1998 Legislative Session: 3rd Session, 36th Parliament

HANSARD

The following electronic version is for informational purposes only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

TUESDAY, JULY 28, 1998

Afternoon

Volume 12, Number 9

Part 2

[ Page 10569 ]

The House resumed at 6:38 p.m.

[W. Hartley in the chair.]

Hon. J. Kwan: I call second reading of Bill 46.

HOMEOWNER PROTECTION ACT

(second reading)

R. Kasper: I ask leave to make an introduction.

Leave granted.

R. Kasper: It gives me great pleasure to welcome my son Aaron and my wife Doni, who are visiting in the gallery. Would the House please make them welcome.

I. Chong: I rise this evening to debate second reading of Bill 46, the Homeowner Protection Act, introduced to this Legislature on July 13, 1998, which at first glance appears to offer a degree of accountability to homeowners. But as with almost all legislation that this NDP government has previously introduced, one must scrutinize and look deeply into what is before us.

When one peruses the details of this legislation, we see that it's an inadequate piece of work. It is not so much what is included in this bill that makes it so offensive, but rather it is those issues that have purposely been excluded. When the Minister of Municipal Affairs announced that there would be a commission established to deal with the leaky-condo issue, we on this side of the House were skeptical -- and, it is now evident, with good reason. I believe many citizens who made submissions to that commission and those who found time to attend and make presentations were misled. They were misled that there would be a government who actually cared and who would actually listen.

We have before us, in Bill 46, an incomplete piece of legislation, because we have a minister who lacks the ability to understand the construction industry. How can anyone expect good government policy to be developed when we don't have a minister capable of understanding that? I find it shocking and I find it unacceptable. Bill 46 is all about regulation and not about problem-solving. It is about increasing the cost of housing to make it more unaffordable at a time when housing starts in this province are at an all-time low.

When I began my comments this evening, I stated that Bill 46 failed to address some very important issues, and for the benefit of those watching, for those listening or for those who may choose to read Hansard , I shall elaborate. Firstly, when the Barrett commission was established, we were led to believe it was to deal with leaky condos. There was never any indication that there was a problem with all other residential units.

Secondly, the leaky condos were identified as a problem in the lower mainland and in parts of Vancouver Island, due to the coastal climate. So why is it that every region in this province will now be impacted by this legislation? As the advocate for all municipalities in this province, it is the duty of this minister to represent them fairly and to recognize that there are regional disparities that exist, and that to provide solutions, she must take into consideration these differences. We expect this minister to possess the knowledge and the wherewithal to understand that one-size-fits-all solutions do not work.

Has this minister considered the impacts of this legislation, the impact it will have on the interior regions, the northern regions and the eastern parts of this province?

Thirdly, another question is raised: has the minister identified the scope and magnitude of the leaky-condo problem? Just how large a problem is this, and what are the costs associated with this problem? We have no idea. The Barrett commission recommended a $250 million reconstruction fund while others have pegged the cost of the problem at close to $1 billion. That is a huge difference. So how did the minister arbitrarily decide to phase in the fund over a period of three years? How can the minister properly deal with this issue if she hasn't even begun to deal with identifying the scope and the extent of the problem?

I find it equally offensive and appalling that this legislation establishes two classes of condominium homeowners. This minister and this NDP government have absolutely no plans to offer any assistance to homeowners who have already paid out thousands of dollars to repair their homes. Those elderly citizens who have had to exhaust their retirement funds to repair their homes are out of luck. Those young families or first-time homebuyers who have had to borrow more from their friends or families, or even from the banks, to repair their homes are also out of luck with this government.

Essentially, all those homeowners who have already completed their repairs because they could not afford to wait any longer are not eligible for assistance. If I am incorrect, then I implore the minister to correct me when she offers her closing remarks on second reading. That is what I have seen in Bill 46. It abandons those homeowners who are desperate and had no choice but to proceed with repairing their homes.

I thought the purpose of this much-touted Barrett commission was to deal with all owners of leaky condos and that government was prepared to help those who have already suffered as well as those who will continue to suffer from this dilemma. That doesn't appear to be the case in Bill 46.

We have one class of citizens who have repaired their condos and are abandoned by this government, and we have a second class of citizens who haven't yet repaired their condos and will benefit from this legislation, because maybe they could afford to wait it out until now. I don't think that is fair. As my colleague the member for Richmond East, the official opposition critic for Municipal Affairs, stated very eloquently last week . . . . There are some very valid concerns that she expressed.

[6:45]

She asked why it is that this government would not consider provincial sales tax relief on materials and labour for repairs to these leaky condos. That 7 percent is a relatively small amount in the scheme of things, but it would have been a sign of good faith by this government. After all, it is an extra 7 percent that this government will be receiving only as a result of the necessity to repair. It is not a forgone opportunity of revenues, because that opportunity to receive this 7 percent would not have been there for this government if it were not for the leaky condos.

I know that this government is able to offer a 7 percent PST relief. It's not a difficult thing to do, if they have the courage and the will to do so. I say that because not so long ago -- in fact, fairly recently -- this government turned over all of the PST that was collected from the sale of records, tapes and compact disks resulting from the tragedy of the death of Lady Diana last year. To turn over the 7 percent PST that was

[ Page 10570 ]

collected was a noble gesture by this government, because they did not want to benefit from such a tragedy. It can be done, Hon. Speaker. So why will this government not now offer that same noble gesture to those people who will be suffering from this leaky-condo issue and who will be required to pay out an extra 7 percent on materials and labour?

It is not on all materials and labour that they will be paying PST. It may only be a portion of those costs, because a portion which is labour, and strictly labour only, would only be subject to GST. It's not a huge amount that we're requesting for these homeowners. As I stated earlier, this government did show compassion in that situation. I would hope they would not want to benefit from this unfortunate instance and that they could seek the same kind of opportunity and afford this compassion to these people. Very simply, this government should not benefit from the misfortune of others.

As I stated earlier, this bill is all about regulation. It is not about homeowner protection, and that's why even its title is offensive. This legislation is about licensing residential builders to meet standards set by government -- a government that hypocritically eliminated the building standards branch. There's one very clear objective of Bill 46, and that is to raise the cost of buying a home in every corner of the province.

From my comments, I think that the minister and all members present here would gather that I am opposed to Bill 46. I state my disappointment with Bill 46 -- a piece of legislation that may have started out with good intentions but ended up as a dismal failure. It fails to recognize the magnitude of the problem. It fails to deal with all homeowners and their families who have been impacted by this leaky-condo issue. I thought that this government cared, but from my viewpoint this government got a failing grade when it introduced Bill 46. I will be opposing it.

J. Wilson: I welcome this opportunity to stand and say a few words in opposition to Bill 46. I think we all recognize the fact that somewhere along the line there needs to be some buyer protection out there, but the way this government is attacking this problem is absolutely ridiculous. The approach is totally wrong.

It is going to have a devastating effect. It has the potential of increasing costs in new dwellings by up to $5,000. It is impacting legitimate contractors all over this province -- people who believe in doing a top-notch job when they construct a dwelling or a condominium or whatever. All we have to do is stop and think for a minute. These people are already fleeing this province. They're going to Alberta, where the construction industry is desperately crying for qualified building tradesmen. They can go there; they can work, unhindered and unimpeded by government bureaucracy and regulation, and actually build with a building standards code.

It really becomes confusing when you look at what's gone on in the last month of this session. We've got three bills here. I really don't understand what this government has got against the construction industry in this province and against people buying homes in this province.

We look at Bill 35. It has the potential of increasing the cost of a new home by about $3,000, and this is going to be passed on to the buyer. We look at Bill 26. Suppose that you have a building going up that has a commercial component: we could be looking at a 30 percent increase in the cost of that building and those units. And now we have Bill 46, which has the potential of increasing the cost of a new home by another $5,000. Add this up. If it's a single-dwelling unit, we could be looking at an increased cost of $8,000 on $100,000.

Under Bill 26, if it happens to be a complex with a commercial component, we could be looking at another 38 percent on the cost of that dwelling. No one can afford this. At a time like this, when our economy is in the gutter -- it's right down at the bottom -- people don't have money to invest. They need to cut costs here, not increase them. This has the potential of destroying the opportunity to ever own a home for thousands and thousands of young people in this province. That's terrible.

An Hon. Member: You can buy one in Calgary.

J. Wilson: We can go anywhere in Canada and buy a home cheaper than we can buy it in British Columbia today.

When you go back a little ways in time and look at what happened, this government can blame no one except themselves for the disaster that's happened with the condo situation in the lower mainland and the southern part of the Island. They didn't see to it that we had a set of National Building Code standards adopted in this province that would have prevented all this from happening. That is where the blame lies. You can't blame a few contractors. Well, yes, you can; they do a shoddy job. But they have no regulations there to say: "This is what you need to build by; these are the standards you need to go by."

So what do they do? They create another bungling bureaucracy: "House Renewal B.C." We've seen what happened to Forest Renewal B.C. It is the biggest bureaucratic nightmare that's ever existed in this province. Now we have another one in an infant stage -- that is just starting to develop -- and it isn't going to be any better than Forest Renewal B.C.

To start with, funding will be inaccessible. If you've put your own money into something -- you've taken your savings and invested them in trying to fix up your leaky condo -- you can't get any help to recover some of that. Nope, the only way you're ever going to get a nickel out of this bureaucracy is to declare bankruptcy -- become destitute -- and then maybe go to this administering body on bended knee and beg. You might get a little bit of help, but it probably won't be enough to plug all of the leaks.

We don't need more unwieldy bureaucracy creating unproductive jobs in this province. Just step back a minute and think about this. With a little bit of common sense you could solve the problem overnight: adopt a set of building standard codes. Let a building inspector approve the building as it's going up. We don't need a bureaucracy to tell people what to do, collect money from them, put it into an account and let it build. It creates more jobs . . . more in-your-face government invasion.

The other thing that really infuriates a lot of people in this province is the cookie-cutter approach they're taking with this. You go anywhere north of Hope . . . . Do you think people are happy when they see this piece of legislation? Not likely. Let me tell you something. Right now, when you go to the north, your building costs are already higher than they are in the south. You've got weather problems that are never thought of in the lower mainland. Insulation in a building is quite critical. You've got to construct a building to carry a snow load in the winter. These are things that you don't have to consider down here.

They do have some standards in most places. The costs there exceed the costs that exist in the lower mainland. To add another cost onto the people that want to build a new home is not right. That's wrong.

[ Page 10571 ]

Hon. C. Evans: We just want you to know that the fact we're not haggling doesn't change the agreement.

J. Wilson: I'm really pleased to see that the Minister of Agriculture agrees with me that it costs more to build a house in the Kootenays than it does on Vancouver Island. That is nice to know. It really is good. Maybe the minister can step in here and intervene and save some of the people in the interior the hassle with the province that they're going to be faced with if this legislation ever goes through.

If I can recap a little bit here, we don't need a cookie-cutter approach in this province; we don't need added cost for homebuilders who don't deserve it. We do have a lot of people in the lower mainland and southern Vancouver Island who have been stung really badly. Who's to blame? None other than those members on the other side of this House. Perhaps some of these people should get a little help. Do you know where the help should come from? Some of those people have put their life savings into repairing the leaks in these buildings.

Why don't some of the members opposite volunteer their pension fund to help stop some of these problems? What better use for that money could we ever think of than for these members to throw their pension plan into a project that would go towards fixing up some of these leaky buildings? After all, they are responsible for what happened here.

With that, I would like to voice my opinion here and say that I cannot in any way, shape or form support such a ridiculous piece of legislation.

[7:00]

V. Anderson: Bill 46, the Homeowner Protection Act . . . . It's interesting, when we're dealing with bills, that one of the last things we deal with is the title. When I first came here, that was a surprising thing; I thought it was the wrong way around. But more and more I've come to realize that the reality is that what is on the cover is not necessarily what is inside the book. When you go through the book, you have to ask if it's the wrong title on the front -- and perhaps you should change it. That's certainly true in this case, because this Homeowner Protection Act will do anything but protect the majority of homeowners in British Columbia.

In my particular riding we have many homes that have been covered with tarps for some time. I think of one particular block, which is there for persons on low income, that was a great development in its early stages. But over the last number of years it's been covered with tarps from one end to the other across the whole building. Likewise the seniors building next door to it, which is relatively new -- built since I came into the Legislature in 1991. Most of the other buildings were built just prior to that time.

One of the realities that is expressed by the leaky-condo definition is that it takes time for these buildings to fall apart, because the water seeps in and stays on the inside and gradually rots away, so the whole side of the building has to be torn apart. I've gone in to the centre courtyard of those buildings. Everyone there is working with a hardhat. There's water dripping down on the corridors and the walkways, the elevator is not working, and you have to go on bypass routes on the stairways that you usually take.

It's just like a war zone inside the courtyard, where you're presumably protected from the street. Interestingly, this act has absolutely nothing for persons in those buildings. They have been working to reconstruct, to take out their own money and build back again the building that was there for them. This bill does nothing for them, because they will have completed most, if not all, of the renovations by the time this comes into effect.

What we have here is a paper tiger, a fictitious opportunity to meet the needs of our people. What we have here is another set of organization . . . . I've been part of activities in the general community. Every time they came up against a problem, they would set up a committee to study it. By the time the committee had studied it, the problem had either vanished or become beyond correction. So you would set up another committee to study what the first committee failed to study or to acknowledge the change that had taken place.

Every time this government comes up against a problem, they want to establish another paper structure. They want to set up a bureaucracy of people to come in to do what the ministry should have been doing all along. They want to take it outside of the ministry and give it to some "independent persons."

Over the history of government, the best government has been that which has been able to do things as part of their everyday work. They don't need to pass it on to somebody else, but they do need to cooperate with those who have the ability, the skills and the knowledge in the community -- that is, to cooperate with the real estate, the building and the labour communities. Each of these has the opportunity to develop in a way that would meet these problems before they start. Given the opportunity to develop their pride and to use their skills, each of them takes pride in what they do.

What I'm suggesting is that we've gone about this in the wrong way, in this particular bill. Here we're trying to set up regulations, licensing, fees and examinations which have nothing to do with the everyday operation of building a building. It has nothing to do with those who plan and construct it within the local communities. It's another layer of committee structure. In another context, let me use the illustration of government in another area. We're all aware that the ministry was trying to help the children of our province.

What they did was to build up a bureaucratic structure of some seven or eight layers. When this was pointed out, they said that they would change it because there were too many layers. So what they did was replace it with 16 layers, twice as many.

This is what's happening in this particular bill. We're adding bureaucracy onto bureaucracy without dealing with the problems. Even if this system were, in the final analysis, to have some positive elements to it, it would take at least three to four years before it could work through to develop the regulations and licensing and to spread these across the province. There would be thousands upon thousands of dollars spent in the very process. The money that they collect from builders, according to the regulations here, would go primarily into the system itself.

Very little of it would be left to go to those who need it the most. In the meantime, the present practices will continue. At least, they'll continue from the point of view of what this bill is able to do about them. If they do not continue, it will be because of the builders and contractors themselves taking their own pride into account and beginning to take control of their agencies and their communities themselves.

For the most part, these are competent professionals. Not all of our buildings have been affected, except those buildings that were under new codes that they thought had been researched and studied even before they were brought into being. So many of our difficulties were not with persons disobeying the building codes that were provided for them;

[ Page 10572 ]

they were working within the building codes. The fault was in the very code itself. This legislation does nothing to correct that particular account.

One of the recommendations that has come forward with this legislation is asking the federal government to forgive the GST on building products that might be used in remodelling and reconstruction. It seems strange -- the very government that is willing to ask the federal government to forgo the GST is not itself willing to forgo the PST, the companion amount of taxation. Then when the federal government says, "No, we're not willing to do that," they rail against them, and say: "Why not?" Probably for the same reason that the provincial government is not willing to do away with the PST.

If we ask others to do things to help to rectify a situation, we must be prepared to do the same ourselves.

One of the realities is that the very people who have been involved most in the problem -- that is, those people who have leaky condos and leaky buildings -- are the ones who have been heard in

part in the Barrett commission: but their comments are not reflected in this legislation. They are the very ones who are doing the building, and who reported to the Barrett commission; but their observations and recommendations are not reported in this legislation.

We would ask the ministry and the government to go back, re-read the presentations that were presented to them, and in the light of them, bring forth simpler, more down-to-earth, more practical legislation that enables people not to get caught up in dealing with administration, but to get on, in reality, with the job. This bill will not provide that opportunity.

J. Weisgerber: It's a pleasure for me to rise and speak to Bill 46, the Homeowner Protection Act. I want to do it from a northern perspective, from the point of view of a northerner looking at this problem, which is primarily one in the lower mainland and southern Vancouver Island. It's certainly a coastal problem as opposed to an interior or northern problem.

Let me start off by saying that I and, I think, most northerners have a good deal of empathy for people -- retired people and young families -- who invest their savings, perhaps their life savings, in a home, a condominium, and then find that it leaks, that it's not worth what they paid for it, that the condo fees and assessments have gone through the roof and they're looking at having to borrow money in order to make repairs to this home that's relatively new. We should all understand that that's a big problem; it's a serious problem. It's a horrific problem in some cases.

I've had some experiences here in Victoria in a condominium that I bought. It was ten years old; it was leaking. We were able to get it repaired, but it gave me a bit more understanding of the challenges that are faced by people who own these buildings. But I also have to reflect on . . . .

I'm glad to see that the Minister of Agriculture is here, because a year ago farmers were coming to this same government to say that not only their homes were at risk but their farms -- which represent their homes, their jobs and their pension plan all rolled into one investment -- were in fact at risk because of a series of weather conditions well beyond their control. And what did they ask the government for? They asked for a number of things, but front and centre for many of the groups was no-interest loans, zero-interest loans. Many of the farmers felt: "Gee, that would be fair; that would give us an opportunity to borrow and tide ourselves over." The government rejected that.

[7:15]

The minister came to Dawson Creek -- to his credit, came a number of times, met with the farm groups -- but he told them flat out: "No no-interest loans.

We'll give you a loan guarantee, but at market rates." And I'm trying to rationalize in my mind what makes a condominium owner in Vancouver, who has his home and his savings at risk, somehow a more worthy and deserving citizen of British Columbia than a farmer who has a few quarter sections of land -- perhaps not worth any more money than the condominium, but something which he's got his life's work wrapped up in; it's his job, it's his retirement and it's his home all in one.

Quite honestly, I can't rationalize in my mind how you can say: "Yes, we're going to give this group of people no-interest loans, but sorry, fella, you farmers up north must find another way. Go buy crop insurance, put a crop in next year." I'm not even disagreeing, and the minister will know that I wasn't harshly critical of the government's decision. But surely to goodness, fairness and equity demand that there be a standard that is applied generally, fundamentally, categorically to British Columbians regardless of where they live.

To the Minister of Municipal Affairs, I want to also say that I'm disappointed that she apparently chose to ignore Mr. Barrett's recommendation with respect to the application of his recommendations to coastal communities only. The minister shakes her head, so we'll have an opportunity to explore that.

Certainly, the Barrett report . . . . His recommendations were reported as applying only to coastal communities, and that would make a good deal of sense to me. I think that if Mr. Barrett made those recommendations, he made them wisely. In a northern climate where you have a lot of cold and low precipitation, you don't have problems with water leakage. You may well have freezing pipes, basements that crack because of frost that goes down seven or eight feet, water lines that freeze going into the house from the street -- those are all very real problems for northern homeowners.

You may have serious heat loss because of a lack of insulation, you may have condensation in the house because of a lack of air exchange, but you don't have a problem with leaky condos in those cold, dry climates.

So I don't know and I'm hoping . . . . I have a sense that the minister will respond. I don't know how or why you would apply these higher standards to northern communities. If you're going to take this sort of one-size-fits-all approach, then let's require people in the lower mainland and Vancouver Island to make their houses frostproof for frost that goes down eight feet. It would make no sense. It would add significantly to the cost of the house, but why not? If we're going to apply one set of standards, why not apply those northern standards to coastal communities?

If we're going to apply coastal standards to northerners, then tit for tat -- if one's fair, the other should be. I don't think someone buying a condominium in Dawson Creek should have to pay for water damages or for some new construction techniques in the lower mainland, and I don't believe that contractors in Dawson Creek should have to adopt the same programs as those in southern communities.

If I've misread the legislation or misinterpreted Mr. Barrett's recommendations, I will be happy to hear either one. I've read the legislation rather carefully, and I don't see any exemptions for people living in different parts of the province, so I can only assume that I have somehow misinterpreted Mr. Barrett's recommendations. But I think I haven't done that either; I don't think I've done either.

In closing, let me just hold out this hope: it's not too late for the government to bring in changes that would accommo-

[ Page 10573 ]

date the various climatic differences around this province. It's quite honestly probably too late for the Minister of Agriculture to come in and bring some fairness to the farmers in line with the assistance being given to condominium owners, and I expect that that's not to be the case. This is a serious problem. I do have real empathy for people facing these problems. I wish this government showed a bit more empathy for my constituents when they're facing similar kinds of tragedies in their lives.

R. Thorpe: First of all, I'd ask leave to make an introduction.

Leave granted.

R. Thorpe: Joining us tonight is a good friend, Harvey Grigg, and I would just like to welcome him to the House and ask the House to make him feel comfortable.

It's a pleasure to speak to Bill 46. It's titled the Homeowner Protection Act, but in fact it really is the homeowner tax act. When you take money out of people's pockets, it's a tax. This bill, as the member for Peace River South said -- and I agree . . . . You know, we had thousands of people who had very, very serious problems; families were put into very, very difficult situations. And this government went through the sham of creating false hope for those families and those individuals.

Let us say here clearly that this bill does absolutely nothing to assist, to put out a hand, to show any caring for those families who have been hurt by the leaky-condo situation. This is not the decent way to help people who have found themselves in this situation.

This bill guarantees one thing: it will raise the cost of housing in every part of the province, from the north to Richmond to Penticton in the Okanagan. When you look at the increased fees and the licences and the taxes, it's upwards of $3,000 per home -- at a time when our economy is in recession, and the homebuilding industry is almost non-existent. The low levels of building we're at now are unprecedented.

So one has to ask oneself: what is this government doing? Why does it now want to destroy yet another industry in British Columbia, when it is trying to fool British Columbians that it is helping the families with leaky condos? Why would they want to do that? Why at this time would this government want to introduce more bureaucracy? We know that one of the spins they're going to try to tell us, as a result of Bills 43 and 44, is that they're going to streamline and cut red tape. This does exactly the opposite.

There's been absolutely no cost-benefit analysis done for this bill. There is no benefit to those who have been adversely affected. This bill flies right in the face of the first recommendations that were tabled, I believe, on July 8, by the first Business Task Force report on cutting red tape. It was chaired by the Minister of Finance, and the Minister of Small Business is on that committee.

And what have they done? Layered on the red tape. First of all they didn't cut any; now we've got more mountains of red tape. Soon people will be visiting British Columbia to see the red mountains. Why, why, why must this government always play politics? Why can it not just tell people the truth? "Sorry, we can't help you." Why do they now go and develop a bureaucracy that is going to cost who knows how much? Who knows what the real objective is? Maybe the minister over there does and won't share it with us.

The homeowner protection office . . . . No, it's a homeowner taxation office. But the board is going to consist of three appointed members. Will any of them be qualified, or will it just be some more friends and insiders at the trough, spending the money, taking the money? Who knows? I'm sure this minister will not be making any patronage appointments into this area -- I'm sure of that. They'll be MLAs. Some of them over there have building experience. But no, no, hon. Speaker, we want those with successful business experience to serve.

This homeowner protection office is yet another NDP off-load. This office will do the same services that this government eliminated just a little while ago: the building standards branch. But it really hasn't helped the families. That's what I thought the government was going through when they conducted that multi-week, costly -- I understand it must be around a million dollars -- Barrett commission to deal with the people's problems. But they haven't been dealt with. What we do end up here with is a bill that, once again . . . .

As our colleague from Peace River South said, the people that live in the Okanagan feel for the families that have been affected. But they're saying: "Why do I get to pay yet again? Why do I have to continue to pay?" You know, the housing industry in the Okanagan right now, to be kind, is struggling. People are struggling to be able to afford to buy a house today. And here we go: $3,000 more tax, more bureaucracy; nobody's helped in the leaky condos, the housing industry is getting killed and people are denied affordability in housing.

This bill is wrong on all counts. It's going to strangle the homebuilding industry that's on life support right now. It's going to affect the families and the suppliers, all because the politburo has decided we need more bureaucracy and more costs to load onto working families that are struggling.

This bill kills jobs. Really, it's a deathblow to the building industry -- one that's not acceptable. But most importantly, what I do want to say is that we do feel . . . we do share with the troubles that many of these families have had. Surely there is a better way than to introduce Bill 46, this homeowner tax act. I will proudly, on behalf of my constituents, stand against this bill, because it is fundamentally wrong. It does not help those who need to be helped, and it places further taxation on those who can least afford it.

D. Jarvis: I rise to say a few words on the Homeowner Protection Act, Bill 46, that this NDP government has now decided they want to foist on the people of British Columbia. It's an interesting fact that hundreds if not thousands of condominiums -- especially in the lower mainland -- underwent a phenomenon that over the past half-dozen years can only be considered a horror scene for the owners of these condominium units.

[7:30]

This phenomenon especially, which we all know as the "leaky condo" phenomenon, occurred primarily to either the first-time buyers of condominiums or the last-time buyers of condominiums -- that being the seniors who had sold their homes and retired and expected to live in the condo for the rest of their lives. However, in most cases these individuals had limited funds available to them. As I said, it was probably their first or last purchase, so the funds were limited. We can see that, especially after this situation arose when it cost them hundreds of thousands of dollars in a lot of cases to do the repairs.

The condominium market in this province -- especially in the lower mainland -- is almost the bottom or the top of the

[ Page 10574 ]

food chain when it comes to the residential building industry. As I said, first-time buyers are those who first come into the market, and that's all they can afford -- limited funds; they buy a condo. Seniors are the ones who sell their houses and move into the other quadrant or third of the condominium market, expecting to retire and live there for the rest of their days. Then we have that middle

section of it -- those who are coming in on an investment basis. Those are the ones who are ostensibly providing at least 40 percent of the rental market in this province. Now, if we allow that industry to collapse -- which is an industry that provides approximately $12 billion per year in the provincial economy -- we're going to have one heck of a problem in this province, which is already unbelievably debt-ridden, with no sign of any kind of recovery.

Of course, we see that this leaky-condominium phenomenon, as I stated before . . . . When it started, the owners were left with a very tragic situation, and you can only appreciate it if you ever have seen one of those situations, rather than the pictures you see on television. How can they possibly repair the damage? The owners looked at it and said: "This is the normal sort of situation." Is it a caveat emptor situation, where it's "Buyer beware," where they are left on their own? Or would the contractor who originally built the premises come back and be there to rectify the damage or at least to ensure that no further damage would occur?

We know now that they were, in most instances, ignored and left on their own for various reasons. The question over this past year has been the culpability issue. Who is responsible? Who is accountable to the owner who makes a purchase in trust that their home is safe -- basically out of the rain? No one knows -- unless, as I said before, you've experienced it or have gone out and actually seen the damage that's been caused by some of these leaky condos -- what these owners have gone through, both physically and mentally. There's a lot of anguish out there.

The only group of people that I can consider not responsible for this situation are the purchasers themselves, the condominium owners. The original sort of home warranty law that we . . . . The first one that occurred was about 4,000 years ago, and that was either the code of Hammurabi . . . . You may recall that the code in those days was that if a builder built a house and it fell down and someone was killed, then he had his head chopped off. At the same time, if they built a house that was improperly constructed, the builder was required to go back and repair that house on his own. Four thousand years ago, that was the first warranty.

How have things changed? Our whole society has changed since those days, and it's not the builder that should be considered the culpable person in this instance. We have seen that there really is no specific culpability placed on the builders, the architects or the municipal inspectors who applied the bylaws that were put out -- the building codes -- on the subtrades and the moneylenders, the designers and the manufacturers of what we know today to be questionable or even shoddy products.

In most instances there really are no bad builders. There are good builders. There are flyers -- I was in the business for 18 years and I saw them -- but they are few and far between. As I say, there are good and bad builders, both union and non-union. When they construct a building, they are building to the specifications and designs that are dictated to them by the engineers, the contractors, the architects and the planning departments.

It's hard to really consider that builders and tradesmen themselves were wrong when it comes to the construction of these condos in question. In most cases they were simply following the specs that were given to them. They did this in a very professional or journeyman way, in most cases. If the building leaked, it was obvious that the design was wrong in the first place; it was designed wrong at the start. Therefore, where does the culpability lie? Who are the bad guys in this instance? Who could be held responsible? We can point the finger at many, but no one person can be held accountable.

It's an interesting fact that only a few years ago we didn't have any leaky condos. They were virtually unknown in this province. Until such time as government agencies -- federal, provincial and municipal -- started to more or less intrude into the building industry for reasons of their own, without much investigation or concern as to the results of their actions, we didn't have a problem of leaky condos. Planning departments and design panels at the municipal level pushed for the west coast design that was used in California.

It was aesthetically nice to look at, but in a wet rain-forest climate it was very questionable. They pushed for the maximum square footage and for the building envelopes to be reduced -- i.e., for the removal of the eves in a lot of cases and the overhangs; all those were eliminated over a period of time. The materials used were never tested for the west coast environment. They did not take into consideration that the water penetration was evident. They used the acrylic stucco that absorbed water.

Along with this, the inspectors were not aware of the potential problems; perhaps they relied too much on the professional credits of those doing the designing and planning.

So, as I said, the municipalities adjusted their guidelines on the square footage ratios for construction, and this in turn caused the reaction of designers and architects to change the overhangs of the roofs, etc. Building codes were changed for the sake of designs and the size -- actually for population control instead of for the improvement of the product itself. No concern was considered that California styles and materials did not apply to the rain-forest environment of the southwestern area of British Columbia. This government was aware that there was a problem coming.

They'd had a study done about two or three years ago, and they buried it -- we have not heard about it. At the same time, the B.C. home warranty plan program did a study; they had a commission on it five years ago. That was buried; we haven't heard a word on it, either.

So everyone out there seems to be culpable, but you can't point a finger at a single person.

As I said, this industry provides $12 billion per year to the provincial economy. So when everyone got rid of the overhangs that stopped most of the rain, and they introduced the acrylic stucco that absorbed dampness, and they clad the inside of the building and the exterior walls, and they created the big vacuum that retained the water that comes out of all wood products unless you're building with an improved product that has been treated, we were then left with a condo that . . . all it can do is become a vehicle to absorb dampness and to rot. It won't keep the water out; it holds all the water in.

In the end, we don't know who was culpable, who was responsible. We can't really impose it on any individual or corporation or government. There's absolutely no outside solution available from those who in essence were responsible. So in the end it would almost have to be caveat emptor or "Buyer beware" in this instance. But that still doesn't help the poor people who were the innocent victims to start with.

It was this socialist government that brought in Mr. Barrett on his white horse to ascertain what was the cause and who was responsible. If you read the report carefully, you'll

[ Page 10575 ]

find out that he never does find out who it was. He rode onto the scene to try to ascertain guilt -- whose responsibility -- and offer assistance. Well, there's an untold dollar cost of this review that has resulted, and it's a very questionable plan, so far as I'm concerned, to control the contractors and the builders. It'll cost this province a lot of money in the long run if we allow this situation. The cost of housing will rise. Builders will simply decide that it's not profitable to work in B.C. Profit's not a dirty word; they need profit to exist. So they'll move into other jurisdictions.

As I said, the plan is to control contractors to ensure the repairs so that the leaky condos that are not already repaired are fixed up. As I said, there was no culpability of the builders or the inspectors who didn't inspect the building properly. We haven't changed their bylaws. This bill will not do anything, in that instance, to control designers and architects. Nor is it going to ensure that the industry itself can possibly look after their own plan to ensure that something happens -- which should have happened anyway, and it's been mentioned before in the House. Once the government interferes, it'll cost the taxpayers nothing but money in the long run.

We ourselves, through our member for Richmond East, put forward a proposal to the Barrett commission. I think it was a very balanced report, and most of our ideas were included in the Barrett commission recommendations. It's not that, as I've heard it said, we are trying to protect certain individuals in this. I think the blame can be spread around quite a bit.

In the end, the Barrett report still didn't come out with any answers on how to build a residence in a rain-forest environment. To expect that there is a problem that can be answered by this government is taking a long shot at it. This government can only do so much. They've intruded into the equation now and created this new warranty plan that's going to cost the purchasers money in the long run. Yet no conclusive plan is down in writing so that these occurrences will not occur again.

No true investigation was made of building standards and the outdated building codes, which if not changed will result in substandard building in the future. That won't keep the rainwater where it should be -- that is, outside of the house.

[7:45]

Hon. Speaker, we see in Bill 46 not only an expansion of the leaky-condo problem but a warranty protection plan that is going to be expanded into the single-family and detached-housing market and an extraordinary expansion of the bureaucratic building standards branch by this socialist government. The government eliminated the building standards branch just a short while ago, and now they're going to create it again. This bill will create an expensive bureaucracy. We can see that's what is shaping up.

The cost of housing will rise, and this government will again cause further damage to an already very delicate economy that we have in British Columbia today. We believe that there are other procedures to solve this problem. These will be proposed and stated when we get into committee stage.

I think that this government went about the settlement the wrong way. They certainly didn't go after the federal government the way they should have. Anyone knows that the federal government, as mentioned by the Minister of Agriculture in question period today, doesn't come in and negotiate on interests or taxation. They come in if they see that it's a disaster. They'll come in and go in on the whole thing all at once. They don't come in piecemeal; they come in all-or-nothing.

We know the track record of this government in negotiating with the federal government. It hasn't been that good. As I said, the feds don't negotiate low interest or partial interest; if it's a disaster, they're going to come in. I know that the minister probably means well, but I don't think that she can negotiate her way out of a supermarket at this point.

Maybe that's not a very nice thing to say, but let's face it: this government has had their opportunity to negotiate their way out of this with the federal government and perhaps bring better relief for the people in this province, but they don't seem to really care that much. If they were really interested in the homeowners and were really the compassionate government that they say they are, why does this bill exclude those that have already repaired their premises or their unit on their own? I mean, it's about being hypocritical. So on that premise, I cannot support this bill as it stands today.

R. Coleman: I am pleased to stand and speak this evening with regard to Bill 46, the Homeowner Protection Act. I want to sort of try to capsulize the previous comments of my colleagues into what this bill is really all about. What this bill is about is failure and about glimmer. It's about the failure of government to recognize its own culpability and what it did to the people who own condominiums in this province. It's about the failure of a government to recognize how they could help those people out in a time when they need help.

It's about glimmer, because there is a slight glimmer in the Homeowner Protection Act that may or may not assist us with some construction difficulties in the future.

Having said that, we also have to remember it's about failure, because this is the government that shut down the building standards branch and is now going to re-create it in the form of the homeowner protection office. If the building standards branch had been in place, they would have been reviewing building codes and what have you back a number of years ago when they should have been reviewed in the first place. There are literally thousands of homeowners in the lower mainland who are affected by water penetration and water retention in buildings. The list of those who are responsible is lengthy.

I want to tell you who they are. I want to tell you why they are, and then I want to tell you why government is failing the people of this province by not recognizing their own culpability in this problem.

Let's start out with the federal government. The federal government has a National Building Code which did not take into consideration the coastal climate of British Columbia. In having the National Building Code . . . . The federal government has an agency called the Canada Mortgage and Housing Corporation. The CMHC approved mortgages on units on the west coast. They also insured mortgages on units on the west coast, and in doing so, they insured the residential construction of those units on the west coast.

During construction, because CMHC had responsibility to the lender that they were insuring a loan to, and to the federal government, they inspected the projects. They approved the progress draws for the drawing of the mortgage against the units. And they signed off on those mortgage draws with their inspectors and approved the progress of the construction.

Where is CMHC today with their low-interest loans or loan guarantees for the people whose assets they want to cancel insurance on and seize? Where are they today? They're not in the equation, and they should be in the equation. That's their culpability.

On the provincial government level, this government failed to react years ago to recommendations to fix the problem. They failed to react to questions that were posed to them

[ Page 10576 ]

in the estimates debates of this House two years ago. They accepted the National Building Code, and they eliminated the building standards branch. Then in the late eighties or early nineties the provincial government changed the Building Code in B.C. to where we wrapped buildings differently. So rather than having what we used to have -- four to seven exchanges of air per hour in a building -- we went down to one to two exchanges per hour. We created wrapped buildings sealed up where moisture couldn't get out. As a result, we created vacuums along the walls, and those vacuums up against things like acrylic stucco will suck water into a building.

At no time, during estimates when we were looking at this problem or in discussions with the ministry, has the ministry at any time admitted their culpability for their own Building Code. They'll try to tell you that they're only responsible for health and safety issues in the Building Code. Yet they will adapt that code to snow loads in construction zones, like Whistler, that are applicable. They adapted it to this -- the way we wrap buildings -- and do not take responsibility for it.

What do they do? They're prepared to put up millions of dollars that somebody else has to pay back, by putting a tax on other units to be built in this province. They're not meeting their responsibility. The provincial government has a responsibility here. The Barrett commission missed that point, the minister missed that point in estimates, and we've missed that point in this particular piece of legislation.

On the municipal government level . . . . The Minister of Municipal Affairs is familiar with this, because she sat on a council that did this, that changed how the calculation of FSRs on buildings was moved from the footings to the eaves. The reason that was done was so that municipalities could push the industry into building a specific type of building with no eaves in a wet coastal climate -- something that looked like what you would build in San Diego, Los Angeles or other areas in California with dry climates.

The planning departments of those municipalities pushed that west coast design on the industry. They demanded the use of materials for aesthetic reasons -- i.e., stucco rather than climate-acceptable products. They placed demands on architects and developers that basically ensured inadequate designs -- particularly relative to the calculation of FSR, which effectively removed one of the most cost-effective ways of controlling water against the building. That would be the overhang. Taking the overhang off the buildings is one of the creations of the problem here.

Inspectors relied heavily on the seals of other professionals. As a matter of fact, in the city of Vancouver you can pay extra money and have a certified professional do the building inspector's job for you. The city didn't want to have to have the staff to do the job that was supposed to be done. Council pushed the building's looks first. They would sit with design panels in council, and they would look at buildings from an aesthetic perspective only and not from a practical application to the use of that building in a particular climate zone.

When units were allowed to be built without overhangs, the problem was accelerated. That problem was accelerated because municipalities didn't want those overhangs. So there's culpability at the municipal level as well.

What about the developers? First of all, developers allowed for designs with the purpose of expediency. They oftentimes dealt with weak, first-year warranty support to the buildings. This is an actual responsibility, however. The developer is the builder's employer and has responsibility to that warranty, as well. If you look at the good developers in this industry, when a contractor didn't follow through on his warranty the developer stepped forward to the plate, because he felt that it was his responsibility to do so. That didn't happen in every case.

The architects bought into designs that did not work in a west coast climate. We had studies on this. They were sometimes weak on site inspections due to cost-cutting on the fees and the push of the industry to cut the costs of the professionals. Sometimes things would go by the wayside because they were weak on site inspections. The engineers drew working drawings, and they sealed their work. They have a responsibility for the completion of the actual construction to specifications, but sometimes those specifications can be changed -- and sometimes without the knowledge of the professional. That's a responsibility of the professionals who have responsibility for that.

The contractors run the job site. They actually build the building. They get on that site, and they see that the building gets built. They are supposed to build it to the specifications that are in the drawings drawn by architects and engineers -- structural, mechanical, etc. Their responsibility was not to cut corners, not to go away from the construction design that was laid out for them by the professionals that were hired. Oftentimes it happened when a corner was cut. Because the engineers or architects were not made aware of it, these things would slide through. But their responsibility was to that person.

They're not certified; they're not regulated. The Homeowner Protection Act moves in that direction, and the industry will have to adapt to this act to see if this works or to try and work with the act to see if we can deal with this. Contractors could set up shop without meeting any litmus test. There are good and bad contractors, which did directly impact on some of the quality of construction. But remember that they were building to the specifications of the National Building Code and of the provincial Building Code, which was set down by municipalities and designed for them by other professionals.

There was another player in this industry that has a responsibility today. That was the bonding companies. You know, if you were to go onto a job site and you were asking who built it and somebody said it was a bonded contractor, it would give you, in your mind, some sense of the level of quality. But all it was was that the bonded contractor would post a bond so they'd get security, thereby legitimizing the process of the project. But bonding companies were very difficult to deal with whenever there was a claim to respond to problems, and this often led to the fixing of the problem not being done to the level it should be.

Again, the subtrades. There are good trades, there are bad trades; there are union trades, there are non-union trades. But the quality of work in trades has always depended on the quality of the group or the individual doing the job. It has never, ever been because of who you belong to or who your friends were. In the cases of a good contractor and good engineers and architect, good trades were on the site as well.

[8:00]

Now, in addition to this -- when we're looking at culpability -- we also had the post-ownership of the unit, and that comes back to condominium management. Even with the best design and construction, a building like any other product of man is going to have some faults. It requires proper maintenance, which is the key to a successful life span. Build-

[ Page 10577 ]

ing management plans should be followed in all cases. There's a level of professionalism that has to be brought into the management of property in this province. In this act and with the act we did earlier, the Strata Property Act, we are now moving condominium management and management companies to the level of licensing where they should be and should have been at for some time.

For the most part, management companies do not follow acceptable and rigid enough systems to ensure a building's long-term future is maximized -- i.e., things like gutter cleaning, drain blockages and things like that -- which in a west coast climate will only accelerate other problems that you bring into the marketplace.

In self-managed buildings, which is where a group of homeowners decide not to hire professional property management to run it but to manage the building themselves, it's important -- as I was telling the Minister of Finance earlier today in another debate -- that they have some sort of a maintenance program put in place and that we go into a process of training those people so that they know how they should manage their buildings and they don't scrimp on their operating budgets, because they'll find out in the future that penny-wise will become pound-foolish and the repairs will be more expensive.

We also had a new-home warranty established to protect consumers. But more than anything else, all it did was make people feel comfortable. When you thought you were buying a warranty, it was nowhere near as comprehensive as you thought it was to actually protect the consumer from the problems that exist today. We're going to change that, too.

But the bottom line is that if you take that few short minutes' walk through the industry, everybody is culpable. The only people who aren't meeting their responsibility here are levels of government -- in particular the provincial government, which changed their Building Code and wrapped buildings differently, and municipalities who took eaves off buildings and made them leak. And that's the bottom line as far as the culpability is concerned: everybody's got a little bit here, and some just aren't standing up to the table.

You know, I think the priorities here are to find long-term economic solutions to this problem for those affected by leaky condos by establishing some financial formula for these homeowners. We haven't gone there. We've only gone to where if you become bankrupt, if you spend every dime you have, maybe there will be a fund there to help you.

We have to set future priorities and standards to minimize similar problems in the future. Now that goes back to this home owner protection office, and this home owner protection office, incidentally, is going to be doing things like reviewing the Building Code. And it's going to be subsidized by the industry that builds residential houses and condominiums in the province. But interestingly enough, the act is mute on whether the Building Code changes and recommendations relative to ICI and large commercial construction are also going to be funded by the homeowner of this province by having to pay for those reviews as well.

The other priority is to establish a system of better consumer protection through a more comprehensive new-home warranty program . . . . Now, some of these things cost money. They cost money, and the consumer will pay. The consumer will pay for what has to happen in the future because of the culpability and the mistakes of government in the past.

There ought to be some options and some recommendations here. I have to wonder out loud: where is the CMHC, to provide insurance for loans to homeowners, even based on a 25-year amortization for the repairs, so that they can get an insured loan and actually do the repair to the unit; where's their exposure if the unit doesn't get repaired and they already have an insured loan at a high-ratio mortgage on the unit, and if there's a foreclosure and the unit gets sold, or it has to be repaired later? They might as well be stepping into the breach today and working with these people, rather than sitting on the sidelines.

You know, if you have a rental unit that's a leaky condo, you've got tax deductibility on the repairs that you have. But this government has not even discussed, looked at or brought forward anything that would allow a person that's an owner of a leaky condo to have the same relationship to the tax structure as a person that owns a leaky condo as an investment.

Municipalities are going to have to relax some of their building envelope guidelines to allow for overhangs to be added to some of these buildings. Because even when you repair them, a lot of them are still going to have the same problem facing them in the future -- that is, acrylic stucco on tightly wrapped buildings with no overhang, in a climate they weren't designed to handle. They aren't from this climate; they're buildings that were not designed to handle this climate.

For seniors and those on a fixed income, has anybody thought about having payments and deductibility deferred to their estate, and seeing how we can help them out with somehow being able to fix the asset that's their retirement home, so they can live in comfort without the disease that's facing them in the walls, like the mould and the mildew and the smell? We left them out. We forgot about them, because all we want to do is politicize one little government office, rather than deal with the issue.

One of my colleagues said earlier that the government called for the federal government to forgive the GST on construction materials and labour for repairing the leaky condos. But do you see anything in any of their documentation that says: "We want to forgive the 7 percent sales tax on the repairs and the labour for the cost of leaky condos"? They can't even take that little, minuscule step forward to do something that's right, that would show the people who are sitting in this situation that they're paying attention.

I don't even know that you actually read the submissions to the Barrett commission. You couldn't have, because they asked for that. And yet you ask for the GST to be forgiven. You always want to pass it off to some other level of government. You never want to accept your own culpability. It was your Building Code, and it was your wrapping that sucked the water into those buildings. It was municipal governments like the one the minister sat on that changed the building envelope guidelines for FSR so there were no overhangs on those buildings, and they leaked.

Where was the discussion of property tax deferral? Not there. You know, it's amazing that this government has had all of these recommendations put forward to them, and they've acted on next to none of them. It's amazing that the federal government has been the same way. But at the same time, the minister wants the banks to step into the fray with a bunch of money. She wants somebody else to pay for her generous fund that nobody will have access to by putting a thousand-dollar charge on every single unit that's going to be built in the province, whether it's built in a wet climate or a dry climate, until such time as that fund is paid up.

Then who's going to get access to the money? Your rigidity on the qualifications is such that you might as well be

[ Page 10578 ]

bankrupt. Now, what does that create? Well, I suspect we'll have $1,000 a unit going into a fund forever, and it's going to become "New Homeowner Protection Renewal B.C." It's going to become a boondoggle for the government and will do nothing for the people who are suffering from leaky condos. That's the people that have been affected directly today; that's the thousands of people that are out there today looking for some initiative from a government that isn't taking any. And it's about time you did. It's about time you recognized that you missed the boat and that this bill is only about your failure to really get it -- to really figure it out.

[The Speaker in the chair.]

You've got the reports -- some of them you've had for three to five years -- that tell you how to fix the building envelopes in coastal climates. Some reports, ironically, were done by CMHC, who are the people that did inspections on the west coast and insured loans -- reports done by this government of their own committee, which recognized the problems as early as the summer of 1995. Yet they haven't been acted upon. You should be acting upon those reports, because even if you do have the new homeowner protection office, if you don't have the building and code changes that affect this . . . .

By the way, when you make those changes, don't forget to say that they're only for health and safety, because you wouldn't want to take any responsibility for anything that got built in this province.

You have to adopt some of these things, like the best-practices guide for wood frame construction in coastal climates. You have to look at these things, because these things were done. They were done for a reason. They were done because people recognized the difficulty we had in the industry long before the government was prepared to recognize it and after they shut down the building standards branch -- which, as far as I can see, is all that they've done. You could tighten up disclosure requirements which will come with the new Strata Property Act.

Ironically, it's the Minister of Finance who brings forward

an act that's been in draft form and asked for in this province . . . . It went through an extensive public consultation process, and it was in draft form in 1994. We dealt with that legislation in July of 1998.

Interjection.

R. Coleman: My colleague asked me: "What's four years?" Four years is about 60,000 more leaky condos built in the province, because nobody reacted to the reports and the requirements in this province.

The bottom line is this: there have got to be some self-funding recommendations and some licensing and training. I agree. But at the same time, the hon. minister, the ministry and the government have to come up to the plate and recognize their own culpability. Not to do so is a fraud on the people of British Columbia who are sitting out there and suffering with this issue, having sat through the Barrett commission, having sat through this thing and realized that all they got was a forum to talk. Nobody was listening.

Nobody was paying attention, and they wouldn't even admit that it was their Building Code changes that started the problem in the first place. They won't recognize it today, they wouldn't recognize it in estimates, and they certainly haven't recognized it in this particular bill.

There are no clean players in this issue. The entire system has not met its responsibility to the consumer. We have to establish a viable solution and move forward. You haven't done that. We've had to react before, with urea formaldehyde foam in the construction industry many years ago. We've had to react before to other issues within our province and within separate industries. There are no winners here; there are just losers. The biggest losers are the people in the situation; the saddest losers are a government that will not recognize their culpability.

This provincial government turns their back on those consumers like they don't care. That's the big loser; the loser is the reputation of the NDP government of British Columbia, because of their incompetence in dealing with leaky condos.

G. Farrell-Collins: I don't profess to have the intricate and in-depth understanding of construction methods and the background on how this issue came to be the crisis that it is that my colleague the member for Fort Langley-Aldergrove, who spoke just before me, has. But I do have a bit of insight into the problems that this issue has caused for the people who have been unfortunate enough to end up owning a home -- a condominium in this case -- that leaks.

The problems that are associated with that are severe. For many people it means health problems; it means stress on the family, stress on relationships, uncomfortable if not unsafe and unhealthy living conditions. Ultimately, it means a huge financial expenditure on their behalf. In many cases that financial expenditure is beyond what those people can afford. They simply cannot afford to fix the home that they live in -- the single largest purchase that they'll probably ever make in their lives.

They simply can't afford to pay for the repairs that would allow them to live in their homes in a safe and comfortable manner. So they have to give them up; they end up losing their homes. They end up renting -- walking away from their lifetime of savings. Some people are retirees who have put all of their life savings into their home and find it gone -- washed down the drain.

[8:15]

It wouldn't be so bad . . . . It would still be bad, but there was an opportunity to catch this problem earlier, when it started to come to light. When the problems with the design and the construction methods started to come to light and have an impact on people, and people started to talk about it and complain about it, there was an opportunity at that time to do something. That was years ago.

Members have talked about the two reports that were issued on this issue in British Columbia. One by CMHC -- the federal housing lending agency -- was completed on November 22, 1996, almost two years ago. It made a series of recommendations to deal with the problem, which had been in existence for some time at that point. Nothing was done.

Then there was the report that predated that one by almost a full year. That was the report of the B.C. government's own Ministry of Housing, Recreation and Consumer Services task force into the leaky-condo problem. It started in the fall of 1995 and issued its report on January 31, 1996.

If the recommendations in either of those reports had been followed, or at least acted upon at the time they were made, hundreds of people across this province -- hundreds of people in my constituency of Vancouver-Little Mountain, on the slopes of False Creek and down by Granville Island -- would have had this problem dealt with. They would be living now in homes that are safe, homes that don't leak, homes that are comfortable. They would not be facing repair

[ Page 10579 ]

bills in the order of tens of thousands of dollars, and in some cases over $100,000, just to get their house back to what it was when they bought it.

When this finally appeared to become an issue for the government, I hoped that they were actually going to do something with it. Every year in the estimates process -- last year, the year before and the year before . . . . The member for Fort Langley-Aldergrove, who is our Housing critic, raised this issue on behalf of all the members of the opposition caucus -- myself included -- each and every year in the debates in this Legislature, urging the government to take action.

He highlighted the problems with the construction methods; he highlighted the problems, as he just did a few minutes ago, with the Building Code. He highlighted the problems that people were facing in communities right across this province and called on the government to take action to deal with them. Every year, he asked them how they were doing. Every year, if you go back and read the debates that took place, he was assured by a variety of ministers that in fact action was taking place -- the problem was being dealt with.

And then all of a sudden . . . . I don't know what happened, but all of a sudden, this year the Premier grabbed it as an issue that he thought he could score some political points on. He decided to commission an inquiry -- another inquiry and another report -- into the leaky-condo issue. Who did he choose to do the inquiry? He chose probably the most highly partisan politician to grace this building in the modern era: Dave Barrett. Trying to take an issue -- and as the Premier said, he didn't want it to be a partisan issue; he didn't want it to be a political issue -- and have Mr.

Barrett, with all due respect, take on that role made it clear from the beginning exactly what it was. It wasn't designed to solve the problem. It was designed to fix a different problem that the government had, and I'll talk about what that problem was towards the end of my comments this evening.

I hoped that the government was really going to make a difference, that it was really going to solve the problem in the future -- but, as importantly, help the people retroactively who are faced with this huge burden, a financial burden, a personal burden. I really wanted to support Bill 46. I know that my caucus is tired of hearing from me about it, but in my constituency, Vancouver-Little Mountain, about two-thirds of the people who live there live in condominiums. That's probably the highest number, percentagewise, of any constituency in the province. So I wanted this to work.

I wanted to see a piece of legislation that was going to do something for people, to stop this from happening in the future -- something we should have done a number of years ago -- but that, just as importantly, was going to deal with the people who are facing this crisis. They call my constituency office, they come in to see me and they write to me, telling me about their problems. I was hoping there was going to be something here. And it's not there; it's just not there for them.

For those people in the future, who are somehow going to have this problem solved . . . . Well, what is the government going to do in this bill? They're going to establish the homeowner protection office, which is now going to oversee a huge bureaucracy that is going to go out there and regulate every single person who has anything to do with the industry. It is going to put a huge amount of regulatory burden on them, which I doubt very much is going to make a heck of a lot of difference to the type of construction that goes on. I hope it does, but I'm not convinced of it.

It's also going add to or improve upon the home warranty. That's something it could have done two or three years ago, three months ago -- or today. But it's going to improve the warranty system -- something everybody had been calling for. The builders had been calling for it, for heaven's sake. It's going to improve the warranty system, starting January 1 of next year.

So as we're sitting in this House in the middle of July debating this, there are condominiums going up in my constituency which are probably going to leak and won't have the warranty, because of the delays in bringing that provision into reality. That's a tragedy. We know the problem; we've known it for a couple of years. We're debating it now; we're dealing with it finally. We've agreed that we're going to improve the warranty system, but we're not going to make it apply to the buildings that, this very day, probably had stucco slapped onto them or had a roof put on them. That's just negligence.

Those people who are going to end up living in those condominiums will have every right to come back to the members of this House and demand accountability for that at some time in the future.

Lots has been said about who's to blame for the problem. When this issue happened, it was the height of partisanship coming into an issue that need not have been partisan. The Premier said that Mr. Barrett's job was to go out and find the bad guys, to find out who was to blame for this. He said -- and I couldn't believe he said it: "No doubt the bad guy will be a Liberal."

Well, hon. Speaker, is that what this is about? Is that what this piece of legislation is about? Is that what the Barrett commission was about -- some revenge, some personal vendetta on behalf of the Premier toward some imaginary individual, who the Premier thinks was a Liberal, who built the condominium that somebody's living in? Is that what this is about? Is that what government in British Columbia has come down to? These are people with real problems, and they need real solutions. They don't need comments like that from the leader of our province; they need solutions.

There is more than enough blame to go around. There's blame for the municipalities and the Building Code; there's blame for the province and the Building Code; there's blame for the province for eliminating the building standards branch, which was responsible for that. As other members have said, there's blame for CMHC, which approved loans. There's blame for builders -- absolutely. There's blame for subcontractors -- absolutely. There's even a little bit of blame for people who purchased buildings without doing a proper inspection. Not all of them were brand-new.

Some of them were used, and people bought buildings that weren't brand-new -- that had a leaking problem, and they didn't get them inspected -- and as a result, they inherited a problem. So there's responsibility and blame enough to go around for everyone. So let's stop pointing fingers as to whose fault it is that these buildings leak. Let's find a way to deal with the people who are in crisis around repairing their homes and make sure that we do whatever we can that's reasonable, that makes sense and that's going to be efficient in solving the problem in the future.

And let's do it in a reasonable length of time.

What is it that people are looking for? The people who are in the crisis situation are looking for a few things. They're looking for tax deductibility on their repairs. As other colleagues have said, if it's a rental that somebody owns, they can deduct the cost of repairing the damage to their condominiums from their income. There's a tax saving -- a personal cost saving -- to them based on that.

There's also been requested -- in fact, Mr. Barrett recommended it -- an exemption from the PST, the provincial sales

[ Page 10580 ]

tax, on the labour and the cost of materials to do the repairs. Why should the provincial government benefit from leaky condominiums that they played a role in? I mean, there was a role for the provincial government; there's some blame there. But the provincial government is actually going to collect 7 percent tax revenue from those people who are trying to repair their homes. Why should the government benefit from that?

Under this bill, those people have to be bankrupt, they have to have expended every single penny they have access to -- their RRSPs, their savings, their retirement funds, anything they've managed to put away . . . . They have to have exhausted it completely before they can get any compensation from the government, any aid at all from the provincial government. That's not an aid package; it's forced poverty. At the same time, the provincial government's going to be pocketing the 7 percent.

You have to ask yourself: who does this benefit? Does it benefit the condominium people -- the people who are in these condominiums now? No, it doesn't. It really doesn't. The vast majority of them are going to see no difference in what they had to deal with before. This has done absolutely nothing for them, and it has done nothing for those people in the future whose homes are being built right now, because they won't be covered by the new warranty. Only those buildings constructed after January 1 of next year are going to have the improvements in place.

As much as I want to, as much as I'd like to, as much I'd love to be able to tell the people in my constituency that we managed to come to some agreement and bring in a piece of legislation that was going to compensate them, was going to help them repair their homes, was going to help them stay out of the poorhouse, was going to make sure they didn't have to raid their savings, and -- for those in the future -- was going to make sure that the warranty was in place as early as possible . . . . As much as I'd like to be able to tell them that that's what we've come to an agreement on, I can't; it's not there.

None of the aid and assistance that the government promised when the Barrett commission was struck is in this legislation. And the warranty doesn't kick in until next year.

On top of it, there's going to be $1,000 or more per unit -- it could be up to $4,000 per unit -- charged to the people that are going to buy these homes in the future to pay for the government's administration of this whole bureaucracy. So the people that have had to save as much as they could to buy a house in the first place now have to face another $2,000, $3,000 or $4,000, depending on the home, on top of what it was they already had to pay, in order to fund the bureaucracy that's going to be running this program.

[8:30]

I have tried to look at what is in this bill that benefits the people of my constituency, and there isn't a heck of a lot. In fact, there's an awful lot that's going to hurt them. The only thing the government's done really well in this legislation is ensure that there's a great structure in place to help to organize the residential construction sector. There's this great bureaucracy in place, this wonderful homeowner protection . . . . What is it -- a commission, an office? I keep getting that wrong -- an office where all the names of all the employees are going to be sent.

They'll all be in a nice, big, clean list for the organizers. There's going to be the ability for the government to make whatever regulations they want, to do whatever they want to the residential construction sector -- to structure it however they like. We just spent a month debating the Labour Relations Code amendments for the industrial construction sector, and the government is doing more in this piece of legislation for the residential construction unions than they were able to under Bill 26 for industrial construction.

I see the members opposite smiling, because that's exactly what the goal was in the first place. I firmly believe that the only reason the Premier of British Columbia started this holy war on condominiums -- the only reason he dusted off those reports, the only reason this became an issue -- is because he knew he had to deliver on the other half of the construction Labour Code changes, and he knew he couldn't do it in Bill 26. He thought an easier way to do it would be to set up a straw man and then knock him down with this piece of legislation.

That's exactly what they've done. The only people who will benefit in any significant way from this piece of legislation are the same people who benefited from the Labour Code changes that this House just passed for the industrial sector. It's the only part of the bill where all the work went, where all the dollars are going and where all the bureaucracy is going to support.

No matter how you measure it -- if you take this bill apart and put it back together, if you stack it up or lay it in a long line . . . . However you look at this piece of legislation, it's clear where the benefits are going. They are not going to the people of my constituency; they are not going to the people in the condominiums that are there now or will be there in the future. They are clearly going to benefit the same people this government tried to benefit with the Labour Code changes in the industrial part of the construction sector.

This bill isn't worthy of support. The people in my constituency who've been begging for some help believe it's not worthy of support, and I won't be supporting this piece of legislation either.

The Speaker: Seeing no further members to participate in the debate, I'll call on the Minister of Municipal Affairs to close debate on second reading.

Hon. J. Kwan: I am delighted to close debate on second reading of the Homeowner Protection Act. You know, as I listened to the members opposite talk about this act . . . . It's disappointing for me, quite frankly, that they will not support the bill. What is clear from the comments of the members

[ Page 10581 ]

opposite is that perhaps they actually don't understand what is in the bill. Let me just clarify . . . . And if they do understand, it's clear in terms of the position they have taken.

Let me just talk a little bit about what the Homeowner Protection Act is and what it does. It provides for licensing residential builders to ensure that there will be quality construction in British Columbia. It requires strong, mandatory warranties on new homes: two years on materials and workmanship; five years on building-envelope defects, including water penetration; and ten years on structural defects.

It establishes the homeowner protection office, which is self-financed, to provide for the licensing program, to do education and research, and to enhance the residential construction industry in British Columbia. The homeowner protection office provides for the authority to audit and inspect construction sites to ensure that builders are in full compliance with new laws and regulations governing residential construction. It provides for assistance programs to affected homeowners in greatest need.

It provides for a new dispute resolution mechanism for those who are now faced with this problem, as an alternative to the court system. As I said earlier, it provides for a mechanism for research and education to benefit folks who are now working in the field. There are many other components to this bill. I won't go through each and every one of them, but those are the highlights of this legislation.

What I heard the members opposite say . . . . They are on record as opposing the Homeowner Protection Act. They are on record as opposing the mandatory home warranty and licensing of residential builders and the self-financing scheme of the homeowner protection office. They are on record as opposing government balancing the need to manage taxpayers' money with the need to provide for assistance for those who are in greatest need. They are on record as opposing providing assistance to individuals who need that loan program.

They are on record as opposing the notion that homeowners should have access to the Homeowner Protection Act in terms of future protection for homebuyers, as well as to the reconstruction fund.

If the members opposite actually had read the Barrett report, they would know that we are in fact doing 47 of the 82 Barrett recommendations. These provisions that have been enacted . . . .

Interjections.

The Speaker: Order, members.

Hon. J. Kwan: Thank you, hon. Speaker. Courtesy is something that I know members opposite sometimes misunderstand. But that's okay.

If you reference the Barrett report . . . .

Interjections.

The Speaker: Members, many of you have spoken already . . . .

Interjection.

Hon. J. Kwan: Yes, indeed -- I will absolutely tell the truth.

If the members opposite actually read the Barrett report, they would know that pieces of people's lives and their stories are in it. What are we doing with the Homeowner Protection Act? We're enacting their recommendations. I want to actually refer to a couple of pieces from the report. Condo owners say that, in general, they find it difficult to understand how a four-year-old, multimillion-dollar building built by a supposedly reputable builder could have problems of this magnitude. They don't understand how you can have a five-year new-home warranty that does not cover the costs of needed repairs.

That's what this legislation is doing: it ensures that there is quality construction in British Columbia and that there is a mandatory home warranty that actually works to provide the kind of protection that members of the community expect.

I want to talk about some specific issues that have been raised during this debate. The question was raised about cooperating with the building industry. You know, for two years my predecessor had been working hard to try to cooperate with the building industry, and members opposite wonder why it is taking so long. Well, I'll tell you why. My predecessor, in trying to work with industry . . . . What they've consistently said is: "Yes, we want mandatory home warranty.

Yes, we do want a licensing program." But the terms under which they want these components to be in place are actually not the fullest and best protection for the people who need it. They said, "Let us self-regulate," and they continue to say that to this day.

Well, the fact is that they have had self-regulation for all these years, and look at the problems we have today. With a mandatory home warranty . . . . The fact is that they say three years is sufficient for water penetration. Yet we've heard through the Barrett commission that many people say that the problems won't surface until after three years, and that we need stronger mandatory home warranty provisions. That is the problem in terms of the industry. I want to cooperate with industry, but they need to cooperate with government, to provide the best protection for the community.

The question of pride in the industry was raised -- and it was actually talked about -- in terms of the work that they do. Let us be sure and clear: I want the industry and all of the people within the system to have pride in the work that they do. But, of course, the industry also has to demonstrate that there is pride in the work that they are doing, and we've got to fix this problem to ensure that confidence in the residential construction industry is being rebuilt.

There was a question about a project that Dave Barrett was a component of when he was Premier in 1973. Yes, that project was built by the Barrett administration, and it was built in 1973. But you know what? After the project was built, there was a change in government. The Socred government came in, and what did they do with that project? They decided to sell it, no longer ensuring that the project was maintained for affordable housing. They sold the project, and it was made into a rental unit.

Interjections.

Hon. J. Kwan: Actually, it was a question that the member for Richmond East raised, and I'm responding to her question with respect to this issue. That's what it has to do with second reading of the Homeowner Protection Act.

On this issue, the project was sold to a private developer who then rented it out and later sold it as a strata unit. Now, in 1998, they are finding problems with this project. The question is asked: is it the people who developed it at the time, or is it maintenance issues that were raised? I know that people who are reasonable and know the history of this project will know that it is not the people who developed the project but rather the maintenance question.

[ Page 10582 ]

Interjections.

The Speaker: Members, the House will come to order. All members will come to order.

Hon. J. Kwan: I'm responding to some of the issues that have been raised, and there is another issue that is very pressing indeed and that I feel I must respond to. That is the issue around the tax measures. Members opposite say that the government is not prepared to provide for the GST component, and let me just be very clear about that. I have said to the federal government time and again that I want to work with them to create a tax relief package and that the Ministry of Finance is prepared to work with them on that front.

What the Barrett recommendation calls for is tax relief in the area of GST, PST and RSP -- in terms of not imposing a penalty on those who want to withdraw their RSP for repairs -- and tax relief retroactively for homeowners who have paid for repairs and who actually live in their home, in the condo unit, as opposed to those who have rented out their unit. I'm prepared to work with the federal government on all of these issues to create the tax relief package. I would actually appreciate members opposite talking to their Liberal federal government cousins and asking them to come onside with the provincial government in the tax relief measures.

What is actually very interesting is that when the members opposite talk about what is needed, all of their comments have been focused on what the provincial government should do. Fair enough, because the provincial government has taken leadership in dealing with this issue, and we are indeed addressing it. But they have also called on the taxpayers to pay for all of the systematic failure issues that have been identified. Not once did any of those members across the floor call on industry to step up to the plate; not once did they call on the banking institutions to step up to the plate.

In his report, Barrett clearly identified that this is a systematic failure and that everybody has a responsibility. Yes the provincial government has stepped up to the plate. Where are those other people? Why aren't the members opposite calling for them to step up to the plate as well?

[8:45]

A member mentioned the FSR issue, about local government, and I want to be very clear. The recommendations relating to local government will be dealt with, and we have already struck, through the UBCM joint council, a subcommittee to work through the recommendations that deal with local government. I want to be very clear, because one member accused me of actually being on city council when the FSR change was made in the city of Vancouver. That is simply not true, and I would ask the member opposite to check the record.

Do you know what, hon. Speaker? It was, in fact, the Leader of the Opposition who actually asked for protection for the city of Vancouver -- to have no liability whatsoever, even if they were found to be at fault. It was the Leader of the Opposition who moved a private member's bill to ask for exemption from all liability for municipalities, even when they may have been found to be liable.

I will work with local governments on these recommendations relating to liability and others, through the UBCM. I believe that those who are liable should be held accountable, and that's what the Barrett report identified. The provincial government has stepped up to the plate to do our part. Industry and the banking institutions need to step up to the plate. All the people who have been identified as a component of the systematic failure need to step up to the plate.

I want to close with two other items. One is with respect to the coastal-communities issue in terms of the application of the Barrett report. It is my intent to apply the spirit of the Barrett report in terms of the coastal communities and the application of the fees, and for the leaky condos that are now in the lower mainland, in the southern part of the province, to be financed by that. I want to be clear that the intent of the Barrett report is in fact the Homeowner Protection Act.

Finally, I want to close with this notion. I've been in the Legislature for about two years now, and I've seen the members opposite flip-flop. They change their minds every single day, so they are no longer really credible in what they say, in my opinion. The fact is that a release put out by the Liberal opposition said that condo homeowners should pay for the lion's share of this problem, but now they've changed their mind -- just like that. They say that taxpayers should pay. Fair enough, because my heart does go out to the people who have suffered. That's why we took action.

That's why we appointed Commissioner Barrett to undertake this work. That's why we're introducing the Homeowner Protection Act. That's why we're going to make accountable those builders who have abused the system. That's why we're bringing in mandatory warranty provisions. That's why we're doing what we're doing we're doing, and that's why we tabled Bill 46.

With that, hon. Speaker, I'd like to move second reading of Bill 46.

Motion approved on division.

Bill 46, Homeowner Protection Act, read a second time and referred to a Committee of the Whole House for consideration forthwith.

HOMEOWNER PROTECTION ACT

The House in committee on Bill 46; E. Walsh in the chair.

section 1.

L. Reid: The minister will know that I asked many, many times during the course of the estimates debate the cost of the process which spawned this bill. I would ask her to commit to the record today the cost of the process which spawned Bill 46.

Hon. J. Kwan: What the member opposite is asking for is, I presume, the cost of the Barrett commission. My ministry has not received that documentation. As well, for the member opposite, the information in terms of the receipts and so on would actually go to the Attorney General.

L. Reid: The minister is more than aware that this material has been promised to me for probably more than eight weeks now. So if indeed this is an issue of credibility, I would suggest that the minister actually act on some of the promises that have been made during the estimates process.

In terms of the

definitions section, "new home . . . . " I simply want to reference the decision around

definitions that was taken by the Barrett commission, which talked about a condominium in the mandate statement . . . . If you go to recommendation 1, it expands it to include any residential construction in the province. I would simply ask why.

Hon. J. Kwan: A new home is defined as a single-family dwelling, a multifamily dwelling -- for example, a duplex, a triplex condominium -- as well as common property, com-

[ Page 10583 ]

mon facilities and other assets of a strata corporation. The question is: why would you make it broader than condominiums in terms of the new definition of a new home? Because through the Barrett recommendations and the Barrett process, he had actually discovered that there are issues outside of the condominium sector relating to quality construction.

L. Reid: The title of this inquiry, the Commission of Inquiry into the Quality of Condominium Construction in British Columbia . . . . Certainly the minister's sense that it was appropriate to expand the definition does nothing for owners of leaky condominiums today. In fact, it removes any scrutiny and moves beyond where they believed their issues would be addressed. The explanation is weak. I trust that the minister can perhaps clarify.

Hon. J. Kwan: I will tell the member opposite again that through the Barrett commission's work -- and he has heard from many people: some 250 oral presentations, with over 700 written presentations -- relating to the leaky-condo item . . . through his work, he has identified that the leaky-condo issue is applicable not just to condominiums but also to some residential homes. Because of that, he has expanded the definition of leaky condos to include those other components.

L. Reid: The minister concluded her remarks by saying that she understood the angst and the anxiety and the anguish experienced by many condominium homeowners. Does she appreciate that in fact this report misses their issues, ignores their issues? Again, I'll come back to the title: Commission of Inquiry into the Quality of Condominium Construction in British Columbia. Recommendation 1, contrary to the title says: "A leaky building is any residential building within British Columbia . . . . " Does the minister understand that the owners of leaking condominiums today truly feel that this commission has ignored them?

Hon. J. Kwan: On a point of order, I'm wondering whether we're debating the Homeowner Protection Act or the report from the Barrett commission.

The Chair: We are debating

section 1 of Bill 46.

L. Reid: Is the minister answering the question?

Hon. J. Kwan: I'm wondering whether we are debating the Homeowner Protection Act or the leaky-condo issue.

The Chair: Order.

L. Reid: The Chair did answer your question. I would ask that you answer mine.

Hon. J. Kwan: I ask the hon. member to repeat her question.

L. Reid: I will go slowly for this minister. When we talk of the title -- Commission of Inquiry into the Quality of Condominium Construction in British Columbia -- and we go to the definition in the act -- Bill 46, and I'm on page 2, for the minister's information -- there is a contention that this bill abundantly ignores the concerns of condominium owners today. I am drawing your attention to approximately the fifth line: " . . . 'new home' means a building, or portion of a building, that is newly constructed and intended for residential occupancy . . . . "

The concern that has been shared with me repeatedly -- and I know it's been shared with this minister -- is that this bill ignores owners of leaking condominiums today. Does the minister understand that what she has done is to ignore owners of leaking condominiums?

Hon. J. Kwan: I would disagree with the opposite member's comments.

L. Reid: For the ministers' information, I'm on the top of page 3, clause (d): " . . . any building or portion of a building of a class prescribed by the regulations as a new home to which this Act applies." I will need some definitive information on that

section in terms of the minister's understanding of a commercial building or a mixed-use building that has a residential component. What happens to that construction under this particular clause?

Hon. J. Kwan: They're included.

L. Reid: The minister will know that that is contrary to the answer she has given in the past, when she indeed said that commercial buildings were not part of this. Indeed, if we go back to residential construction, we have some difficulties around

definitions, and certainly I cannot be the only person who's asked this question. The minister, I trust, has more information she would wish to share.

Hon. J. Kwan: To clarify: it's the residential component that's included.

L. Reid: There is also a reference to a manufactured home: " . . . does not include a manufactured home unless otherwise prescribed." Why?

Hon. J. Kwan: Because manufactured homes have not been identified as an item with major problems. If those issues do arise, there will be opportunities for us to make changes to deal with those matters.

R. Neufeld: I appreciate what the minister said: that manufactured homes may not be as big a problem as some of the condos. But if we go around the province and we look at many of the residential houses, they're not leaking either. So I can't quite get the correlation there. That's one question.

Secondly, if someone has a manufactured home -- many people do, and they build additions onto them -- how does the act apply to that?

Hon. J. Kwan: The components relating to manufactured homes, as I said earlier, have not been identified as a major problem. However, residential homes have, through the Barrett commission, albeit it appears that the problems are not nearly as significant as with the condominiums . . . . But residential homes, in terms of single-family homes, duplexes, etc., have been identified as an issue. What this legislation does is address those components that came up through the Barrett recommendations.

[9:00]

R. Neufeld: That's half the question. The second part of the question that the minister wasn't listening to is: what happens, then, if manufactured homes . . . ? As the minister says, there's not a problem with them, so they're not going to deal with them. But many people -- in fact, probably 90

[ Page 10584 ]

percent or better of the people that own manufactured homes -- build additions to them. When I read in this act and the

definitions . . . . Does that mean that once an addition is built onto a manufactured home, they then come under the force of this act? Could the minister explain that, please?

Hon. J. Kwan: The answer is no.

L. Reid: The definition of "residential builder" is "a person who engages in, arranges for or manages all or substantially all of the construction of a new home, and includes a developer and a general contractor." The concern expressed is that builder, developer and contractor are terms that are used interchangeably, and they are not terms that are used interchangeably in the industry. They're used interchangeably for the purposes of this piece of legislation, but not anywhere else. I would wonder why the minister would choose to wrap all of those items together.

Hon. J. Kwan: The purpose of this act is to identify one key person in terms of accountability -- we have done it within this definition -- and to define it as broadly as we can, to encompass the needs of the act.

Section 1 approved.

section 2.

L. Reid: Under the purposes of the act -- "to improve the quality of residential construction . . . " -- it would appear that subtrades today don't have to be licensed, or in fact that that's not going to happen now but that cabinet may in future do so. I'd like some background on that, in terms of the extent of the subtrade that will be involved. Are we talking about the person who comes to look at your pool? Are we talking about someone who in fact is putting in concrete at the front of your house? What exactly are we looking at? How big is this package of regulations, and how much will it encompass before this is all said and done?

Hon. J. Kwan: This piece of legislation does not include subtrades; however, it does provide for cabinet to bring in some legislation at a later date if there are problems arising out of subtrades. But at this time, it is not applicable to subtrades.

L. Reid: Could the minister explain to this House how subtrades would differ dramatically from renovators, who do require licensing under this act?

Hon. J. Kwan: The act does not actually call for renovators to be regulated in this act, although, again, cabinet could actually bring in changes through an OIC around that.

I want to highlight the difference around renovators, as reported through the Barrett commission. He has identified the need to concentrate on renovation components, especially with respect to fixing the current problem today. What needs to be done is to ensure that those who are doing the renovation work do it in such a manner that it does not re-create the problem. So the interim CEO has been instructed by me to look at the renovation component as one of the top priorities of his work over the next while.

L. Reid: If the minister could confirm this: has she indeed said that renovators will not be regulated under this act for the next, let's say, six to 12 months?

Hon. J. Kwan: Renovators would be brought in through regulation, in terms of regulation of their work.

L. Reid: I thank the minister for information she has basically already shared with us. The question was that they may require licensing at some future point. I am asking for a time line as to what that future point looks like. I believe that this piece of legislation is onerous, in that the power will be found in the regulation, and the regulation has not yet been written. The minister was not able to provide information on what this regulation may attempt to accomplish.

So indeed, if this is going to be a superficial discussion, and once this bill is passed the net widens to include every person who ever sets foot on your property, it would be prudent to share that information with the public at this juncture.

Hon. J. Kwan: As I advised the member earlier, the work is actually being taken on by the interim CEO, and it is a priority for the interim CEO to address the issue of renovations.

L. Reid: Did it not seem odd for this ministry to appoint, hire and pay an interim CEO prior to the legislation being passed? Did it not seem like they were putting the cart before the horse?

Hon. J. Kwan: There are many pieces of the work that need to be done, including setting up the office to allow for the work of the homeowner protection office. The interim CEO has been hired to undertake that work. We have a very tight time line indeed to get the work done, and the intent is to get the office up and running by October 1.

L. Reid: "A further purpose of this Act is to establish a Reconstruction Program to provide financial assistance to eligible homeowners for home reconstruction" -- perhaps we can spend some time on this section. It is our contention that this will not help owners of leaking condominiums today unless, frankly, they have declared bankruptcy or are prepared to have a lien on their property. Is that the minister's understanding?

Hon. J. Kwan: The reconstruction fund would be dealt with by the homeowner protection office, which will actually administer the reconstruction fund. Again, part of the work of the interim CEO is to prepare the criteria under which individuals can access the loan program. I've said that the priority for the loan program would clearly be those who are in the greatest need -- those who risk losing their homes and those who are faced with health and safety issues.

L. Reid: Under whose authority would the funds be expended today to pay for this interim CEO?

Hon. J. Kwan: The interim CEO is paid for by the ministry at this time.

L. Reid: Where would I find that item in the budget that was debated?

Hon. J. Kwan: It's part of the operating dollars that will be coming out of my ministry.

L. Reid: I would ask the minister to be a bit more specific about her budget. Exactly where in the budget were those dollars found to hire this individual who has not yet received a legislative mandate?

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Hon. J. Kwan: There are many line items within the ministry budget. It doesn't go on to say which line item, specifically, the dollars would come from. But within the overall ministry budget, there are funds available that we will draw on to pay for the interim CEO's work.

R. Thorpe: Did I understand the minister correctly to say that she wasn't sure which line this came out of, but that if she could find some money in one STOB, she'd take it from there, and if she found some in another STOB, she could take it from there? Surely the minister could be specific. What STOB number did the salary and the expenses for the interim chief executive officer come out of in your budget?

Hon. J. Kwan: I actually don't have the budget line items in front of me, but I can tell the members opposite that the funding for the interim CEO will be coming from my ministry.

L. Reid: I asked a question of the minister a few moments ago regarding eligibility for homeowners for the home reconstruction fund. The minister was very clear in the documentation that went out at the press conference as to who would be eligible. If that has changed, it's interesting that we may now have this discussion at this very juncture, which is indeed appropriate and relevant for

section 2(2). It seemed at that point -- I can quote the minister's words from her press release -- that she talked about people who had declared bankruptcy and who would have a lien on their property. If the minister is now saying that the decision about eligibility will be determined by the interim CEO, that would be interesting for us to learn. Frankly, if she's prepared to withdraw her earlier remarks, that also would be interesting.

Hon. J. Kwan: In my presentation and announcement of the Homeowner Protection Act and the work that the government is doing to respond to the Barrett recommendation, I was very clear in saying that the interim CEO, along with myself, would work on the criteria to be established for the loan program. I was very clear in saying that there would be some examples -- especially that those in most need would have priority, including those who are faced with health and safety needs as well . . . . So there was no misleading in terms of my comments at the press conference and today.

L. Reid: Frankly, I disagree with the comments that the minister has just made, and I am more than prepared to send this information over for her consideration. It's fairly clear that there were guidelines in her mind, just as there were guidelines in the mind of Dave Barrett when he took on this task. The preconceived notions of both the commissioner and the minister abound, in terms of any other information she might provide around home reconstruction, if indeed . . . .

Has the minister indicated to Mr. Ramsay that he will have some responsibility to interact directly with experts in the field around setting up eligibility, that he will need to meet with homeowners around setting up eligibility requirements?

In her closing remarks, when the hon. minister talked about putting the challenge forward to the federal government, she didn't indicate why she's not prepared to act independently of the federal government. The comments I made in second reading debate, where I said, "Find me where this government has waited for an opportunity to act in concert with the federal government in the past . . . . " In this situation, that is not a fallback position for this minister at this juncture. So the question to the minister is: why will she not act independently and put in place today the 7 percent GST exemption and/or rebate for owners of leaking condominiums?

Hon. J. Kwan: I actually have a copy of my speech notes from the press conference, and I'm looking back where it touches on the issue around the zero-interest loan program. It clearly states that on a priority basis, those who are faced with the risk of losing their home, health or other related matters will be dealt with and that the interim CEO will actually set up the criteria and have them in place by October 1.

With respect to the question around the tax measures, as I said earlier, I've met with Minister Gagliano; I have spoken with him on a couple of occasions now on this issue. I've urged them to work with my ministry and with the Ministry of Finance to develop a tax package. A lot of the measures actually need the federal government's and Revenue Canada's cooperation to provide for the tax relief. Unfortunately, the minister turned that down. I would certainly welcome the members opposite pressing their federal colleagues to support the provincial government in coming up with a tax relief package as per Barrett's recommendations.

L. Reid: The question that I posed directly to the minister was why she has not made an independent decision in this province today, with this government, who are responsible for the provincial sales tax, to accept recommendations 79 and 80, I believe, of the Barrett commission. This minister has not convinced me that those two items are inextricably linked. I do believe that this minister and this government have the ability to move forward today and to put that relief into the hands of owners who have leaking condominiums that require repair. I would ask for the answer to the question.

[9:15]

Hon. J. Kwan: As I said earlier, the tax relief package recommended by Barrett includes a whole range of components, including the GST, PST, RSP and retroactivity components in terms of the ability to write off repair costs for those homeowners who actually live in their units today. Those are the measures that I'm interested in working on with the federal government. I believe it is insufficient for the provincial government, in and of itself, to move on this alone. We really do need the federal government to sign on to work with us with respect to the tax relief measures.

L. Reid: Since the minister referenced the document, I will put the recommendation into the record -- recommendation 79: "For purposes of reconstruction, all GST and PST, payable on qualified repairs and renovations, be repealed. In this way, the owner-occupier is treated by taxation the same way as the owner-landlord." It seems fairly straightforward. Recommendation 80 says: "All GST and PST that has been paid on renovations should be refunded to homeowners."

Let me pose the question to the minister again: what prevents the minister from being of assistance today to British Columbia owners who have expended provincial sales tax on their repairs?

Hon. J. Kwan: The tax relief measures identified by the Barrett report have a range of components to them. To effectively have these tax measures work in the way in which Barrett had envisioned, we do need the federal government to work in cooperation with us. I have made the offer to the federal minister on a couple of occasions now to sit down and look at those measures, to work with the Ministry of Finance on them. Unfortunately, the federal government has turned us

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down. I will continue to pursue the federal government to come on board with respect to those tax measures, because I do think that they're an important component of all of Barrett's recommendations.

Clearly, the provincial government cannot do it alone. We do need those who have been identified as a component of the systematic failure of the residential construction industry in British Columbia to also step up to the plate with the provincial government to deal with these issues.

L. Reid: What I didn't hear the minister say was that, frankly, she doesn't want to move unilaterally -- which is the only answer. There is no technical issue that prevents this minister from putting 7 percent of the cost of their repair bill into the hands of British Columbians today. So this minister should get to her feet and tell me why this government -- any government -- should benefit from someone else's misfortune. Why would this government choose to take in 7 percent of somebody else's misfortune -- the cost of their repair?

I will commit this to the record: there is nothing today that prevents this minister from making a unilateral decision in the best interests of people who reside in this province. To hang your hat on what's happening in the federal government . .