1977 Legislative Session: 2nd Session, 31st Parliament

HANSARD

The following electronic version is for informational purposes

only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

MONDAY, AUGUST 29, 1977

Afternoon Sitting

[ Page

4997 ]

CONTENTS

Routine proceedings

Oral questions

Gasoline and heating oil price hike. Mr. Macdonald –– 4997

Proposed urban transportation authority Act. Mr. Gibson –– 4997

Installation of traffic lights at Mackie Road and Island Highway. Mr. Stupich 4998 Exclusion of Teamsters Union members from trial. Mr. King –– 4998

Damage to Princess Marguerite. Mr. Wallace –– 4999

Barkerville sanitary facilities. Mr. Nicolson –– 4999

Settlement in MEL Paving case. Mr. Macdonald –– 4999

Residential Tenancy Act (Bill 86). Second reading

Hon. Mr. Mair –– 5000

Mr. Levi –– 5002

Mr. Wallace –– 5013

Mr. Gibson –– 5016

Mr. Macdonald –– 5021

Mr. Cocke –– 5022

Mr. Nicolson –– 5023

Mr. Lauk –– 5027

The House met at 2 p.m.

Prayers.

MR. D. BARRETT (Leader of the Opposition) : Mr. Speaker, I would ask the House to welcome Mr. and Mrs. John McInnis from the great province of Alberta. Mr. McInnis is the executive assistant to the leader and one-man caucus of the Alberta New Democratic Party, Grant Notley.

HON. W.N. VANDER ZALM (Minister of Human Resources) : Mr. Speaker, visiting with us today from my constituency are my cousins, Mr. and Mrs. Leo Warmerdam and their daughter Alice. Also present are my aunt from Holland, Mrs. Trudi Warmerdam, her son Peter, and Mr. John Van Schie. I would ask the House to make them welcome.

HON. S. BAWLF (Minister of Recreation and Conservation) : I would ask the members to welcome two very hard-working members of the British Columbia Physical Fitness and Amateur Sports Fund advisory committee, Mrs. Hunnings and Mrs. Faye Ecclestone.

Oral questions.

GASOLINE AND HEATING OIL PRICE HIKE

MR. A.B. MACDONALD (Vancouver East) : Mr. Speaker, I've got a question for the Minister of Energy, Transport and Communications. I want to ask him in view of the fact that British Columbia n; a has legal jurisdiction over gasoline prices and home heating oil under

section 84 of the Energy Act, and in view of the increase that is planned for this time, will the minister take steps to invoke

section 84 of the Energy Act so that this increase will not be allowed to take place at this time in home heating oil and gasoline?

HON. J. DAVIS (Minister of Energy, Transport and Communications) : The answer, Mr. Speaker, is no. The reason for this is that there is a general understanding between all provinces and the federal government that the tax increases announced in Ottawa will be put in place as announced.

MR. MACDONALD : On a supplementary, Mr. Speaker, the minister says it's announced in Ottawa and, I would just point out, it's with the active help of this government.

My second question is: in view of the amount of additional excess profits that have gone to the oil companies in British Columbia which produce old oil from flowing wells, which with this increase of $1 will be another $7 million a year after the royalty figure, and which is added to $26 million since this government took office for a total of $33 million extra for those companies, and in view of the minister's refusal to consider price controls to protect the consumer, will he revise the royalties

schedule so some of that money will be brought back into the public treasury?

HON. MR. DAVIS : Mr. Speaker, as the hon. member knows, these and other matters are considered by the B.C. Energy Commission when they make their annual review of field prices. The field-price hearings have been held and a report is expected from the B.C. Energy Commission within the next few weeks.

MR. BARRETT : A straight giveaway to the oil companies.

MR. MACDONALD : Does the minister know that according to testimony before a U.S. Senate investigation, Imperial Oil was giving $234,000 annually to political parties including Social Credit, but not including the NDP? Is that a factor in the kind of policy that has been followed by this government?

HON. MR. DAVIS : Mr. Speaker, the answer most emphatically is no.

MR. BARRETT : You took the money!

PROPOSED URBAN TRANSPORTATION AUTHORITY ACT

MR. G.F. GIBSON (North Vancouver-Capilano) : A question to the Minister of Municipal Affairs and Housing. In the opening speech last January the Lieutenant-Governor told us: "My Minister of Municipal Affairs and Housing has advised me that he will introduce an urban transportation authority Act which will co-ordinate provincial and local government roles in providing public transportation." That was to be this session, Mr. Speaker. I'd ask the minister if indeed such

an Act will be forthcoming this session.

MR. GIBSON : On a supplementary, Mr. Speaker. The government policy, of course, has been announced, as of the date of the opening speech

[ Page 4998 ]

which said that such

an Act will be brought forward. What I am asking the minister, in view of the concern of those trying to plan urban transportation around British Columbia and particularly in the lower mainland, is: when will that legislation be forthcoming? Will it be in this session, as promised in the opening speech?

HON. MR. CURTIS : Mr. Speaker, the matter is under review. We are looking very carefully at all aspects of transit. The Leader of the Opposition (Mr. Barrett) seems insistent today upon asking questions from his seat, rather than having the courage to stand up and ask them.

Mr. Speaker, to the hon. member for North Vancouver-Capilano, I am not aware of any grave concern on the part of local or regional authorities with respect to transit. We have introduced transit services in a number of communities in British Columbia. I think they recognize that it is an extremely complex issue. I assure the member, through you, Mr. Speaker, that the matter is under review and policy is being decided upon.

MR. G.R. LEA (Prince Rupert) : On a supplementary to the same minister. Since the throne speech, where the government promised it would come in this session, what has taken place that now makes it look like there is only a possibility? What new factors have entered into this drama?

HON. MR. CURTIS : Mr. Speaker, I believe that the member for Prince Rupert would find in my answer to the member for North Vancouver-Capilano (Mr. Gibson) the description of precisely where the government is with respect to transit at this time.

MR. LEA : A final supplementary, Mr. Speaker. As I understand it, the minister explained to the member for North Vancouver-Capilano that it is very complex and therefore hard to judge when it's going to come in.

My final question is: did they not know it was complex when they made the throne speech at the opening of the session? What new factors have entered into this to make the situation different now than it was at the time of the throne speech?

HON. MR. CURTIS : Mr. Speaker, I don't believe I indicated that it was more complex than when it was announced in the throne speech. The matter is under review. We have had a number of discussions relative to transit in British Columbia, and the matter rests there, hon. member.

MR. LEA : Well, why did you put it in the throne speech?

INSTALLATION OF TRAFFIC LIGHTS AT

MACKIE ROAD AND ISLAND HIGHWAY

MR. D.D. STUPICH (Nanaimo) : In connection with a fatal accident at the

intersection of the Island Highway and Mackie Road last week, the minister will

be attending a meeting in the area on Wednesday evening. I wonder if in preparation

for that meeting, he can confirm that installation of traffic lights has been

prepared for – that the underground wiring is in place and it only remains

to complete that installation at some future date.

HON. A.V. FRASER (Minister of Highways and Public Works) : Mr. Speaker, it is my information that there has been electrical installation made that could lead to full installation of the signal, if that decision is made.

MR. STUPICH : On a supplementary, Mr. Speaker, the minister said: ". . . if that decision is made." I wonder whether his ministry has considered making this decision, or if that is something that they will consider further at the meeting Wednesday evening.

HON. MR. FRASER : This intersection was looked at, I believe, with a traffic count in February, 1977. At that time the decision was made not to proceed with the signal. They are now checking traffic counts between February and now to see if a signal is justified.

B.C. RAIL SETTLEMENTS

HON. D.M. PHILLIPS (Minister of Economic Development) : On Thursday, August 25, the first member for Vancouver Centre (Mr. Lauk) asked a question of the Premier regarding the British Columbia Railway. The Premier took the question as notice. The question was: "Can the Premier confirm that B.C. Rail and its officials are now negotiating a settlement out of court with KRM Construction and Keen Construction, which have launched and are proceeding at this date with an action?" The answer to that question is very simply no.

EXCLUSION OF TEAMSTERS' UNION MEMBERS FROM TRIAL

MR. W.S. KING (Revelstoke-Slocan) : I have a question to the Minister of Labour. A trial is taking place in the city of Vancouver with the teamsters' union regarding an internal trade union matter. But members of the teamsters' union are being prohibited from attending that trial of a union official. Is the Minister of Labour concerned about the exclusion of members from the constitutional proceedings of their union, and does he intend to take any action to

[ Page 4999 ]

ensure that members have access to this kind of trial?

HON. L.A. WILLIAMS (Minister of Labour) : In answer to the first question, Mr. Speaker, yes, I am concerned at this development. As to the second question about the action to be taken: as the member well knows, the legislation in this province does not entitle me to interfere in the internal affairs of union organizations. However, this is being very carefully examined. I wish to be perfectly clear that the government is not prepared to stand by and allow trade unions to become battlegrounds, which may result in industrial unrest in the province, Mr. Speaker.

MR. KING : A supplementary, Mr. Speaker. Is the Minister of Labour saying that the only possible basis on which he could intercede is through some statutory provision? May I ask the question: does the minister intend to personally express his views to leaders of the teamsters' union?

HON. MR. WILLIAMS : Mr. Speaker, I don't know how much clearer I could be to anyone who might listen who might see fit to report what is being said. The government is not prepared to stand idly by while trade unions become battlegrounds for contending groups, which may result in increased industrial unrest in the province.

MR. KING : Supplementary, Mr. Speaker. Would the Minister of Labour care to outline to the House precisely what the government intends to do rather than standing idly by?

HON. MR. WILLIAMS : Mr. Speaker, the government does not intend to stand idly by. But as the member well knows, the powers which the government has in this respect are, at this moment, limited. I would not like it to be thought, however, that as Minister of Labour I was prejudging the situation, as the member for Revelstoke-Slocan already has.

MR. BARRETT : Open the doors.

MR. KING : Just on a supplementary, Mr. Speaker. I want to point out to the Minister of Labour that my question relates solely to the exclusion of the union members from the trial, not to the issue involved.

I wonder if the minister would nonuse his office as the office of Minister of Labour is used in other labour relations matters to attempt to persuade the union to open up the hearing to their own members. That's a mediation role that the Minister of Labour used to customarily play.

DAMAGE TO PRINCESS MARGUERITE

MR. G.S. WALLACE (Oak Bay) : Mr. Speaker, to the Minister of Energy,

Transport and Communications: can the minister confirm that the Princess Marguerite

struck some object during the weekend, sustaining damage to the propeller? If

so, are the required repairs of such an amount that the ship will have to go

to drydock, and if so, for how long?

HON. MR. DAVIS : Mr. Speaker, I'll make enquiries in that regard. Whatever damage did occur was not of sufficient importance for my office to be alerted.

MR. WALLACE : You should have phoned me, Mr. Minister, and I'd have let you know. In view of the possibility of dislocation of the

schedule and the fact that there's a substantial financial deficit for the period ending June 30, 1977, may I ask the minister if any tentative plans have been drawn up to terminate the summer

schedule earlier than the originally intended date of October 10?

HON. MR. DAVIS : Mr. Speaker, the Marguerite is operating today, and as far as I know, it is intended to operate through the full

schedule as originally announced.

MR. WALLACE : A final supplementary, Mr. Speaker. Could I ask the minister if, prior to the incident at the weekend, plans were being developed to send the Princess Marguerite to California on a tourist promotional visit following the end of the normal schedule?

HON. MR. DAVIS : Not to my knowledge, Mr. Speaker.

BARKERVILLE SANITARY FACILITIES

MR. L. NICOLSON (Nelson-Creston) : A question to the Minister of Recreation and Conservation: the minister has received several letters from visitors to Barkerville complaining about the general filth and difficulties with sanitary facilities. Has the minister ascertained what's the cause of the problem, and what action has he taken?

HON. MR. BAWLF : I'm not certain of the letters to which the member opposite is referring. I'll take the matter as notice.

SETTLEMENT IN MEL PAVING CASE

MR. MACDONALD : Mr. Speaker, on February 24 of this year, I asked the Minister of Economic

[ Page 5000 ]

Development a question as to the total legal costs of the settlement of the MEL Paving case and the minister took that as notice. Then I asked him again about six weeks ago, and he said that the answer would be forthcoming. I wonder if the minister would be prepared to answer the question before I have to use an ear trumpet to hear the answer. (Laughter.)

HON. MR. PHILLIPS : Mr. Speaker, I am aware of the question. The answer will be forthcoming.

MR. MACDONALD : What did you say? Eh? Orders of the day.

HON. MR. WILLIAMS : Second reading of Bill 86, Mr. Speaker.

RESIDENTIAL TENANCY ACT

HON. K.R. MAIR (Minister of Consumer and Corporate Affairs) : As members of this House are aware, the Law Reform Commission of the province in 1973 made extensive recommendations concerning landlord and tenant law. Most of these recommendations were encompassed in the Landlord and Tenant Act, passed by this Legislature in the spring of 1974.

The basic thrust of that new legislation was, first of all – and this is probably the most crucial part of it – to grant a system of security of tenure to all tenants; secondly, to remove landlord and tenant disputes from the provincial courts; and thirdly, to create the office of rentalsman, the rentalsman to have jurisdiction over such disputes, and with broad terms of reference.

Now as you also know, Mr. Speaker, a former member of this House was appointed rentalsman and he has since established his office, I think with great success. I think it is fair to say, Mr. Speaker, that a far more harmonious climate exists in this province today between landlords and tenants, and I think it is attributable to a large degree to that legislation passed in 1974 and to the work of the office of the rentalsman.

I'm happy to report, Mr. Speaker, that the experiment in this area has been a model for new legislation in Saskatchewan, Manitoba, Ontario and a number of the Atlantic provinces. During the past few months the rentalsman has hosted a delegation from California, and jurisdictions from as far away as New Zealand are planning studies of our legislation in the very near future.

A number of necessary amendments were introduced to the Landlord and Tenant Act in the winter of 1974, Mr. Speaker. These were caused by the need to separate the function of the rentalsman from the administration of rent control, and for the replacement of unworkable sections dealing with security deposits.

The legislation before you now, Mr. Speaker, represents the experience gained in three years' operation of the office of the rentalsman. There are no basic changes in the principle behind this Act. The title has been changed, however, to the Residential Tenancy Act. I think, Mr. Speaker, that this is only appropriate and that it does a great deal to take away from the rather hostile nature of the previous Landlord and Tenant Act and from the adversary situation that the name seems to imply.

Interjection.

HON. MR. MAIR : I am suggesting, Mr. Member, that you read on.

A number of administrative procedures have been modified and simplified in this Act, Mr. Speaker, to the benefit, I believe, of both landlords and tenants. Certain additional powers have been given to the rentalsman and the status of the rentalsman himself has been clarified to clearly establish his independence in the exercise of his judicial and his quasi judicial responsibilities. Other changes, Mr. Speaker, are of a housekeeping nature. It is because of these minor amendments that we are introducing a new Act. An amendment of the present legislation would have been extremely confusing.

I would like to comment on

Part VIII of the bill before you, the rent control section. Since the Rent Review Commission was moved to my ministry last fall, I have been studying the many questions of rent control. Unlike some people who comment on the subject, I do not profess to be an expert on this topic, but I think it would be only proper that I make one or two observations. Shelter is, of course, a necessity, but the form of tenure, whether it be ownership or tenancy, is open to choice. In many cases, perhaps even most cases, this choice is dictated by economic circumstance.

If owning were free, Mr. Speaker, there would be no tenant. If renting were free, there would be no owners. If owning is a better bargain, there will be more owners. If renting is a better bargain, there will obviously be more tenants.

But the relationship between owning or renting is not strictly economic; it is partly psychological. There are, I would suggest, some satisfactions from owning a home. There is, for example, the joy of painting. There is the pleasure of broken plumbing or mowing grass or buying appliances, and the great pleasure that comes at least once a month of worrying about mortgage rates. There is the satisfaction of receiving your property tax bill and there may be a more direct sense of responsibility for the behaviour of municipal officials. Owners may have a better hedge against inflation, but in the past

[ Page 5001 ]

few years they have paid a premium price for the monthly use of their property.

On the other hand, renting also has its advantages. You can complain to the landlord. You can go away for a weekend or a vacation with less worry about your property. You don't have to save up for a down payment, and you can be more mobile, less encumbered and less worried about the long-term value of the premises rented. Often, however, it is all that the tenants can afford. Unfortunately, this is too often the case. Because the two forms of tenure that I have mentioned are economic substitutes, we must examine what caused the shortage in rental accommodation and which led to the demand for – and, I think, the need for – rent controls.

The largest single factor in the shortage of accommodation was the federal government's change in the Income Tax Act of 1971. While the federal government was, of course, entirely within its rights in changing the income tax provisions, it was, however, in my view, remiss in not considering what would happen to the rental housing market as a result of tax changes. In fact, tax changes, coupled with rising inflation and other trends, had a disastrous effect on vacancy rates.

Just to summarize, Mr.

Speaker, I think that these other trends included: an increase in the number of young people establishing their own accommodation; some postponement of doubling up through slower family formation; more older people being able to afford their own accommodation rather than living with their children or other relatives; the length of time that municipal governments took to approve building permits became longer and longer; higher municipal standards led to higher final costs – I don't make that last statement critically, but as a statement, I think, of fact – the cost of mortgages became more expensive; the cost of land increased; and the growing popularity of condominiums by builders became evident.

All of these factors came together at more or less the same time to create a very unhappy vacancy-rate situation.

The logical political alternative to this situation was rent control. Mr. Speaker, I make no secret of the fact that I don't like rent control. I believe it may be necessary to control rents at some times and in some economies, but I do not believe it is necessary, or indeed wise, to control rents in this economy for all time. I do believe that permanent controls would be disastrous over the long term because it would lead to falling investment in new construction and falling maintenance of the existing stock of rental housing.

If we were to control rents permanently, then logically we should also control ownership costs, because you can't have one without the other. That is a very serious proposition and not one that this government wishes to entertain lightly. The horror stories of rent control in other jurisdictions are essentially stories of governments not wanting to squarely face the issue of permanent rent and ownership control. This government rejects permanent rent and ownership control, Mr. Speaker.

Accordingly, the major change that we are making to the rent control

section of the legislation is to provide for phased out decontrol, and I emphasize the words "provide for." The formula's not contained within the legislation, only the opportunity to come up with that formula and to enforce it. At present the Act provides that rental accommodation costing more than $500 is exempt from rent control, and that is about 2 per cent of the rental market. We are introducing legislation that will allow that limit to be changed, and will also allow that limit to vary depending on the number of bedrooms in the rental accommodation.

This pattern has recently been established, I might say, by the Alberta government. The Alberta government established this pattern after discussing the matter with senior officials in my department.

We're also providing, Mr. Speaker, that we may phase out or decontrol by area. Some communities are in a much different position than others.

The majority of other changes in the rent control

section of the legislation are essentially housekeeping changes of detail reflecting more than two and a half years of experience in the administration of rent control. These will clarify landlord and tenant rights, specify the commission's powers and relieve bureaucratic inequities. I don't like red tape and we're trying to cut it out where we can.

Previously in this session, Mr. Speaker, we introduced legislation to enable the reduction in rent increase from 10.6 per cent to 7 per cent. That was to be effective May 1 and will be effective May 1. There is some suggestion, I might say – and I think I should comment upon it – that we should make it effective till January 1 of this year. While there are some other changes to follow, it's frankly no more equitable to make all these changes happen on January 1 than any other day. One day is the same as another. January 1 is not etched in tablets of stone.

AN HON. MEMBER : Unless you're paying rent.

HON. MR. MAIR : Unless you're paying rent at any particular time, Mr. Member.

The previous administration saw fit to leave a loophole allowing unconscionable and irresponsible landlords to charge large amounts for additional occupants. This government is putting an end to what we consider to be a dreadful practice. I'm sure that all responsible landlords, which includes nearly all of them, will be pleased to see an end to this practice. We are providing, of course, that responsible landlords who may be seriously hurt by this change through no fault of their own may apply to the Rent

[ Page 5002 ]

Review Commission for relief. For example, a landlord who has recently purchased a building on the basis of permanent rents might find himself in such a position. With this legislation, this government is also going to remove a small source of nuisance to both tenants and landlords by requiring rent increases to be rounded off to the nearest dollar.

The Central Mortgage and Housing Corporation has recently reported the increase in vacancy rates that is obvious around us. I would like to make three observations about the vacancy rate, if I may. First of all, Mr. Speaker, it is a gross rate, and there may still be considerable shortages in the three-bedroom, family rental units, and in rental units suitable to our poorer or older citizens. Secondly, the increase in vacancy rates is largely due to the excellent job done by my colleague, the minister responsible for housing (Hon. Mr. Curtis), in response to the short-term federal government tax and subsidy programmes.

Thirdly, I wish to warn you, Mr. Speaker, and members of this House, that the vacancy rate may disappear in 12 to 18 months' time as a result of federal changes to these same short-term subsidy programmes. The boom-bust cycle in housing is not a healthy state of affairs. It is not a simple matter, as many trends interact and many individual decisions are necessarily made without the decision-makers knowing what other decisions are being made by other people. In other words, too often we act in isolation one from the other.

It may be that the boom-bust cycle in housing is not the result but cause of other boom-bust cycles in our economy. I would call upon the federal government to assist the provincial housing ministries in tackling this question.

To monitor effectively the effects of decontrolling, we are strengthening the requirement that landlords must file a copy of any rent increase notice with the commission. This will allow us to re-evaluate the situation if irresponsible landlords attempt uncalled-for increases.

Since becoming responsible for rent control last fall, I have received representations from both tenants and landlords, individually or in groups. In fact, I made a trip to Vancouver this morning for just such a purpose. Both tenants and landlords are somewhat unhappy with the present state of rent control in this province. The fact that they are both unhappy may be a good sign and good news because it suggests that the legislation basically achieves a balance between the interests of the two parties.

I would be particularly worried if either group were really happy with the situation because it would mean that the legislation favoured one group at the expense of the other. We have tried to find that point of balance between the rights of the tenants and the rights of the landlords. Experience will tell us how close we have come.

The final issue, Mr. Speaker, is what I might call post-control controls. There are some landlords – and I'm sure there are very few – who think that following the absence of controls or decontrols they can get away with very large increases. We have taken care, Mr. Speaker, to design a

section that will give the tenant rights of appeal and, hopefully, force landlords and tenants alike to be reasonable as to what is fair in the circumstances. In no way, therefore, does a phasing-out of controls mean that we are abandoning the tenant to the variables of the market place and to the tender mercies of the landlord.

As I said earlier, Mr. Speaker, we are determined to phase out controls. We are equally determined that no one be victimized by our so doing, so we'll be monitoring decontrols to assure that this happens. Mr. Speaker, I move that the bill now be read a second time.

MR. N, LEVI (Vancouver-Burrard) : I'd like to thank the minister for giving me a copy of his notes. He reads very well, but he tends to edit as he goes along.

During the last election in my riding, Mr. Speaker, a major issue that was discussed was rent control. It had been a major issue in 1972. In 1975, my colleague and I went to great lengths to point out to the voters in that riding that it was the intention of this government, or of the party if it was to be elected – the Socreds – to remove rent controls. That kind of debate went on both at all-candidates meetings and while canvassing on a door-to-door basis in talking to people, reminding them that this group, the Socreds, voted against rent control. They have always indicated that they would remove it.

That's the position they took in the election and have taken until about the last 10 days.

Then, to and behold, in my riding they spent thousands of dollars just on one particular Saturday dropping a very expensive leaflet which was, in fact, a reproduction of an advertisement that was in the papers, saying: "It is not true." They kept protesting: "It is not true." I suppose parenthetically, although they didn't say it, "what the New Democratic Party says is that we are going to remove rent control." Interestingly enough, because of the saturation campaign centred around the Socreds not removing rent controls, a number of people bought that line.

Yes, a number of tenants in the riding of Vancouver-Burrard switched their votes because they were mainly concerned about the issue of rent control. As a result . . . .

MR. SPEAKER : Hon. member, we're not debating the last election campaign. We're debating Bill 86, Residential Tenancy Act, and unless you can relate your remarks to the Act that's before us, you're out of order.,

[ Page 5003 ]

MR. LEVI : Oh, Mr. Speaker, I don't want to get into an argument with you.

MR. SPEAKER : As long as the hon. member remains in order there'll be no arguments.

MR. LEVI : The principle of the bill, Mr. Speaker, is to remove rent control. That's the principle of the bill. It's quite simple – rent control. They voted against rent control when they were in opposition. They were against it when the election started and then they suddenly did a switch-around. Now that has something to do with the bill.

HON. MR. MAIR : I can't think of what.

MR. LEVI : I'm sure it does, Mr. Speaker. I know that it pains some people for us to remind them of what happened in 1975, but it was very serious because people were told that they would not remove rent controls.

Now we have a bill. The minister went to great lengths to have a speech prepared in which he talks about his feeling on rent control – he's not in favour of it. He tells us that the CMHC has indicated to him that there is a vacancy rate. Well, I want to talk about my riding. The average vacancy rate in Vancouver, according to CMHC, is 1.8 per cent. But in two particular areas of my riding, Kitsilano and the Granville Street area from 16th down to 8th, the vacancy rate is half of 1 per cent.

Of course the minister makes a mention about the business – you can't average, you've got to be careful . . . . There are no indications, Mr. Speaker, that there is a large vacancy rate in terms of the average kind of housing that most people in my riding need to live in, or, indeed, most of the people in the lower mainland area, who represent about 60 per cent of all the tenants living in this province.

We've had no solid information from the minister to back up this bill. In his speech he points out a number of problems that go toward the creation of a serious vacancy rate, then he tells us that the vacancy rate has improved. One of the factors he talks about is the increased cost of land. That's a very significant factor in terms of the cost of housing.

When the legislation that we are now repealing – not repealing, but adding to in terms of making allowances for controls – was brought in, we were told that this was going to be a disincentive for people to build houses; that somehow, because this happened, none of the people who invest in housing would do so. The minister himself pointed out that the first problem was created by the federal government.

What the minister has not recognized is that in terms of the problems of having more housing . . . . He feels comfortable about going into rent controls and he's talking about selective areas. They'll select an area somewhere in the province where the vacancy rate looks good and they'll say: "Well, we'll take the ceiling off there." Then, as though sucking his breather because he thinks maybe something terrible will happen, they make provisions in the Act for people to go in if there is an undue increase in the rents in the decontrolled areas. What about the Vancouver area?

The minister brought in a bill in April indicating that the increase limit would be 7 per cent. Then – and I think it's very typical of that government – they rush in with a piece of legislation and leave it on the order paper. All the people out there, particularly the senior citizens, don't know whether they're paying 10 per cent rent increase or 7 per cent.

I don't know what kind of confusion he has created for the Minister of Municipal Affairs and Housing (Hon. Mr. Curtis) in reference to his SAFER programme, because they're going to have to manipulate rentals there in order to decide what share they're going to get. So that bill sat there, and nobody really knew.

Now he has brought in a bill that is going to incorporate the bill that's on the order paper and, somewhere down the line, the cabinet will have some power with which to look at the areas where we can talk about decontrolling.

Mr. Speaker, it is important when talking about rent controls to remember that the minister used the argument that was used by all of the apartment owners and investment dealers when the previous government brought in the Act – that this is going to limit house building. Let's look at the situation, because it is important to have a complete understanding of what actually took place over a period of four or five years in terms of how many houses were built and who built them.

Mr. Speaker, we have – and the minister hasn't talked about this – an extremely serious situation in this province, particularly in the lower mainland area, where we have a highly concentrated amount of control by about four major companies in the house construction business and the control of land that could be used for house construction. Four major companies that are controlling enormous amounts of land have all of the tax advantages. I'll give you an example. We'll deal with the four major companies as they are known in the lower mainland area. I want to talk about Daon Development Corp., Block Brothers, Wall & Redekop and Nu-West Carma.

MR. GIBSON : What percentage do they control?

MR. LEVI : I'll give you that in a minute. Now what I want to talk about here . . . .

HON. MR. MAIR : What was the last one, Norm?

[ Page 5004 ]

MR. LEVI : Nu-West Carma.

Now here are four companies that have, at the moment, an accumulated deferred taxation of some $46 million. That is tantamount to the taxpayer saying: "Here's $46 million. You don't pay any interest on it. When you're ready to pay us, fine." Now where are these four major developers – who have a gift of $46 million – developing houses? In Burnaby? In New Westminster? No – Seattle, Houston, Dallas and points south.

They're being subsidized by the taxpayer here and they're taking their money and they are going over the border. It is estimated that in terms of the amount of money we have calculated that some $100 million has gone out of the market here and gone down there. There is a loss of approximately 2,500 houses to the B.C. market, and that's important in terms of the argument the minister uses, which is that unless you create more housing you have a larger vacancy rate; therefore you don't have the need for more controls. He doesn't like controls. Right. Okay.

If we have the market system that he defends, people will in fact build houses. They'll build them, but when you look at these four companies – and there are the major developers plus we also have Genstar here – they have one heck of a lot of power in this province. They start out with a little 14 or 15 people getting together and forming Western Realty. They're taken over by Abbey Glen and then Abbey Glen is taken over by Genstar and over a billion dollars of land values is controlled by that group. Now that is what's happening in this province.

It's analogous to the kind of terrible situation that we have in terms of food in this province where we have a high degree of concentration. We also have a high degree of concentration in the housing market in terms of control of land and of the construction. One would think that because they're rushing over the border it really doesn't pay to work in B.C., that you can't make any profit so they have to go somewhere else. If you look at the kind of money these people are making, at the kind of profits that they've been making since 1971, there's nothing wrong with the profits.

The average increase in profits on a yearly basis over five years has been 34 per cent. When we look at the housing market incredible profits have been made, and yet if we look at the housing starts we can't find that there's any significant difference in the housing starts over the last three or four years. In fact they have yet to reach – and we don't know whether they will reach it in this year – the highest starts which were six years ago. The indications are for CMHC that housing starts are down.

Now again we have to go back to the proposition that the minister talked about. If you remove the climate of controls you are going to encourage people to invest. Well, we've shown that doesn't happen. Controls or no controls, they'll go over the border if it is more advantageous. They're sharp. They went over the border, made some significant investments, presumably produced some houses at reasonable costs, and now the big boom is on in the United States and there is a lot of money going to be made down there. Why, even the forest industry is going to make a lot of money. The prices of lumber are shooting up all over the place.

The important thing is, what is happening here in British Columbia? One of the things the minister did not talk about because he is not in favour of it is rent controls. Well, I am. This party is. We have to look at the availability of people's income in terms of what they pay for rent. That has to be a justification and argument that we have to make if people need to rent, whether they need to have some kind of assurance that they are controlled.

In 1975, in the GVRD there was a survey done and it showed that 35 per cent of households were spending 25 per cent or more for shelter costs in the Greater Vancouver Regional District. Altogether you have more than half of the people who rent, some 133,000 tenants out of some 242,000, were people who were classified as in need because they were spending more than 25 per cent of their income on rent, some as high as 35 per cent, and one group even as high as 51 per cent. Now that has to be an issue to justify keeping on rent controls, not removing them. That situation has not in any way been changed.

We have an inflation rate as of the last figures from Ottawa of 8.4 per cent. Now, the actual inflation rate that the federal government and all of the other governments were working for when they all joined together and jumped into the AIB pit was 7 per cent, and here we are in July up to 8.4 and we are going further ahead. Today we had a question in the House about the cost of home heating oil. It's going up five cents and another five in six months, my colleague says. All right, that's 10 cents. Home heating oil costs what, about 44 cents, 45 cents?

AN HON. MEMBER : Forty-nine cents.

MR. LEVI : Forty-nine. Okay, we've got 49 now and in six months it is going to go up another 10 cents and we're looking at something like a 15 to 18 per cent increase. That is going to reflect itself in a change in the inflation rate, and in the cost of living. That's certainly going to do that.

Now all of these factors are going to make life far more difficult for people who are living in low-income housing. If it's public housing, there's some kind of control on the basis of income. There is some basis, but not to 25 per cent for the people of SAFER. That's going to be a tougher proposition.

So all in all, the present conditions of inflation do not indicate that down the road over the next 6 or 12 months there is any necessity for this kind of

[ Page 5005 ]

Things are not getting better; they're getting worse. They are not getting better. The minister has not produced for us any figures whatsoever or any up-to-date study on why it is he sees that he's going to be able to take off control in certain areas of this province. We have none of that information.

Now the amazing thing is that when the previous government was in, we used to get a brief every three weeks. They were spending thousands of dollars proving to us how rent controls were ruining the economy. They would say: "You are, in fact, discouraging the building of housing units." When we said to them that there is an exemption for any new housing for five years and that there's no rent control, they never talked about that at all.

But the economic situation is such today that there are no indications whatsoever it's improving in such a way that they can even think about it. How can you think about lifting rent controls now, with heating oil going up 5 cents now and 5 cents in the next six months? What kind of economic logic is that?

Mr. Speaker, the issue of rent controls is a contentious issue all across the country. When it was brought in three years ago, it was brought in while, on the one hand, a group of people were worried about their basic income and their disposable income. They could see it disappearing because the increasing rents were having an effect on them. In this House in 1972, when we brought in the Mincome programme, we had serious concerns about the increase in rents, because while we made more disposable income available to seniors, they were being charged more rent.

We were concerned about that and there was a great discussion about the need to have some rent control, to make sure that low-income people would be able, to some extent, to live within the amount of money that they got, particularly when they were getting more disposable income. That was important, because we are dealing in this province with 60 per cent of the people making less than $12,000 a year. There's a significant number of them – something on the order of 150,000 – who make less than $5,000 a year.

They are those people on old-age pension and guaranteed income supplement and the GAIN-less programme – just in one group.

Those people who are the middle group, which was not eligible for Mincome, were the people who had the better pensions. They have now lost that real effectiveness, because of the general increase in the cost of living. There are a lot of people in this province who need the assurance of rent controls. There are great dangers in the idea of selecting areas simply because there may be a surplus of housing in one particular area. The question we have to ask ourselves is, if there's a surplus of housing, who could go in there? People in fixed incomes are not people who can go up in terms of paying more rent.

They are locked in. That's what happens. They have to make a commitment as to whether they're going to spend 25, 35 or, in some cases, 50 and 55 per cent of their income on rent.

So, for example, if you decide that you're going to de-control an area . . . let's call it Wonderland, and there are 25,000 people living there. They have the usual percentage of low-income and fixed-income people. In what way is that going to have any great assistance? In what way is it so terrible that there are rent controls? You're going to have horrendous problems. You're going to say that if your rent goes up too high, you can go see the rentalsman or go to the rent commission. Can you imagine the kind of bureaucracy you're going to get? What's going to be the level?

You de-control an area and then you say: "Well, we'll sit back and see what happens." Now when do we start getting twitchy? When it gets to 8 or 10 per cent of what it was – or 12 per cent or 15 or 20 per cent? Sooner or, later you're going to have to say – not because it's in the bill now, Mr. Speaker, and there is a provision in the bill to appeal unconscionable raises . . . . But are you going to have out there, with your rent commission and with all of the work that they have to do now, the kind of work force that's going to be able to resolve those kinds of problems?

One might very well ask: "Why do it in the first place?" We're not sailing into an economic boom. We haven't been in the past two years and we're not going to be, contrary to what the Conference Board of Canada says. It seems to change its mind every two months. One day there's a boom on; the next day there's a boom off. One has to listen very carefully to what the Chamber of Commerce in B.C. said about the Conference Board in Canada: "They say there's going to be a boom? We're not aware of it." They are usually the people who are held up to the public at large as having their finger on the pulse of the economy.

Well, they don't see any boom. Maybe the minister does. Maybe he has information that we don't have. Maybe he's anticipating that the statistics bill, which the Minister of Economic Development (Hon. Mr. Phillips) brought in, is going to work so well that somehow he's going to manufacture a boom out of it.

One really wonders why it is they feel it's necessary at this time to bring in this kind of legislation. It can very well be, Mr. Speaker, that the minister will get up when he's closing debate and say: "Well, we're not saying that we're going to decontrol; we're only saying that we're making it possible to decontrol." Now what does that do? Well, that may send a message out there to all those landlords who voted for them. The message is: "Look, we have some IOUs for you guys, and this is it. We've got legislation which allows us to go into

[ Page 5006 ]

decontrolling of rents in particular areas." Well, we don't have any information. We have no information whatsoever.

There are other problems. There is the age-old problem which my colleague the second member of Vancouver Centre (Mr. Barnes) very often raises: the area of designation. That's the business of hotels down in the Vancouver area. There are hotels in other areas, too, where people live – that's their residence. Well, we're not sure yet. From the briefing we got, we are given to understand that there will be a procedure. I hope that it will work, because really, apart from the decontrol

section of this bill, the other amendments really relate to refining the Act on the basis of problems which have come up. That is needed to make the operation of the rentalsman work more smoothly, and that's accepted. But that's the housekeeping part. Well, we hope that the designation

section is going to be a little bit more than housekeeping, because we know, certainly, on the basis of the survey that was done in 1975, for instance . . . at that time there were almost 1,400 welfare recipients right in the Vancouver area, who were living in 127 hotels in the downtown area. I'm not talking about the Bayshore or the Hyatt-Regency; I'm talking about those hotels that are situated somewhere between Clark Drive and Hastings Street, not much farther up than, probably, Pender Street.

At that particular time, there was something like $2.5 million being paid for rents by those people. I remember talking to some of the landlords then, when these people were having trouble. They kept pushing up their rents because they were exempted. There was no control over them. I was saying to them: "But surely this has to be your bread and butter. After all, where can you get . . . as landlords you're getting something like $2.5 million a year just from that one group, yet you are prepared to treat them the way you've treated them."

All right, we amended the Act. But we were not able to put it into effect. That was our fault, and we can't blame anybody else but the government. We can't blame the rentalsman; it was a question of the provision of staff. But the point is, 'there was a recognition of the problem. Apparently, here in this Act, there is a recognition of the same problem. Nevertheless, there is – and one has to develop in this particular area – a sense of urgency about doing something for those people down there. I hope that, certainly within this section, it can work.

So, on the basis that this is the housekeeping part, one can only see it as a continuation and a practical continuation of making the rentalsman's office continue to work even more smoothly than it has done. That's accepted. But when we get back to the decontrol section, Mr. Speaker, then we are in some very serious trouble.

We had a series of studies done during the previous government. We don't know if there have been any studies available to the minister since. He apparently rushed over to Vancouver today to meet with landlords and tenants. Or just tenants? No, neither.

HON. MR. MAIR : Tenants.

MR. LEVI : Tenants? Oh, tenants. That's Bruce Yorke, I guess.

HON. MR. MAIR : That's not even a good guess. Who else?

MR. LEVI : Brucie's the king of the tenants.

In order to justify the kind of legislation that's implicit under

Part VIII, the minister is going to have to go a lot further than telling us that he may have information available that indicates that there are vacancy rates. I've already pointed out that we have the questions If there are vacancy rates, who can take advantage of them?

We've had a great discussion with the Minister of Housing (Hon. Mr. Curtis) about his plan to sell off the Quesnel Place operation. You know about the Quesnel Place operation. I'm sure you do, Mr. Speaker. Quesnel Place is one of those stories which is tantamount, but even worse, than the empty office space story that they had when we were government. Here you have 278 units and 19 of them are rented. God knows what it's costing the taxpayer to keep that place empty simply because the minister wants to develop a policy which is in keeping with his economic philosophy of free enterprise.

They wanted to sell them off so they opened, and what happened? Well, 17 or 19 people bought, and it's been sitting there empty. All right, that's part of the vacancy rate, but why is it empty? Because people haven't got the money.

You know, one of the joys, as the minister put it, of owning your house is that you can sweat a little bit every month about whether you can pay the mortgage payments. There's a lot of sweating going on in this province right now, Mr. Speaker, about mortgage payments, not only from the people who have to pay the mortgages, but also from the people who did all the lending in relation to the mortgages. We have a very serious situation in respect to that particular question in terms of mortgage foreclosures. They're going up. Why are they going up? Because the economic situation is going down.

That appears to be the general opinion of the people you talk to in the mortgage-lending business. There's that holy economic trinity that we have: unemployment, increasing inflation and, because we're dealing with mortgages here, a soft real-estate market. There's no buoyancy out there. There's no reason for optimism – not the kind of optimism that's implicit in the minister's statement that we're going to bring in the

[ Page 5007 ]

right to decontrol. Is that what it is, too? Is it part of the general propaganda of the Socred government somehow to indicate to the industry and to people that we are now in a position to decontrol because we have some kind of vacancy rate, and to ignore completely the questions of unemployment, increasing inflation, and a soft market in terms of real estate?

I talked to the mortgage companies. They're very frank. They'll tell you that they're worried. They're worried about people who are carrying 95 per cent mortgages based on two salaries and then somebody gets laid off – either one spouse or the other. What happens then? There's a big panic. Some of the companies are saying: "Let's suspend payment. If you have some kind of employment options down the road, we're prepared to do that." But in some situations it's much more serious because they don't have any options.

There are all sorts of family situations – there may have been a split in the family, and that kind of thing – where that house is going to be lost because there's no way these people can make payments of $600, $700 and $800. That's a serious problem.

We have an incredible vacancy rate in terms of condominia because in the nature of the so-called free enterprise economy, which is a highly planned one, so we're told, they over-built because that's where all the bucks were. It paid to over-build, to do a lot of building of condominia, because everybody was switching to condominia. There was money to be made in it. What do we have now? We have a flat condominia market. We have all sorts of vacancies, and that's part of the vacancy rate the minister talks about.

That's one of the dangers: the suggestion that somehow in the vacancy rate there's some kind of mobility on the part of people who rent. The mobility rate for at least 60 per cent of them is nil. They are not able to get beyond a particular level of rent simply because their income dictates that level, and that's it.

The small group who can get in there are presumably in there. What we have in terms of a vacancy rate is an overbuilding and an excess of units which are not going to be filled by people on fixed incomes or low incomes, or by people who are well off, simply because it has reached a serviced saturation point.

Added to that is a new factor – something which none of us realized until very recently when the studies were finally completed. That is, the populations in two major areas, Victoria and Vancouver, are declining. Not only the money is going over the border, but also some of the people are going over the border. There is a serious problem in terms of the GVRD, particularly in the Vancouver area. They were shocked when they found they had a drop of some 16,000 in the population. One has to have questions about that. We have it in the Victoria area.

Here in the Victoria area it may very well be that towards the end of the year, as some of the people in CMHC indicate, there may be a vacancy rate as high as 10 per cent. I'm told that could happen. But that's got nothing to do with building. That has to do with the fact that people are skedaddling out of here, particularly from the Island.

In order for the minister to really have done his job properly, he certainly, in fairness to his own party, should have had some hearings about this thing – not royal commission hearings. Let the rentalsman or somebody from the rent commission hold hearings, and not the way they hear appeals, where they fly off to some place and they have these kinds of closed meetings.

I'm talking about public hearings where we get response from all manner of people in the community about the issue of controls, about the issue of availability of rental accommodation and about what people talk about when they talk about affordable housing, because we constantly deal in averages. It's very difficult to deal in averages.

It would have helped the minister's cause to say that we will have a series of hearings around the province to find out what is going on in terms of the housing market. We could have heard from the land developers. We could' have invited them to come and said to them: "What is your situation? Do you control a lot of land? If you're not going to do any building, why?" Those are good questions to ask people in the industry, because we have to have some concern. The major people in the industry are investing over the border – the four majors. I gave the facts in terms of the kind of profitability that is in there.

There's a lot of profitability in them, and certainly it's around the issue of land.

The other hearings could have been related to the whole business of tenants and tenants' rights, beyond what appears to be a major emphasis in terms of tenant rights in the lower mainland area, and related to the kind of problems tenants are having in other parts of the province. Certainly the B.C. Tenants' Association has representation there, but we would also like to have an, opportunity to hear from people about their kinds of problems These kinds of hearings would have been very useful, because they would have given us a feel for the situation.

We would have to get the other kind of specific information from the experts in terms of who put the information together, and we'd have to be able to interpret what is really going on out there.

MR. SPEAKER : Hon. member, may I just interrupt long enough to inquire if you are the designated speaker?

MR. LEVI : Yes, I am.

So I would say to the minister that he has missed

[ Page 5008 ]

an opportunity to find out what is going on in the community in respect to this whole problem – the issue of rent controls and what kind of difficulties people have in terms of housing. He might have been able to buttress his arguments about the vacancy rate, but I doubt it very much. I doubt very much that he could in any way substantiate those kinds of facts. The other facts show that if there was a willingness on the part of the industry in this province to build houses, we would have had houses built – not because there were rent controls, but we would have had them.

The big issue is that because you have a high degree of concentration – an ever-increasing degree of concentration – then you're going to have a situation where the smaller builders are going to be somewhat discouraged because they have to get in. The first thing they have to do is get land. Land is quite expensive for them, and that's a major problem.

We don't have to discount all of the other problems that flow from that. Some of them have been mentioned time and time again in this House. It's important that we understand that at one time in this province, when you talked about construction, when you talked about who was involved, there was a large number of smaller companies involved in building houses. But that's not the case now. Let me give you an example. If you take the eight largest companies in British Columbia dealing in housing, in 1972 they had 12 per cent of the market. Now they have 22 per cent. Those figures are from 1975-76.

If you look at the kind of people that go into multiple-housing development, in 1972 they had 25 per cent and now ,they have 42 per cent. There we are – an ever-increasing share of the whole housing market by a small group of people. It's extremely serious. It's a serious problem certainly for a government, particularly in relation to the federal government and the concentration of food, but that's never been one that's greatly discussed in this province.

I want to go over the business of the concentration by these companies. You know, we begin to wonder, particularly in relation to the present government. I thought we might have heard something from the minister about who actually is the big action, the high rollers, in the industry and what kind of discussions he might have had with them. Has he had any discussions at all with the major people in the industry, particularly about the so-called vacancy rate? Because if he's going to use the argument about the vacancy rate, then what he had better do is create some vacancies.

The only way he can create some vacancies is to get somebody to build some houses beyond the 16,000 or 17,000 units per year that we've had over the past three or four years.

We don't know yet where we are going to be in terms of the housing units for this year. If that's the case – and I am using the argument that we can have a decontrolled situation because there are some vacancies and also because it's good for the industry – then I suppose he might very well say to them: "Well, why haven't we got more houses?"

Now let me just give you an example. In 1966 we had something like 9,000 housing starts in the province. In 1976 we had 16,000. In 1966 the land costs in terms of those houses were about 30 per cent, but in 1976 it's 47 per cent. When we examine that problem of the land cost increase, we can then address ourselves to why that is the case. We will then begin to find that it is because of the high degree of concentration by a small number of companies that are controlling a very considerable amount of land, and we begin to wonder.

For instance, Nu-West Carma or something of the order of the Genstar group . . . . I talked about the Genstar group before, which is the Western Realty, Abbey Glen, Genstar kind of operation. They control 6,000 acres. That's an incredible amount of land. Nu-West Carma has something like 912 acres, by themselves. Block Brothers has about just over 600 acres, plus about 1,089 lots. This was in 1976. But what's missing from this in terms of stated figures – and that's difficult to get – is the amount of land that these people control in terms of the options that they have. Those are factors too and all of this tends to create a high proportion of cost in terms of land costs.

As a result, the small entrepreneur and the small construction man, who used to be very, very visible in this province, could get in and build houses – a few houses, not too many. He wouldn't build big developments because he didn't have the money anyway. But now he has a basic worry about whether he can actually come up with the money to cover the housing costs, which are going to represent something like 40 per cent of his cost of building housing.

Now I would have hoped that the minister would have discussed this, but he didn't. So I have to go back to the statement that I made that what we're talking about here is really, in the first instance, a payment of an election IOU. They have indicated to those people who supported them, particularly in the housing market, and those people who were approached regarding rent controls that were brought in by the previous government, that it's in the legislation that we can get out of controls. It's underscored by the fact that they have a minister who doesn't like rent controls.

Well, that's strange, because they have a Premier who does like rent controls, because he went to the trouble of telling everybody in the province that they would not take rent controls off. So we really don't know where we are.

Mr. Speaker, I have made reference to my own riding because it .has a representation of people in the

[ Page 5009 ]

fixed-income and pension area, which is very significant. Many of those people are aware of the effect of rent controls in terms of their daily lives. They've had their troubles over the past two or three years. They've had landlords who have increased their rent beyond the required amount – the 10.6 – they've had to go down to see the rentalsman, and that's been settled. They have now got into a kind of routine or, if you like, a mind-set, or at least the mind-set was there until April of this year. They knew the rent controls were there.

They had been there for about three years and they could look forward to them continuing, because they didn't see how anybody in their right mind could think about taking off controls, given the kind of incomes that they had.

Then in April, we had the bill come in and they were very happy about that – 7 per cent. But it wasn't passed and their rents continued at 10 per cent. Now we're told that somehow there'll be a procedure worked out, that either they will get their money back or . . . we don't know. I don't know how they're going to do it. Oh, they may have to go to court to get their money back, because they've paid more than they should have done.

What the minister should do is to look seriously at the Act or at a regulation whereby there might be some kind of provision made so if money has been paid at 10.6 per cent up until the time the bill is proclaimed, then what they'd better do is to allocate a period of time when rents can be paid at the 7 per cent level, in such a way that the money is paid back to them. Otherwise, a lot of people will probably lose that money. So their mind-set was disturbed. Now it's become even more disturbed, because within the Act itself is a

section that really says that we can move into the business of decontrolling.

Now I suppose we cannot see down the line over the next several months. At least, I hope we don't, that somehow we are going to have a cabinet order which decrees that the Vancouver area can be decontrolled. Are we going to have that? Can you imagine the kind of chaos that's going to result from that kind of statement, Mr. Speaker?

Except, maybe, for a little enclave around 26th or 28th Avenue up to about 33rd or 34th, seven or eight blocks on either side of Granville, where you might not affect people by decontrolling rents, in every other single area of Vancouver, and even into New Westminster, into Richmond and Delta, you are going to have people who can be seriously affected, creating an enormous amount of tension and unrest among people, because there's a suggestion that they're going to take off controls.

The minister bases it on the basis that we have to look at the vacancy rate. He might have a better argument if he were to take the vacancy rate and take the prospects for increased affordable housing construction. Then he could say that in one or two years X number of units will be available and the affordable rents will be this. Therefore there will be sufficient housing for us to justify the lifting of the controls. But there's none of that at all.

There is no indication that the housing market itself is going to improve, because the major people involved in the housing market have no confidence in the market in British Columbia. They're going over the border to make their investments. They're taking with them the very large subsidies provided by the taxpayers – $46 million in deferred taxes for the four major developers in the province – and they're investing over the border.

I would have thought that the government, because of its serious concern about the development of the economy of the province, might have taken a good look at this kind of situation and address some remarks to the federal government. But they haven't done that. After all, it's a free enterprise system: you get what you can and you take what you can, and then we just have to see whether you're happy enough to use the money here. If not, well, it's free enterprise and you can go over the border.

But what we have to be annoyed about is that they can only go over the border because the taxpayers of this province are subsidizing people in the United States to have housing, and that's wrong. That's a terrible tragedy in this day and age. We talk about affordable housing for our people but we're sending large amounts of money over the border at the expense of the taxpayers. We don't hear a word from the free-enterprise government. And that's a serious problem, because if the minister wants to be able to justify a vacancy rate, then he can say that we have more houses than we need. That will be the day when that happens.

In some kind of planned economy – that's not going to come from this group – it can happen. But at the present time, because of the way the federal government – and I join this government in the attack on the federal government – have allowed the kind of tax break that they can have, this province is deprived of 2,500 houses, while down in Washington and Texas and in various states in the United States, they are getting the advantages of the money that was made in this province, because down over there the returns were better.

Now the minister should address himself to that very carefully, because that is the key question. The key question being: if we have a healthy economy and a climate in which it would be possible for people to want to build houses, then we have to say: "Well, why isn't it happening?" The four companies which I referred to have made record profits. They control large tracts of land. They have large amounts of money. Yet they appear to have no basic confidence in the economy whatsoever in this province, and they

[ Page 5010 ]

go elsewhere.

Now how do you generate that kind of confidence? That's a good question: how do you generate that kind of confidence with a group like this? After all, this is the government, Mr. Speaker, that wants to be able to improve the economy and yet is facing, as a result of the bill which they're talking about . . . they're really trying to kid the public that things are a lot better now because there's a vacancy rate. Yet they haven't been able to demonstrate one fact that shows that there's that kind of vacancy rate which would justify the

section of this bill which allows them the freedom to remove controls.

But we don't have that kind of leadership from this minister. We don't have it from the Premier in terms of the economy. Consequently, we have large unemployment and we have an ever-increasing inflation rate. We have a soft real estate market. All of these factors put together mean for that government – but for nobody else – that we can decontrol in terms of rent. It's incredible! That's an incredible kind of philosophy. They're really only doing it for one reason.

They're doing it because they have to make a show to that industry that down the road – not now, but down the road – there will be decontrol and things will go back to the way they were before, where landlords can charge what they like, particularly more than they used to, because now they haven't got the tax advantages that they used to have.

So that's where we are. We have this bill before us and we can't deal with it. We cannot accept this kind of legislation. Four years ago and three years ago we fought in this House about the introduction of this kind of legislation because it was necessary and it was intended to protect people who could not protect themselves. What has happened is that it has become a reasonably well operated office in terms of the rentalsman and in terms of the function of the Rent Review Commission. That's important. It takes years; it doesn't work overnight.

Now they're going to be saddled with an additional burden in terms of the appeals under the excessive rents in areas where the decontrolling will take place. It will take them some time to straighten out that mess.

Well, what have we got at the end of it all? We have a great deal more confusion than we had as a result of not having controls three or four years ago. We're going to have the same kind of problem, because somebody – the cabinet – based on some kind of information or maybe on hard-nosed political decision making, will say that X area will be decontrolled. Then the roof will fall in on them. Sure it will. The roof will fall in on them, but it will mainly fall in on the people who are living in the houses, so they won't be concerned too much. As long as they make the right kind of political decision.

They're always prepared to switch around if it fits in with their programme. But it's going to be a tragedy, if we're not careful. Because all the experts that we have – economists and statisticians – are all monuments to looking at averages. In looking at averages in terms of what affects people, it misses completely large numbers of people who are in no way average in terms of income or in terms of the kind of housing that they've got. For some people, there is no mobility in terms of moving from less satisfactory housing into more satisfactory housing.

In terms of the rent control situation, it at least gave people the feeling that they could plan from year to year where they were. This legislation just simply creates an incredible amount of uncertainty. It's more uncertainty for people who are going to be victims, who have been in the past and probably will now be in the future, because once it's decontrolled, the landlords are going to be prepared to charge them far more rent than they can possibly afford.

Well, Mr. Speaker, while the housekeeping details of this bill are necessary for the operation of the rentalsman and the Rent Review Commission, the basic principle which leads to the removal of rent control – and that's what it does – is something which this party could never agree to. This minister has not done his homework in terms of presenting to us the information that in any way shows any kind of justification whatsoever for this kind of move. It's a betrayal of something that they said in the election, but we're already used to that.

You can always disregard what you say during the heat of an election when you're the government. You don't have to produce the things you've said you're going to produce; you just do it for political expediency.

This bill has the potential of creating more misery than any other piece of legislation they have brought in. We went through the business last year of all the tax increases, and people are still suffering from this. But this one is a basic issue. We have food and we have shelter. That's what people, particularly in the

[ Page 5011 ]

low income levels, have to spend most of their time about and worrying about. Have they got a place to live? Have they got enough money to eat? Well, all of this creates all of that uncertainty which was gradually removed as a result of the assurance that there would be rent controls. Now it's interesting that we don't have the loud, screaming house developers saying to us that it's because you brought in rent control that we don't have any housing. That's not said any more. They have been found out.

Rent controls are not the reason for the lack of housing at all. The facts are there; they speak for themselves. It's simply that there is a complete lack of confidence in terms of the economic situation to develop the kinds of housing that are needed here, so they develop it somewhere else, perhaps in the United States. None of those arguments has been made. These people who made so much noise during the time of the previous government are silent, as are other groups who are affected by other legislation that this government brings in.

I can remember the meetings with people from the rental housing council and the incredible arguments, the incredible documents they would bring up to substantiate their arguments. Where are they now? They are quiet because, after all, this government has been here two years.

Do you know the housing starts went up in 1976 over 1975? I'm sure that if we're not careful they will claim credit for that, too, but that's not the case at all. Their test year is now, this year, and whether they have been able to do things to the economy that encouraged that kind of homebuilding. There are no indications – no indications whatsoever – that the housing starts will reach the level they reached last year.

The only indication is that there are serious problems as a result of the kind of tax policies of this government where people's disposable income is shrunk and, as a result of that, there are more anxieties about where people are going to live and how they are going to maintain their housing. In the midst of all of this, in comes the gay minister . . . . I shouldn't say that – the Falstaffian minister. He comes in and, in a very pleasant way, delivers . . . .

HON. MR. MAIR : Gay?

MR. LEVI : Falstaffian.

HON. MR. MAIR : What was the first word?

MR. LEVI : He's the gay deceiver, Mr. Speaker. He comes in . . . .

HON. MR. MAIR : Mr. Speaker, on a point of order, if any suggestion was made by the member opposite that I'm gay, I want an unequivocal withdrawal. (Laughter.)

MR. LEVI : Well, I can't equivocate about that, Mr. Speaker. I withdraw. I did correct myself.

HON. MR. MAIR : Falstaffian I'll take.

MR. LEVI : Falstaffian you'll take. Well, I'll tell you things about Falstaff that you never read. I should see you after the House.

You know, in terms of the presentation of the speech, the introduction the minister made to second reading, it's always nice. I think it's really very nice that we have an opportunity to read the speech, and I think it's useful, you know, because we're all pretty busy and we can't always get into following necessarily the kinds of remarks the minister has made but, you know, it seems that he sees the principle of the bill quite differently from what we do. His concept of the principle of the bill is really the kind of housekeeping adjustments that are being made.

Now it may be because he split his speech in half and he was talking about the housekeeping ones and then he said, "that's the principle," and then he moved into the whole issue of the rent control section.

Now I just want to cover this because he made some effort to go into some of the remarks that he made about the difference between owning and renting, but the point is that the tendency in our society, contrary to the philosophy of that government – and they campaigned on it – that everybody has a right to own his or her own home, is that most people can't afford to own their own home. The tendency is toward people renting. That has been recognized.

HON. MR. MAIR : I said that.

MR. LEVI : Yes, that's where it is going. It isn't the great arguments that took place on the front lawn some years ago about depriving people of the power to own their own land. That's very nice except that a lot of people can't afford it. The more you look at the price of land, the more you begin to realize that that's because of a high degree of concentration by a very small number of companies which don't give two hoots about the housing needs of this province.

Despite all of the things that we have used in the argument, we still haven't resolved the question of the municipalities and the delay that it takes, but that's presumably down the road. There are other questions that he raised: the standards leading to final higher costs. He's right. I said when I was in the previous government that I'm not always sure that we can afford the kind of standards that some of our bureaucrats feel that we should have. There are basic standards that you have to have, but one begins to wonder about some of the standards. On the issue of the cost of mortgages, that is a serious problem. It is

[ Page 5012 ]

as the minister has indicated, that there is not particularly something that we can do about it; it's more of a federal matter.

He has a stance in respect to the borrowers and depositors legislation. I doubt that it will come forward. I'm very skeptical about that kind of thing. The onus on this government is going to be to say very quietly – and far be it for me to give this kind of advice to a lawyer, but – to heck with the constitution, let's protect people. Let's see if we can protect people in terms of the unconscionable mortgage situation and the needs for a moratorium. That is important. He does mention, very specifically, the cost of land. I've gone into that in some detail.

I've also added to that, because he didn't deal with it in his remarks, the high degree of concentration in respect to the cost of land. That is important. You were about to say something, Mr. Chairman? If you want to join in the debate, I'll sit down.

In his brief he talks about the issue of the growing popularity of condominiums. Well, we don't know about that, because the condominium situation is operating for a particular income level and it appears to be not quite as popular as it used to be. Vacancy rates in condominiums certainly in my riding are looking pretty rough. Some of the people who initially got into them because of an investment possibility now find that they're not quite as good an investment as they thought. He did say that all of the factors I've enumerated came together at more or less the same time to create a very unhappy vacancy rate situation.

What he really has done is argue the case about the issue of rent controls creating the lack of building and he has in part made my argument. What I'm looking for in his statement is: where have things got better to justify this kind of legislation? He says that the major change that we are making to rent control is to provide phased-out decontrol, at present de-activized, of rental accommodations, assisting more than 500 exempt from rent control. That doesn't affect most of the people, as the minister points out, just a mere 2 per cent. If they're going to introduce legislation to reduce the limit, then we begin to wonder that it's going to be what, maybe down to 4 per cent?

If he takes it down to 3 per cent it will make a lot of trouble for a lot of people, because a lot of people are struggling like mad to pay $300 and $400 a month. A lot of people are also paying $500, $600 and $700 a month; that's in mortgages. That's a problem there, but the people who can pay the big rent are paying it. Once you start going below $500 – and maybe you go to $400 to put the ceiling on there – you could be affecting a lot of families.

One would hope that if we don't get it from the minister, Mr. Speaker, in the second reading, he should be prepared to tell us in the committee stage of the bill just exactly what the process is going to be in selecting the areas for decontrolling. What are the criteria going to be in order for him to do that? Is he going through the formulas used in a variety of payments – unemployment insurance, for instance? Are they looking at areas, particularly as they are rating the areas according to unemployment rates, and at welfare rates? What is he going to be looking at?

What series of factors will go to make up the formula for him to make the decision that this area's going to be decontrolled? That's a very serious problem. It becomes a problem in mobility.

What would happen, for instance, if you have an area where you're decontrolled? You may very well have a problem in getting people to go live there who are employees. Take a town in the north that is looking for people to come in and work there, and yet one of the disincentives that could be created as a result of this legislation is that there is no rent control. That's a very serious factor. How are they going to do it? How are they going to make these kinds of decisions?

Certainly it is probably the most serious move that they have made because except for the taxation qualities, it really involves just about every individual in this province who is a renter – some 52 per cent of the total number of families that actually rent. Of all the families, 52 per cent are people who are presently covered by this legislation.

The minister might very well tell us, in terms of the economic development of the province and the various areas that they are looking to improve, if it is going to be a factor that if in a particular area there's a larger amount of vacancy rate, somehow they're going to take off the controls and think that that is in some way going to satisfy some people who are going to come into the area because they're going to work there. I would suggest that that's going to be a terrible disadvantage. It's going to be another problem added to the whole issue of trying to find the people who need to work in particular areas.

When he's taking about decontrolling, what is he talking about, and where? Well, I would hope to God he's not thinking about the lower mainland area. He has to be talking about areas in the north or in the Okanagan. There is a sufficient number of problems there. We're constantly told that there are serious labour shortages. Well, if they are going to bring rent control into those areas, they're only going to have people going into areas where the sky's the limit in terms of rent.

So, Mr. Speaker, while the minister made a lengthy presentation, he skipped over a number of points. We haven't found any specific information that he has brought forward that justifies this. I have attempted in my remarks to talk about problems, about the concentration of corporations in terms of land control and the housing market, and to say that nothing the minister has said has proved in any way

[ Page 5013 ]

that rent controls have had anything at all to do with the reduction in the production of housing units in this province. This legislation is simply paying off an election debt they have to the people who were against the rent controls. That is all it is, and there's no way we can vote for it.

MR. WALLACE : Mr. Speaker, I wish to start my remarks by thanking the minister for the notes he provided to us some time ago long before today's .debate, which has given us an opportunity -to appreciate the minister's position on this bill. I would also like to express my personal appreciation to the access which party leaders have had to the rentalsman, with the consent of the minister.

I don't know how often I've talked in this House about the stupidity of the secrecy of government and the defensive cat-and-mouse attitude which governments and cabinet ministers tend to have in regard to legislation. They like to come to the debate with as much hidden as possible, so that when they bring out the facts as they see them, the opposition has less time to give a considered and intelligent response. I consider that to be one of the most childish and immature practices that goes on in this House, and I am delighted that this minister – a new minister to this House, I might say, Mr.

Speaker – is introducing this concept of giving the parties copies of his intended notes prior to the debate. In this particular case, he has shown the initiative of permitting, if that's the correct word, the rentalsman to discuss matters freely in private with the party leaders on the opposition side of the House. I think that is to be greatly commended.

MR. GIBSON : Hear, hear!

MR. WALLACE : As to the bill, Mr. Speaker, my conclusion is that in general terms it is a good bill. I have some reservations about it, but it is such a complicated subject that there is no way that a bill of this complexity could meet every concern that an individual member would have. I just wish to say in general terms that I believe this bill to be a step in the right direction, although I do have some reservations which I'll touch upon in the course of my comments. I see this bill essentially as a move towards the removal of rent control.

The challenge of any such legislation is to establish two standards. One is the standard of balance – in other words, presenting what is as close as humans could come in any human relationship – namely the relationship between landlord and tenant – to establishing balance in the rights that each has vis-a-vis the other. The other challenge is to try and respond as quickly and as intelligently as possible to what appears to be the ever-changing lack of balance between building incentives and vacancy rates.

I'm rather pleased that the minister mentioned in his remarks the rather unpredictable and erratic behaviour of the federal government. Now I'm sure that the federal government is well motivated, but they do say that the road to hell is paved with good intentions. I think that in the housing field the federal government's performance has been perhaps more erratic than in many other areas, and that's saying something in terms of the federal government we now have.

The legislation of 1971, which took away the incentive for people with excess capital to obtain some tax concessions by investing in apartment buildings, produced a sudden reduction in apartment construction. I'm not familiar with all the details, but we've suddenly completely reversed the situation, and I gather that an investor can receive up to a subsidy of $3,000 a unit.

It seems to me that from 1971, when apartment construction almost ground to a halt, we have had a very difficult period of years when the provincial government, whether it wants to call itself a free-enterprise government or not, would also have introduced rent control had it been in power. Maybe not, but I imagine that the present government, had it been in power subsequent to the 1971 federal legislation, would have been under enormous pressure to do something because of the stupid action of the federal government, the consequences of which were as predictable as one could imagine.

I don't say this just to slam the federal government. I say it because it seems that it was such an obvious, sudden and depressing effect on the construction of rental accommodation. At any rate, history shows, and the years show, that that's exactly the mess we got into, and the provincial government was forced into a rent control situation.

I say that if we're making any progress at all, it would, I hope, be in the area of federal-provincial co-operation, whereby this government, as implied by the minister's comments today, desperately wants to get its message through to the federal government, first of all, to stop the boom-and-bust approach, and, secondly, to please tell us, as provincial governments what your plans are. Because, for example, Mr. Speaker, I understand from an

article that appeared in Monday Magazine at the weekend . . . .

Before I say this, I am delighted at the language that's used. It reminds me of Ron Ziegler, when he was press secretary to Mr. Nixon, because it says here: "According to CMHC officials, ARP" – that's the assisted rental programme – "has been rendered inactive for at least 12 months." That reminds me of some of the "inoperative value" of some of Mr. Nixon's statements when they were found to be lies.

But at any rate, we're on the other side of the situation that we were in in 1971. The financial incentives to rental construction are pretty attractive

[ Page 5014 ]

and there's been a tremendous rush to build rental accommodation. Now we've reached the point where the federal government, through' CMHC, has "rendered inactive" for 12 months its ARP policy. It's like turning a tap off and on. One time you are dying of thirst, and because you make a loud noise to the federal government, they suddenly turn on a avalanche and you drink very well. Then when there's water all over the place and you're puddling around and getting your feet wet, they turn off the tap again.

This seems to me to make it very difficult, if not impossible, for any provincial government to have any kind of long-term planning in relation to this whole very difficult area of rent control.

So that would be my first general comment, one about which I hope the provincial government is screaming loud and long at the federal government – stop the on-again, off-again approach to subsidy. Secondly, I hope that they would give this government some reasonable advance notice of what its subsidy plans are or to what degree it's learning from this erratic and episodic way of providing subsidies for housing.

The other problem I can see for this government or any government right now is that now that we have this sudden rush of apartment construction, it isn't by any means uniform in even an area like the greater Victoria area.

Again, if I can just relate to the contents of this

article in Monday Magazine, Mr. Speaker, the vacancy rate in one area of Victoria, the Hillside area, is 13.5 per cent. Anybody who knows the Hillside area knows very well – if you have driven around there recently – there are apartments coming up like weeds. You can go along one week and the next week when you go back it's just amazing the amount of new building that seems to be there.

On the other hand, in little old Oak Bay where we don't have a lot of vacant land the vacancy rate is 1.3 per cent. That's only two or three miles from Hillside.

I understand that in Esquimalt, where 80 new units have just been brought onstream, the vacancy rate is 10 per cent. And down in the area on Cook Street that's so popular in Victoria and not far from the parliament buildings, the vacancy rate is 3.7 per cent. I can't vouch for the total accuracy of these figures, but the person who has written the

article has obviously done a fair bit of research. I think they're close enough that we can draw the general conclusion that there is still a tremendous variation from area to area.

The

article also points out the numerous incentives that landlords are providing. I believe they even include a free trip to Las Vegas in some cases in order to attract tenants. At any rate, it is worth mentioning, Mr. Speaker, that the ARP programme began in the middle of 1975. In the greater Victoria area the vacancy rate at that time was 0.3 per cent and there were 1,268 units under construction. By July, 1976, the vacancy rate had risen to 1 per cent with 2,382 units under construction. I understand that in July of this year the vacancy rate was just over 5 per cent with 2,219 units under construction.

What we need is a balance, because not only is it of benefit to both landlord and tenant if there is a balance, but it doesn't do the construction industry any harm either if there is some uniform and predictable amount of employment in the construction industry from year to year.

Mr. Speaker, the essential thrust of this bill is to provide a mechanism to remove controls. While I know that we've often witnessed in this House in debates the fact that neither side of the House really trusts the other "round the corner," I happen to feel that this bill will either rise or fall on the amount of trust and confidence that is placed in the bill and in the subsequent manner in which the minister and the cabinet utilize the provisions that are in the bill.

This is where I come to my first reservation, not that I have any reservations about this minister or this cabinet on this subject. But we might as well face it: we're giving this government some very substantial power under the well-motivated goal of flexibility and the capacity to respond to some of these federal actions that are not always predictable and which perhaps the provincial government hears about at the last minute.

Nevertheless, even allowing for the thinking behind this bill that the government wants to have flexibility and the capacity to respond on a fairly rapid basis in relation to rent control, I am just a little uneasy about the amount of discretion and power the bill gives to cabinet.

I could say, Mr. Speaker, that once this bill is passed any government could very quickly change the situation overnight in one direction or another. We could get a government in . . . . A centralized government might suddenly re-impose the most rigid controls in a stupid and unenlightened fashion to satisfy its own particular dogma.

We've heard a great deal today of the thinking of the official opposition. They are certainly entitled to hold that point of view, and I respect their right to hold it, but I don't agree with the overwhelming thrust of the comments of the member for Vancouver-Burrard (Mr. Levi). I feel that there are circumstances with which any government will have to grapple, and this mechanism in this bill certainly provides what appears to be a not unreasonable and flexible way of doing it. But we could have a government that suddenly clamps all kinds of controls back on.

It's obvious that the official opposition is concerned about that and believes that controls should be left the way they are. Alternatively, we could have a right-wing revolution in this cabinet. We could have all the right-wingers screaming that they remove rent control on the first

[ Page 5015 ]

dry Saturday in September or whatever. I use that expression because it was always an expression my mother used when I asked a question and she didn't want to tell me when something was going to happen. It was always going to be on the first dry Saturday.

But that kind of ad hoc comment could be applied to this legislation. I'm sure the minister recognizes that although he is well motivated and has a commitment to try and balance the rights and needs of the tenant against the rights of the landlord, in relation to rent, this legislation leaves tremendous amount of scope for governments to move in either direction.

Now I suppose someone will say that if we get a new government, the new government might just change the legislation anyway. But we've found out that it takes time to get legislation rewritten. We certainly know that our experience this summer shows that you don't always get to certain bills as soon as you anticipate, so a new government . . . .

Interjections.

MR. WALLACE : They once filmed a movie called "Summer of '42." Since we've got a person who has been taken on as a film consultant by the Minister of Travel Industry (Hon. Mrs. McCarthy), maybe the first film he should make is "Summer of '77."

MR. GIBSON : It would be too long!

MR. WALLACE : Just to finish on this point, Mr. Speaker, the flexibility is extreme in this bill, inasmuch as in the definition section, the word "prescribed" is defined as being "prescribed by the Lieutenant-Governor-in-Council." When you get to the guts of this bill, if you can pardon the crude expression,

section 65(8) is just full of the use of the word "prescribed." It almost sounds as though you're in the medical profession, you're doing so much prescribing. But that, in essence, to me is the area of this bill where you either have to take your courage in your hand and trust the government, or you have to say to yourself: "This leaves the cabinet with total power to move the goalposts sideways, upside-down or any other way, on short notice and with pretty dramatic effect." So it is a double-edged sword. For the record, I am willing to read and believe and trust in the minister's remarks as he introduced the bill.

The other area of this bill which I think is very important in general principle, Mr. Speaker, is the role of the rentalsman. I personally want to say that I believe the rentalsman has done an excellent job in the new role which was created by the original legislation. When one considers again what a complicated field this is in the area of human relationships, it surprises me that we have not had more dissension and friction and maybe even the occasional uprising, and that hasn't happened. I just say that I think that in a difficult area, the rentalsman has done an excellent job.

Here again, while I have every confidence and trust in the rentalsman of today, we're certainly placing a great deal more power in the hands of the rentalsman by the various amendments that we will perhaps discuss in greater detail in committee. But again, I see the rationale that we wish to simplify procedures; we wish to minimize the involvement of courts; we wish to speed up the whole process by which landlord or tenant can have problems resolved. So I see the very reasonable and attractive concept inherent in many of the ways in which this bill gives more power to the rentalsman.

When I talk about simplifying procedures, I like, for example, the suggestion that a hearing can be held on the telephone as long as the other party is given the assurance of rebuttal. This seems to me to prevent and save troubles by cutting down on the time spent on investigating and dealing with the problem.

I think also that in this regard we could perhaps go a step further in the role of the rentalsman and have the rentalsman come before the Legislature annually, or perhaps before a committee of the Legislature, in much the same way that we have called the chairman of B.C. Hydro before the public accounts committee. It may well be that the government should look at the best way in which that could be accomplished.

I'm not suggesting that I have all the answers, but I think that if we're to give the rentalsman more power for valid reasons, as I see them, there nevertheless always has to be the greatest care taken to balance that power with increased accountability. While I've no hesitation in changing the rules and giving extra power to this rentalsman, we never can tell what problems might arise with a future office-holder in that role of rentalsman.

I raised another point in the debate we had on the Crown Corporation Reporting Act, and the Premier on that occasion gave me the assurance I wanted. I would like the assurance again, on debating this bill, that we're giving the rentalsman more power, more responsibility and a wider range of duties. I would hope that the government doesn't try to be stingy or cheap and expect this extra role to be filled by the rentalsman and yet perhaps try to avoid providing him with adequate funding.

Worse still, as I mentioned in the debate last week, I would hope that the rentalsman gets some kind of guarantee when he gets a budget. Then, when the province finds that perhaps our revenues aren't as rosy as was expected, he won't suddenly find that he gets a 5 or 10 per cent cut in his budget.

I think there are certain directions in which this government is moving which are very commendable – the auditor-general, the rentalsman, the ombudsman. But the government must, I hope, accept that you

[ Page 5016 ]

can't have it both ways. If you're going to give more responsibility and a wider range of duties to a highly independent, responsible individual, then that person can only do the job adequately if the staff is made available and if the funding which is . . . I don't mean that the funding should be an open-Sesame approach, by any means. All I'm saying is that with increased duties and responsibilities, there must be increased funding. It must be guaranteed and not subject to cutbacks mid-stream.

I'm delighted that when I raised this issue with the Premier, debating the new committee to inquire into Crown corporations, he admitted and gave a guarantee that once funding was approved for these particular positions and responsibilities, they would not be subject to cutback.

Mr. Speaker, I think the other areas of the bill deal a great deal more with specifics about some of the ways in which the rentalsman is given power to determine what is unreasonable; what amounts to a discontinuance of a service or facility; and many other more specific matters which I think we can touch on better in committee.

I just want to wind up by saying that I think this is one of the most important bills we'll be dealing with this session. It's one of the bills where we should try even harder than usual to be objective, because I don't think it would matter which one of the four parties in this House might be sitting over there today, there is a large measure of uncertainty in relation to our provincial and national economic future. There's an enormous uncertainty not only regarding the whole issue of decontrol of wages and prices nationally, but the method by which that is to be implemented.

It would be, I think, very rash of anyone in this House to try and stand up and say that they have some complete and total blueprint as to how the landlord-tenant situation should be changed in British Columbia today.

Just because we're all human, I suppose we will find that there are gaps and deficiencies in this bill, which time alone will show. But within the uncertainty of federal legislation and taxation laws in relation to housing, it would seem to me that this bill makes a very reasonable and considered step in the right direction. But I would hope that at an early date, or even in winding up this bill, the minister will give us some kind of outline as to how he and the cabinet will responsibly handle the very substantial increase in authority and power.

As far as the party I represent is concerned, we feel we're placing a large measure of trust in this minister by supporting the bill in the way I've done, but with the reservations I've tried to outline.

MR. GIBSON : Let me say at the outset that I support this bill. Like the hon. member for Oak Bay, I have some reservations about it that I will raise both in committee stage and in going through the various items of principle today. But in the overall, I support it. I think it does a good job of continuing the best of the principles arrived at in the Landlord and Tenant Act initiated by the previous government, and at the same time gets the people of British Columbia off the hook of rent control.

However necessary it might have been when it was brought in in 1974, I think it's working against the best interests of British Columbians in general today. Again, there are exceptions which I will delineate later on.

It would be nice, as the minister said in his opening remarks, if a bill of this kind were to be universally acclaimed. Failing that, it's at least reassuring to find that there's some balance of criticism from both sides of the case. I saw a statement from the Vancouver Community Legal Assistance Society in the papers the other day. VCLAS lawyer Allan McLean said: "Bill 86 would wipe out tenants' security of tenure and expose them to arbitrary eviction by landlords with the co-operation of the rentalsman's office."

That's one perspective of it, and I imagine, Mr. Speaker, that that comes from the ability that the rentalsman has under subsection (

r) on page 15 to uphold eviction notices if he thinks they're properly merited. The VCLAS spokesman seemed to put the worst possible

interpretation upon the possible actions of the rentalsman. So, yes, there's one side of it.

The other side of it was when representatives of the B.C. Rental Housing Council came into my office, as I imagine they came into the offices of other members, and said: "Well, the minister's statement was very nice when he talks about the interests of both landlords and tenants in legislation that will encourage building of new rental accommodation in British Columbia but," they say, "it just won't work.

There's nothing in the bill that is going to encourage new rental accommodation," they said, "and, as a matter of fact, it's just more bureaucratic red tape." Then they gave figures to the effect that some 10,000 suites in the city of Seattle are owned by Canadians or British Columbians. That may or may not be a correct figure – I don't know. There has been a great deal of real estate money moved south of the border lately.

You can see that there's some concern on both sides of the issue, which leads me, at least, to believe that some balance has been achieved in that bill. That doesn't mean that the concerns evinced by both sides can be ignored. The enormous discretion of the rentalsman under this Act is an item of concern. The movement of real estate capital out of British Columbia is equally an item of concern. I know that that is not directly the responsibility of this minister – or to the extent it is, it's certainly shared with the Minister of Housing (Hon. Mr. Curtis) – but, more

[ Page 5017 ]

properly, it's a problem for all of Canada, I think, in our national tax law.

The principles of this bill are several. The first thing it does is continue the concept of the rentalsman. I would like to pay tribute, and I think the minister probably would like to pay tribute, to the fact that the rentalsman is a concept which was introduced by the former government, and it is a good one. That concept is continued in this bill. The powers of the rentalsman in some areas are strengthened, in other areas are somewhat circumscribed, but the basic concept is there. There are some new

definitions,

Coming back to the concern of the hon. second member for Vancouver-Burrard (Mr. Levi), there is, as I read it, a definite ability in one

section of this bill to provide for protection for tenants of not only downtown Eastside hotels in Vancouver, but also hotels of that classification throughout the province. It's an enabling section, and it comes under

section 3 in the general provisions of the bill, which enables the rentalsman to designate protected tenancies with respect to specified persons, which personally I think a rather ingenious solution to the problem of protecting what are, in fact, residential tenancies in what are, in theory, transient rooms. The bill does manage to at least give authority to protect these kinds of tenancies, and I trust we will see early action by the rentalsman in exactly those kinds of designations. Early action of that kind will be one of the tests of the efficacy of the bill.

It gives powers in the bill, in another area, for the implementation of a standard-form rental or tenancy agreement. This is a principle and a

section that the B.C. Rental Housing Council has argued against. It is a principle that it is my understanding the rentalsman is in no great hurry to implement. I have to confess a good deal of sympathy with the B.C. Rental Housing Council in this particular regard because there are, I think, something like 300,000 tenancies in British Columbia.

I can hardly conceive that a standard form of rental agreement, or lease agreement, could easily cover all of these contingencies without being so complicated and awkward that it might be better in the first place to say that each rental agreement has to contain certain principles, certain things that must not be deviated from, but besides that, you can go a good distance to tailor the agreement for the special circumstances of the particular landlord-tenant relationship.

The bill restores the rights of courts to deal with certain possession questions, which is a good thing. They should not have been taken away in the first instance. I would imagine it was an oversight. It gives a change in the form of the notice of termination which, again, I would propose to raise for study at committee stage.

The new form notice of termination would require reasons for termination to be given in much greater detail which, on the one hand, is arguably an increase in the rights of the tenant; on the other hand, it may make it more difficult to deal with some situations that, in the interests of all of the tenants in the building, have to be dealt with one way or another. In requiring a statement of claim, the landlord may be laying himself open to libel action, but we can get into that in greater detail in the committee stage.

The bill puts more particular restriction on the – I won't call it a loophole – provision in the original Act for so-called relatives to move into accommodation and use that as grounds for the eviction of the existing tenant. It's good that that has been tightened up. On the other hand, the provisions for obtaining premises for conversion or demolition have been slightly loosened up. On balance, that seems to work out about right.

There is a provision for relatively rapid eviction because of non-payment of rent, and this I concur with. It is not a good thing that it has been possible under the existing Act to drag on considerably in excess of 30 days when any security deposit has long since been used up, when the premises themselves may be damaged, and still find that the landlord is unable to either collect the rent which is rightfully owing to him or to obtain possession of the premises. It's these kinds of relationships which makes the landlord-tenant relationship in our province tougher for everybody.

These kinds of very rare cases, where if suitable action isn't taken it becomes a thing that gives grounds for argument and concern in the relationship, are not good.

There is a change to some extent in the security deposit section. This again is one that I'm going to want to question to some extent in committee stage. I understand that the security deposit

section of the Act gives rise to about a third of the workload of the rentalsman's office. And of the 300,000 tenancies in this province, 80,000 or so, I think, have security deposits, and something under 1,000 of those cause at least a third of the rentalsman's work. The amendments we see in this Act may be the right ones as far as it goes today, but we have to find something better down the road in ways and means in dealing with security deposits.

The most controversial

section of the bill is the part that deals with the phasing out of rent controls. Mr. Speaker, let me say, first of all, that there is no doubt whatsoever in my. mind that rent controls should be phased out almost entirely. Secondly, it should be done slowly and carefully. I have no way of knowing, but I would suspect that perhaps the minister is one of the doves in the cabinet on this particular question. I suspect there are probably those of his colleagues who said, as the hon. member for Oak Bay said: "Let's do it on the first dry Saturday in September." That would have been the wrong way to

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go, because once you get the government so far into the marketplace as it must necessarily do when it gets into rent control, you can't drop everything just like that. Too many of the institutions of society, too many of the financial arrangements of individuals come to be structured around this particular programme. Therefore you have to, to the extent you can, decontrol in a way that seizes the marketplace at a time that it won't make that much difference.

The hon. member for Oak Bay referred to a recent issue of Monday Magazine which describes some of the vacancies around Victoria. That's very true from my own investigations, and it relates as well to some parts of greater Vancouver. I see the rental housing council came out with a report in the Vancouver Province this morning that suggested that the overall greater Vancouver vacancy rate was 5.7 per cent.

Well, that may be, and to the extent that it is true, and in those sectors of the housing market where it is true, it is possible to decontrol with minimal adverse impact on the lives of either landlord or tenant.

There are special cases, again, such as senior citizens on Mincome, that I want to specifically exclude and come back to later, but if the minister follows the practice of decontrolling in those areas, be they geographical areas or specific sectors of the housing market – or both – that are relatively in a free market situation at that time, I think that he will do a favour to the economy and he'll certainly do a favour to his government.

Rent control is something that in the long run is not only against the interests of the people; it is against the interests of the government of the day that has to enforce it as well.

The question of the vacancy rate of the day: I want to advert briefly to the minister's comments on it. It is certainly, as he says, a gross rate, and the particular area that he mentioned of a three-bedroom family accommodation, in my opinion, remains fairly tight. It is certainly an ephemeral situation, and the minister in his decontrol planning is going to have to grasp time by the forelock in each of the sectors as they come up, because he cannot expect high vacancy rates, in my opinion, to prevail very long in any given area or sector. The investment in the rental housing market is just not there.

The minister paid tribute to the housing policies of the government as having produced this vacancy rate. Well, that may be, and I don't want to detract from that. But I would suggest, Mr. Speaker, that it's much more likely due to the fact that British Columbia had a net migration out of the province for roughly a 12-month period and a very small immigration in the most recent period. It's been this change in the historic population growth rate of British Columbia which has given us this breathing space in having the chance to make some sensible changes in the rent-control situation.

There is also at the moment a slowdown, almost amounting to a standstill, in the assisted rental programme. The assisted rental programme has been responsible for a great deal of the recent housing that has been built and, therefore, the vacancy rate. That is just not going to continue, at least not in the foreseeable future.

When you look at decontrols you have to balance your goals of public policy. You want the good of the community and all of its members and, in particular, you're looking for a proper allocation of our financial resources and our capital. Some of that capital has to go into housing stock, some of it has to go into producing efficient industrial capital investment and some of it has to go into income support. Those are the only areas I want to look at at the moment. But what's the best way to do this?

Rent controls may be a way of economizing on the capital that's necessary to go into your housing sector in the short run and, in extraordinary cases and in the short term, may be the correct answer. One of the previous speakers said he suspected that had this government been in office in 1973 or 1974 they might well have found it necessary to bring in rent controls, and I think that is the case.

In the short run, the housing market can have quite an inelastic supply and there is no question whatsoever that the policies of the federal government in 1971 were absolutely ruinous to the rental housing market in British Columbia – not, I should say, to the owner-occupied market, which was going along quite well. But in British Columbia, more than anywhere else, rental construction was being done by relatively small financial groups. Many were professional groups, for example, and relatively less of it was done by the well-financed corporate groups, so this particular change in the Income Tax Act hit us harder in British Columbia than anywhere else in the country.

I want to quote from the document put out by the Fraser Institute called "Rent Control – A Popular Paradox": "The coupe de gras to the profitability of rental housing was delivered in 1971 in the form of Finance minister Benson's tax reform measures." It goes on to say later: "In the light of Smith's warnings" – Smith being the professor who undertook a study that is being quoted here – "the 1971 change in the Income Tax Act appears retrospectively to have been a policy measure out of keeping with responsible action." Then it goes on to note that the Carter commission, which was a part of the justification for making this change in the Income Tax Act which was supposed to bring greater equity – it did have worthy goals of public policy – was warned about this in these words: "If this reform were implemented, construction activity would be reduced for a period until rents rose sufficiently in response to a growing demand to restore the relative attractiveness of real estate investment.

The

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government would probably have to take action to offset any reduction in apartment construction during the transitional period."

Well, as a matter of fact, the offsetting action wasn't taken. We got into a bind in Can