.

Now the Minister has said on several occasions that the real problem

is a lack of serviced lots. I'm finding difficulty understanding in

this estimate or from the Minister's remarks to date exactly what is

being done to solve this problem of serviced lots. It's clearly not a

question of availability of land.

I have here two quotes from a Greater Vancouver Regional District planning officer. First of all, he says:

"There are approximately 29,000 acres of vacant land"

— 29,000 acres, Mr. Chairman — "already designated urban 1 in the

official regional plan. The demand for residential land in the next 10

years requires only 8,300 acres, or about one-third of that total.

Including commercial, residential, recreational and industrial land,

there's enough to accommodate our needs for the next 25 years at

present densities."

That takes no account, in other words, of the many possibilities of higher density, infilling and so on.

So it would seem that the land is available. And it would seem the

problem we are faced with here is one of the provision of these lots

onto the market — and then the placing of hammer and saw to wood to get

something done. I'd be awfully glad, after I resume my chair, if the

Minister would certify to this House that there will be more housing

units produced in British Columbia in 1974 than there were in 1973.

He has been planning about a year, since last May, I think, since

his appointment last May. He has a budget that's gone up fivefold, from

$15 million to $75 million. So I presume this is just a pro forma

request, and that the Minister should have no difficulty in certifying

that more houses and units will be built in this coming year, with all

his planning and with all the money he has.

But the fear that lies behind many of my remarks tonight is that,

irrespective of what he might certify, there will be fewer units

constructed in 1974 than there were in 1973 — irrespective of all the

land available, and irrespective of the money he's been given to do the

job.

Now I'd like, as I said earlier, to examine some of the factors

related to supply and demand, because I don't think the solution is

leasing, Mr. Chairman. The Minister has suggested to us earlier that

leasing is the way out of this. It's the way out of it, in his view, if

I understand him rightly, because it would, if he is able to arrange it

thus, take some of what he calls the speculative factor, by which I

assume he means windfall profits, out of the price of land.

But I wonder how that would work, Mr. Chairman. We had a fair amount

of time on leasing earlier on today, and I'm not going to go through

all of those arguments again. But there were many obvious defects to

it. The Minister cited some mysterious advantages: for example, land

assembly. But along with the Hon. Second Member for Victoria (Mr. D.A.

Anderson), I find it difficult to understand why the government needs

this power of automatic land assembly when of course it has the power

of eminent domain whenever that may be required.

On the other hand, against these vague and mysterious advantages of

leasing, we have the terrible defects of transferability. One of the

phrases the Minister used in his concluding remarks on leasing this

afternoon — and he may elaborate on this — was the phrase "guaranteed

purchase." Now guaranteed purchase of a lease sounds pretty good, Mr.

Chairman. It sounds like you're getting a guarantee of something. But

it's a guarantee of what?

Suppose that you've got a lease which you have with the grace and

favour of the Crown and your house is sitting on it. In your lease it

says that if you want to sell your improvements on that Crown-owned

lot, the Crown will guarantee to buy them. Indeed, it may say that you

can't sell them to anybody else. But at what price, Mr. Chairman?

There is the exact question. Who sets the terms? Any time the

ordinary citizen is dealing with the government, Mr. Chairman, you and

I know who sets the terms. The government sets the terms. It's bad

enough when the ordinary citizen is dealing with large landowners or

landlords. But when it's the government that's the landowner and the

landlord, what chance do we have if we are indeed all to become tenants

of the state, or if many of us are to become tenants of the state?

I very honestly fear that many of our freedoms will be in the

process of erosion, that it's just one more instance of state control.

How do you appeal actions of the state with respect to Crown-owned land

that you happen to lease? How can the state at the same time be the

regulator, which is its job, and also the party that is being

regulated? We're running into this same difficulty all throughout the

economy as this government chooses to delve ever more deeply into the

business sector.

In land and in housing it's particularly critical, because there is

no other matter which cuts so close to the bone of the ordinary

citizen, their land and home being not only their place of residence,

but often their major investment — often their only investment. So I

don't see leasing as the solution to the problems of housing.

What I see as the solution to the problems of housing is a

tremendous increase in supply of residential units. I am very seriously

bothered by the possibility, and perhaps the probability, that the

actions of the Minister and his department, as good-intentioned as I

have no question they are, will

[ Page 2073 ]

be counter-productive in the sense of putting 1,000

or 2,000 or 3,000 or 4,000 more units on the market in 1974 than would

otherwise be the case — and at the same time keeping off the market

10,000 units which would otherwise have been built by private builders.

And it's critical that these units be built.

Now the same GVRD study that I cited earlier suggested that in the

Greater Vancouver Regional District over the next 10 years, I think it

was 10,000 units a year would be required. That's just for new housing.

Of course there's replacement housing, which runs in the neighbourhood

of 5,000 or 6,000. The Minister; stated earlier on in this debate that

he thought something like 18,000 or 19,000 per annum in the Greater

Vancouver Regional District would be required to ease the crisis. So

there is that tremendous demand, and that's just in terms of people and

in terms of replacement housing.

There's also a tremendous and increasing demand in money terms.

There was some discussion on Saturday on the availability of mortgage

money. Now I don't have the figures for 1973, but I do have something

here about the growth of mortgage loans approved on new residential

construction from 1970 to 1972.

In 1972, according to these figures, which were garnered by the

Vancouver Bank of Montreal: $2.295 billion, mortgage loans approved on

new residential construction. In 1972, $3.49 billion. A very rapid rate

of growth, as all the evidence I have seen is that the supply of

mortgage money increased even beyond that in 1973.

The supply of money doesn't seem to be the problem in the housing

field. Indeed, it seems to be part of the cause of the problem because

the money available is escalating at a tremendous rate as governments

and private institutions do their best to provide the financial

resources necessary to upgrade the quality and the quantity of our

housing stock.

Yet at the same time, the actual physical supply isn't being

increased at anything like the same rate as the money supply. The money

supply is chasing housing. You have the natural inflationary phenomenon

of supply and demand, where the greater amount of money chasing the

lesser amount of goods causes a rising price.

Again, Mr. Chairman, the solution is simple: the provision of more

serviced lots and then allowing the construction industry to get on

with its job.

What are the factors in this supply situation? On the rental side,

I'm very concerned, and that's one of the reasons I was hoping the

Minister would undertake that, come what may, there would be more

housing units this year. It looks to me like the rental construction

side of things is going to completely dry up.

I would be very interested if the Minister, when he resumes his

place in this debate, could give this House some estimate of the number

of rental units under construction at this time in 1973 and the number

of rental units under construction presently. I very much fear that the

number of units under construction presently, in two months, three

months and six months hence will be half, perhaps less than half of the

number last year.

Apartment popularity has been heading downwards. Incidentally, the

figures I have here seem to contradict what the Minister said about the

declining importance of single-family dwellings. They seem to be going

up in importance, not only in British Columbia but all across the

country, where apartment starts as a percentage of starts have been

going down. By 1973, apartment starts were running only about 40 per

cent of total when they peaked at 50 per cent in 1969.

But, nevertheless, apartment starts as a percentage of the total

residential housing field, even at 40 per cent, are very, very

important. If that share of the market dries up, we are in very bad

shape.

So, if we can't look to apartment supply — and I hope that the

Minister will be able to reassure the House on that and tell us why we

can foresee good apartment supply (I'm betting that we can't with

current government policies) — then we have to have quite a boom in

single-family dwellings.

Interjection.

MR. GIBSON: I'm not arguing with myself, Mr . Minister,

through you, Mr. Chairman; I'm trying to understand the policies of

this government which seem so much to be contradictory with the words

of the government.

Interjection.

MR. GIBSON: I'm having a little difficulty hearing the

Minister, Mr. Chairman; if he would speak up a little bit. The Minister

of Health (Hon. Mr. Cocke) had some sage advice.

I wonder if the Minister or the government has any policies with

respect to the encouragement of growth in one region of British

Columbia as opposed to the others. My knowledge is mostly of the

Greater Vancouver Regional District but I have reason to believe that

is where the problem is most acute by far. So a simple question here

without suggesting particular means, which I will come back to later if

the Minister doesn't have any ideas on it, is: what is the government

doing to try and steer growth in British Columbia and encourage people

to settle where there is more room and better housing at lower cost.

Question No. 1 is growth.

The second question I have relates to how the Minister proposes to….

[ Page 2074 ]

HON. MR. NICOLSON: Is that your second question?

MR. GIBSON: The second question I have in this stage in my

remarks, Mr. Minister, is how the Minister proposes to work with the

municipalities in the Greater Vancouver Regional District to encourage

them to accept their share of growth.

As the Minister knows, at a staff level, the Greater Vancouver

Regional District is currently producing — indeed, were to have

produced by today, April 1 – a set of provisional allocations of growth

between the various municipalities making up the regional district.

Growth has been very unequal up until now. If we take the last

available inter-censal period between 1966 and 1971, the enormous

discrepancy in growth rates is apparent. Delta grew by 122 per cent;

Port Coquitlam by 76 per cent; Port Moody by 53 per cent; Coquitlam by

30 per cent; Richmond, 23 per cent; Surrey, 20 per cent; North

Vancouver District, 20 per cent; Vancouver by 4 per cent.

To what extent do those growth rates reflect the ability of these

various municipalities to accept new residential construction? To what

extent do they reflect the eagerness on the part of some municipalities

and the extreme reluctance on the part of others to accept new growth?

To what extent do they reflect transportation policies? The senior

planner of the Greater Vancouver Regional District, Mr. Peter George,

has an interesting quote here which relates to my own riding. This,

again, is in The Province of February 2, where he says as follows:

"Talk of developing the Blair Rifle Range of 656 acres

in North Vancouver cannot proceed without consideration of the third

crossing problem and some form of rapid transit."

Well, this again ties in precisely with the problems of the

government. I won't argue the case again today for a third crossing;

that was done on Saturday. But it is very much a part of the housing

problem to the extent that the North Shore can be helpful to the

Greater Vancouver Regional District in the solution of housing problems.

The Minister, I have no doubt, has looked at some of the reasons

municipalities may be reluctant to accept new housing. The Minister

apparently feels very strongly about this because there was a remark

that he made in his intervention in the budget debate which so struck

me at the time that I marked it down. I would like to quote it now. He

said:

I regret that a few municipalities around Vancouver

appear to be discouraging housing. This is something that I intend to

work on because I simply will not tolerate outright opposition to

providing new homes for the thousands of families in this province that

require better accommodation.

One of the Members from this side of the House said, "What are you going to do; take over city council?"

It raises that question, and the Minister has unquestionably given a

lot of thought to it. New residences and therefore new people can imply

a lot of charges on the local community, charges in terms of services

like parks, community centres, better roads, water and sewage charges,

and this type of thing. It appears that some municipalities have

restricted supply of their land in the approval of building permits in

order to escape those kinds of charges or at least keep them at a level

they can stand.

There is another suggestion which has been made: some

municipalities, those blessed with a goodly allocation of land

themselves, have not been in any hurry to sell this land off but have

rather preferred to maintain the market at a good level. You can

understand the bind these municipalities are in because they have a

responsibility to their own ratepayers to keep their taxes as low as

possible. Their land is one of their precious assets. But the other

side of the coin is that it raises the housing prices for all the rest

of us.

I was much struck by the comment of a real estate man quoted in The Vancouver Sun

of March 4. He was speaking of this problem of higher prices for land

and what it did to the housing costs. He noted that about 5 per cent of

housing on the market is built by developers each year. If the price of

an average home, because of an increase in land costs, was up $1,000 or

$2,000 or $3,000 in a given year, so does the price of all of the other

95 per cent of our total housing stock already in existence. In other

words, the price of residential housing is determined by the price of

the latest unit built. The price of all the older houses floats up

along with the new houses.

It doesn't simply raise prices for the people who have just bought

today or last week; it raises prices for the whole community. At the

same time it raises taxes for the whole community because taxes have to

be paid on assessed values, and assessed values are moving quickly up.

So with this difficulty between the municipalities, the Greater

Vancouver Regional District has come to the tentative conclusion, and

I'd be interested to know if the Minister shares it, that there should

be on a voluntary, negotiated basis, some kind of allocation of growth

between the member municipalities of the Greater Vancouver Regional

District.

It seems to me that that is the logical road to go down, but at the

same time it seems equally important that there must be negotiation,

there must be a voice in every municipality and hopefully there will be

no need for coercion. In particular there should be no need for

coercion by the provincial government because this government, Mr.

Chairman, has found itself very prepared to use its muscle, often

[ Page 2075 ]

in the privacy of the back room, in ways that I

don't think would lead any Member on this side of the House to suggest

that it be given more muscle. I think these kinds of arrangements have

to be made between the municipalities working through their regional

district.

There would be an obvious set of advantages through arriving at some

kind of plan for the allocation of future growth. The municipalities

could better plan their land use for the next 10 or 15 years, not just

in residential terms but industrial and commercial, school, and so on.

Capital budgeting could be done better. It would make it easier to

avoid redundant services in adjoining municipalities, parks planning,

and so on and so on.

I stress again that these subregional growth targets can't be

imposed as a top down solution. So I'm delighted that the GVRD is

working on this and I would appreciate the Minister's comments along

that line.

One of the very interesting correlations that's been developed is

the correlation between the assessment growth and population growth.

Common sense would suggest to us, Mr. Chairman, that assessments would

grow roughly in direct proportion to population, but in fact if you

plot the growth rate in assessment and the rank order in growth of

assessment versus growth in population from 1966 to 1971 you would find

an amazing thing. The community with the highest growth in population,

which was Delta, had the lowest growth in assessment, and the community

with the lowest growth in population, namely Vancouver, had the highest

growth in assessment. You can draw a straight line showing an inverse

relationship and almost perfect negative correlation right through the

middle there. You find that Surrey, which out of these 13 communities

was the seventh highest in population increase, was the sixth highest

in asset growth, and so on. There's an exact trade-off down the line.

This leads us to some kind of a theoretical proposition that the

faster the rate of growth in a municipality, the greater will be its

lag in assessment. This goes a long way to explaining why

municipalities have been so reluctant to accept new growth.

What are the ways of solving that? If all the municipalities were

one, the problem would be automatically solved, at least in the Greater

Vancouver Regional District, but that's not the case. So what else can

be done?

There's a possibility of equalization of the burden of growth in

between the member municipalities. It's a kind of a tax-sharing

relationship — almost the same kind as we have on the

federal-provincial scale with the equalization formula between the

areas with the greater financial resources and those with the greater

financial needs. This could make it possible for municipalities with

greater growth to stand the cost of that growth, and at the same time

for the municipalities with lesser growth to give some help to the

neighbour municipalities who are accepting the burden that they aren't.

There's something in it for everybody. This kind of working together,

and the sharing of the tax basis of the municipalities in the Greater

Vancouver Regional District, I think, is important. It might be called

regionalization of growth costs, or whatever label you might put on it.

I make that proposal to the Minister.

That has so far had to do with the receptivity of municipalities to

new residential growth. How about the housing demand itself? One of the

pernicious aspects of the inflationary spiral in housing we're seeing

right now is that people seem to have lost faith in other kinds of

investments. They don't have faith in Canada Savings Bond any more — at

least, a lot of them don't — because the coupon rate is less than

inflationary. They don't have faith in the stock market or the bond

market, because experience in the last five years has shown that these

things just aren't very good investments.

The only things that have been good investments in the last five

years are what I would call hard, tangible assets. Of this category of

assets, by far the most available and the most useful — because you can

use it as well, which you can't a bar of gold — is a house. So a great

deal of the price premium on housing today, I would suggest, is caused

by investment demand, by expectational demand of people saying: "Here

is the best place to put my money."

I wonder how the government goes about curbing that philosophy,

because the end result of that philosophy is just madness. It's an

increasing transfer of wealth and resources in the community from the

have-nots to the haves, from those who do not own property to those who

are fortunate enough to own property. It is a very real problem, and I

would like to hear the Minister's comments on that.

Next I'd like to hear the Minister's comments on ways to open up new

land. Is it indeed the case, to quote our GVRD planner, that there's

29,000 acres ready for conversion into serviced lots in the regional

district? Is the figure, indeed, much higher? I've heard the figure of

50,000 from other sources. The land appears to be there. How is the

Minister going to get it onto the market?

There are a lot of policies that he could look at. Some of them he

has looked at, I know, because he's told the House about them. His

emphasis on planned-unit development projects I think is a good one. It

gives us the possibility of 10 or more single-family dwellings on an

acre of land without any substantial loss of privacy, and that's up

from the four or five that you get normally. So that kind of doubling

is a great step forward.

Can the Minister take steps to facilitate re-plotting

[ Page 2076 ]

of existing municipal land? Can he take steps to

encourage the development of infilling through purchase of certain

lands, through replotting schemes, through preparing development plans?

MR. CHAIRMAN: Order, please! Just for the guidance of the

Hon. Member for North Vancouver-Capilano (Mr. Gibson) it would be

helpful if I read the

section from the budget speech just so that he

can keep his remarks somewhat more relevant. As I said, there is

considerable scope, but I would like to read the words here so that he

will have something. On page 20 of the budget speech:

"Initially the Department of Housing will have $50

million for programmes of land assembly and servicing neighbourhood

improvements and cooperative housing and family and rental housing.

Under this programme the province has the flexibility to build houses

on government land and either sell them, using the first mortgage

programme, or rent the properties."

This is the

section 1 think we are now debating. As I said, it does

provide considerable scope, but I would ask him as far as possible to

relate his remarks to these items.

MR. GIBSON: Thank you, Mr. Chairman. I'm trying to deal at

the moment with some of the specific techniques for the increase of the

availability of serviced land for housing.

Is there anything the Minister can do, working with the

municipalities, to speed up decisions on subdivision plans? Is there

anything he can do to establish a complete inventory, and I won't talk

about the whole province, but just in the Greater Vancouver Regional

District, a complete inventory, municipality by municipality, of land

which either is available or ought to be available for conversion into

serviced lots and the construction of new dwellings?

There is again this question of working with municipalities, and

once again I would want to come back with my caution to the Minister

that he must not seek to ride roughshod over them. In that connection,

I was very concerned to see remarks attributed to the Minister of

Lands, Forests and Water Resources (Hon. R.A. Williams) in a speech to

the Delta Chamber of Commerce, which I trust does not represent

government policy, but which perhaps I might just read out to the

Minister of Housing who has the direct responsibility to see if in fact

they do represent government policy.

The Hon. Minister of Lands, Forests and Water Resources is quoted as saying:

"A system of incentives and disincentives for

municipalities may have to be established if they do not rezone more

areas for two-family residences. No one," he said, "not even Russia,

has solved the housing problem yet, but the government has established

a housing department and is providing money and a few ideas."

He went on to suggest duplexing through greater Vancouver. He said:

"If that doesn't work, I think the province is going

to have to look at a system of incentives and disincentives for

municipalities to get the job done." Then he elaborated later on to

reporters that: "I think that the province must look at the whole

process of aiding municipalities in relation to the housing problem.

And if municipalities are clearly preventing a positive approach to

providing more housing, then the province has to look at ways of

encouraging them."

I hope, Mr. Chairman,

that the Minister will reassure us that the other Minister, that

Minister of Lands, Forests and Water Resources, wasn't in effect making

to the municipalities an offer that they couldn't refuse. He has to

assure us that his relationships with the municipalities will be such

as to take into account their responsibilities. They do have

responsibilities for local development and we in this chamber, and in

particular this government, must not seek to usurp those functions.

I'd like, in conclusion, at this stage to suggest to the Minister

three things that might be helpful in freeing up land for completion in

the near future as serviced lots.

The first general proposal I would suggest to him is a gradual shift

in taxation policy, which the province can influence, of a higher

taxation on the land component and a lower taxation on the improvement

component in the residential field. How this would work in the

industrial field I have no idea, but in the residential field I think

that it could act as a positive encouragement to the creation of

structures on land rather than the holding of land.

I would secondly suggest — and this is why I asked for the average

cost of servicing a lot — that this government should undertake to pay

for the complete cost of servicing of new lots put on the market for

the next few years. This is obviously an enormous sum of money. If

we're talking about $5,000 a lot on the average, and if we're talking

about 20,000 lots a year, let's just say, or lot equivalents — because

much of this is higher-density dwellings — we're talking about $100

million just there. But what's the effect of spending that $100 million?

The effect of spending that $100 million is that we save something

like $2 billion in house prices in British Columbia that would

otherwise be pushed up. Remember that 20-to-1 ratio — that the houses

that come on the market each year are only about 5 per cent, only about 1 in 20 out of our total housing

[ Page 2077 ]

stock. If we can lower the prices of those new homes by $5,000 by

paying for the servicing of the lots, then we will drive down or

stabilize the price of housing throughout British Columbia — of

existing housing — to that extent. So, as huge a sum of money that it

is, it is the kind of sum that by the province spending it, it can save

that much in housing costs for all the rest of us. The Hon. Members

across are saying aye; they don't like to hear these good ideas.

Interjection.

MR. GIBSON: A little bit yet, Mr. Premier.

Next, is there some way — and I don't mean in the way of the

Minister of Lands, Forests and Water Resources — but is there some way

we can give active encouragement to municipalities to proceed with the

quick opening up of their land? Now in the North Shore municipalities

it would take the form of improving the transportation, Mr. Minister,

through you, Mr. Chairman: a third crossing, for example. Buses are

very helpful too. It could take the form of per capita grant incentives

as well, to help these municipalities, to provide a tangible

encouragement to them and to say, in effect:

"We realize that growth presents a very real cost to

you, quite beyond the cost of servicing the lots, which now hopefully

the provincial government will pick up, but costs well beyond that.

Because this is a provincial problem and not just a problem relating to

any municipality, we do not want to remove from you, the municipality,

your jurisdiction, but we are willing, from the tax resources of the

entire province, to help cushion the particular load of growth that

your particular municipality has to bear."

Now, Mr. Minister, through you, Mr. Chairman, you could take this

approach to all of these growth costs or just a portion of them. Just

equalize to the average that the municipalities throughout the province

bears.

But I would suggest to you that those three steps, a gradual shift

of more of the tax load from the improvements to the land, a complete

government payment of servicing costs on new lots, and positive

encouragement to the municipalities to make it advantageous to them to

absorb growth, and possible for them to absorb growth, would be a great

and positive contribution to solving the housing crisis.

It won't help on the rental side until you remove the uncertainty

there, but it can help on the owner-occupied dwelling and, in

particular, the single-family dwelling which, in spite of the remarks

of the Minister in his opening comments on these estimates, I believe

will remain the dominant form and the preferred form of accommodation

in British Columbia for many years to come yet.

MR. G.H. ANDERSON (Kamloops): I've been following this

section of the debate with interest up to vote 111, and I just have a few remarks to make on it.

I was particularly attracted by the previous speaker when he spoke

of the ease…that there's mortgage money, lots of mortgage money,

available. Well, I suppose there is a lot of mortgage money available

at the interest rates they're charging. But this problem isn't only

confined to British Columbia, because I understand from the

article in

The Vancouver Sun on Saturday, coming out of the debates in the

parliament buildings in Ottawa, that 40,000 new homes were built in

Toronto in 1973, but at an average price of $46,210; and only 136

purchasers could qualify for the CMHC loans out of all of those homes

being built.

I was particularly interested too, Mr. Chairman, in the amount of

the expenditure, $50 million, as to whether it's going to be enough or

not. I have another

article here from one of the B.C. newspapers where

it says:

"Bill 42, known as the Land Commission Act , was

introduced. The residential housing lots in many areas of the province

have doubled and they've even quadrupled in price."

Four times, just because of Bill 42. Then the

article goes on to say:

"The second drawback, of course, is the high cost of

money. The previous Social Credit administration was making great

strides toward their ultimate goal of providing low-interest money for

housing in British Columbia." Oh, it also says: "As the MLA Member of

the opposition charged with the responsibility of being the housing

critic, I look forward to giving the government many suggestions during

this session of the legislature."

Well, it's signed "Don Phillips, MLA," and I'm still waiting to hear

some of those suggestions about improving the housing situation in

British Columbia. "The price of the average home in Toronto is

increasing at the rate of $4 an hour."

That's a cheerful thought for the homeless of that city and elsewhere to ponder.

"The national goal of 200,000 new dwellings was exceeded in 1968. Last year there were 269,000 housing starts.

"In Ottawa the price of an average house increased

from $25,000 to $39,000 between 1965 and 1972. The average for all

Ontario was 23 per cent. In Mississauga the lot prices increased from

$20,000 to $42,500 in the past year.

"A Calgary man transferred to Montreal sold his house

for $54,000; one year ago he bought it for $35,000, and he wasn't happy

with the profit. He has a recently married son who is now looking for a

home at inflated prices.

[ Page 2078 ]

"In Ottawa a house sold last April for $45,000 to

$47,000 and three months later it resold for $72,000. It is now

advertised for $95,000."

The reason I wanted to bring these up, Mr. Chairman, was because

Ontario, as far as I know, and Alberta, as far as I know from what I

last heard, are still governed by the free-enterprise Conservative

Party, the home of investment and turnover and everything great for the

electors in the province. It looks as though their situation is worse

than ours, and they haven't got a Bill 42. They haven't been able to do

a thing to keep prices down; in many cases they are going up faster

than the B.C. rates. They still have a tremendous housing shortage.

Rentals are approaching zero in the City of Toronto and yet we still

have the statement that Bill 42 has doubled and quadrupled lot prices

in British Columbia.

Other statements from the House in Ottawa show that there have been

leaps in the price of both housing and land in two provinces at least

in this country that don't have any Bill 42. Therefore I can't see any

reason why their lots should be going up in price if Bill 42 is what

did it in British Columbia.

MR. P.L. McGEER (Vancouver–Point Grey): I was certainly

interested in what the Member for Kamloops (Mr. G.H. Anderson) had to

say. Of course, we all know that there is a shortage of housing right

across the country and that other provinces have had similar

difficulties to our own.

Mind you, the statistics have shown on the average that housing has

experienced more of an inflation in British Columbia than anywhere else

in the nation. One can always find isolated examples. They have been

quoted in the press, but there have been numerous stories. I didn't

bother to bring the documentary evidence into the House because I felt

that it was generally accepted that housing has gone up faster in five

years in British Columbia than anywhere else in Canada.

MR. G.H. ANDERSON: Nonsense and poppycock!

MR. McGEER: It may not all have been due to Bill 42 but I can

tell you, Mr. Chairman, that it hasn't gone down as a result of Bill

42. Mr. Chairman, it was only a month or so ago in this very assembly

when the Attorney-General stood up and said there was going to be an

investigation in British Columbia because of the tremendous speculation

in the housing market. I've got the story right here. I did bring that

evidence into the House.

Interjection.

MR. McGEER: Could you have some order please, Mr. Chairman? The Premier has got his three-second attention span

going this evening. He's very upset about the fact that Members of the

Opposition are taking a close look at the estimates. It's a big

budget....

MR. CHAIRMAN: Order, please! Would the Hon. Member proceed with his remarks in regard to the vote?

MR. McGEER: No one in the opposition would want us to skip quickly past $50 million…

HON. G.R. LEA (Minister of Highways): Where's Rodney?

MR. McGEER: ...particularly in a field, Mr. Chairman, that

has experienced, as I was mentioning to the House, this enormous

inflationary increase.

HON. MR. LEA: Hey, where's Rodney?

MR. McGEER: Certainly this is a vote that should be

considered in more depth and with greater public scrutiny than in any

province in Canada. We certainly intend to do our duty in this

Legislative Assembly to try and understand why it is that we've had

these fantastic increases in housing costs.

HON. D. BARRETT (Premier): Could I ask the Member a question? Does that include Friday as well?

MR. McGEER: Mr. Premier, I know Friday was a big day because

you ended your campaign in Nova Scotia and you came back to see how

things were going in British Columbia.

HON. MR. BARRETT: Will you be here Friday?

MR. McGEER: But I can tell you that the housing crisis was on

while you were there…and I don't think they're going to do very well

in that election.

MR. CHAIRMAN: Order!

HON. MR. BARRETT: Will you be here Friday?

MR. McGEER: Excuse me, Mr. Chairman. Mr. Chairman, I was doing my best.

MR. CHAIRMAN: I would respectfully request the Hon. First

Member for Vancouver–Point Grey to make his remarks relevant to this

vote and not to respond so much to the asides.

MR. McGEER: Yes, thank you, Mr. Chairman, I'll do my best. If you can keep order I promise to keep to the point.

[ Page 2079 ]

HON. MR. LEA: Where's Rodney?

MR. McGEER: See what I mean, Mr. Chairman? I heard that. I

don't know who Rodney is (Laughter), but it's these asides that tempt

me. They really do. I'm struggling to keep on the point, and, Mr.

Chairman, I think some of the Members on that side don't want to hear

what I have to say about housing. I think they're heckling me. It's

most unfair, Mr. Chairman.

In any event, we've got this probe which the Attorney-General (Hon.

Mr. Macdonald) has just promised that we're to have in British Columbia

because we have had speculation. We have had these fantastic increases

in housing costs. Mr. Chairman, this kind of thing is impossible if

there's adequate supply. It only becomes a device that can be placed in

the hands of the greedy and selfish to bid up prices when there is a

shortage.

If ever there was an admission on the part of the government that it

has not seen to it that there is an adequate supply of housing, it was

the Attorney-General's speech in the budget debate promising to have an

investigation. That promise was confirmed again today. Mr. Chairman, I

hope when this investigation takes place that the Attorney-General will

examine the activities of the Housing department itself.

I have another story here. This was February 16. Perhaps this was

what the Attorney-General referred to. It involves a bid by Dunhill

Development for a piece of property that Daon had bought from some

other developer. Here's what the story said: "Why is Dunhill so keen to

buy the project?"

HON. MR. NICOLSON: Point of order, Mr. Chairman. This matter, I believe, was canvassed earlier this evening when the Member wasn't in the House.

MR. McGEER: Well, it was made clear in this that they would

have to say so in a markup. Isn't that the very thing that leads to

increases in housing costs?

MR. CHAIRMAN: Order, please! Would the Hon. Member be seated, please?

I would just point out to the Hon. First Member for Vancouver–Point

Grey that a point of order was made and he should extend the courtesy

to the Chair to allow it to make a reply to the point of order before

he continues with his speech.

In response to the point of order, I would point out to the Hon.

First Member for Vancouver–Point Grey that the subject matter which he

presently has raised in this newspaper clipping has already been

brought up by another Member of the committee. Therefore I would

caution him to keep his remarks brief so that he doesn't become

repetitious.

MR. McGEER: Thank you, Mr. Chairman. I can tell that there

are other Members of the House who are pursuing this sort of thing with

the same kind of vigour that I am. Certainly we don't want to have the

government guilty of pushing up the prices of any real estate

development. Certainly if the government bids on land or any housing

development and pushes the price up because of that bid in their desire

to get property in their own hands, ultimately that cost has to be

passed to the people of British Columbia. It has to be passed on in

higher rents. It has to be passed on in higher taxes because the money

is going to go to the developer and we're going to have to pay. I don't

think the government should be bidding up the price of real estate. I

think the Attorney-General is correct to investigate. I hope his

investigation will include the activities of the Department of Housing.

Mr. Chairman, this vote is for $50 million. It seems like a lot of

money. Compared with the size of the budget and other votes that we're

passing, it is a lot of money, but compared with the value of real

estate in British Columbia it's a drop in the bucket.

Mr. Chairman, the Minister can correct me if I'm wrong in his

estimation of money, but if we're to build 40,000 units in British

Columbia, 40,000 would be inadequate to meet our needs. If we were to

build just that much it would involve a minimum of $400 million

expenditure in housing, probably $800 million and perhaps $1 billion,

just this year alone. That sum total wouldn't amount to more than 5 per

cent of the total housing that now exists in British Columbia, so that

if you look at cost value of everything that we have, this sum of $50

million would not equal 0.5 per cent — scarcely a drop in the bucket.

Anything that the government does in the way of making cash

available either for mortgages or for lease-purchase arrangements is

going to have so little effect on the total supply that it cannot

possibly catch this rocket that has taken off in the way of values of

new or old housing.

The Member for Kamloops (Mr. G.H. Anderson) was correct in saying

that housing costs have gone leaping. He was incorrect in not

recognizing that it is happening right in the City of Kamloops.

Examples as bad as that or worse could have been found in his own home

town; they could be found in Vancouver–Point Grey or North

Vancouver–Seymour. Why? Because of a shortage of supply, that's why.

Only one thing will bring the price of houses down: supply, supply,

supply. That is what has to be provided. This $50 million is not going

to significantly affect supply, nor can any government offer supply

with 1,000, 2,000 or 3,000 units. Government can only ride to victory

in this thing on the coattails of the private sector.

MR. G.H. ANDERSON: They've failed so far.

[ Page 2080 ]

MR. McGEER: To the Member for Kamloops, through you, Mr.

Chairman, the private sector, to put it bluntly, has been throttled by

the New Democratic Party government. It has been throttled by their

colossal ignorance of the market demand and the market supply factors.

These people think they can alter 2,000 years of human history with 17

months in office.

The New Democratic Party government has been fouling up the housing market.

MR. G.H. ANDERSON: In Toronto?

MR. McGEER: It happens to be worse in British Columbia. They

are making protestations, Mr. Chairman. The Member for Kamloops is

defending a government, because it is no worse than Ontario and

Alberta. The facts are that it is worse. If you believe the kind of

King Canute chest-beating statements of the Minister of Housing, he is

not going to tolerate this and he is not going to stand for that. It's

ridiculous!

Every move that Minister makes dries up the supply. When that supply

dries up, the speculators take over. When the speculators take over,

what defence has the government got but to get in and speculate as

well? Isn't that what the Housing department did with this offer to

Daon? Sure it is. It pushed the price up, and that is what the man who

said this statement to the press was complaining about.

The government itself is playing the game. It has to because the

government itself is involved in supply and demand, just as everyone

else is.

What we want, Mr. Chairman, is for that Minister and his cabinet

colleagues to regain their senses. Until they regain their senses, the

little people of British Columbia are not going to be able to afford a

home.

I have called developers, I have called real estate firms, I have

called private builders. The opinion is unanimous: supply is going to

be less in the coming year and prices are going to continue to rise. It

isn't good news, but it is fact. What we have got to do in this

assembly is face the facts and begin to establish policies that cope

with them.

This $50 million on a vote looks impressive, but what comes onto market this

coming year? These 40,000 units or whatever manages to be built is only going

to be a tiny little peak on top of a great big mountain of accommodation that

now exists. It adds maybe 3 or 4 per cent, if that, to a large existing total.

When people want to buy a home, they are not buying into that 1 or 2 or 3 per

cent; they are buying into the total pool. If just a tiny little bit to the

top of the mountain is added and the population increase exceeds that height,

it is like a game of musical chairs: too many people for too few homes and rental

accommodations. Those few people bid up the price; they bid it up awfully fast.

There are houses in the constituency I represent, Vancouver–Point Grey, that

are literally falling down and are selling for $75,000.

If there were rental accommodation available in that riding, these

houses would drop to about $30,000 in a matter of a month. All you have

to have is a few vacancies and it is like letting air out of a balloon.

Nobody is building those rental accommodations. Who wants to these

days when there is a proposed rental freeze, when Bruce Yorke is around

to organize the tenants before they ever get moved in? Who wants to be

a landlord these days? It is not worth the headaches, is it? You lose

money and you take a lot of guff from people like Bruce Yorke.

What happens is that nobody builds rental accommodations, nobody

sells their home, and places that are falling down, instead of selling

for $35,000 which is a little more than the land is worth, are selling

for $75,000. Who loses out? Not the people who own homes but the

younger families who are looking for homes. They are the ones who lose

out, probably the ones who voted NDP.

I just think it is a sad thing that the Minister refuses to accept

the realities of life. Those realities are that there are many people

in British Columbia looking for accommodation. If the supply equals

that demand, the price drops. If the supply is unequal to that demand,

the price goes up.

Then the government puts on a rental freeze. That shoves it up

higher. They go into leasing arrangements. That pushes the price up

higher. They go into land freezes. That pushes the price up higher. All

the tax money on the government's part that gets committed to these

programmes is doing more harm than it does good. We are voting $50

million in this vote that, taken in isolation the way it is, is

probably doing damage to the people who are trying to find homes today.

That sounds extreme, I know. But if it results through mismanagement in

a reduction of the total supply of housing, that will be the effect.

I would like to ask the Minister: what is the total supply of

accommodation in British Columbia? What were the number of new housing

starts last year? What are the commitments he has been able to learn

about by talking to developers and real estate agents regarding the

supply this coming year? How much has been the average increase in the

cost of a home in this past year? That should be a figure you people

have at your fingertips. What is the percentage increase?

How will this $50 million we are voting result in a decrease in the

cost of homes in this coming year? How can the Minister justify in this

vote that the money is going to be used in a maximum fashion to

increase the total new housing units in British Columbia and therefore

decrease, as far as is possible by government action, the cost of each

individual unit to those unfortunate people who are trying to

[ Page 2081 ]

find accommodation in British Columbia today?

MR. CHABOT: Just a couple of short questions. The first one

is dealing with the Daon and Dunhill episode in Burnaby which I raised

a little earlier and which the Minister has answered. He's confused me

by his answer. He suggested at the time that the reason why Dunhill was

in the market for the purchase of this large, uncompleted complex in

Burnaby was to ensure that the project got underway. Well, it's quite

obvious that it will be underway with Daon taking it over, being one of

the larger developers in the province. It has a tremendous success

record in development of residential property in the province.

What really confuses me is the fact that Mr. Paulus of Dunhill

agrees with the Minister that the most important thing is that

construction isn't being held up on these badly needed units. Why was

Dunhill concerned about getting another chance to take over this

development? Is it for the purpose of lending credibility to that firm

or credibility to its principals?

MR. CHAIRMAN: Order, please! I would just read a

section to the Hon. Member from a decision that was made as recorded in the Journals in 1956, pages 8, 9 and 10, on January 20. These are the words of Mr. Speaker Irwin:

"The principle has been followed by the Legislatures

throughout the Commonwealth — Legislatures which, like ours, are based

on the parliamentary practices of the British Houses of Parliament. For

instance, in New South Wales, in 1932, the late Sir Daniel Levy, then

Speaker, ruled that it was 'not for the Speaker to microscopically sift

the relevant from the irrelevant evidence, but to liberally apply the

sub judice rule in such a way as to prevent the mischief which that

rule was intended to obviate.'

"There is nothing mysterious about the words 'sub

judice.' A matter is sub judice when that matter is pending for a

tribunal having judicial powers.

"The reason for the rule that matters sub judice may

not be referred to in debate or upon a motion is two-fold. In the first

place, it might be inferred that a breach of his rule would be not only

a grave discourtesy to the court, but also might be considered an

improper usurpation of the powers of the court or an attempt to

influence the court — an attempt of the Legislature to influence that

very distinct and parallel part of the government, namely the judiciary.

"In the second place, it might prejudice that sacred

right of Her Majesty's subjects to a fair trial before the proper

tribunal."

I would consider that the remarks made by the Hon. Member before I

interrupted him, in which he referred to a principal involved in the

case and made a comment about him, should be withdrawn, inasmuch as it

is clearly violating the principle of sub judice.

MR. G.S. WALLACE (Oak Bay): The Chairman's filibustering.

MR. CHABOT: Well, Mr. Chairman, I'm discussing the actions of

Dunhill Developments since it's been controlled by the Crown in its

endeavour to take over control of a contractor who is in receivership.

Really that has absolutely nothing to do with the charges or the

allegations that might be heard in a courtroom.

Furthermore, I did mention that the government had engaged what it

considers to be exceptional expertise with which I differ. And I think

I should have that right to differ, based on its failure to negotiate

successfully two development projects which I have made reference to

tonight.

MR. CHAIRMAN: Order, please! Hon. Member, the remarks that

you made earlier I did not rule out of order. I simply ruled out of

order the point which you made at the end in which you made some

comment about the character of one of the principals of Dunhill. This

could be considered prejudicial and therefore would be covered by the

principle of sub judice.

MR. CHABOT: Well, I'm not a lawyer, Mr. Chairman, but it's my

understanding that the matter which is subject to be a court case is

not a question of whether Mr. Paulus has been charged; it's a matter of

Mr. Paulus or other principals of Dunhill charging a radio station and

certain employees of that radio station.

I cannot understand how the reference that I am making to the lack

of ability and sloppy handling on the part of these principals who are

reportedly laying charges has anything to do with the court case that

might and might not be heard. I'm just suggesting that the talent….

MR. CHAIRMAN: Order, please! The very point of this court

case is the character of the principals involved. The Hon. Member has

alluded to the character of the principals involved in some way.

Therefore I'm ruling that this is the very matter which is before the

courts, perhaps in some other form, but I'm asking the Hon. Member to

discuss the facts perhaps of Dunhill's involvement in the other matter,

but not to touch upon the personalities or the principals.

MR. CHABOT: Thank you very much, Mr. Chairman. I'll abide by your ruling. But I will say that

[ Page 2082 ]

the negotiations on the part of Dunhill were sloppy indeed in their

endeavours to take over the construction project that was in

receivership in Burnaby.

I'm wondering if the Minister could tell me why Dunhill attempted

to… It was very embarrassing for a development corporation which had

taken over, which had negotiated and worked long, hard hours, as is

customary in the private development sector, and had basically scooped

Dunhill and taken over this project. I'm wondering why Dunhill would

attempt to embarrass these people by wanting to take over the

unfinished project after it had already been taken over and in view of

the fact that the Minister told me that the main reason for Dunhill

attempting to take over this corporation was to ensure that housing

would be on stream. Daon Developments has stated that they'll probably

cut down on the size of some of the units. Instead of 482 units, there

are liable to be over 500, and they'll be on stream in 1975 — the fall

of '75 or the spring of '76. So I'm wondering just what the objective

was, Mr. Chairman, for the attempt again to move in on this

construction project.

One other point that I wanted to make was the question of housing.

One young budding politician a few years ago gave a reasonable

suggestion.

MR. CHAIRMAN: Order, please!

MR. CHABOT: There's a lot of fruit-chewing in here.

MR. CHAIRMAN: I would request that the decision made by the

Speaker on a previous occasion that there not be any consumption of

food on the floor of the House be followed. Therefore I would ask Hon.

Members to desist from eating food on the floor of the chamber.

MR. CHABOT: Thank you very much, Mr. Chairman. But a young budding politician…

MR. PHILLIPS: The Minister of Public Works (Hon. Mr. Hartley) is sucking a lemon.

MR. CHABOT: …a few years ago made a suggestion as to the

ways and means of promoting the establishment of housing in British

Columbia. His suggestion was what I consider a reasonable suggestion.

It wasn't a matter of tampering and playing with the private sector or

attempting to compete with the private sector, and make it difficult

for them, or to discourage them from their rightful role in the

providing of housing in British Columbia. But he suggested that there

should be 5,000 low-interest loans established in the province of

$15,000 apiece, that there should be $75,000 of mortgage money made

available.

Interjection.

MR. CHABOT: Oh, $75 million. I'm sorry, Mr. Minister. Thank

you for correcting me. I'm glad you correct me once a session. It makes

me realize you're listening from time to time.

He suggested that the interest rate should be 5 per cent. This would

really be an incentive to housing getting underway. It would also be an

incentive and make it possible for the working man in British Columbia

to get into housing, which is extremely difficult today. That young

politician in 1969 — that little MLA from Coquitlam (Hon. Mr. Barrett)

— has now become the Premier of British Columbia.

I wonder, Mr. Chairman, if you will agree with making 5 per cent

mortgage money available, as was so eloquently suggested by that MLA

for Coquitlam back in 1969 when he was running for the leadership of

the New Democratic Party. I thought at the time, and I still think so

today, that the suggestion was a worthwhile one. The suggestion is one

that would make it possible for the working people of this province to

get into housing. It would be a tremendous incentive as well in getting

housing underway in the province.

HON. MR. NICOLSON: To start with the Member for Columbia

River (Mr. Chabot), the Zajac property was known to be in some

difficulty. I understand only Daon and Dunhill probably had the

capability at that time to attempt that particular project. There

wasn't complete communication between the two companies. One of the

principles of Daon was away, I believe, at the time the thing was

proceeded with.

It was brought to our attention in the Department of Housing some

one or two months before that and was repeatedly brought to our

attention. It was at that time that we had Dunhill look into this. The

first and foremost purpose was to make sure this was brought on stream.

Certainly, as I've outlined before, it sometimes takes two years to get

an approval and it would be most unfortunate if something was delayed

in the construction phase.

Interjection.

HON. MR. NICOLSON: We didn't try to take anything over. We made an offer, just a straight business offer.

AN HON. MEMBER: You made an offer they couldn't refuse.

HON. MR. NICOLSON: No, we didn't make them an offer they couldn't refuse.

[ Page 2083 ]

Interjections.

MR. CHAIRMAN: Order, please! Would the Hon. Members not interrupt the Minister when he's making his reply.

HON. MR. NICOLSON: The Member for North Vancouver-Capilano

(Mr. Gibson) gave a fairly wide-ranging speech, citing certain

problems, vacancy rates, inflation of housing costs over the years from

1969, price of building-lot increases.

He asked the direct question: will there be more units built in

1974? I say that is an impossible question to answer: 1974 is a

bargaining year, there have been severe shortages of materials and the

outlook is not good. Certainly extra efforts will have to be made in

terms of supply and looking at alternatives in tendering of contracts.

Both the private and public sector are looking toward shorter tendering

periods and such in this area.

There was some mention made as to the words which I used of

guaranteed purchase. I merely made mention of the fact that early in

the afternoon the Member for West Vancouver–Howe Sound (Mr. L.A.

Williams) had clearly pointed to two of the alternatives, I think, upon

which a land-lease policy must be based. Either you allow assignment or

you must guarantee purchase if you are going to be realistic about it.

As I've said, I'm not prepared at this time to say which of these will

be the policy.

One might wonder about what the effect of a land-lease policy might

have been in an area like James Bay or certain areas of Vancouver where

you look at a lot of nice, existing housing but most of it is held as

revenue housing. The prices of it are very highly inflated, awaiting

rezoning or redevelopment. The number of potential rental units under

construction is 4,000 but it is impossible to differentiate that from

the numbers which might be put under condominium arrangements. So you

can't really give a breakdown on the figure and I don't think it's

available from the Vancouver Real Estate Board or any other source at

this time.

Interjection.

HON. MR. NICOLSON: Well, 4,000 private, I believe, but that's

a combination of things that will be going to strata title and to

rental. Multiple dwellings cannot be too accurately broken down in

predicting how they will be when they're completed.

Interjection.

HON. MR. NICOLSON: I did mention how we are working with the

municipalities. You mentioned the fair share for growth. I don't think

I would take credit for coining the words, but I think that from my own

experience I came up with this very spontaneously. Like a lot of

things, when the time is right, people do come up with the same thing

at the same time. I was very interested to see the GVRD had sort of

adopted "fair share of growth." My first recollection of this phrase in

this connection was something I had mentioned myself. However, I'm sure

that others came up with it at the same time or before.

It is something we are looking toward. I explained to the Members

yesterday that we had quite a great deal of dialogue, especially with

some of the new councils which have been elected. We are looking

towards this.

You mentioned housing as investment tends to push up the cost of

housing. The best counterforce to this, I think, is cooperatives.

However, I try to stress that this is no panacea.

You talked about infilling and you mentioned a figure of some 20,000

acres. That's probably a more accurate figure than the gross figure

which is cited for infilling in the study from which I think the

greater Vancouver liveable regional plan was developed, a study I

indicated earlier in which they came up with a 57,000 acre figure. I

believe that some of these are unsuitable for certain purposes.

[Mr. Liden in the chair.]

Interjection.

HON. MR. NICOLSON: Yes. You asked if there was a complete

inventory of available land. I believe the Greater Vancouver Regional

District does have a report on inventory of lands. We have, of course,

a person assigned to the greater Vancouver area and he is currently

collecting data on this.

You have also mentioned the speech of the Minister of Lands, Forests

and Water Resources (Hon. R.A. Williams) alluding to incentives and

disincentives. Later on in your speech you asked three specific

questions which I believe are recommendations of the regional district

liveable region plan: gradual shift in taxation emphasis on residential

land from being higher on land than on improvements; de-emphasizing

improvements and increasing the emphasis on land; undertaking the

complete cost of servicing and instituting a system of per capita

grants.

I think those comments are somewhat related to incentives and

disincentives as were mentioned by the Minister. These things are

outside of my direct responsibility. However, they are matters in which

I take some interest: the first and last, obviously.

Cost of servicing. Again, some of the financing for that comes under

Municipal vote, sewage treatment plants systems Act. But we recognize

that servicing of land is of very high importance and we are looking

[ Page

2084 ]

towards this.

I might say that a first emphasis is activity throughout the

province and not just in the lower mainland. Servicing of lands in the

outlying areas is very important towards a policy of decentralization.

The First Member for Vancouver–Point Grey (Mr. McGeer) has said that

Dunhill might have bid up the price of Zajac. Well, we made an offer;

we didn't get into a bidding war. We got out and the main purpose was

served when this project was put back on the rails. I would point out

that it was felt at that time by Daon and Dunhill that they were

probably the only two projects that had the spare capacity at that time

to put that project on the road.

To see that best interests were served our main concern was that

this project get going because it had gone through the major hurdle

which was the municipal approvals and was already into the ground.

That's the one in Burnaby, at North Road and Lougheed.

The Member has said that anything the government does for mortgage

releases will have little effect. We will be leasing — well, leasing

really comes outside of this vote — but we are setting a target of

2,500 family rental dwelling units. This is our target for initiation

this year. We would hope that about 1,500 would be built under

section

43 at a capital cost to British Columbia of $4 million, and 1,000 under

section 40 at $7 million, for a total of $11 million.

We would set a target for 1,000 senior citizens' dwelling units: 500

built under

section 40, at a cost of $2.1 million; 500 built under

section 43, at an outlay of $900,000 for a total of $3 million.

We are also setting a target of 1,500 cooperatives, and for leasing

that serviced land we would expect, at $6,000 a unit, an expenditure of

$9 million.

Servicing of lots on Crown and municipal subdivisions: an average

cost of servicing a lot, we would hope for $7,000 for servicing costs.

There's $14 million to be expended in that way.

Our contribution to the Neighbourhood Improvement Programme is $2

million. Land assembly would be $10 million. For grants to such

organizations as the United Housing Foundation, other grants and

miscellaneous expenditures in native housing, we would make an

allowance of $1 million for the $50 million expenditures so that….

Interjection.

HON. MR. NICOLSON: For servicing costs. But we have land

purchase costs in there as well, where we have set aside….Some of

this is on Crown Land where we have no costs, others will require

expenditure for servicing.

MR. CHABOT: A couple of brief questions. The Minister has not answered

my question. In dealing with the Dunhill and Daon attempt to take over this

financially troubled apartment complex in Burnaby, the Minister said the main

purpose was served when the project was put on the road by Daon. He suggested

that Daon was quite capable of getting this thing under way.

The question I asked was: why was Dunhill attempting to take over

after Daon had successfully negotiated the purchase of the project? It

says right here that Dunhill says it wants another chance. Dunhill then

asked Daon if it would be interested in selling the project he had just

bought — three 22-storey towers at Lougheed Highway and Erickson Way on

which construction had just started.

AN HON. MEMBER: Make them an offer they can't refuse.

MR. CHABOT: This is a direct quote: " 'We were totally

unprepared for that kind of overture from Dunhill,' Jack Poole, Daon

President, said Friday. 'It took us by surprise. Usually in this game

when several bidders are after property, one of them wins and that's

that. Now we don't know what to do. We owe it to Dunhill to respond. We

should have an answer for them within a week.' "

This is the thing that I suggested was very embarrassing to private

developers who had, in fact, scooped Dunhill. The former contractor

suggested the reason they got scooped was because there was too much

red tape. These are direct quotes from the president of Daon,

suggesting that Dunhill made a serious attempt to again take over.

I want to know why the Minister stood in his place here and said

that the main objective of getting housing on stream or on line was

served by the fact that Daon had taken over this complex. If the main

objective of government had been served by Daon taking over, why would

Dunhill then make another attempt to embarrass or to take over the

project in Burnaby? Was it to give some credibility to Dunhill, to make

it appear to be a viable home-complex developer in the province? That's

the only conclusion I can come to and I want to know from the Minister

why Dunhill made this attempt to take over the project.

One other very brief question is: do you agree with the suggestion

on low-cost interest on mortgages, and abundant mortgages in the

province, of $15,000 each, made by that young, budding political leader

in 1969?

HON. MR. NICOLSON: To set the records straight, I believe our

offer, the first offer….Daon made an offer, I understand, in the

middle of the night….They worked all night. The principals of

Dunhill, most notably Mr. Paulus, said that at no

[ Page 2085 ]

time…. Well, he expressed to me that we should not necessarily try

to change things by some sort of force, or something. I'm not familiar

with that particular newspaper article, although I've read some. I

believe I read the Province article. Is that from the Province ?

MR. CHABOT: This is Mike Grenby, Sun business writer.

HON. MR. NICOLSON: No, I didn't read that one.

MR. CHABOT: These are direct quotes from Jack Poole, president of Daon.

MR. H.W. SCHROEDER (Chilliwack): Mr. Chairman, I'm glad to

see $50 million in vote 111 for housing. I think that if we were even

going to scratch the surface of trying to solve the housing problem

that exists in British Columbia, the figure should read something like

$400 million, but at least $50 million is a start. As I listened to the

debate here, we have tried to offer in the opposition, our views as to

why we have the great housing crisis we have in British Columbia

tonight.

We have offered the excuses that if we had a greater supply, the

price of housing would decrease. We have offered the solution that the

housing supplies are here. We have had all kinds of offers of

solutions, but it seems to me like we have been shooting all over the

target, yet few of us have really hit the bull's eye.

I think the reason why we have a housing shortage in British

Columbia today is simply because you can't pay for a house at what it

costs to build a house. There's no way you can pay for the house.

Let's just take our pencils out and work a bit of a model. If you

were a very discriminating soul and you went out to find a building lot

on which you wanted to build a house, $9,000 is likely the base price — $9,000. If you were going to build a small house on that very small

lot, a house of 1,000 square feet, with building costs what they are

today, even if you find a very good contractor, it's $21 a square foot

for construction. A 1,000 square foot house at $21 a square foot is

$21,000 added to the price of the lot, and no matter which way you

figure, you've got $30,000.

One-third of the cost of the house is materials, and we can strain

on that all we want to; we can pull our hair out. We can work on the

cost of materials, try to hold the cost of materials down. We are only

affecting one-third of the price of the house, even if we should be

successful. So we say, "Well, why don't we try to hold down the cost of

labour?"

Labour represents another third in the cost of a house. Even if we

could keep labour down to half of what it is, it still would not affect

the appreciably final cost of the house because that again only affects

one-third of the cost.

Materials are one-third; labour is one-third; real estate is the other third. That house costs $30,000.

I propose that you can't pay for it. The reason you can't pay for it

is because if you go to get a mortgage for $30,000, if you have a good

down payment, if you can get a mortgage for 9.5 per cent or 9.75 per

cent or 10 per cent, you are fortunate. Bat most people in the Province

of British Columbia today don't have enough money to put 20 per cent

down. As a result, they've got to go to a place like a credit union to

get their mortgage and the mortgage is more like 11 per cent.

They also draw up a contract for a period of 30 years, and 11 per

cent interest over a period of 30 years amounts to $60,000 worth of

interest. I said the price of the house was $30,000, of which materials

represented one-third, labour represents one-third and real estate

represents one-third. If the price was really $30,000, all of us could

afford a house. The fact is that a house, in the final analysis, is

costing us $90,000.

I'd like to suggest to you, Mr. Member, that one of the reasons why

the value of property has appreciated is not only because there is a

shortage of housing but also because those people who have lived in a

house for even a short period of time have put into that house very few

dollars of principle but a good number of dollars in interest.

Let's just break it down. Let's take the same model: a $30,000 home

with an 11 per cent mortgage. Before you begin to pay anything,

interest alone is $275 a month; add to that the taxes of $50 a month;

add to that principle of $25 a month and add to that utilities which

you need to keep the place running — you're costing yourself $400 a

month for just housing alone.

Those people who are expert in budgeting tell us that you should

allow for not more than 25 per cent of your total earnings to go for

housing. This means the minimum salary that would be used to determine

whether or not you could qualify for that kind of mortgage, the minimum

salary, is $1,600 a month. I tell you that the people who want and need

the housing the most, the people who are the young people of British

Columbia are not earning $1,600 a month. Therefore I have to come back

to the original statement: we can't pay.

As a matter of fact, Mr. Chairman, even if we were building at

capacity and we had an extra supply of houses on the market, we

couldn't sell them because there is nobody who can afford to buy them.

The reason why the private sector is not involved in capacity building

is not because of the shortage of supplies, because on the railway line

between Smithers and Quesnel there is enough plywood and

[ Page 2086 ]

dimension lumber to build a town for 450,000 people. We're not short of supplies.

AN HON. MEMBER: How about nails?

MR. SCHROEDER: How about nails?

We're not short of land, in spite of the fact that some would have

you believe that if you freeze the land for agriculture there is none

left for building. The truth is we have all kinds of land. We have no

shortage of money. We have no shortage of skilled labour. But even if

you build the houses and have a surplus of housing, there is no way you

can sell it. The private sector knows this and as a result they are a

little bit cautious about their building construction and they are

holding back — one of the reasons we have a shortage. But I tell you

the basic reason is: we can't pay. No way.

I would like to subscribe to the suggestion made by the Hon. Member

for Columbia River (Mr. Chabot). There is a solution. Rather than $50

million in the housing development vote, if we could provide $400

million, and make all $400 million available at five per cent then we

could begin to solve the building problem.

Let's take the same model that I created just a little while ago and

use the $30,000 house. Even though you can make money available at five

per cent it doesn't make the original cost of the house any less

because materials are the same, labour remains the same and real estate

remains the same. So you've still got a $30,000 house.

But you take a $30,000 house at five per cent and your monthly

payment for interest drops from $275 a month to $125 a month. Add to

that your taxes, your principle payment and your utilities — the cost

is now down to $250 per month. Lo and behold, anybody earning 1,000 a

month can now qualify for this kind of a home.

I would like to say, let's use the surplus money that we are

anticipating in our budget this year. If we're really concerned about

helping British Columbia not only in housing but in putting to work all

of the employables who are now unemployed, if we want to inject into

the economy of British Columbia at the place where we need the greatest

injection, let's take the $400 million that we are anticipating as a

surplus this year and put it into the housing scheme, put it under vote

111, if you wish. Then I believe we're at least beginning on the

solution.

That's one solution. That's plan A. I believe if plan A doesn't

work, you must always have plan B. There still is housing available at

a reasonable price. It's available in mobile homes. I think the

Minister of Housing should look into the desirability not only of

mobile homes but also of mobile home parks in various municipalities.

I like your phrase "every municipality should assume a fair share of

the growth." I think while you're talking about growth in these various

municipalities, you need to talk to these municipal leaders about their

aversion to mobile home parks.

In the Chilliwack municipality we have very few mobile home parks.

But if you tried to get a zoning for an additional mobile home park,

even though the need for it is obvious, you cannot get even a listening

ear with those who are responsible for zoning.

I'd like to make a serious suggestion to the Minister of Housing.

I'd like you to talk to those who are in the regional zones and in the

municipalities about their aversion to mobile home parks, because here

for $12,000 you can still get into a mobile home. For about $55 to $65

a month you can still get a 40-ft. lot, something with a little bit of

green grass. I know the density is not the most desirable, but for a

layout of $12,000 and for a monthly charge of $65 for a plot, you can

still have a beautiful place to live.

I think we need to provide some incentives to the municipalities to

encourage them to encourage mobile home parks, and at least allow the

young people of British Columbia an opportunity to live in a home of

their own. Thank you very much.

MR. McGEER: I asked the Minister a short time ago about the

relative picture in housing in British Columbia because we're into a

supply and demand situation. I rather like the suggestions of the

Member for Chilliwack. They are dramatic, but obviously it's one way of

getting us off dead centre.

AN HON. MEMBER: It's financial suicide.

MR. McGEER: I'm not sure it is financial suicide, Mr. Member. What we've got is suicide of a different kind going on in the province today.

Let me read some figures, Mr. Chairman, for the past 10 years for

the City of Vancouver. The increase in the cost of a house in 1964 was

5 per cent. In 1965 it was 5 per cent. In 1966 it was 9 per cent. In

1967 it was 17 per cent. In 1968 it was 15 per cent. In 1969 it was 17

per cent. In 1970 it was I per cent. In 1971 it was 9 per cent. In 1972

the New Democratic Party took over, it went up to 18 per cent. In 1973

it went up a further 32 per cent. The increase in the cost of housing

in the City of Vancouver in the past two years has been nothing short

of astronomical. That's happened since the NDP took over.

What's required, Mr. Chairman, is some kind of dramatic action to

lower this increase to some acceptable level. It's happening almost

exclusively in British Columbia.

I'd also asked the Minister to tell us what the increases were in

this past year across Canada. He didn't answer that. These are the

figures from the

[ Page 2087 ]

Canadian Real Estate Association: in Quebec in the past year the

increase was 4.5 per cent; in Manitoba, 10 per cent; in Saskatchewan,

14 per cent; in Alberta, 20 per cent; in British Columbia, 23 per cent;

and in Ontario, 26 per cent. Now Ontario was worse than British

Columbia but we were the second worst in the nation. Our inflation rate

was five times that of the Province of Quebec; double that of the

Province of Manitoba; almost twice the Province of Saskatchewan.

Mr. Chairman, these are the realities of housing in Canada in 1973.

This is why we're deliberating this particular vote so thoroughly.

Performance has been lacking, Mr. Chairman. The Minister doesn't

know the number of housing units in British Columbia. He doesn't know

the number of new housing starts that are being contemplated. He

doesn't understand the supply and demand situation, and we've got a

runaway horse in British Columbia when it comes to the cost of new

housing.

Something dramatic needs to be done. This $50 million vote, large as

it may seem, is not dramatic and will not substantially affect this sad

situation.

I'd accept the suggestion of the Member for Chilliwack (Mr.

Schroeder) as being worth considering. Pour $400 million or $500

million into housing; get the interest rates down to a fraction of what

they are. That will certainly stimulate production.

Another way would be to eliminate the 5 per cent sales tax on

building materials for residential homes and rental accommodation. That

would decrease the cost of new construction and stimulate the private

sector.

Another is to appeal to the federal government to remove the 11 per

cent sales tax they placed on building materials. I think we should

perhaps have a resolution in this House. Certainly I would support it,

because I think with the inflationary increase in the cost of housing

all across the country, particularly in British Columbia, it would be

appropriate for the federal government to remove that 11 per cent tax,

because that would stimulate new housing starts.

If we were to take off the federal tax of 11 per cent and the

provincial tax of 5 per cent, the cost of materials for putting up a

new home would be decreased by 16 per cent. You've got to figure that

most people buying homes have to borrow huge amounts of money in order

to gain ownership. The down payment is only a small fraction of the

total cost.

The rest they have to get in mortgage money, which is at impossible

rates. You are lucky if you get a 10 per cent mortgage today. It's

usury what you have to pay, straight usury. The only relief that we can

bring the average person who is trying to gain some equity in life is

to get these costs down.

One way is to just pump the money in from the provincial level: $500

million if necessary. We have that money. Secondly, hack down the cost

of getting some of these ridiculous taxes off home accommodation — 5

per cent at the provincial level, 11 per cent more at the federal level.

Perhaps some kind of capital cost write-offs might be instituted at

the federal level too, to stimulate the production of rental

accommodation.

I'll tell you this, Mr. Chairman: the Minister has announced

cutbacks in the amount of new rental accommodation in British Columbia

today. Four thousand new units, which I judge from what he said would

include condominium conversions, is nothing short of a disaster.

To relieve the demand, total units must approach 40,000 in this

coming year, of which 15,000 at least must be rental in-order to keep

the present balance of rental versus ownership accommodation in the

GVRD.

What's the total for British Columbia? The GVRD must account for

half. Even if it's 8,000 for the whole of British Columbia, it's still

only half of what it must be.

Mr. Chairman, it's a grave situation. It does require dramatic

action. The government has it within its power to produce that dramatic

action. Massive infusions of money into the mortgage market; reduction

of unfair taxes on the materials required. It could do it as well by

placing huge amounts of money at the disposal of cities and

municipalities so they could service new lots at no cost to the people

who are moving into new accommodation.

The cost of land is largely the cost of servicing. If the provincial

government subsidizes the servicing, then the price of lots goes way

down. All of that comes right off the top of mortgage money that must

be borrowed at 10 per cent or more.

There are lots of things that this government can do. There are lots

of things that that Minister can do. But we're just playing around with

dinky little programmes that aren't meeting the needs and will only

result in the cost of accommodation being pressed ever higher in this

coming year.

MR. N.R. MORRISON (Victoria): Earlier in this debate on

another vote I was discussing cooperative and I was instructed that

vote 111 was the point at which I should bring it up again. My question

at that time was concerning property which the government is acquiring

and leasing for fairly long periods — 50 to 60 years — to cooperatives.

I'm not opposed to cooperatives, but my question really is: as the

government acquires this land, particularly serviced land, it would

appear that they are then mortgaging. I'm not quite sure how they do

it, frankly. They call it a mortgage, but they say at the end of the

period they get the property back. But they are taking a rather

sizeable markup on the

[ Page

2088 ]

property.

There's one in particular I would like to bring to your attention — and I'm sure it's happening in others. This one, I understand, hasn't

been finalized yet, but apparently this is the pattern. It's the

Pembroke Co-op, where the land was purchased for $38,500, but it was

mortgaged to the cooperative (the notes I have are 60 years although

the Minister prefers to give me 50) at 4 per cent a year.

Now that's a $10,000 markup between what the government purchased it

for and for what it's mortgaged to the cooperative. If you take that at

4 per cent interest, that's costing the cooperative a minimum of $400 a

year in extra interest. And if you take the Minister's figure of 50

years, that cooperative is actually paying $20,000 extra just in

interest. Now that $20,000 over that 50-year period obviously has to be

recaptured from the people who are going to pay the rent or whatever in

the cooperative.

I'm a little bit curious as to why the government, who is trying to

put out low-cost housing, trying to get these cooperatives going at low

figures, who is giving them what appears to be a low interest rate — that is, a 4 per cent annual rate rather than the normal interest rate

they would be paying — would then add a markup on the property that

they have purchased to lend to the cooperative. So it looks like a

rather sizable increase.

As a matter of fact, it appears to me that it's the sort of very

thing that this government is saying — that private industry is ripping

off the individuals. I don't want to get into the Dunhill situation,

but I must refer to an

article which is in this evening's Vancouver Sun .

It's concerning statements which were made here, and I won't go into

the details of it. But the Minister of Housing was actually very proud

of the fact that in having purchased Dunhill they were disposing of

some of the very surplus pieces of Dunhill, and that they had an excess

of book value of $2,978,982.

Now it would strike me that that is exactly the situation the

government seems to be giving private industry a hard time about. On

one hand you are saying to private developers: "You're ripping off the

customer because you've bought it at a certain figure and you've sold

it at a markup." On the other hand, the government is acquiring a

company, disposing of some of the surplus assets which they don't want

at a very large markup, and bragging about what a wonderful deal

they've made. It seems to me that they want their bread buttered on

both sides.

I would like the Minister to answer both those questions if he could.

HON. MR. NICOLSON: Well, starting with the First Member for

Victoria (Mr. Morrison), the $38,500 purchase price is a very good

price which I believe we got from the Victoria School Board. That's the

price we paid for it from them.

They do not pay off the principal. It is a land lease, and we lease

it to them at 4 per cent of that. Certainly, I suppose, over the

50-year period at 4 per cent per annum...That would even be subject

to reappraisal in five-year periods, so it would be more than what you

have estimated. That would be the minimum figure.

But if you look at this in conjunction with the 8 per cent money

which they get on the improvements from Central Mortgage and Housing — this particular one might be subject to negotiation because it's a

little bit out of the ordinary — they would be coming up with something….

Shirley Smith, director of the United Housing Foundation, says that

co-ops tend to be $50 a month less than market rentals. Al Coley of

Community Builders in the private sector says, "No, she's too modest in

her estimate. It's more like $100 at the outset." So there is a

considerable help to people in this cooperative type of housing.

[Mr. Dent in the chair.]

Now as to developers, I question the addition in that article, but

it might have been difficult trying to glean it from Hansard or from my

comments in the House. I don't think it was that high, but certainly I

was establishing a point of some profit, and I would say at least

$500,000.

I don't believe that I make a practice of going around calling

developers "rip-off artists." I think that if I have said this, it

would be more a comment out of character. Certainly some developers

have made a bad name for others, but I have consistently pointed out

where developers have not been ripped off, where developers who sold

condominium units for $24,000, two years later they are selling for

$50,000. So one wonders who the rip-off artist is.

MR. MORRISON: Well, I can take it, then, from the Minister's

answer that the general policy on cooperatives will be that the

government will take some sort of markup above their original cost of

the land when they mortgage it out for that 50-year period or whatever.

This is not an unusual experience, this particular one I'm referring to

is really the pattern that will be used over and over and over again.

Is that correct? Is that what you were saying?

HON. MR. NICOLSON: Well, I wouldn't call it a markup. We

charge 4 per cent of the market value of the land as a ground rent. If

this were compared to the 8 per cent….

MR. MORRISON: You missed my point altogether.

[ Page 2089 ]

HON. MR. NICOLSON: I'm finding it very hard to get your point.

Well, we do charge 4 per cent, the market value of the land for the

ground rent portion which is our participation in the cooperative. We

make other contributions as well, but that's our major contribution.

MR. MORRISON: Mr. Chairman, the difference, obviously, at

that point is that when you talk about the market value of the land,

you consider the market value as being different than your cost value

when you bought that property within the last four or five months. In

this particular instance you bought the property for $38,500 about six

months ago and you're considering that the market value of that

property today is now $48,500. Is that what you're saying to me?

HON. MR. NICOLSON: No, I believe we've established market value at $48,500.

MR. MORRISON: It's in that proposal at that figure, $48,000 at 4 per cent.

HON. MR. NICOLSON: We have $38,500…. Well, Pembroke, we have down as $36,750.

MR. MORRISON: I think you and I are looking at two different proposals.

HON. MR. NICOLSON: I can only tell you…. Okay, let's go to

the Victoria West one. We took the price that we purchased it for from

the City of Victoria; that was the market value that we established for

the first five years of the lease. That, in general, is our policy.

MR. MORRISON: With absolutely no markup.

HON. MR. NICOLSON: With no markup.

MR. McGEER: Mr. Speaker, this $50 million that's in this vote, is any of this earmarked for developments on the University Endowment Lands?

HON. MR. NICOLSON: No, there's no physical planning been done out there at this time.

MR. W.R. BENNETT (Leader of the Opposition): Mr. Chairman,

this afternoon when I wanted to talk about the lease programme I was

advised that we'd better discuss it on vote 111. There was some

discussion earlier this afternoon and I was trying to find from the

Minister the principle on which he based the leasing programme.

I was under the impression from last fall that when they first

introduced leasing as a form of providing serviced lots in the province

it was to meet a particular crisis for a particular price range, a

particular market. We weren't going to gauge it for the wealthy or the

middle wealthy; it was to meet the young married couples or people on

fixed incomes. And the rationale for leasing at that time was that

these people didn't have the income or the savings, particularly young

married couples, to make a down payment or to put an equity into a

property so that we would lease to them. They could get in at a low

price, they would get shelter and a house they called their own,

although they would never own the property. I was asking the Minister

if this was also a social intent of the government, owning the land. I

think we ran into a conflict there with the Member for West

Vancouver–Howe Sound (Mr. L.A. Williams) when he suggested that if the

government was going to supply money for its own programmes for

leasing, he would like to see them give government aid to private

properties and large landholders so that you would have land leased

from large property owners in the private sector.

He asked the Minister for a commitment. And I would ask the Minister

to give us a policy statement because I'm totally against the

Government of t