1975 Legislative Session: 5th Session, 30th Parliament

HANSARD

The following electronic version is for informational purposes

only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

WEDNESDAY, JUNE 18, 1975

Afternoon Sitting

[ Page

3673 ]

CONTENTS

Routine proceedings

Oral questions.

Bedrock credit cards. Mr. Curtis — 3673

Leave of absence of Corrections Deputy. Mr. D.A. Anderson — 3673

Status of Causeway Esso site. Mr. Wallace — 3673

Progress of committee on basic education services. Mr. Gardom —

Sunday horse racing. Mr. McClelland — 3674

Mailing of tax notices. Hon. Mr. Lorimer answers — 3674

Flaws in Westcoast pipeline. Mr. Rolston — 3674

Pay proposal for Hydro linemen. Mr. McGeer — 3674

Western Canada Lottery. Hon. Mr. Hall answers — 3675

Transfer of Liquor Administration Branch head office to mainland. Mr. D.A.

Anderson — 3675

Complaints on freezer food operation in Columbia River. Mr. Chabot —

Claims handled by Scrivener firm. Hon. Mr. Strachan answers — 3675

Interior food service on Gulf Islands ferries. Mr. Wallace — 3676

British Columbia Railway Company Construction Loan Amendment

Act, 1975 (Bill 27). Committee stage.

section 1. Mr. Phillips — 3676

Amendment to

section 1. Mr. Phillips — 3677

Mr. Chairman rules out of order — 3677

section 1. Hon. Mr. King — 3678

Division on

section 1 — 3688

Report and third reading — 3689

Islands Trust Amendment Act, 1975 (Bill 97). Second reading. Hon. Mr. Lorimer

— 3689

Income Tax Amendment Act, 1975 (Bill 101). Second reading. Hon. Mr. Stupich

— 3691

Motor-vehicle Amendment Act, 1975 (Bill 108). Second reading. Hon. Mr. Strachan

— 3692

Natural Gas Revenue Sharing Act (Bill 110). Second reading. Hon. Mr. Lorimer

— 3694

Public Service Superannuation Amendment Act, 1975 (Bill 112). Second reading.

Hon. Mr. Hall — 3699

Municipal Superannuation Amendment Act, 1975 (Bill 113). Second reading. Hon.

Mr. Hall — 3699

Teachers' Pensions Amendment Act, 197 5 (Bill 114). Second reading. Hon. Mr.

Hall — 3700

College Pension Amendment Act, 1975 (Bill 115). Second reading. Hon. Mr. Hall

— 3700

Public Services Medical Plan Amendment Act, 1975 (Bill 116). Second reading.

Hon. Mr. Hall — 3700

Public Service Group Insurance Amendment Act, 1975 (Bill 117). Second reading.

Hon. Mr. Hall — 3700

Public Service Labour Relations Amendment Act, 1975 (Bill 135). Second reading.

Hon. Mr. Hall — 3701

Public Service Amendment Act, 1975 (Bill 136). Second reading. Hon. Mr. Hall

— 3702

Royal assent to bills — 3703

Appendix — 3703

The House met at 2 p.m.

Prayers.

MR. R.H. McCLELLAND (Langley): Well, Mr. Speaker, I'm not

sure if this is a pleasure or not but I was informed earlier

today that we now have a new addition, or are about to have a

new addition, to the press gallery. I don't know whether it's a

record or not either, but we have a father-and-son team now in

the press gallery with Jim and Mark Hume. I think, whether it's

a record or not, we should certainly recognize that

achievement.

MR. G.B. GARDOM (Vancouver–Point Grey): I would like all of

the Hon. Members to join with me in a cordial welcome to Mr.

and Mrs. Bob Reid from Vancouver. Mr. Reid has been a cameraman

with CBC for 20 years and is now retired. All best wishes to

him.

MR. G.S. WALLACE (Oak Bay): Mr. Speaker, I understand that

we have in the gallery an old friend who used to sit right here

on my left — the former Member for Dewdney whose good humour

remains everlasting, as Members of this House will know. I'd

like to welcome Mr. George Mussallem.

Oral questions.

BEDROCK CREDIT CARDS

MR. H.A. CURTIS (Saanich and the Islands): Mr. Speaker, this

is to the Minister of Consumer Services. Earlier today I

forwarded to her information concerning a Bedrock credit card.

I trust the Minister will be able to tell us just a little more

about this today. She indicated this morning that the

department was investigating, but I wonder when this came to

her attention and if she has any indication from her department

that it may be in violation of normal consumer relations.

HON. P.F. YOUNG (Minister of Consumer Services): Mr.

Speaker, it first came to my attention when I received a

similar thing in the mail about a week ago. I immediately sent

it to my department. I've not had a report back from them yet

on it.

LEAVE OF ABSENCE OF CORRECTIONS DEPUTY

MR. D.A. ANDERSON (Victoria): To the Provincial Secretary,

Mr. Speaker. I wonder whether the Provincial Secretary, who's

responsible for the civil service, could explain why Mr. Ed

Epp, the Deputy Minister of Corrections, was ordered to take a

three-month leave without any reasons being given.

HON. E. HALL (Provincial Secretary): I'll look into that for

the Member.

STATUS OF

CAUSEWAY ESSO SITE

MR. WALLACE: Mr. Speaker, I would also like to ask a

question of the Provincial Secretary regarding the property at

the corner of Government Street and Wharf Street in Victoria,

formerly called the Imperial Esso station. I understand that

the City of Victoria transferred that property to the Capital

Improvement District Commission in January, and there appears

to be some suggestion that subsequently the title has been

transferred from the CIDC to the provincial government. I

wonder if the Minister could tell us first of all if that has

happened, and secondly if there's any truth in the suggestion

that it might be used as a sidewalk café or some form of

fast-food service.

HON. MR. HALL: I anticipated a question on this, Mr.

Speaker, and I asked my staff to look into that news story. I

have unfortunately not yet had a reply from the secretary of

the CIDC or my staff people. I'll tell the House as soon as I

get the answer.

PROGRESS OF COMMITTEE

ON BASIC EDUCATION SERVICES

MR. GARDOM: A question to the Minister of Education, Mr.

Speaker, dealing with committee on basic services referred to

in the Premier's budget speech. I note that they're supposed to

be reporting on August 1. In light of that, maybe the Hon.

Minister could inform us whether groups such as the B.C. school

trustees and the independent schools association have had an

opportunity to participate. Have there been public

hearings?

HON. E.E. DAILLY (Minister of Education): There was no

intention to have public hearings, but certainly to have the

participation of those two groups. At the present time it has

still been on an informal basis and the Ministers, I believe,

are now at the stage where they're prepared to meet

formally.

MR. GARDOM: Do I take it from that, Madam Minister, that to

this point there has not been any input from those

associations?

HON. MRS. DAILLY: There has been input from one particularly — the independent schools association — and discussions with

some staff members of the BCSTA. That is as far as it's gone at

this time.

[ Page

3674 ]

MR. GARDOM: Will the Hon. Minister be requesting any public

input?

HON. MRS. DAILLY: No, it has not been our intention at this

time.

SUNDAY HORSE RACING

MR. McCLELLAND: A question to the Minister of Municipal

Affairs, and I notice he got up on his feet before I asked the

question. That's service. Mr. Speaker, I'd like to ask the

Minister whether or not he's given any consideration to a

request from the Lower Fraser Valley Exhibition Society — and I

believe he may have had one from either the PNE or the

Vancouver Jockey Club as well — with regard to changing of

subsection 3 of

section 210(

a) of the Municipal Act to remove

the prohibition of horse racing on Sundays in the province.

HON. J.G. LORIMER (Minister of Municipal Affairs): Yes,

we've given it some consideration. I have had discussions with

the Attorney-General. It's still under consideration and you'll

notice it's not in the amendments proposed for the Municipal

Act....

MR. McCLELLAND: Not yet.

HON. MR. LORIMER: Not yet at this session.

MAILING OF TAX NOTICES

I'd like, Mr. Speaker, while I'm on my feet, to answer a

question that was asked by the Hon. Member for North Okanagan

(Mrs. Jordan) in which she asked about the mailing out of tax

notices to unorganized territory. I'm advised that there are

260,000 tax notices sent out, 230,000 of which were mailed out

on June 13 and the balance on June 16. The statutory

requirement is to mail them by June 15, but June 15 occurred on

a Sunday, so the balance were mailed on the Monday.

FLAWS IN WESTCOAST PIPELINE

MR. P.C. ROLSTON (Dewdney): A question to the Minister of

Transport and Communications. Mr. J. Sutherland, a former pipe

welder, is again claiming that there are flaws in the welding

of the pipe containing natural gas of the Westcoast

Transmission. This pipe runs underneath the deck of the

Agassiz-Rosedale Bridge. The flaws appear at random — he's

x-rayed this. Last year the Attorney-General (Hon. Mr.

Macdonald) doubted that there were flaws, but I'm asking you

what is your most recent information. Have your inspectors gone

out there? If not, will they go out? Is this 20-year-old

natural gas pipe defective?

HON. R.M. STRACHAN (Minister of Transport and

Communications) : I want to thank the Member for giving me

notice of this question. It is a serious charge that this Mr.

Sutherland has made. He made the same charge a year ago. This

pipeline is regulated and controlled by the National Energy

Board. The province has absolutely no authority to usurp any of

that jurisdiction. However, a year ago we were part of a

committee that was involved because we felt the responsibility.

Mr. Sutherland was employed as a welder on the construction of

this line in 1957. Evidently he was fired by Beckton. He then

went north and obtained a welding job on another Beckton job

and was fired again after three days. He unsuccessfully applied

for an inspector's job with Westcoast about four years ago.

I have here the report which Westcoast Transmission made a

year ago where they examined all of the pipeline. The latest

information I have is an x-ray job done by Westcoast

engineering. On June 6, 1975, my Associate Deputy Minister

contacted Mr. E. Phillips, the president of Westcoast

Transmission, and he advised:

"Westcoast have now installed as part of their regular

looping programme an additional pipe across the Fraser River at

Agassiz. After this new

section is tested and brought on stream

in July, the company proposes to take steps to remove the

so-called inconsistencies in the two wells in question so as to

eliminate any possible future concern."

In the report that I had a year ago, it was pointed out to

me that the line in question was constructed in 1957 and was

tested to 1,225 pounds per square inch. The normal operating

pressure is 936 pounds per square inch, but as this line is

exposed and on a structure, it is only authorized to operate up

to 780 pounds per square inch. In actual fact, it is operating

at 600 pounds per square inch, which is less than 50 per cent

of the original test pressure.

So two things: (1) the report of a year ago indicated the

line was safe and (2) despite that, the company is moving to

upgrade the line itself in that particular area.

PAY PROPOSAL FOR HYDRO LINEMEN

MR. P.L. McGEER (Vancouver–Point Grey): Mr. Speaker, to the

Minister of Lands, Forests and Water Resources in his capacity

as a director of the B.C. Hydro. Today it was announced that

the B.C. Hydro would recommend acceptance of a proposal that

would make the linemen by far the highest paid in the world,

their pay including 17 new paid holidays per year. The

directors must have thought through the impact of this

settlement on consumer electricity rates. I wonder if the

Minister could give us some announcement of what the impact to

the consumer

[ Page 3675 ]

will be of this settlement if it is accepted by the

company.

HON. R.A. WILLIAMS (Minister of Lands, Forests and Water Resources):

It has to go before the board yet, Mr. Speaker.

MR. McGEER: I am astonished at what the Minister tells me.

But will he be making an early announcement as to the effect of

this on consumer electricity rates in British Columbia?

HON. R.A. WILLIAMS: Once the board has met, Mr. Speaker, I

certainly anticipate it would have no impact on rates, in terms

of my understanding of the situation.

WESTERN CANADA LOTTERY

HON. MR. HALL: Yesterday, the Member for Oak Bay asked me

two questions regarding the operation of the Western Canada

Lottery. He asked me, first of all, with regard to the Western

Canada Lottery, if any money at any time has been transferred

from consolidated revenue to the lottery fund as provided for

section 6(2) of the Act. Mr. Speaker, approximately $33,000

was paid out for salaries and expenses at the start of the

lottery in the latter part of last year. The revenue of

approximately $400,000 came in during the first month of

operation and the $33,000 was repaid immediately.

The second question was whether some financial statement as

of March 31 could be tabled in the House as provided for in the

legislation regarding the financial status of the lottery fund.

The Lotteries Act states: "The Minister shall annually prepare

a report respecting the administration of the Act during the

previous fiscal year and he shall lay the report before the

Legislature within 15 days after the commencement of the first

session in the following year." The comptroller tells me, and I

checked this out this morning, that this would mean the report

would be tabled in the Legislature within 15 days after the

commencement of the 1976 spring session. That is the technical

response.

However, I think I probably share the Member's — not

dissatisfaction — interest in knowledge on the operation. I

shall be looking into the possibility of tabling some interim

statements later on in the year.

TRANSFER OF LIQUOR ADMINISTRATION

BRANCH HEAD OFFICE TO MAINLAND

MR. D.A. ANDERSON: To the Provincial Secretary, Mr. Speaker. May I ask

the Provincial Secretary whether discussions have taken place with the officers

of the liquor administration branch, soon to be renamed, about moving and locating

the head office on the mainland rather than on Vancouver Island?

HON. MR. HALL: Not with me, Mr. Member. I will inquire with

the Public Service Commission if any negotiations of that

particular component have taken place with the public service.

I will also find out for you, as I think is more likely to be

the case, what type of discussions have gone on in the Attorney-General's department vis-à-vis the liquor

administration branch.

MR. D.A. ANDERSON: A supplementary, then. I thank the

Minister for undertaking those commitments. May I ask him at

the same time to look into the possibility of having the senior

officers of the liquor administration maintain their homes in

Victoria and fly over by government aircraft on a daily basis

to the new offices in Vancouver if indeed they have to be

located in Vancouver or the lower mainland?

HON. MR. HALL: I will see if I can get that into the report

of the implications of the move.

MR. D.A. ANDERSON: Thank you very much.

COMPLAINTS ON FREEZER FOOD

OPERATION IN COLUMBIA RIVER

MR. J.R. CHABOT (Columbia River): Mr. Speaker, to the

Minister of Consumer Services. Could the Minister advise

whether there has been any progress on the complaints made

months ago by some of my constituents? They were bilked by

Budget Freezer Foods Ltd. of Burnaby.

HON. MS. YOUNG: Mr. Speaker, under the provisions of the

Trade Practices Act,

section 12, I am not at liberty to

comment.

CLAIMS HANDLED BY SCRIVENER FIRM

HON. MR. STRACHAN: Mr. Speaker, yesterday the Member for

Langley asked me some questions regarding claims handled by

D.A. Scrivener Adjusters Ltd. The information I gave to the

House, I've checked it, and that is the information provided to

me by Mr. Scrivener. Because of the strike that is on at ICBC I

am unable to check the ICBC records, but I will do so as soon

as the strike is settled.

MR. McCLELLAND: Mr. Speaker, as a supplementary, when that

opportunity avails itself after the strike is over, will the

Minister file with the House all of the information relating to

claims which were handled by all companies which bear the

name

[ Page 3676 ]

of Mr. Scrivener, and the total dollar values and the fees

paid? Because I understand it's not commissions with an

adjuster; an adjuster charges by the hour. We'd like to know

the fees paid.

HON. MR. STRACHAN: I'll certainly consider that.

INFERIOR FOOD SERVICE

ON GULF ISLANDS FERRIES

MR. WALLACE: Mr. Speaker, to the Minister of Transport and

Communications: several regular travelers on the Gulf Islands

ferries have stated that the standard of cooking is poor and

the meals are inferior to the meals on other ferries in the

system. Could I ask the Minister if there has been any

particular difficulty in obtaining experienced cooks on the

Gulf Islands run?

HON. MR. STRACHAN: Not to my knowledge, but I'll check into

it.

MR. WALLACE: Just a supplementary. Is there any system of

review in regard to maintaining standards on the food service

on the ferries — any regular monitoring device — or do you just

wait to get complaints?

HON. MR. STRACHAN: No, as a matter of fact, I am aware of a

programme within the ferry service itself for upgrading those

employed in the provision of cooking for the ferries.

DEPUTY SPEAKER: The Hon. Member for South Peace River on a

point of order.

MR. D.M. PHILLIPS (South Peace River): Mr. Speaker, it was

brought to my attention that yesterday afternoon during the

debate on the British Columbia Railway, I may have

inadvertently referred to the Deputy Minister of commercial

transport. I was really referring to Mr. Swanson, the chief

engineer. I don't know whether the Blues can be corrected, but

I want to make it perfectly clear that I wasn't at any time

referring to the Deputy Minister.

AN HON. MEMBER: The present Deputy?

MR. PHILLIPS: The present Deputy Minister — or past either,

as far as that goes.

Orders of the day.

HON. E.E. DAILLY (Minister of Education): Mr. Speaker, I ask

leave of the House to proceed to public bills and orders.

Leave granted.

HON. MRS. DAILLY: Mr. Speaker, committee on Bill 27. I think

you've heard that one before.

BRITISH COLUMBIA RAILWAY COMPANY

CONSTRUCTION LOAN AMENDMENT ACT, 1975

(continued)

The House in committee on Bill 27; Mr. Liden in the

chair.

section 1.

MR. D.M. PHILLIPS (South Peace River): Mr. Chairman, we

still have some unanswered questions on the British Columbia

Railway. The Minister has not yet answered for what Mr. Robert

E. Swanson received $766.80 in direct payment to him after he

became a director of the railway. We still haven't heard any

more from the Minister with regard to the management report

which Mr. Swanson drew up for the railway. I have now received

information that there was a bill submitted by Mr. Swanson —

there was an invoice submitted by Mr. Swanson' company. No, by

Mr. Swanson — I'm sorry, Mr. Chairman. There was an invoice

submitted by Mr. Swanson. I understand that the bill was in the

amount of $1,900.

AN HON. MEMBER: Or thereabouts.

MR. PHILLIPS: Or thereabouts — $1,900 or thereabouts. I

understand that the invoice was discussed before a board

meeting and after a board meeting. I'd like to know if this

invoice was ever paid. I understand that the comptroller of the

railway and the then manager of the railway refused to

authorize this bill, which they had to do because it was an

expenditure of over $500 and less than $5,000. I understand

that they refused to authorize this invoice because they

considered it a conflict of interest.

Mr. Chairman, I understand that, after having the refusal by

the comptroller and the then general manager to authorize this

invoice because there might be a conflict of interest, Mr.

Swanson brought it up again. I understand he discussed it with

the Premier. The information I have is that the Premier passed

the invoice to the Deputy Minister of Finance, who is a

secretary of the railway, and asked him to check it out for a

conflict of interest.

Mr. Chairman, I think that the Minister of Labour, who was a

director of the railway at that time, should advise this

Legislature whether that invoice was ever paid. Did the Deputy

Minister find out that there was a conflict of interest? If the

invoice was never paid was Mr. Swanson given any other

instructions or any other method whereby he might collect

payment for

[ Page 3677 ]

this management report which he prepared while a director of

the British Columbia Railway? It was a management report that

has meant a complete shuffle in the top management of the

British Columbia Railway, and that shuffle has meant that the

British Columbia Railway is going down the track of no return

at the present time. And that is why, Mr. Chairman, we have

this bill before us.

I'd also like, Mr. Chairman, the Minister of Labour to

advise the House what company refurbished the Royal Hudson. Was

it sublet to the CPR? If so, what company was employed by the

CPR? I'd like to know, Mr. Chairman. I'd like the Minister of

Labour to advise us who directed the refurbishing of the Royal

Hudson on behalf of the BCR. Who drew up the plans for

refurbishing the Royal Hudson?

Mr. Chairman, I think that the Minister of Labour should

give us these answers because there's possibly another

involvement of a conflict of interest. I think that to

straighten this whole mess out the Minister of Labour had

better come clean with the Legislature this afternoon.

Mr. Chairman, that British Columbia Railway over a number of

years was well run. For 20-odd years when the British Columbia

Railway needed money — not to cover deficits for operating, but

to cover required capital expenditures for extending the line — the bills were brought before this Legislature. None of that

money, Mr. Chairman, was used to subsidize losses on the

British Columbia Railway.

Mr. Chairman, now we have a bill requesting $200 million. I

would just like to ensure that none of this money is going to

be required to cover operating deficits on the railway, to prop

up the lack of cash flow and the losses due to poor management

on the railway caused by political meddling in the management

of the railway — specification changes, line changes, changing

the Dease Lake extension from a resource railway line to a main

line. Because of the intervention of the Minister of Labour

while he was a director of the railway, because of the personal

intervention of that Minister in settling wage disputes, I want

to ensure that the taxpayers' money is not going to be used to

cover losses on the railway due to poor management, Mr.

Chairman.

We want to support this bill and we want to see the railway

construction continued. We want to see it continue to expand.

Because of this, Mr. Chairman, I would like to move an

amendment by renumbering and adding to

section 2 the following:

"The moneys advanced to the company under subsection 1 shall be

applied to the constructing, reconstructing, bettering and

maintaining of the railway of the company and providing the

necessary ancillary works in such a manner as may be directed

by the Lieutenant-Governor-in-Council."

Mr. Chairman, this is just a little amendment which will put some guarantee

on this $200 million that it's not going to be used or wasted by the present

management and the directors of the railway for their incompetence in operating

that railway line. We must have, Mr. Chairman, some guarantee that we are not

going to be faced with another bill of larger proportions than this next year

to make up even greater losses than the railway has had in the past year.

Mr. Chairman, I know that this little amendment will be

gladly accepted by the government. Add it to the bill, and then

we will be able to carry on with the work of the House.

MR. CHAIRMAN: The amendment is out of order. It requires a

message to bring in an amendment of that kind.

AN HON. MEMBER: What?

AN HON. MEMBER: Why?

MR. CHAIRMAN: It imports a new principle on the bill that's

there, and imposes an obligation on the Crown. It's out of

order.

MR. PHILLIPS: There's no financial obligation!

MR. CHAIRMAN: It's not a question of a financial

obligation.

MR. PHILLIPS: A point of order. There is no financial

obligation on the Crown.

MR. CHAIRMAN: I didn't say it was a financial

obligation.

MR. PHILLIPS: Oh, I'm sorry. Did I misunderstand you?

MR. CHAIRMAN: I said it imposes an obligation on the

Crown.

MR. PHILLIPS: But not a financial obligation.

MR. CHAIRMAN: It is out of order.

MR. PHILLIPS: I just want to say, Mr. Chairman, how very

greatly disappointed I am that the government would not accept

this amendment to protect the taxpayers of this province

against waste of their tax dollars.

HON. E. HALL (Provincial Secretary): It is out of order. It

is not a question of acceptance; it is simply out of order.

MR. PHILLIPS: I'm terribly disappointed, Mr. Chairman, but

it proves to me and the rest of the

[ Page 3678 ]

Members of this Legislature that a large amount of this $200

million will be used to make up losses on the British Columbia

Railway, losses that have been incurred by poor management due

to the fact that that government interfered politically with

the operation of that railway.

MR. CHAIRMAN: Shall

section 1 pass?

Interjections.

MR. CHAIRMAN: Did the Minister ask for a division?

Interjections.

MR. CHAIRMAN: The Minister wasn't speaking.

MR. D.A. ANDERSON (Victoria): Just hold the phone. The

Minister was on his feet. Now you can't go back and say that

therefore the vote took place, the rest of us were sitting

down, because he was on his feet and he intended to speak — he

stayed on his mike for some time. So don't bob around on this

vote.

MR. CHAIRMAN: I didn't see anyone on his feet, so I put the

vote and he sat down.

MR. D.A. ANDERSON: Now if he's not going to speak, other

Members will. I, for example, have something to say, but I

think he had the floor. You recognized him and he wants to

speak.

HON. W.S. KING (Minister of Labour): I thought someone had

called a division, Mr. Chairman. Someone called division.

Mr. Chairman, the Member for South Peace River (Mr.

Phillips) raised two questions, one was a question regarding

payments to Mr. Swanson. I made a clear statement yesterday in

the debate that the only payments I can determine that were

ever made to Mr. Swanson by the BCR were in connection with his

duties as a board director, and it was a small amount, I

believe in the area of $600 or $700, incident to travelling

expenses as a director of the board.

MR. PHILLIPS: Why don't you look at the account? It had

nothing to do with travelling expenses.

HON. MR. KING: Mr. Chairman, the Member goes into his long

tirades, then he doesn't want to listen to the answers.

MR. PHILLIPS: Well, I'd like the honest answers. I mean....

I'll withdraw.

HON. MR. KING: Mr. Chairman, I would ask the Member to

withdraw the imputation that lies have been told in this

House.

MR. PHILLIPS: Yes, I will.

MR. CHAIRMAN: The Member withdraws.

HON. MR. KING: You can lead a horse to water, but you can't

make him drink, and if Members are unprepared to accept the

answers given, then obviously this whole exchange is a complete

charade because they are not trying to elicit information,

they're simply embarking on delaying tactics for other

purposes.

Now I made the statement that Mr. Swanson had received

expenses incident to his responsibilities as a director of the

company. Public accounts, as revealed in my discussion

yesterday, for six years, including 1971, indicated that Mr.

Swanson had been paid, when he was the chief inspection officer

of the Department of Commercial Transport, for other services

rendered to the government. The fact that he may, in his

capacity as a board member of BCR, have been paid by another

government department for certain services to that department,

in my view, does not constitute a conflict of interest.

There is no reason whatsoever why a director of certain

Crown corporations should not be involved in a business

arrangement with another department of the government. Indeed,

as I indicated, that was the case in years prior to this

government taking over, when the former government paid to Mr.

Swanson, apparently....

Interjection.

HON. MR. KING: It is evident in public accounts. I believe

it was a considerable amount of money paid out to Mr. Swanson's

firm: 1971, $979; 1970, $11,592; in 1969, $869; and back in

1965, $10,000-plus. That was paid out to Railway Appliance

Research, a firm in which Mr. Swanson is a principal.

Now that doesn't indicate to me that there was necessarily

any conflict of interest. If the Members of the opposition wish

to place that connotation on the fact that a person associated

with one department of government, indeed a civil servant at

that time, received payment to his firm for dealings with

another department of government, then that's up to them.

But, Mr. Chairman, they should be consistent because that

certainly occurred for at least six years under their

administration.

In my view, the only clear-cut conflict of interest that

would arise would be if any director of the railway received

payment for services rendered to the

[ Page

3679 ]

railway and received payment by the railway. That is not the

case, as far as I can determine. I have talked to Mr. Swanson

on the telephone this morning. He has assured me that he was

not paid for a report which the opposition Members referred to.

He and the railway management people have assured me that he

received no such payment and that the only payment he did

receive was incident to travelling expenses as a director.

That's a matter of common practice in any corporation or in any

government agency, I would suggest.

With respect to the work that was done on the Royal Hudson,

yes, Mr. Swanson's firm did some work on that engine. I

indicated that yesterday. Mr. Swanson did, in my view, a very,

very admirable job on behalf of the Province of British

Columbia in terms of finding the old parts, in cooperation

with CP Rail, to render that locomotive operable once again.

It's my understanding that his expenses and his services were

paid for by the Department of Travel Industry — again, an

identical situation with what transpired in the years 1965,

1969, 1970 and 1971.

Now if the Members of the opposition wish to interpret that

as conflict of interest, then that amounts to a

self-indictment. I don't think it's the kind of gratitude that

should be expressed to a long-time civil servant in this

province, a man who has done a very great deal to contribute to

the operation of the British Columbia Railway and also to the

tourist trade of this province.

Now while I'm on my feet there's one other thing that came

to my attention last night. There was a newspaper report which

attributed certain statements to the Member for

Boundary-Similkameen (Mr. Richter), the former Minister of

Commercial Transport. He apparently made a number of statements

outside this House. The opposition was saying that they knew

that Swanson, as chief engineer for the Department of

Commercial Transport, was....

AN HON. MEMBER: The official opposition.

HON. MR. KING: Yes, the official opposition, I beg your

pardon.

They said they knew he was receiving money from the government for several

years, which was shown in public accounts, so the government had full knowledge

of the situation. That's obvious. In the face of this knowledge they're saying

they took no action. In fact they kept extending Swansons periods of employment

past retirement age. That's an admission by the official opposition. Surely

if he was doing work for the government and it was shown in public accounts,

the Minister of Commercial Transport was aware of it and the government was

aware of it. But during that same period they kept extending the retirement

age of Mr. Swanson. The former Minister of Commercial Transport yesterday made

two completely conflicting statements outside the House. In the House he was

completely silent. He didn't enter the debate. At 4:30 p.m. he was reported

to have made the following statement to the Victoria columnist, Mr. Jim Hume:

"Frank Richter, the cabinet Minister in charge of commercial

transportation in 1971 and still Social Credit MLA for

Boundary-Similkameen said outside the House Tuesday at 4:30

p.m. Swanson wasn't fired. 'He was considerably past retirement

age,' Richter told the Colonist. 'He had received three or four

extensions to his retirement date and I just decided there were

younger men who deserved a chance. So I didn't renew his

tenure.' "

Now that conflicts completely with what the Member for South

Peace River (Mr. Phillips) said. He made the statement

yesterday in the House that as soon as the Minister became

aware of a conflict of interest, he terminated, he fired Mr.

Swanson.

AN HON. MEMBER: He didn't say "fired."

HON. MR. KING: But the former Minister at 4:30 said he just

didn't renew his tenure, because he'd had some extensions. Then

apparently he got news from his leader because at 6 p.m. he made

another statement outside the House. At 6 p.m., presumably after

hearing from the leader, he was reported to have said:

"But at 6 p.m., Richter said Swanson had been retired because

of conflict of interest, although he said Swanson was never given that information,

nor is there any evidence in the files."

He apparently had this evidence on hand when the NDP

government took over office. But he didn't consider it his

responsibility to pass on that information to the new

government.

Now it seems to me, Mr. Chairman, that this situation is yet

another and a very clear example of the duplicity of the former

government. One of the statements made by the former Minister

of Transport and Communications, the Member for

Boundary-Similkameen, must be false, because they're in direct

conflict and they were made an hour and a half apart.

I would suggest that it was the 6 o'clock statement that was

false. I would suggest that in his 6 o'clock statement he was

acting in accordance with a message from his master. I suggest

that at 4:30 he told the truth but he had to reverse

himself.

Interjection.

HON. MR. KING: The two statements — the 4:30 statement and

the 6 o'clock statement — are

[ Page 3680 ]

completely at variance with one another. Obviously there

must have been a reason for changing his position in the short

space of an hour and a half. What would that motivation be

except a conflict between what he had said in the corridor and

the statements that were being made in the House by his own

Members?

MR. D.E. LEWIS (Shuswap): He got orders.

HON. MR. KING: I think that's a safe assumption. So I assume

that at 4:30 he told the truth. I make that assumption.

MR. W.R. BENNETT (Leader of the Opposition): You're

wrong.

SOME HON. MEMBERS: Oh, oh!

HON. MR. KING: Mr. Chairman, that could well be, but I think

that it's about time the individual in question got up and

spoke his own mind on this question. He was completely silent

all the way through the debate and because of some fairly

irrational statements by Members of his own party he felt

obliged to justify what had taken place under his stewardship

of the Department of Commercial Transport.

I think at 4:30 he gave the facts. I think at 6 p.m. he

tried to save face for the Member for South Peace River, who

said in this House that when the Minister found out, he was

fired. The two completely conflicting statements made by the

former Minister are in line with everything that has been

presented so far by the official opposition. They have

attempted to introduce in debate any ruse that would detract

from the central issues that were revealed by the Premier some

time ago.

It should be remembered that with the full knowledge of the

former government they presented auditor's reports that they

had ordered restricted, and they deliberately hid B.C. Rail

losses to the extent of $57 million. These are the facts,

supported by documents tabled in this House that are

irrefutable. I suggest that it's a sorry state of affairs when

they are faced with documented facts and then seek to make a

scapegoat out of an individual like Mr. Swanson, who has been a

dedicated civil servant for many, many years. They are quite

prepared to use him as a sacrificial lamb to cloud the issues

that have been raised in this debate.

I don't know which of the statements of the former Minister of Commercial Transport

are true — the statements that are attributed to him in the corridor yesterday.

But they are in direct conflict. I think he owes it this House to rise in his

place and clarify whether or not his first statement was true that the man simply

retired, or whether it's a fact that according to an investigation he held he

concluded that there was a conflict of interest, never notified the individual

involved and terminated him. Mr. Chairman, I think that Member has an obligation

to clarify that to this House.

MR. FX RICHTER (Boundary-Similkameen): The Minister of

Labour has made certain charges regarding my administrative

duties as Minister of Commercial Transport in the former

government. The Minister said that I didn't enter the debate.

If you'll look at the Blues, you'll find that I spoke for

approximately 30 minutes the other day in this House on this

bill. To be precise, I believe it was June 12, or about that

time. I did mention at that time in that debate, and you will

notice it in the Blues, that "I was under a cloud" regarding

BCR because the chief engineer's reports given to me.... I had

discussed on many occasions the inspections, the quality of the

rail. The engineer's, Mr. Swanson's, reports speak for

themselves. As long as I was Minister, he had very glowing

reports. The reports are available.

Interjections.

MR. RICHTER: If I as a Minister cannot depend on the reports — especially in the light of the last report that Mr. Swanson

has drawn up for the now present government — then of course I

have to feel that the earlier reports were either not correct

or there has been some change in Mr. Swanson's conclusions

regarding that railway.

What I said at 4 o'clock yesterday — or 4:30, as the

Minister has specified — to Mr. Hume.... He asked me specific

questions: was Mr. Swanson fired? No, he wasn't fired. He was

on extended employment by way of extensions by order-in-council

every three months.

I had certain matters which I was investigating and on which

I felt I had conclusive evidence to terminate these extensions.

This came about the time one of the extensions was coming to a

conclusion. I advised Mr. Swanson by letter that these would

not be extended. I asked for an inventory of the government

equipment that was in the building on Burrard St. This was

prepared and is probably in the Department of Transport and

Communications at the present time. A new appointment was made

at the termination of Mr. Swanson. Mr. Turnbull was

appointed.

The specific questions were asked at 4:30. At 6 o'clock

there was a bevy of reporters out here asking a hundred

questions, and they got exact answers to all those questions as

to the whys and wherefores. I don't want to damage anybody's

reputation, and I don't think I have, but at the same time, I

don't want my reputation damaged either because I think I

have

[ Page 3681 ]

tried to carry out to the very best of my ability my

administrative jurisdictions and responsibilities under my oath

of office as a cabinet Minister when I was within the cabinet

of the previous government.

There is no conflict of interest as far as I am concerned

with what I said at 4:30 and at 6 o'clock. One was more

detailed and more extensive than the other, and I know

more.

MR. L.A. WILLIAMS (West Vancouver–Howe Sound): I will just

be a few moments. Ten days ago the Premier of this province,

after much promise over past weeks and months, brought forward

this bill and with it, a rather obvious attempt to create a

scandal surrounding the former operation of the B.C. Rail. This

small statute, so necessary for the continued operation of B.C.

Rail, was used as the vehicle for the purpose, a very thinly-disguised vehicle, I must say.

As a consequence of that commencement, we have been treated

for 10 days to a wide-ranging debate which has called into

question the conduct and the integrity of past directors and

past officers of the railway. It has called into question the

integrity and competence of professional people within the

Province of British Columbia who formerly acted for the railway

and who are acting for the railway today in their professional

capacities.

We now come to the situation where it is calling into

question the integrity and performance of civil servants,

former civil servants and people who are currently directors

and employees of the railway.

Surely, Mr. Chairman, we have gone far enough with this

campaign. Surely, it is clear to the government today that what

the Premier began 10 days ago has gone far out of control.

Surely, it must be clear to the government today that there is

only one way of ending this sorry story, and that is for the

Government of British Columbia to call a royal commission to

investigate all of the operations of this railway and all of

the intricate involvement that there may have been with persons

who are today officers and employees, people who were in the

past officers and employees and people who are in the civil

service of this government.

So many words have been spoken, so much reflection has been

cast upon individuals who have no opportunity to answer, that

the government can only, with propriety, respond in this

particular way. The government is guilty of it; Members of the

opposition are guilty of it. Surely, we cannot use this

instrumentality of political difference to besmirch the names

of individuals who have no right to be heard in this assembly,

and no way, no procedure, by which this assembly can call them

before the Members and ask them to answer questions. Surely, we

have gone too far.

We are not probing into the manner in which the railway is being operated,

we are probing into the conduct of individuals, conduct of individuals who were

responsible to the former government, and who were under the direction and control

of the Ministers of that government. We are calling into question the conduct

of Members who are still in this House.

I think that surely there is only one appropriate vehicle,

and that is to have an inquiry established under the Inquiries

Act where a commissioner charged with specific responsibilities

can make the proper investigation and give to people the

opportunity to defend themselves outside any question of

political motivation. Only in that way will the people of this

province know the answers. Only in that way will people who

have conducted themselves properly be able to answer.

MR. D.A. ANDERSON: Mr. Chairman, I am pleased that the

Member for West Vancouver–Howe Sound has seconded a call I made

during second reading debate for a royal commission inquiry.

Unfortunately, we have the complication about a lawsuit, which,

according to professional advice given to me, would delay any

such royal commission inquiry or judicial inquiry. But the

Member's words are carefully chosen, they're right, and just as

soon as that lawsuit is out of the way, this matter should be

put to a royal commission. However, as it may be months,

absolutely months, before such a royal commission or judicial

inquiry could entertain witnesses or information and get going,

there are some things which we have to try and clean up just as

quickly and neatly as we can.

I read of the accusations made against Mr. Swanson with

interest and regret. The man is unknown to me; I don't believe

I have ever met with him or spoken to him. But no individual in

British Columbia should be subjected to comments of this nature

without some opportunity of defending his reputation.

The man, apparently, was released, was never informed of

charges against him and was never informed of who was critical

of him. Suddenly he reads in the newspaper — maybe it was

phoned to him, I don't know — but presumably he read in a

newspaper that he was fired for cause as a result of a secret

investigation. The man is still in business in the Province of

British Columbia — he still has two companies — and his

reputation has been attacked.

Whether we have an inquiry or royal commission this fall or

not — and I devoutly hope we do — it's a basic principle of

justice that no man should be falsely attacked by this court or

this House, or any other, without the opportunity of defending

his name. No man should be accused and stand guilty in the

newspapers, on the radio or on the floor of this House until

it's proved beyond reasonable doubt that he is guilty as

charged.

I do not know Swanson; I have never met

[ Page 3682 ]

Swanson. But I feel that at the present time we,

collectively in this House, simply must do something to rectify

the damage we have done to him. His reputation has been

attacked. It is said that there was a private investigation

done into his activities. It is said that these results will

never be disclosed. Apparently, none of these results are

available in the Minister's office. Apparently, none of the

results of this are available within the department.

Apparently, some other individual is involved, a person

presently within the civil service. Let me digress for a minute

on that, Mr. Chairman.

Is this person, who has to be protected, being protected

because were the information made available, he also would be

fired? Is this person therefore in jeopardy and under threat of

dismissal if this information is released? If that is the case,

then this man is subject to blackmail. He's a civil servant.

His whole future, apparently, will be jeopardized if

information is made public. The man somewhere in the

organization is obviously amenable to blackmail by any

individual or individuals who decide to release information

about his activities prior to 1971. I have no idea who this can

be, but we have here, essentially, a witch hunt.

This man, Swanson, obviously deserves a full apology. The

information that is or is not available about this second man

is clearly required to be made public and divulged, at least,

to the Minister — perhaps, indeed, a judge should look into

these matters.

It's not fair to use Star Chamber tactics. It's not fair to

have private investigations carried out, people fired — because

that's clearly what took place — people released, and the dates

were convenient. But obviously, the implication is he should

have been fired, and, obviously, the implication from what has

come up is that he should have been fired earlier on. So we

have two problems which are left as a result of yesterday's

accusations. The Minister said yesterday in the House, and I'm

quoting the Colonist newspaper again, the Jim Hume story

referred to earlier:

"All King could say to the quotes from Swanson's report was

that it was a confidential, internal document and that it would

be interesting to find out how it came into Phillips'

possession.

"Was this document released by a man who is open to

blackmail? Was this document released by a civil servant or

person working for the railroad, whom, if information were

available about his activities before 1971, the Minister, or

vice-president of the railroad would be required to fire? Is

this civil servant being subject to pressure, a conflict

whereby he must release information even though it violates his

integrity as a civil servant?"

I feel, Mr. Speaker, that apologies are due to Swanson. I

have no knowledge of what Swanson did with respect to his

department, except what comes out of the Department of

Commercial Transport's annual report. He was responsible for

railways, pipelines, industrial transportation and aerial

tramways.

The Deputy Minister, Mr. McLean, makes note of his

retirement on page 7 of the annual report in 1971, which went

in over the signature of the Minister. I wonder, Mr. Chairman,

about the propriety of a Minister withholding from successors

information which either should be made available or which

should be buried for ever, but releasing information of this

nature and at the same time stating that it's to protect

somebody else who obviously must be under some cloud or must be

subject to some accusation if the full story is known simply is

impossibly bad form. We just cannot allow that to continue.

You can't have it both ways. Swanson's name first came up in

this House when the Hon. Leader of the Opposition (Mr. Bennett)

referred to his report on Tuesday, June 10.

MR. BENNETT: It was on Friday.

MR. D.A. ANDERSON: Okay. It occurred on Friday in the first

week in June, and on Tuesday, June 10, six pages were read into

the records, essentially in praise of Swanson, essentially

pointing out what he had said. Later on, apparently, Swanson

was no longer useful, and Swanson has been essentially, in

terms of professional reputation, destroyed.

I know nothing about the charges. I don't know what any

judge or any royal commission would find, but until such time

as any man or woman is adjudged guilty, until such time as he

has had an opportunity to see the charges against him and meet

them if he can, the man should be left with his professional

reputation standing intact.

Mr. Chairman, constantly in this debate we have had attacks — attacks on companies, attacks on accounting firms, attacks on

whole professions, attacks on engineering firms such as Swan

Wooster, attacks on individuals such as Swanson, Broadbent, and

others. We've attacks now on the whole civil service.

I think it is time for these attacks to cease. If indeed

there is information which is pertinent, it should come

forward, but this constant attempt to attack, attack, attack,

and besmirch names, raise new issues, red herrings, be they the

Canadian dollars's value on the international market or an attack

on the credit rating of the province, is getting to be quite

sickening.

We cannot continue in this Legislature, when an issue of

this nature is raised, to have the matter

[ Page 3683 ]

under discussion ignored by constant attacks, which up to

now have turned out to be totally inaccurate, on other

individuals, other companies, other professionals, other

professions or, indeed, the civil service.

If there is information — hard information — let it come

forward. When I heard the Hon. Member for Boundary-Similkameen

(Mr. Richter) explain his remarks, I was indeed compelled to

speak up again. Clearly, if indeed his second statement

yesterday is accurate, he must come forward and provide

information to the government. Clearly, if he allowed the

government to continue to employ a person whom he believed to

be untrustworthy, and did nothing to allow the government to

know whether a person was trustworthy or untrustworthy, he has

been delinquent in his duty to this House.

[Mr. Skelly in the chair.]

Credit or chaos." I wonder, Mr. Chairman, whether that is a threat. When they

can't have Social Credit what they are creating is the maximum chaos they can.

They attack our credit rating, they attack the Canadian dollar, they attack

the civil service, they attack whole professions — the whole accounting profession,

they attack engineering firms, they attack individuals and they fail to back

it up!

It is similar to the statement made in second reading. If

indeed this government is returned, it was said, maybe the

official opposition would vote against this bill. They don't

judge it on its merits; they judge it on what the people will

do. They'll punish the people if they don't decide exactly as

they would like them to decide in terms of a future

election.

Well, I for one say it is time for a halt. It's time for a

halt to these individual attacks. It's time for the Member for

Boundary-Similkameen (Mr. Richter) to either apologize to

Swanson or come forward with information.

In any event, it is time for him to come forward with the

name of this man he is protecting and therefore will not give

Swanson a fair hearing. The idea that somehow there is a man

being protected, without any indication of from what he is

being protected, just is not good enough in this House.

I differ with the government. I don't wish to see the

government returned. I think that Hansard shows that the

bitterest debates in this Legislature in the last three years

have been between myself and the Premier of the province. But

if the people decide to re-elect the government, that is their

decision. We certainly will not carry out a deliberate campaign

of creating chaos to prevent the government from running this

province.

I find myself disgusted. We now have this latest charge. If Swanson deserved

to be fired, we deserve the information. If he did not, he deserves an apology.

This may not seem very important to the Member for Langley (Mr. McClelland),

but if we cannot protect the individual rights of citizens, if we cannot protect

the good name of companies which have done nothing, if we just for political

advantage besmirch anyone in any position in this province, then we have sunk

to a low where indeed the people of the province should elect none of us again.

I find this thing here on the Swanson case and on this

unknown person who is being protected the absolute end in terms

of cynicism. We cannot have that type of thing carried on. I

urge the Minister to reread the words of the Member for West

Vancouver-Howe Sound (Mr. L.A. Williams), and at the

termination of the Broadbent-BCR lawsuit to have a proper

inquiry — a royal commission or judicial inquiry — into the

entire matter of the BCR.

HON. MR. KING: Mr. Chairman, I want to thank the leader of

the Liberal Party for what I feel is a very responsible

position. Certainly we have our political differences. That is

what we are elected for. But with those political differences

and overriding those political differences should be a

commitment to the best interests of this province. Certainly

the British Columbia Railway is an inherent part of the

economic structure of the northern

section of this

province.

I want to remind the Members of the House that, as I recall

it, when the Premier made his speech and tabled the documents

that have been before the House now for over a week, I believe

at that time (I haven't got the exact reference to Hansard ) he

did indicate that when certain litigation was completed, he

would be considering whether or not there should be some form

of inquiry into this whole question of the B.C. Rail operation

over the past number of years. I think that is a matter of

record with the House.

It is a matter of regret to me that I read the

article to

which I referred earlier in last night's Daily Colonist where

it was stated by the former Minister that there had been a

conflict of interest in Mr. Swanson's duties with the

government previously. Yet I find in the report of the

Department of Commercial Transport, filed with this House,

signed by the former Minister, that that gentleman had retired

and there was an almost laudatory comment made after his

retirement was noted, saying: "After a combined total of more

than 66 years of service to the Province of British Columbia,

Mr. Swanson and Mr. Bowering, professional engineers, retired."

Certainly there was no indication, no hint, that there was

anything untoward in the relationship.

I think the leader of the Liberal Party has put the duties

and responsibilities of Members of this House

[ Page 3684 ]

very succinctly and I think all Members should pay attention

to his admonition.

MR. BENNETT: Mr. Chairman, it is very interesting seeing

people seeking comfort wherever they can find it these days and

putting their own

interpretation on remarks that are clearly

spelled out in the records of this House and trying to create

attacks where there were no attacks, assumptions where there

were no assumptions, but one thing is very clear: this debate

was led off by the Premier of the province and the president of

the railway. It was led off in a highly political way after

months of hearing both from the Prime Minister of this province

and the Minister of Economic Development (Hon. Mr. Lauk) that

we were going to have a scandal, perhaps involving fraud. And

of course the Second Member for Victoria (Mr. D.A. Anderson)

always chortled with glee when they brought up past government

Members' names. Past directors of the railway were fair game

for him.

For a Member that has such a history of personal abuse to

stand up in this Legislature and try and keep it holy is the

last straw in this Legislature. He invented the personal

attack.

What I would like to say is that this whole debate has never

had an opportunity to adequately discuss the financing of the

railway, because the whole introduction of this bill was a

political attack tied around the presentation of the rewritten

financial statement. That had followed months of predictions by

the Premier and president of the railway that he was going to

unfold a scandal. In fact, the Economic Development Minister

(Hon. Mr. Lauk) used the word "fraud," a word he hasn't

dared use since, a word that neither the Second Member for

Victoria (Mr. D.A. Anderson) nor the Minister of Labour have

used in this debate.

He introduced at that time names of former directors of the

railway to thunderous applause from the Second Member for

Victoria and thunderous applause from their benches. That was

the first introduction of personalities and people who couldn't

defend themselves: past Ministers and past directors. Indeed,

we're in an arena that's political; it's an arena in which once

you're involved, I suppose you're always involved. But this

selective bit of integrity that comes from time to time is just

astounding to this side of the House, particularly that this

bill right from day one in this debate has gone off in the

highly charged political atmosphere of half-truths and

misrepresentation introduced by the Premier and the president

of the railway.

His charges, Mr. Chairman: let's start with them. I can quote from the Premier

when he introduced the bill. He says: "As with the Columbia River Treaty the

people of British Columbia are going to learn the true facts of the cost of

the recent construction of the British Columbia Railway, costs which had to

be borne for many years by the public of British Columbia." The Premier referred

to the Minty report and the Price Waterhouse report to suggest that the auditing

on the BCR did not meet normal accounting practices and the limited pre-engineering

work resulted in poor estimates and consequent overruns.

If you read all of the reports that were presented to this

railway — all of the reports which were presented by the

Premier and some of the reports which were not presented — you

get an entirely different picture. What we have is a political

presentation with selective reporting, selective reading to

sell a particular political position. Out of that we even had

selective reading by the Minister of Labour last night in

finishing off the debate in attempting to tell this House that

these were the words — I quote from the Blues — that were

contained in the financial statement. This is what he said was

contained in the financial statement: "As described in note 2

of the notes to the financial statements, a review of the past

accounting policies of the company has been carried out. It was

concluded that the financial statement as of December 31, 1973,

on an overall basis did not present fairly the cumulative

operating results of the railway" and so on.

He left out two important words that change the whole

intention of that paragraph. It implies that the report of the

independent auditors said this, but he left out the very

crucial words after "it was concluded." He left out "by

management." By management.

AN HON. MEMBER: Shame on you!

MR. BENNETT: He purposely left that out of his report to the

Legislature last night. The Minister of Labour purposely left

it out because it changes the...

MR. CHAIRMAN: Order, please.

MR. BENNETT: ...connotation that was contained in this financial statement.

MR. CHAIRMAN: Order, please. The Member is imputing improper

motives.

MR. BENNETT: Last night I brought it to his attention....

MR. CHAIRMAN: Order! The Member is imputing improper motives

to the Minister of Labour in suggesting that he deliberately

left out words in order to mislead this House. I would ask the

Member to withdraw.

MR. BENNETT: Mr. Chairman, I'll withdraw.

[ Page

3685 ]

The Minister selectively quoted from the financial statement — selectively quoted, which distorted the meaning and intent of

that statement by the auditors. It's this type of selective

reporting that has happened right from the first presentation

of the Premier and president of the railway to all of the

speeches of the government over there. It is that type of

half-presentation that has distorted even the intent as

reported by qualified people in the Province of British

Columbia. There was even a distortion in attacking and bringing

to light over and over again the former auditors of the

railway, who also were the auditors of the Vancouver Stock

Exchange.

HON. MR. KING: Mr. Chairman, a point of privilege. The

Member of the official opposition has made an improper

statement and an unfair allegation and completely misquoted the

report of the auditors. That report of the auditors is tabled

in the House. It reads: "It was concluded that the financial

statement as of December 31, 1973, on an overall basis did not

present fairly the cumulative operating results of the

railway." No mention of management, Mr. Chairman. The Member

had better read the report of the auditors.

MR. CHAIRMAN: Order, please. The Minister can answer when

his turn comes.

MR. BENNETT: In the financial statement it says: "It was

concluded by management....

Interjection.

MR. BENNETT: Right on the financial statement — within the

financial statement tabled by the Premier. Very important words — "concluded by management." Now, Mr. Chairman, "by

management." That's a very, very important phrase contained

within the financial statement.

I'd like to go back and say it was brought up, it was drawn

out time and time again, or implied, or the impression was

left, that Buttar & Chiene, the internal auditors, were

somehow the comptroller of the company and an employee of the

B.C. Rail. That's not true. The comptroller was a Mr. Miller,

and the outside auditors were there to audit the books on an

outside basis.

I think it should be clearly stated that the chartered accountants of British

Columbia, as they do elsewhere, have an association that polices their accountants

and makes sure that the clients get a fair and proper audit. From time to time,

Mr. Chairman, they have to discipline one of their members when they do not

get an audit as was stated by one of their member firms. It happens from time

to time, and it happened here. It happened, as it says, before their committee.

It happened when they did the investigation for the audit of this statement

of the B.C. Rail for the year ending 1972. It was done while the Minister of

Labour was a director. That was the incomplete audit. They don't state any other

years. They state 1972. That's what it states in the report that the Premier

filed in this House.

Now when we talk about the facts, let's take a look at some

of these reports, because as revealed in the 1974 annual report

prepared by Peat, Marwick the alleged auditing deficiencies

centred around the formula used to compute depreciation. As the

Peat, Marwick statements reveal, it was essentially the changes

in the depreciation formula which resulted in the restatement

or BCR earnings. That's a point we've been trying to make.

The Price Waterhouse study states:

"While existing accounting and reporting practices may have

been adequate to meet the requirements of the railway management in the past,

with the anticipated growth and diversification of the company there is now

a clear need for change and improvement."

Certainly, because up until this government took over, the

railway was growing. Like a small business that's expanding it

was growing. And changes must be made; they're ever made.

That's why you have constant appraisal and upgrading,

certainly. But we've seen what's happened to that growth

between 1973 and 1974. No growth in revenues. No growth, but a

tremendous growth in expenses so that the first time ever this

railway has expenses higher than its revenue. Nothing to do

with depreciation. Nothing to do with the extension of the

railway, but a lot to do with management, a lot to do with wage

settlements, a lot to do with direction initiated by the

directors, the new directors of the company.

AN HON. MEMBER: Or lack of direction.

MR. BENNETT: Or lack of direction. Price Waterhouse further

states: "Our principle conclusion, stated briefly, is that the

financial control and reporting of capital expenditures in the

British Columbia Railway is inadequate and should be improved

as soon as possible." They go on to say: "This is not meant to

imply that there has been improper use of railway funds in the

last." That's what Price Waterhouse said.

They made no allegations. They gave a report that has been

selectively presented to imply impropriety, an implication and

a charge that surrounded the whole presentation from the

government on this bill to extend the borrowing powers of the

railway. Selective quotations from the president of the

railway, Mr. Chairman. There may be opportunities for

improvement of financial practices on the railway, but nowhere

was there any impropriety suggested by the Premier.

[ Page 3686 ]

Now in the matter of depreciation, I tabled the McPherson

study. The McPherson study clearly showed that depreciation

formulas are a very subjective matter. They vary between

railways. They vary between methods by which railways are

extended. They vary between the way railways are run and what

use they are put to. They vary between construction standards.

They vary between the philosophies on extending a railway

related to possible financial return. They don't vary

illegally. They vary because the businesses vary. They're all

railways but they vary in the type of load they're to carry,

cargo they're to carry and how they're to fit that economy.

When it's a resource railway, they're built to resource railway

standards with resource revenue in mind. When they're mainline

like the CPR or the CNR, they're built to carry passengers and

a lot of finished product.

This railway in British Columbia, unlike the CNR, hasn't

needed massive subsidies every year. It has operated on a cash

flow basis right until now, and within the means of its

revenue. For the first time ever, in 1974 and now in 1975,

we're asked, through the borrowings of the railway, to

subsidize the cash flow for the operation. This is a dramatic

change, and the responsibility must be laid at the feet of the

present management of the railway — the directors, the

management and the philosophy by which that railway is operated

and extending now.

We know that there has been overruns on the costs of

extending this railway, yet, clearly, we see a report where the

whole philosophy of that railway's extension was changed by

existing management and directors. We saw a report that was

tabled in this House last night that says they were going to

change it to mainline standards — four different areas of that

report. Certainly, this is a change: a change in philosophy and

a change in costs and a change in the financial capability of

that railway to pay its way. But who is responsible for that?

The existing management and the existing directors.

We had some questions in this House regarding the philosophy

of directors of the railway, and whether they are allowed to do

business with the government or with the railway. It was asked

last Friday, and it was asked all of this week in a very, very

straightforward manner. It was asked because the financial

accounts that were tabled in this House last Friday, even

though they were late, show that one of the directors received

$3,000 in salary and wages, as he should. It also has an area

in that same section, under salary, wages and travelling

expenses, for travelling expenses.

But in another section, there's a

section called

schedule of payments to corporations

and individuals for supplies or services rendered. This deals with all the people

who supply goods and services to the railway, and the same name crops up with

an item for $766. We asked the question of what it was for. We asked the question

last Friday — whether it was a conflict of interests or whether it was a mistake.

Last Friday the Premier was so anxious to get on the plane, he never bothered

to reply. From that request and the lack of response from the government, we

have seen that situation develop into a series of charges and counter-charges

in this House, but a question that should be answered.

During this debate we have seen the very real issue of a

financial statement contained in a prospectus in New York being

at variance with a financial statement as presented in the

Legislature. We have questioned the timing of the Premier who

had control over the timing of that prospectus and the timing

of this statement in the House. We have questioned as to why

that prospectus was not withheld.

That's not just my opinion, that opinion has been expressed

editorially and in financial circles where the propriety of

securing and obtaining loans takes place. Whether you agree

with where we have to borrow money, or if we have to borrow

money, you must agree, we must deal within the framework of the

confidence of the areas we have to deal with. It's been

seriously questioned; it's been questioned within our province

and it's been questioned outside our province.

The First Member for Vancouver–Point Grey (Mr. McGeer) felt

so concerned about it yesterday that he called for the

resignation of the president of the railway, called for his

resignation in absentia, wherever he is.

We have heard a debate where there has been selective

reading, selective reporting. We've heard a debate where all

Members of this House are concerned with the future of this

railroad. We've heard a debate where it's been identified that

the loading factor, the reason for this railway being extended

in the first place, the minerals of the northwestern part of

this province.... The feasibility and viability of mining

those products, where there are minerals, has been threatened

by the change in government attitude, by the introduction of

Bill 31 and by the government's philosophy that has scared off

the investment capital.

We have had no information offered to this House, although

we've sought it, as to which firms are prepared to go ahead and

develop those resources. Who is going to develop them? What are

the projects? What will the daily, weekly, monthly, yearly

loadings be? What will the economics of this railway be?

They're asking for a blind extension. We can't believe the

feasibilities that went before. Right in one of the

government's own reports, which they tabled, is a very

significant statement. That statement is that, yes, the

possibility of minerals is there, but along with the railway's

policy of extension for extraction must be a government policy

that encourages the

[ Page 3687 ]

development of those resources, and the two go

hand-in-hand.

Yet, Mr. Chairman, there has been no attempt by the Premier

when he was here, or by the Minister of Labour (Hon. Mr. King)

in carrying this debate now that the Premier has fled, to tell

this assembly that there is a change in policy, to assure this

assembly that those resources will be developed, that the

railway will have something to carry. We are asked to follow

and develop this railway on a blind trust.

I have a commitment to that railway because I know what that

railway has done for this province. My party has a commitment

because many of us here represent communities that depend on

that railway for their economy. All of us in this House

represent communities of the whole province who benefit because

of the resources that are transported on that railway. It built

the economy of this province. Until it developed a beginning

and an end, this province was not together. We had a community

on the coast; the rest lived in isolation and our wealth was in

isolation from the rest of this province. But that rail line

drew this province together economically, just as the highways,

poor as they are now, drew us together for communication as

people.

We are committed to that railway being extended, but we need

assurance. We must have the assurance that the government will

change its policy to make sure the development will take place.

We must have some answers and accountability as to why, for the

first time, expenses are greater than revenue. We must have

some rationalization of the economics that demand the change

for going to mainline standards ahead of the ability of the

railway to pay. We must have some rationalization over and

above the tradition of extension that built the line, knowing

full well that even constructing to mainline standards in the

initial instance requires constant upgrading for years after as

road beds sink in unsettled terrain, and as the freight

develops and we change to heavier rail.

You don't build an elephant cage to hold a mouse — you wait

until you get the elephant. It is the same in developing a

railway. You develop a railway for the expected freight, and

you upgrade as that freight loading increases.

I know it is hard for the Member for Alberni (Mr. Skelly),

who has always known conflict with capital, to believe that

somehow somebody has got to pay it back, and it should be spent

rationally and wisely. But here we shouldn't be antagonists

because that capital belongs to all the people of British

Columbia. It should be spent wisely, and it should be developed

with some plan in mind.

For more than 20 years, all the years of this railway, it has had a philosophy

of development. It has had good years and bad, but by and large, it has served

the province well. The changes that are now being made are dramatic from the

style of this railway being developed before, and under various governments.

The changes in philosophy of construction, depreciation, management and costing,

the changes in the government of the day, and changed philosophy in providing

that loading and expected freight, have changed the economics of this railway.

I have said, and I agree, that there shouldn't be charges

and counter-charges, and earlier this week we called for a

judicial inquiry. I still believe that a judicial inquiry, with

the opportunity to see all the reports, an opportunity to

interview all the witnesses, an opportunity to arrive at a

judicial conclusion, will be even more conclusive than any

court case than may be there.

But I do question one other attitude of the Premier, and

this is: in making this political presentation to this

Legislature, I would seriously question whether the

presentation of some of the reports, the style in which they

were presented and the way in which they were asked to be got,

particularly the Hanrahan and Wakeley reports. I question

whether, in his enthusiasm for political attack, he hasn't

hampered the case of the government of B.C. and the British

Columbia Railway in that court case which he mentioned, and

which is well-known to all of us. I would hope that in his

enthusiasm for a political kill he hasn't prejudiced the

position of the British Columbia Railway which belongs to the

people of British Columbia.

AN HON. MEMBER: Settle down.

MR. BENNETT: I would hope, Mr. Chairman, that in that

resultant court case it doesn't come out that the Premier,

against all advice on presenting those reports in that manner,

has prejudiced our case, because we are all British Columbians,

and we will all have to pay the bill.

I would like some assurance from the Minister of Labour that

he, or whoever is in charge, will consider a judicial inquiry.

We don't want a public witch-hunt, we want a judicial inquiry.

I hope we can have it.

We will not withhold supply from this railway, nor will we

retard its development. We want answers, but we want to see the

railway go ahead. We want to see those resources developed. We

want to see the economy of British Columbia approved. We no

longer want to see 100,000 of our people unemployed.

We no longer want to see the massive losses that have been

built up on this railway last year and this year that we are in

now — $32 million lost last year, more this year.

Mr. Chairman, we'll support this bill, as I said. We have

reservations. Our reservations are in our confidence in the

government, both in their resource policies and in their

policies in directing this railway.

It is not going to be easy to solve, but before we

[ Page 3688 ]

pass it in just a short time, perhaps the Minister would

answer some of the questions that have been posed since last

Friday in this House.

MR. G.B. GARDOM (Vancouver–Point Grey): I would just like to

make this observation, Mr. Chairman. There is absolutely no

question that the method in which the B.C. Rail accounting,

engineering and estimating procedures that have been brought

before this House was primarily for political purposes. I'm not

condoning or absolving the past administration or the present

administration from any excesses there may have been, be they

administrative or executive excesses.

What I have asked for, not only in this debate, but way back

in November of last year, after the Minty report but before the

B.C. Hydro prospectus, and I believe also, Mr. Chairman,

before the commencement in this province of the lawsuit that

has been taken against B.C. Rail by one of the contractors

concerning only one piece of line in this huge endeavour, was

that the matter should have been dealt with by an impartial

judicial inquiry under the Public Inquiries Act I requested

then and have requested again in this debate.

This House has heard for many days selective statements and

selective reports by each side of the House, and I don't think

it's been right, I don't think it's been fair. Names have been

put into public disrepute by each side, and we have been

conducting, in this Legislature, unfortunately, a war of

innuendo — all by Members enjoying legislative immunity. But

the people who have been spoken of have not been able to enjoy

that privilege. We don't find suits being started against these

individuals by the government or by anyone else, if they think

they have been improperly maligned.

The government could have initiated a public inquiry a long

time ago, it should have initiated a public inquiry a long

time, and it can initiate a public inquiry right away. I'm not

suggesting for one second, Mr. Chairman, that the mere

existence of a writ and the initiation of a lawsuit in this

province can stifle a judicial inquiry under our Public

Inquiries Act.

The people in this province have not received their value

from this debate. There has been no mechanic for the general

public to receive the true facts independently. So far in this

long debate there has not been adequate evidence to the general

public of the true need for the moneys that are requested under

this bill. The House has not been furnished with economic

projections, social projections or environmental projections of

the need for this tremendous amount of money called for.

As I say, and would reiterate, Mr. Chairman, when the Premier in his opening

remarks was highly political, it was a matter that was well prepared for him

— we noted him reading from his podium, which is certainly not the style of

the Premier of this province. We noticed that he had a well-documented

summary

of evidence, most of which was old-hat stuff, and it was sitting in the desk

drawer. That material was before him, and he had a responsibility to come in

with an independent judicial inquiry.

On a request from this side of the House that he do that,

once again he sort of put up his hands and he said there was a

lawsuit underway at the present time. There is nothing to

prevent the government initiating an independent judicial

inquiry today, that lawsuit notwithstanding.

The interest here is the public interest, and the public

interest is not being served. It is not being served at all.

All we have had, as I say, is innuendo upon innuendo from each

side of the House. Facts, taken at their face value, clearly

indicate measures that were improperly taken.

Everyone is entitled to the other side, to the other

position, and everyone is entitled to a fair trial. The people

who have been accused have not received a fair trial and the

public have not received true and fair value.

The Premier chose to initiate this as a political mechanism.

I think he would have been better fulfilling his function as

the Premier of this province if he had seen fit to call a

judicial inquiry. He could well have done that upon receiving

the Minty report. There was enough within the Minty report to

call for an independent judicial inquiry. The Hon. Members of

the back bench know that. We haven't heard too many of them

arguing against that fact. The only person who has stated on

the government side that it is not possible is the Premier, and

he raised this spurious suggestion that there was a lawsuit

going on and that would prevent it. That's a smokescreen. That

is absolute nonsense.

Section 1 approved on the following division:

YEAS — 35

Levi

Lorimer

Williams, R.A.

King

Lea

Young

Nicolson

Nunweiler

Skelly

Gabelmann

Gorst

Hall

Dailly

Strachan

Nimsick

Stupich

Hartley

Calder

Brown

Sanford

D'Arcy

Steves

Anderson, G.H.

Rolston

Lewis

Webster

Wallace

Anderson, D.A.

Fraser

Chabot

Bennett

Richter

McClelland

Curtis

Morrison

NAYS — 2

Williams, L.A.

Gardom

[ Page 3689 ]

Hon. Mrs. Dailly requests that leave be asked to record the

division in the Journals of the House.

Title approved.

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

report the bill complete without amendment.

Motion approved.

The House resumed; Deputy Speaker in the chair.

Bill 27, British Columbia Railway Company Construction Loan

Amendment Act, 1975, reported complete without amendment, read

a third time and passed.

MR. D.A. ANDERSON: A point of privilege . Mr. Speaker, a

former civil servant has been accused falsely of having been

fired from the government service. I would like with permission

of the House to read into the record, so that at least there

will be some information from him, the report of a conversation

I had with him some 10 minutes ago. I would request unanimous

consent to do that.

Leave not granted.

DEPUTY SPEAKER: The matter of privilege will be taken under

advisement.

HON. MRS. DAILLY: Mr. Speaker, we're proceeding now with

second reading of bills. Second reading of Bill 97.

ISLANDS TRUST AMENDMENT ACT, 1975

HON. J.G. LORIMER (Minister of Municipal Affairs): Mr.

Speaker, basically, the principle of the bill is to allow the

trust to hold lands in its name. At the present time it is

unable to accept gifts of real estate and also personal estates

and to hold anything in its name. The provision here allows the

trust to be a corporation for the purpose of holding land and

it allows the trust to carry on as an individual might do. In

other words, it does have the power to buy or sell land as

well. However, the basic purpose here and the need at the

present time is for power to hold the land because we do have

an offer of property which we would like to look into. At the

present time it probably has to be put into the Department of

Lands.

Most people don't want to donate property as a trust to a department of government;

they would far rather prefer to donate it to a trust in which there would be

some control and that the trust would be bound to exercise control of that particular

land or personal property in conjunction with terms of the trust. It may be

to hold the property in perpetuity or it might be for a given purpose or given

length of time or whatever, and that could be set out in the trust documents.

I believe there are some housekeeping sections. There was an

error in

section 6. It's to change the wording of one of the

Acts referred to. I think that basically the principle of the

bill is for the purpose of holding the land.

Interjection.

HON. MR. LORIMER:

Section 3 of this bill. There was an error

in the original bill in reference to the name of a particular

Act.

I move second reading.

MR. H.A. CURTIS (Saanich and the Islands): Speaking in

second reading on Bill 97 which amends the Islands Trust Act

introduced last year — and this is Islands Trust day I suppose

inasmuch as this morning we discussed in committee of supply a

number of other matters relating to the trust during the

estimates for the Minister of Municipal Affairs.

The Minister's comments notwithstanding, with regard to

individuals transferring land to the trust, and perhaps not

feeling very warm towards the idea of transferring land to the

Crown provincial, I still wonder if the amendment is necessary — that is, the main amendment contained in the bill — and if it

would not be preferable to let the acquisition of land in the

islands or the transfer of land be handled through the general

provisions of the Land Act.

Clearly the Minister and I hold differing views on this

inasmuch as he has indicated that this might be a little more

palatable to those individuals, survivors in a family

situation, who would like to leave the land for public use and

enjoyment later on.

It's in respect of that main point, therefore, Mr. Chairman.

It's somewhat of a puzzling amendment. If it is taken at face

value as stated and as referred to by the Minister, it could be

a reasonable addition to the authorities vested in the hands of

the general trustees. But will bills before us such as Bill 127

which will be coming up at some other time, which clearly gives

a Minister and his senior people such tremendous authority and

power, I think we have to look very carefully at all

legislation which is presented by this government and ask: is

this bill really necessary?

The Crown does have the right to accept, under the Land Act,

as has been indicated earlier. There will be some points, I

think, to be raised in committee state. I note the Minister's

comments with respect to

section 3 which merely corrects an

error from last year.

I would also point out that this bill has proved to be a

repeat of a rather awkward situation for the Minister dealing

with the Islands Trust. A year ago

[ Page 3690 ]

when he introduced the main bill, he was caught out in the

corridor in terms of stating that there was something in the

bill which was not...and I think he had the same unfortunate

experience this year. So for his own well-being and comfort, I

would suggest that perhaps when he brings in another amendment

to the Islands Trust Act, he....

HON. MR. LORIMER: There'll be no more.

MR. CURTIS: There will be no more, the Minister says. Well,

that's an interesting and thought-provoking comment from the

Minister on the trust.

But the comments the Minister makes in the corridor and the

items contained in the bill are sometimes at variance, and that

is also unsettling. But we shall have further questions, I'm

sure, in committee.

MR. G.S. WALLACE (Oak Bay): The content of the amendment is

whether or not it is desirable for the trust to be able to buy

and sell land rather than just inherit land by donation from

the land owners. If there's one subject that's got this

government into all kinds of misunderstanding since it took

office, it has to be its policy towards land. It is a little

disturbing that the Minister has stated that he never intended

the amendment to give the government or give the trust the

power to purchase land. It was simply intended to make it

possible for the trust to have land or property donated to

it.

The Minister went on to say in a news report dated June 11th

that although he had originally instructed the department that

the bill should not have the power to buy land, he would

probably need that power in a couple of years. So it will

remain in the bill. If we think of the basic concept of the

initial legislation, Mr. Speaker, which was to try and bring

about the best and optimum orderly development of the Gulf

Islands, is seems strange that we might not need power to

acquire or buy land now, but the Minister envisages that in a

year or two that power might be desirable.

I wonder if in winding up second reading the Minister could

tell us what kind of changes are going to occur in the next two

years which would make that power desirable in 1977 when

probably he feels it is not necessary in 1975 or within that

kind of time-frame.

There is no doubt that I think all of us in the House voted

in favour of the original bill for the very sound reason that

this is a priceless area we live in, and the degree to which we

want to preserve the islands in their best possible environment

is sound. As I recall, the whole House supported the original

bill.

Giving this additional power to the trust to buy land does raise the question

of whether the government really wants to have much-extended powers through

the trust. Really, I wonder if that extended power is necessary. In particular,

I want to know why it might be necessary two or three years down the road when

the Minister really doesn't think it is necessary now.

If he can convince me that the whole purpose of the

amendment is to further improve the functioning of the original

legislation, then of course we will be happy to support it. But

I would like some more definitive explanation that we have had

up to this point.

MR. L.A. WILLIAMS: I agree with what the Member for Oak Bay

has just said. I wonder if the Minister, in closing the debate,

would indicate whether the trust, now assuming the capacity and

powers of a corporation, isn't also going to assume its

obligations. With respect to land which it may hold, will it

pay taxes?

MR. N.R. MORRISON (Victoria): Mr. Speaker, in closing the

debate I wonder if the Minister could also explain to us.... I

think the bill is perhaps a bit of a misnomer because it would

lead you to believe that the Islands Trust Amendment Act, 1975

would only hold land which was within the Islands Trust itself — that is, in the area of the Islands Trust. Nowhere in the bill

do I see that that is defined. The inference I would get is

that you could own land and buy and sell anywhere — not only

within the province, but anywhere.

It talks about some of the purposes of the fund in referring

section 2A where it says a "gift or will that is not subject

to terms, conditions, and trusts that are inconsistent with the

purposes of the fund." But nowhere does it tell us what the

purposes of the fund are. I think that perhaps the bill,

although the Minister may feel it is necessary, should not be

called the Islands Trust Amendment Act. It may be a trust Act

of some kind, but it certainly broadens the powers way beyond

what was envisioned in the Islands Trust Act in the first

place. I wish that he would give us a pretty thorough

explanation of what the purposes are that are referred to but

not defined.

DEPUTY SPEAKER: The Hon. Minister closes the debate.

HON. MR. LORIMER: A year ago, when the Act was originally

brought in, it was felt that there was no need for powers to

hold real estate or other types of personal property, that it

could be held elsewhere. There are a number of areas in

government which can hold land. We have found in the past year

that people who were prepared to give donations objected to

giving them to the government as such or to a department of

government. They wanted to give it to

[ Page 3691 ]

the trust and wanted that understood in terms of a trust in

which they would set out in writing what the terms of this

particular trust were. So the idea was at that stage then to

give the trust the power to hold personal and real

property.

I will admit that I understood the amendment to be only to

hold land. But when it came through the machine, it was of the

power to buy and sell as well. I said that we wouldn't need

that for a couple of years, and the reason for that is this: we

expect that the trust will also receive donations of cash. We

expect the trust will receive donations of total estates. Those

total estates may be within the trust area in total, or maybe

part of them will be outside that trust area. The funds may be

in a bank account in Victoria or somewhere else.

The reason I said we wouldn't need the power to buy or sell

for two years was basically on the fact that we had no such

offers at the present time. When we got the offers and had

those funds, we could then amend the statute a second time and

take care of it. We have no reason at the present time for

buying and selling of land. I can foresee that the need could

well arise within a number of years. So that is why I said that

we would present the bill to the Legislature in the way it came

out. The Islands Trust will pay taxes, full taxes.

MR. McCLELLAND: What's the purpose of the fund?

HON. MR. LORIMER: I would suggest that the purpose of the

fund is to develop and look after the islands, to acquire land

for possible park purposes and for wilderness areas. It's also

to look after the question of looking into water supplies and

make studies in the area. There have been very few studies made

up to now, and those have to be done. These grants will go in

accordance with the terms of the trust. In other words, when

they give money, they will say what that purpose is for, so in

each case it might be different as to what the funds will be

for.

Interjections.

DEPUTY SPEAKER: Order, please. There will be ample time to

ask questions in committee. I would ask the Hon....

HON. MR. LORIMER: So I would suggest that the purpose could

well change from gift to gift as to what the cash was wanted to

be used for and so on.

I think I've answered most of the questions. I can verify

the fact that at the present time there's no property there

that we are looking to buy, and we have no funds to buy if we

were looking to buy. I now move second reading.

Motion approved.

Bill 97, Islands Trust Amendment Act, 1975, read a second

time and referred to Committee of the Whole House for

consideration at the next sitting after today.

HON. R.M. STRACHAN (Minister of Transport and

Communications) : Second reading of Bill 101, Mr. Speaker.

INCOME TAX AMENDMENT ACT, 1975

MR. D.D. STUPICH (Minister of Agriculture): Mr. Speaker, the

Members will recall during the presentation of the budget

speech that the Minister of Finance forecast certain changes in

provincial tax treatment of corporations. Bill 101 is the

delivery of those promises.

There are several amendments. One of them increases the tax

rate for large corporations from 12 per cent up to 13 per cent,

but reduces the rate for small corporations, as defined by the

Income Tax Act, from 12 per cent down to 10 per cent. In

keeping with our policy of assisting small business, the tax

rate, as was forecast, has been reduced, Again as an implementation of government policy, our belief

that royalties are a cost of production, the bill does provide

that royalties shall be deducted from corporate income in

calculating the British Columbia portion of the income tax, and

also provides that the additional income arising from the

deemed selling price of gas — in effect, another royalty — will

also be deducted in calculating the corporate income tax.

A further amendment to the logging tax allows for logging

tax paid against corporate income taxes, an amendment so that

the credit will be kept in line with the current income taxes

payable, as provided for in this legislation.

The renters' benefits are scaled so that those on lower

income will get additional benefits from this particular

proposal, again an amendment to the Income Tax Act.

Finally, some changes that were requested by the federal

government in keeping with our agreement for administration of

the Income Tax Act. They have asked that some changes be made

in the calculation of foreign tax credits. There is one further

amendment to advance by one month the final income tax

instalments paid by large corporations.

Mr. Speaker, on behalf of the Minister of Finance, I move

second reading of Bill 101.

DEPUTY SPEAKER: Before the Hon. Member proceeds, I would note that much

of the discussion probably should take place in committee. However, bearing

that in mind, I would recognize the Hon. First Member for Victoria.

[ Page

3692 ]

MR. MORRISON: Mr. Speaker, you just took my speech. That's

precisely what I intended to say — that since there were a

number of subjects in the bill, we would be discussing them in

committee and not at this point in second reading.

DEPUTY SPEAKER: The Hon. Minister closes the debate.

HON. MR. STUPICH: Mr. Speaker, on behalf of the Minister of

Finance, I now move second reading of Bill 101.

Motion approved.

Bill 101, Income Tax Amendment Act, 1975, read a second

time and refereed to Committee of the Whole House for

consideration at the next sitting after today.

HON. MR. STRACHAN: Second reading of Bill 108, Mr.

Speaker.

MOTOR-VEHICLE AMENDMENT ACT, 1975

HON. MR. STRACHAN: Mr. Speaker, this bill is similar to a

number of others. It contains a number of amendments, and would

also probably better be discussed during the committee

stage.

It does, however, allow by proclamation the moving of the

handling of dealers' licences from the motor vehicle branch to

the Consumer Affairs branch, where both the Minister of

Consumer Services (Hon. Ms. Young) and I agree it more properly

belongs because it is a commercial operation.

It allows for the giving of dealers' licences from the motor

vehicle branch to the Consumer Services department because it

is a commercial operation, and it allows for it to be done by

proclamation.

There are some other amendments. The Members will remember

some comments made by judges on the not less than $250 fine for

not having a driver's certificate. That has been changed. It

changes the definition of bicycle. It gives a little more scope

to school patrols.

I will be introducing a small amendment later on which adds

"or adjudged to be a juvenile delinquent under the Juvenile

Delinquents Act (Canada), by reason of..." and so on. It is

a very small amendment which I will be introducing in committee

stage.

I move second reading.

MR. GARDOM: I'm delighted to see that the Minister refers to the removal

of that extremely harsh, preposterous

section wherein there was an automatic

fine of $250, or in default, three months imprisonment or both fine and imprisonment

for an individual not having a driver's certificate in this province. This created

a great deal of hardship for a large number of people. I do hope that the Hon.

Minister, in closing the debate, will give his assurance to the House that any

people who have fallen into the preposterous net that was developed by this

section, and have paid those fines, will receive order-in-council assistance

and the fines will be remitted to those individuals. It was a preposterous

section

when it came in, as was indicated and stated at the time, and the government

has seen the folly of its ways and, fortunately, have agreed to an amendment.

But still, the general public — Angus or Agnes, I should say — are not too sure of the number of documents they are still

required to have in their possession to be considered validly

insured in the Province of B.C. The Minister always makes a

great issue of correcting people when they are wrong, and in

the strongest of language, and if I am incorrect I hope you

will correct me — but I assume that the Minister has not yet

informed the general public that they will be totally insured,

notwithstanding they may not have all of these pieces of paper

in their car at the time of an accident. Such was the case

under the former system of insurance that the general public in

this province enjoyed.

It certainly opened a question today that if a person

doesn't have a valid registration certificate, and owner's

insurance certificate, a driver's licence and a driver's

certificate in their possession at the time of the mishap, they

fall outside of ICBC and are not protected to the extent of the

injuries that may happen to them or that they may cause to

others and others could recover against them. It has been a

serious problem. If it has been cured, I do hope that the

general public have been notified adequately of that fact. If

not, they certainly should be.

Secondly, or thirdly, perhaps. I would like to ask the

Minister's comments on this: under what authority and what

general statement is the law of this province now being

followed? I gather that it is impossible for people to obtain

driver's certificates today as the result of this strike of

ICBC. Does this mean that there will be a complete moratorium

ordered, or already ordered, for any convictions under this

section of the Act for a person not having that piece of paper?

Does it also mean that by virtue of this individual not having

that piece of paper, they will still be considered to be

adequately and properly insured?

Really, this Insurance Corp. of British Columbia has created

more difficulties, I think, for the motoring public and for the

government than the government ever envisioned. It has proven

to be a millstone around the neck of government, and perhaps

will end up being their downfall.

Mr. Speaker, I feel very strongly that the

[ Page 3693 ]

public.... We have got a set of laws in our statutes. There

is no administrative discretion within the statute itself to

see that these laws are enforced, and conceivably it has got to

be done by executive action. I would assume that you would be

bringing in an amendment, if nothing else, to cover these

situations. Or are you merely instructing prosecutors in the

province not to proceed according to the law as written? If you

are doing that, and I think in the circumstances it should be

done, but it is the sloppiest kind of practice and the

sloppiest method in which to effectively administer justice in

this province.

MR. MORRISON: There are a number of sections in this bill

which we will deal with in committee, but I wonder if, in

closing the debate, the Minister could just give me a little

information.

I notice he said that the dealers' licences will be

transferred to the Consumer Services branch, but it also talks

about a fee and so on for that, a prescribed fee in

section (

b) in 34(A), and perhaps you would give us an indication of what

that fee might be. I don't believe there is a fee currently

charged now in addition to either the licence plate itself.

Another section, 34(c), odometers, is tightening up the

problem of people turning back speedometers, but unless I

incorrectly read this section, there is still that loophole

which allows a private individual, while he owns the vehicle,

to adjust the speedometer and then turn the vehicle in, and in

this it would appear that the dealer could be held responsible

even though the individual himself had changed the speedometer

prior to trading the vehicle in. I would like some

clarification on that point.

I think really the solution to the whole thing is to just

simply say that no one can adjust a speedometer, period, or

odometer, period.

The other item which I think would probably be better dealt

with in committee is the

section where vehicles are required to

be registered whether they are sold or not. I think I'll leave

that one to that section, but I think there should be some

discussion on it in committee stage.

MR. WALLACE: A very small point, Mr. Speaker. I'm just

amazed that the Minister, with the erudite background of a

possibly define a bicycle as being a vehicle with "any number"

of wheels. (Laughter.)

The definition in the dictionary described a bicycle as "a

vehicle, usually designed for one person, consisting of a metal

frame mounted upon two wire spoke wheels with narrow rubber

tires in tandem."

We've heard such a long, tiresome debate with a lot of bad feeling, and I thought

a little bit of humour might not go amiss at this point. I just wanted the definition

section 6 which refers to a bicycle being a device having any number of wheels

just as long as it is propelled by human power.

Maybe the Minister would like to comment.

MRS. D. WEBSTER (Vancouver South): I would like to ask the

Minister just one question, and that is concerning getting your

registration and car licence renewed. In that case all you get

is a very small slip of paper and it states on that slip that

you must leave it in your car. You don't get anything else that

you can keep on your person or keep in safekeeping to show that

that car belongs to you if, for instance, the car is stolen or

if it is burned or anything happens to it. I would like to know

from the Minister what his answer to this is.

I was in the ICBC office one day with a problem of one of my

constituents, and she was very concerned because her car had

been demolished and it had disappeared completely. She was

concerned for two reasons — first, because she didn't have her

licence plates returned, and secondly because the registration

was in the car. I asked the gentleman who looked after me what

his attitude to that was, what his answer was, and he said:

"Well, for myself, I have had mine photostated so I have got a

copy of it in safekeeping."

This is the sort of question that I have been getting from

people who are a little bit concerned because of the changeover

from the time when we used to have very cumbersome papers

concerning insurance, to the very opposite when this really

almost skeleton or sketchy type of insurance papers that seems

to look after everything. But there is always a fear that it

could be lost, strayed or stolen.

DEPUTY SPEAKER : The Minister of Transport and Communications closes

the debate.

HON. MR. STRACHAN: You know my bicycle with any number of

wheels that is propelled by human power on which a person may

ride. I guess that's the legal extension of the traditional use

of the word bicycle.

Interjections.

HON. MR. STRACHAN: Well, anyway, you don't want the definition of a

camel.

Interjection.

HON. MR. STRACHAN: What does that mean? You ride two

bicycles? (Laughter.) You ride two bicycles, going in separate

directions? That's the way it comes out, in order to provide

coverage for vehicles that ride without a motor that have more

than two wheels.

[ Page 3694 ]

The Member for Vancouver–Point Grey (Mr. Gardom) asked about

insurance. As he knows, the superintendent of the RCMP, after

discussions with I think the superintendent of motor vehicles,

issued instructions some months ago to give any person who did

not have his driver's certificate two weeks in order to get

it.

MR. GARDOM: You can't get them at all now.

HON. MR. STRACHAN: That's right. It is my understanding that

instructions have been given that that apply until 14 days

after the strike is settled.

As far as the coverage is concerned, it is my opinion that

the

section in the other legislation does give the right to

have them covered by insurance.

MR. GARDOM: Whether they do or do not have those four pieces

of paper in their possession?

HON. MR. STRACHAN: There is a discretionary

section in the

Act. You will recollect that.

MR. GARDOM: That is the hardship section?

HON. MR. STRACHAN: Yes.

MR. GARDOM: You say they have got to go to the hardship

section, then.

DEPUTY SPEAKER: Order, please.

HON. MR. STRACHAN: I was asked about registration even

though the vehicle is not licensed. I think there is a

section

in here that does not allow a vehicle to continue to be

registered even though it is not licensed. I would certainly

consider issuing an extra copy of the car registration in

duplicate form.

MR. GARDOM: What about refunding fines?

HON. MR. STRACHAN: I would have to discuss that with the

Attorney-General.

DEPUTY SPEAKER: Order, please. I would ask the Hon. Members

to save their questions until we are in committee when they

will be proper.

HON. MR. STRACHAN: I would certainly consider the

possibility of providing two pieces of paper so they can have

one in the car, but the Member was complaining about them

having too many pieces of paper now. However, I would have to

check that other matter with the Attorney-General. I couldn't

give a commitment on that. So I now move second reading, Mr.

Speaker.

Motion approved.

Bill 108, Motor-vehicle Amendment Act, 1975, read a second

time and referred to Committee of the Whole House for

consideration at the next sitting after today.

HON. MRS. DAILLY: Second reading of Bill 110, Mr.

Speaker.

NATURAL GAS REVENUE SHARING ACT

HON. MR. LORIMER: Mr. Speaker, this is a great little bill.

I am really very proud to speak on this bill in second reading,

a bill obviously made possible through the great work of our

Premier in going back to Ottawa and getting a deal for the

people of British Columbia, getting an increase in natural gas

export prices and coming back from Ottawa with his hands and

pockets full. It was probably the first time in the history of

this province that a Premier has gone to Ottawa and come back

with more than he went with.

Sharing with the municipalities is not an easy thing to work

out. There are a number of difficulties. Any set programme or

formula can work fairly well for maybe 90 per cent of the

municipalities, but there is the odd case where there is no

formula which will quite fit the picture. Some municipalities

are not helped to the amount they need to be helped under this

formula or any other formula we could think of. That is the

reason why we have a portion of it for special grants. The

areas which qualify for these grants will be decided by the

executive of the UBCM and myself. We will try and be as fair as

possible with these specialized areas.

We have avoided the per capita grant structures for two

basic reasons. One is that we feel it doesn't take into account

the difficulties and expenses in operation that some of the

northern communities have in relation to some of the southern

communities. Snow clearance is one item that is a substantial

expense for some communities,

whereas it is no expense at all

for others. There is the problem of rock formation in the soil

which causes more expense in some municipalities than in

others. So we have worked out a system of actual cost in the

municipalities and divided it in that way.

I have discussed the formulas with the Union of B.C.

Municipalities executive in two meetings. They have agreed that

this system is satisfactory, considering it was basically done

in somewhat of a rush.

Interjection.

HON. MR. LORIMER: I'm sorry, I can't hear you. No doubt you

will be able to speak and let me hear about it in due course,

because I don't intend to be too long here.

The changes may well take place for distribution

[ Page 3695 ]

next year. The UBCM are going to take the formula to the

UBCM convention and will see if they can arrive at a proposal

that they will present to us for possible methods of

distribution for 1976.

I now move second reading.

MR. BENNETT: Mr. Speaker, in speaking to this bill, while

any help is greatly appreciated by the municipalities, those

who have received their tax notices this year are aware more

than anyone that this $20 million has gone nowhere to solving

the financial problems of the municipal governments. They

finally end up relating to the property owners and homeowners

in this province who have had the biggest single one-year

increase in our history in property taxes on their homes. Some

homes have increased up to 30 per cent or more in their

property taxes.

This bill shows a glimmer of light on a principle that

should be recognized by this Legislature and by all provincial

and federal governments, and that is the plight of

municipalities. We all realize, Mr. Speaker, as I know you well

do, that the financial sharing between governments in this

country and between provinces and municipalities certainly

isn't equitable. While our provincial revenues have doubled

since 1972 — gone from $1.4 billion to $3.2 billion, hopefully,

this year — our share with municipal governments has only

advanced at 6 per cent a year.

HON. MR. LORIMER: No, it hasn't. It's doubled. It's over

doubled.

MR. BENNETT: Six per cent in relation to provincial

revenues. That relationship has only increased by 6 per cent a

year.

HON. MR. LORIMER: Over doubled.

MR. BENNETT: Six per cent a year. Obviously the

municipalities have not shared in the growth revenues of this

province. It's obvious. No matter how you wish to play with

percentages, they haven't shared and yet they have been forced

to deal with many of the problems of growth. That is the

extension, Mr. Speaker, of services to people both for those

who are lucky enough in this year of no construction of houses

for services to accept housing. The municipality has only one

answer and that of course is to pass along increases to the

property owner, and it's now evident that it's beyond the means

of property to pay the costs which municipalities are called

upon to expend on behalf of people. They need to share in the

growth revenues of the province.

This bill deals with gas. It deals only in a minor way with the particular

part of the gas revenues, and it doesn't come to grips with revenue sharing

on a very specific basis so that it will reflect a share of the growth revenues

in all areas. I repeat that the growth areas are sales tax....

HON. MR. LORIMER: Like they used to have.

MR. BENNETT: You know, the Minister says like they used to

have. I agree. I agree that no government in Canada has yet

committed itself to revenue sharing on this concept, with the

exception of the studies done by Ontario. I agree that while it

wasn't done in the past it has become evident in the high

inflation times that have taken place in '72, '73 and '74, when

we've seen the dramatic increase in property taxes, and we've

seen the fact that the government hasn't kept pace in grants to

homeowners or in grants to municipalities to deal with it, that

the worst effect has taken place last year and this year. It's

more evident now than ever that a specific share of income tax,

both on a personal and a corporate level, a specific share of

the sales tax, a specific share of resource revenues should be

shared on a specified basis with municipalities to reflect the

economy of the Province of British Columbia.

DEPUTY SPEAKER: Order, please. I would ask the Hon. Member

not to stray away too far from the principle of this bill and

to import new principles.

MR. BENNETT: Well, the revenues that reflect the growth of

the province....

DEPUTY SPEAKER: Order, please. Before the Hon. Leader of the

Opposition gets distracted again or starts again, I would like

to make my point.

MR. BENNETT: Yes, Sir.

DEPUTY SPEAKER: I would ask the Hon. Leader of the

Opposition to stick to the principle of this bill and not to

import new principles or new concepts.

MR. BENNETT: Yes. The title of the bill is the Natural Gas

Revenue Sharing Act, and we're talking about revenue sharing,

and revenue sharing is fundamental to dealing with municipal

governments. The whole Act talks about the provincial

government and its financial dealings with municipal

government.

I'm saying that this bill doesn't go far enough. It's too

iffy, Mr. Speaker, because it deals with a revenue source that,

if we listen to some of the Members of the House, they wish to

be discontinued. They wish the export of gas to be

discontinued. It then would mean that this bill sometime in the

future won't deal with the needs of municipalities. We're

talking about growth revenues of which natural gas, being one

of the resource revenues, is one. The resource revenues of this

province and other revenues that deal with the

[ Page 3696 ]

growth of the economy should be shared with municipal

governments.

DEPUTY SPEAKER: I think the Hon. Member doesn't understand

the ruling the Chair is making. I just want to make the point

that it's permissible either to support or oppose the limit of

the principle contained in this bill, but it's not permitted to

expand or introduce new concepts beyond the scope of the bill.

If this is to be done, it should be done by placing a bill on

the order paper oneself. So I would ask you to stay within the

scope of this particular bill.

MR. BENNETT: Thank you, Mr. Speaker, but I know that you are

as concerned as I am with the municipal government, and in

these dying days of this session of the Legislature I know that

you too are probably a homeowner in this province and are

concerned about the excessive tax bill that you've just

received, and you would be interested in exploring a commitment

from the provincial government, an extension of a commitment

contained in this bill that would relieve the homeowners of

this province from the type of increases they face this year,

increases that we never want to see again.

These increases don't even reflect an increase in services

in the municipalities. In fact, what we have are pat budgets,

and the municipalities are still thwarted and cannot accept the

very necessary growth. And of course that's thwarting the

Housing Minister (Hon. Mr. Nicolson). We see that housing

construction starts are down. We see municipal government

unable to perform the functions and services for which it was

intended.

Now surely, Mr. Speaker, you must recognize that we in this

assembly are dealing with the very same taxpayers the municipal

governments are dealing with. We cannot keep quibbling about

who is best able to tax and deliver services. We know that

municipal government has been given responsibility in certain

areas. We must now recognize that we have a responsibility to

share with them gross revenues so that they can carry out these

responsibili