1978 Legislative Session: 3rd Session, 31st Parliament

HANSARD

The following electronic version is for informational purposes only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

MONDAY, JUNE 5, 1978

Afternoon Sitting

[ Page

1959 ]

CONTENTS

Routine proceedings

Oral questions.

Repayment of moneys for committee services. Mr. Barber –– 1959

Alleged illegal break-ins by RCMP in British Columbia. Mr. Macdonald ––

Proposed Vancouver convention centre. Mr. Gibson –– 1960

Repayment of moneys for committee services. Mr. Barber –– 1962

Committee of Supply; Ministry of Education estimates.

On vote 54.

Mr. Cocke –– 1963

Hon. Mr. McGeer –– 1966

Mr. Cocke –– 1968

Mrs. Jordan –– 1970

Ms. Sanford –– 1973

Hon. Mr. McGeer –– 1974

Mr. Cocke –– 1976

Mr. Kerster –– 1977

Ms. Sanford –– 1977

Mr. Stephens –– 1978

Hon. Mr. McGeer –– 1979

Mr. Stephens –– 1980

Mr. Macdonald –– 1981

Mr. McGeer –– 1983

Mr. Macdonald –– 1984

Mr. Young –– 1984

Mr. Gibson –– 1985

Hon. Mr. McGeer –– 1991

Mr. Gibson –– 1993

Hon. Mr. McGeer –– 1993

The House met at 2 p.m.

Prayers.

MR. LOCKSTEAD : Mr. Speaker, we have in the galleries today Mrs. Germaine Paulus, accompanied by Rick and Kathryn Rockwell, formerly of Victoria and now living in Qualicum Beach. As a special guest today we have from Brussels, Belgium, Mr. George Pieters, here to visit his cousin Catherine Rockwell, on his way to an international archery competition in Pennsylvania, where he will be a judge and a competitor. I ask the House to join me in welcoming them.

HON. MR. CHABOT : Mr. Speaker, we have in your gallery today three representatives from the Canadian Association of Oilwell Drilling Contractors, from Calgary, Alberta, Mr. W. Krausert, president; Mr. Stan Jones, general manager; Mr. Williams, chairman of government relations. They are here to attend the first directors' meeting of their association since 1949. The prime objective of coming to British Columbia is the intense activity that has taken place in exploration and the renewed faith that they have in British Columbia as a good place to explore.

HON. MRS. McCARTHY : On this beautiful British Columbia day I would like to refer to your ruling of last Thursday, wherein, you asked that I withdraw a phrase referred to in that ruling; I am pleased to withdraw, Mr. Speaker.

MR. BARBER : On a point of order, Mr. Speaker, if I am counting properly, there are nine ministers away today.

MR. SPEAKER : That is not a point of order.

MR. BARBER : My point of order is this: I ask leave of the House to delay question period 10 minutes until more members take their seats. I know the Minister of Recreation and Conservation (Hon. Mr. Bawlf) is in the hall. Hopefully he is waiting to come in. There are others who hopefully will arrive.

MR. SPEAKER : Hon. members, I think that if we allow the traditional period for members to assemble, not just members of government bench but on all sides of the House

Interjections.

MR. SPEAKER : Order, please. May we proceed with question period?

HON. MR. GARDOM : They are all at meetings, and you know it.

MR. BARBER : One of them is in the hall with the press.

Interjections.

MR. SPEAKER : Order, please. Hon. members, may we proceed?

MR. BARBER : With respect, Mr. Speaker, half of the cabinet is missing. Nine out of 18 are gone. I ask leave to delay question period by 10 minutes in order that were members of cabinet may come and be held accountable for their actions.

MR. SPEAKER : Hon. members, it's unusual, but I will ask: shall leave be granted?

Leave not granted.

MR. SPEAKER : Please proceed with question period.

Oral questions.

REPAYMENT OF MONEYS

FOR COMMITTEE SERVICES

MR. BARBER : Well, my attempt at delay has served one purpose. I have a question for the Minister of Recreation and Conservation. I'll wait until he takes his seat.

Interjection.

MR. BARBER : No, it means my question was first. I'm waiting for the minister.

Could the minister inform the House whether or not he has repaid to the Minister of Finance any moneys he received or had paid on his behalf for his services during the time he was a member of what is now known as the Bawlf committee on housing?

AN HON. MEMBER : Order!

AN HON. MEMBER : What do you mean by "order! "?

MR. SPEAKER : Hon. members, is this is a question that has arisen before?

MR. BARBER : No, it has not.

[ Page 1960 ]

HON. MR. BAWLF : Mr. Speaker, I believe that question is out of order on two grounds. First of all, it does not pertain to my duties as a minister. Secondly, it is a matter which is before a committee of the House.

SOME HON. MEMBERS : It is not!

MR. SPEAKER : Order, please. The rules by which the House is bound do not provide that we can ask a minister a question about matters which did not take place during his administration - and I was just trying to find the actual citation. Perhaps if you will give me a few moments, I will give you that citation. Perhaps we could proceed to another question.

MR. BARBER : Mr. Speaker, would it be in order - and I would respect your advice - to ask the minister if, since his appointment as Minister of Recreation and Conservation, he has paid back to the Minister of Finance any moneys paid to him or paid on his behalf as a member of the Bawlf committee on housing?

MR. SPEAKER : Order, please. With great respect, I think that if the first part of the question is deemed to be out of order, this would refer to the same matter. Please proceed.

MR. BARBER : All right. In the absence of the Minister of Finance, I ask the acting Minister of Finance - whoever that might be today - has the government received, through the Minister of Finance, any funds from the now Minister of Agriculture (Hon. Mr. Hewitt) , the now Minister of Recreation and Conservation (Hon. Mr. Bawlf) and the still member for Coquitlam (Mr. Kerster) in regard to repayment of moneys paid to them or on their behalf for their service during the work of the so-called Bawlf Committee on Housing?

I'm afraid, Mr. Speaker, I have no idea who the acting Minister of Finance is today. There are so many of them missing, you can't tell.

MR. SPEAKER : The first member for Vancouver East (Mr. Macdonald) .

MR. BARBER : No, I asked a question.

MR. SPEAKER : Order, please. We can ask questions but we cannot insist on answers; and I saw no minister on his feet.

ALLEGED ILLEGAL BREAK-INS

BY RCMP IN BRITISH COLUMBIA

MR. MACDONALD : Mr. Speaker, I was going to answer the question.

I have a question to the Attorney-General. The background is that the Attorney-General announced an inquiry into 402 alleged illegal break-ins on the part of the RCMP in British Columbia; and the opposition then questioned whether it should be conducted by the Deputy Attorney-General in view of the statements he has made. Now the Deputy Attorney-General apparently isn't returning calls about the subject and the Attorney-General has been a little bit vague. So I ask the Attorney-General: what precisely are the terms of reference of this inquiry apparently taking place with respect to these break-ins?

HON. MR. GARDOM : I haven't received a report yet, hon. member. And - as I informed the House - when the information is available, I will inform the House. I don't intend to speculate in matters that have not yet come to my attention.

MR. MACDONALD : On a supplementary, Mr. Speaker, before there can be a report there should be some terms of reference. Are there terms of reference? If so, what are they arid are they in writing?

HON. MR. GARDOM : The reference terms, hon. member, are to determine both the validity of the alleged number and the legality.

MR. MACDONALD : On a supplementary, Mr. Speaker, are these terms of reference in writing and can they be tabled with the House? If there's an inquiry, I think the House might be entitled to know just what the terms of reference are.

HON. MR. GARDOM : It's not a public inquiry. I've requested a report. The hon. member perhaps is aware there is an inquiry going on at the present time. The Macdonald commission is a royal commission.

MR. MACDONALD : A final supplementary: will there be a report to this Legislature during this session and, if so, will it be in writing and filed with this House?

HON. MR. GARDOM : I hope so.

PROPOSED VANCOUVER CONVENTION CENTRE

MR. GIBSON : Mr. Speaker, I have a question for the Provincial Secretary.

Under the Provincial Secretary's proposal for a convention centre for Vancouver....

[ Page 1961 ]

Interjections.

MR. SPEAKER : Order, please, hon. members. We're having some cross-fire here, hon. member, and I cannot hear the question. I would ask the member for Revelstoke-Slocan (Mr. King) and the Attorney-General please to come to order.

MR. GIBSON : There's one advantage if you can't hear the question, Mr. Speaker - you can't rule it out of order. Maybe I should be more quiet more often.

I want to ask the Provincial Secretary: under her proposal for a convention centre in Vancouver, who would look after deficits that might arise out of that convention centre -the provincial government or the city government?

HON. MRS. McCARTHY : Hr. Speaker, I think it is a hypothetical question which I would not be able to answer at this time. The proposal -as the member probably knows - is in the hands of the City of Vancouver at this time. They will come up with a programme and the city of Vancouver will make a report on that.

MR. GIBSON : On a supplementary question for clarification, then, is the Provincial Secretary telling the House that she made this kind of announcement and this kind of a suggestion without having some idea in her own mind as to what it might be committing the province to financially?

HON. I-IRS. McCARTHY : The answer to that question is no.

MR. GIBSON : If the answer is no, then the Provincial Secretary did have something in her own mind as to what the financial consequences to the provincial government might be. I ask her what that is. What's her estimate of this? What's her plan? Does she have one? What's her thinking?

HON. MRS. McCARTHY : Mr. Speaker, I think I would prefer to send a copy of the proposal to the hon. member, as I have done for all the Vancouver representatives on both sides of this House. I'd be pleased to make that available to him. If there are any questions arising from that, I'd be pleased to answer them.

MR. GIBSON : On a supplementary question, I've obtained a copy of the minister's press release dated May 29, and I simply don't see any proposals in it for financial sharing, to the provincial government or city government, so how can that clarify my question if the information isn't there?

MR. SPEAKER : I don't see a real question there, but perhaps we can....

MRS. McCARTHY : Well, Mr. Speaker, I didn't take it that the question was: what was the financial proposal? The financial proposal was 40 per cent by the provincial government, 40 per cent by the federal administration and 20 per cent by the civic administration. I think that if I send the proposal to the member he will clearly have that picture before any further questioning is put before the House.

MR. LEA : On a supplementary question, I'd like to ask the Provincial Secretary who it was - in government or some outside consultant - who advised the minister on the costing of this new proposal that she is putting forward. I take a look at it and it seems impossible to build something of that magnitude for the kind of money the Provincial Secretary is talking about. I'd like to know where she had her technical advice coming from, in terms of that convention centre.

HON. MRS. McCARTHY : I'd be pleased to answer that, Mr. Speaker. The F. Rex Werts reports, the National Harbours Board figures, the city of Vancouver figures, the Convention and Visitors' Bureau figures, the Ministry of Travel Industry figures, and all of the figures which we've been able to obtain from other jurisdictions and from many other individuals who have offered reports and figures to the Ministry of Travel, we co-ordinated along with the city of Vancouver and that was the outcome of the report.

MR. LEA : A final supplementary. I'd like to ask the Provincial Secretary how far the planning has gone. Is this just a concept? Would it be nice to have it there? Would it be a nice area of the city? Or has there actually been some costing out of what it would take to build the things that are being proposed? Has it gone that far, or is this just a "wouldn't it be nice" sort of thing, an announcement saying: "It would be nice; it would cost so much money." Has there been any figure on any specific building and specific projects? Do we know for sure that it's possible and that's what it would cost?

HON. MRS. McCARTHY : Mr. Speaker, the concept that was presented to the city of Vancouver a week ago today envisions a trade and conven-

[ Page 1962 ]

tion centre. It would be presumptuous of the provincial government to offer anything more than a concept. The reason for that is that we do not feel that we can impose architecturally a design, impose a programme on the city of Vancouver, other than that which we have worked on with them through the F. Rex Werts proposal, which was a two-year study and presented to both the city of Vancouver and the provincial government and financed by both parties.

The concept is one which envisions a trade and convention centre which is much needed by the city of Vancouver. It will bring added dollars to the city of Vancouver and added business to the downtown area by redevelopment of the waterfront and as a catalyst to redevelop the waterfront. It has been projected by the Vancouver visitors and convention bureau that from 20 conventions that have been lost in the past 24 months, $40 million would have been left within the downtown Vancouver area. That was the reason for putting that proposal before the city of Vancouver. It is more than just a nice proposal, Mr. Speaker.

MR. LEA : Mr. Speaker, point of order. I think it is obvious to everyone that the minister is not attempting to answer the question. The question is: is it anything more than a concept? She has answered that it is only a concept, nothing more, nothing firm.

[Mr. Speaker rises.]

MR. SPEAKER : Hon. members, it is obvious to the Chair that members of the House from time to time insist upon order from the Chair; but on insisting upon order from the Chair, themselves are out of order. This is exactly one of those instances where a member obtains the floor, purportedly to cite a point of order. He essentially has not a real point of order at all, but perhaps a fraudulent point of order. When a question is put, the question is framed in such fashion as to evoke an answer. The answer must be acceptable. If the answer goes beyond the scope of the question, then it is the duty of the Chair to intervene.

[Mr. Speaker resumes his seat.]

REPAYMENT OF MONEYS

FOR COMMITTEE SERVICES

MR. BARBER : Mr. Speaker, my question is to -the Minister of Finance. I gather Dr. Pat has already told him what the question is anyway, from lip-reading, which we learned to do.

I Can the Minister of Finance inform the House whether or not, in his official capacity as minister, he has received payments or repayments from the now Minister of Agriculture (Hon. Mr. Hewitt) , the now Minister of Recreation and Conservation (Hon. Mr. Bawlf) and the present member for Coquitlam (Mr. Kerster) regarding moneys paid to them or on their behalf for the period on which they served on what is now called the Bawlf committee on housing? Has the money been paid back?

MR. SPEAKER : Hon. members, this is a similar question to which we were going to rule on early in the question period and perhaps should do so now. The question doesn't involve a ministerial duty.

'MR. BARBER: But it's his.

MR. SPEAKER : Order, please. I'm giving you a ruling on the earlier question. It does not involve a ministerial duty and as such must be called out of order.

The second reason: it is seeking for purposes of argument information on matters of past history, and for that reason the question should not be allowed.

The third reason: it reflects on the character or conduct of one of the members of the House and, as such, can only be debated on a substantive motion. For these three reasons, I cannot allow the question.

Now the question presently being asked is on the same subject matter. Unless the question can be phrased in such a fashion as to be in order, I cannot allow it. Would the second member for Victoria try again, please?

MR. BARBER : What I'm asking very specifically now of the minister, who is now in his place, is whether or not he has received - and for all I know, Mr. Speaker, it may be as late as this morning - moneys from the now Minister of Agriculture (Hon. Mr. Hewitt) , the Minister of Recreation and Conservation (Hon. Mr. Bawlf) and the member for Coquitlam (Mr. Kerster) , regarding repayment for those moneys paid directly to them, or on their behalf, during the period which they served on the Bawlf committee.

It may in fact be a very recent matter. I do not know. I'm asking this minister, under his responsibility as Minister of Finance to receive such funds, whether in fact he has received those funds.

HON. MR. WOLFE : The question was whether I could inform the House now. The answer to that question is no, but I will take the question as notice.

[ Page

1963 ]

MR. LOCKSTEAD : Mr. Speaker, because of your lengthy rulings in the question period, I'm asking leave of the House that the question period be extended a further five minutes.

MR. SPEAKER : Hon. members, this is question period, and perhaps an orderly question period might be more appreciated. We've already elongated the question period by three minutes in order to take up the time of the ruling.

Orders of the day.

HON. MR. GARDOM : Mr. Speaker, I'd ask leave of the House to proceed to Motion 16.

MR. SPEAKER : We have a motion of precedence which, of course, requires that we go to Committee of Supply. If we do not wish to go to Committee of Supply, we would require leave.

Leave not granted.

HON. MR. BAWLF : On a point of order, Mr. Speaker, I had intended to make a brief statement to the House, if it is appropriate to do so at this time.

MR. SPEAKER : Hon. members, to the best knowledge of the Chair, we are now in Committee of Supply.

HON. MR. BAWLF : Thank you. I've been on my feet three times, Mr. Speaker, trying to get recognized.

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

ESTIMATES: MINISTRY OF EDUCATION

(continued)

On vote 54: minister's office, $119,793 -

continued.

MR. COCKE : Mr. Chairman, I thought today that maybe we'd have a little change in our direction. The Minister of Education (Hon. Mr. McGeer) is also the minister in charge of ICBC and I would like to reminisce with the minister for a few minutes. The Minister of Mines

(Hon. Mr. Chabot) , if he wishes, can ask him some questions. Mind you, there

will be some questions, I would think, coming up in our minds when we talk about

this particular scenario that I would like to reminisce about. I would like

to go back to November 30,1977, a fateful day indeed, when the board of ICBC

met at Harrison Hot Springs and - what a coincidence! - so did the cabinet on

the same day at the same place, enjoying the same hot pools. It was very, very

coincidental. The cabinet, I understand, were there to discuss some of their

own business but they also were there to discuss who, in fact, should be the

nominee for the presidency of ICBC. I know that the ICBC board - or at least

certainly I feel that the ICBC board - had a particular individual in mind,

and that individual was Gillen, a chap who was on loan from MacMillan Bloedel

to ICBC. He was doing a credible job in the eyes of the board, or certainly

in the eyes of some members of the board.

A company by the name of Price Waterhouse, I believe, had moved about the countryside looking for a potential president, and they had an alternative. This alternative to Mr. Gillen came from a far-flung region of the earth. He was way over in Europe working for the Hartford Group.

I recognize that they needed that alternative, because cabinet were obviously quite concerned over the job that Fotheringham had done on our poor friend Mr. Gillen who, incidentally, was an executive who obviously had not won favour with Mr. Fotheringham. So, as a result, he became persona non grata with the cabinet of our province.

I would like to ask a few questions, Mr. Chairman, with respect to this particular situation. Certainly I would like to know whether or not this was a real search. I'm just wondering how highly motivated the board of ICBC was to find an alternative, because they felt they had their man in Mr. Gillen. So I just wonder whether or not there was a countrywide search for an alternative and whether or not a name came up from across the sea that would not elicit, too much favour with the cabinet for many reasons, not the least of which being that he was not a Canadian citizen.

It strikes me that the board of ICBC was on a lot firmer ground to pick up Mr. Gillen if, in fact, the alternative was not all that attractive to the cabinet. I would like to know what the fees were to Price Waterhouse to do this search. I would like to know what the involvement of the directors of ICBC was - and there were, as I recall, two of them involved in the search. I'm just wondering about the costs of bringing in the interviewee for his interview from London or wherever. I'd like to know who made the offer.

Mr. Chairman, I'd just like to do a little bit of history on the Hartford Group. I have said, and I'm going to say again, that this country has a very large insurance industry. Most of it is centred in Ontario, but it has an extremely large insurance industry. Do you

[ Page 1964 ]

mean to tell me that the industry - the size that it is in this country - could not produce one person to take this opportunity and to do a job with this particular obligation? Mr. Chairman, I think that the search was a disaster; the whole question is a disaster.

And beyond that, let's look at what Fortune magazine talks about in 1975 as being a major disaster. ITT - International Telephone and Telegraph - had a disaster, according to Fortune magazine. "ITT's Disaster In Hartford." This

article in Fortune is likely in the library, and I would suggest it as nice afternoon or early evening reading for anyone who would like to go and read it. It talks about the major disaster that happened to ITT as a result of picking up the Hartford Group. I'm going to get into some of the areas that they feel were disaster areas in the Hartford Group, bearing in mind that my reasoning is that we have had a very successful insurance industry in this country, having produced many, many successful insurance people. That's why I'm asking the question: why did we go across the sea and why did we bring in a person who....

Interjection.

MR. COCKE : This is nothing against him. This is against that cabinet which made a convenient decision because they couldn't stand Fotheringham's heat. That's it exactly. It was the cabinet that reversed the decision, I'll bet you any money. The ICBC board already had their man as far as they were concerned. No question about it. Don't you tell me that that meeting of convenience wasn't just that. It was a meeting of convenience so that the cabinet could override and overrule what the ICBC board had decided. At least the ICBC board had decided on a Canadian citizen. As I say, I have nothing against Sherrell.

I don't even know the man other than having met him once. I'm just here to tell you that there are available in this country.... Particularly for $80,000 you can get a pretty good insurance man to run that company.

Now let's get back to the Hartford Group. This

article that I referred to was in Fortune magazine, May, 1975, which is a relatively well thought of business magazine in the United States. This is the lead in one paragraph: "The focus of the first is on ITT's most discouraging problem of all...."

Don't forget that when we are talking about ITT we are talking about a huge, very successful multinational. They felt that was one of the greatest disasters in their entire history; Hartford Fire was their disaster. It was the most discouraging problem of all to ITT.

Hartford was among the special disasters, they say, in the insurance industry in the early 1970s. They go on to say that in 1974, Hartford, that jewel, that prize of consent decree, racked up a loss of $123 million in its underwriting operations.

Mr. Chairman, the president of ITT, Geneen, was 64 and a half or so at this time, and decided he had to stay on for another couple of years because he had made such a distressing decision as to bring in the Hartford Group into their group of companies. "Geneen is embarrassed by Hartford's troubles. It is pretty clear that he regards them as an unsightly blot on his management record, " this says. "He is probably right. It would appear that ITT has not managed Hartford with anything like the energy it has expended on its other operations."

You see, they didn't really know what made the insurance companies tick and they let Hartford's own management continue on the course that they had set for themselves in years gone by. Those decisions were absolute disasters for ITT. Mr. Chairman, Fortune magazine claims that ITT is noted for its management excellence, yet on the other hand the Hartford Group did not reflect this at all.

I want to bring another couple of areas to your attention. This is an area where ITT later that year had to make a contribution of $93 million to the Hartford Group. The irony of this contribution is special. '!During the controversy that attended ITT's acquisition of Hartford, opponents of the merger repeatedly charged that its consummation would allow ITT to raid Hartford's assets." They didn't raid Hartford at all. Hartford was a living liability to ITT.

Mr. Chairman, this

article goes on and on and on, but where does it end? Just before I get to that end, which incidentally comes right down to the claims department of the Hartford Group .... That's the situation. At least, that's where our applicant to be the first officer of ICBC came from.

One of the problems they had, they say in this article, is that they were underestimating their reserves, with the result that their profits were overstated. Hartford had a special distinction: it was the only one of the companies - they were researching nine companies - to have underestimated its reserves and overstated its profits in all nine years looked at. It was no wonder Geneen was concerned. No wonder he had to stay on as president of ITT for another two years up until the time when he was 67 just to try to straighten out this mess.

[ Page

1965 ]

Mr. Chairman, the survey of the nine companies points up a major management problem in the industry. A business that does not know its cost any better than this one is probably going to have great difficulty setting intelligent prices; we've certainly seen that.

Anybody who is interested in getting into the entire matter can look over the article; you can just

chapter and verse it all the way through. One of the things it says is that if ITT is still not cracking the whip, it is at least watching the action more closely -that's now - which means that the staff of Hartford are looking for safer perches on which to land, naturally. ITT are not particularly happy, having gone through what they went through.

The last area in this

article that I want to allude to is: "Are the claims men smarter?" This is where we are really getting to the nub of the problem at the Hartford Group. Geneen, who again, I say, was the chairman of ITT, sounding more like the old Geneen, says firmly:

" 'Hartford is not going to write bad business, and if that means not growing, well, so it does. It has already in fact meant not growing in 1974. Hartford's written premiums declined slightly from 1973.' Geneen is comforted by a belief that Hartford recognized its problems earlier than other companies did, and will be pulling out of them sooner."

Here's the key to it.

"How about the problems associated with the reserves? Are these now more accurately stated? If they are, it's not because Hartford has done a lot to improve the procedures by which it establishes reserves. Ray Deck says: 'Mainly, Hartford is just trusting and assuming that its claims men have gotten smarter. Considering their past record, that sounds like a pretty thin reed to lean on."'

Mr. Chairman, I suggest that these are some of the areas that ICBC and this government of ours should have been looking at. I propose that there are highly trained and highly skilled insurance people in this country and that there was no need for this round-the-world search that led us to the point where we are at the present time.

Mr. Chairman, I am not the only one, I feel, who takes this position. I suspect there is one sitting in the back row on those government benches. I want to take you to an

article that was in the Colonist on February 25, where Vander Zalm chides McGeer for hiring an American for ICBC: "Human Resources Minister William Vander Zalm said Thursday a provincial resident should have been hired as president of the Insurance Corporation of B.C."

I'm not sure he would have found one in the province. Maybe he would; maybe he wouldn't. There are some highly trained, well-skilled insurance people in this province, but there certainly are in Ontario, and they are, after all, Canadians.

"Vander Zalm believes Pat McGeer, minister responsible for the corporation, made a mistake in hiring Robbie Sherrell, a U.S. insurance company manager for the $80,000-a-year job. Vander Zalm told a ratepayers' meeting in Surrey that all work done in B.C. should be done by B.C. residents. 'If someone builds a pipeline across the north of this province, I want to be darn sure that it is built by a British Columbian, ' he said in a subsequent interview.

The minister said he would extend his policy even to executive posts in Crown corporations. 'We've got lots of good people in B.C., ' said Vander Zalm, adding that he would have found a provincial resident had he been responsible for the job hunt. McGeer has said that no one capable of performing the job was found in Canada."

I believe the Minister of Human Resources, who from time to time has made mistakes, was bang on on that one. I believe that the job we did of searching around across the sea and into areas where there have been problems hasn't really served us.

We're not out of the woods yet because there are people indicating that the job could have been filled here. The Canadian government say they are going to bring an order in that will permit Mr. Sherrell to stay, but I have some legal opinion that says they're going to have difficulty in doing that because the order will not flow with the Act. It will be counter to the Act, and it is very difficult, for those of you who know anything about orders-in-council, to bring in an order-in-council that does not complement the Act. It is my understanding that this does not complement the Act.

Mr. Chairman, just to refresh our memories, Price Waterhouse's man involved in this particular search was Clark Jackson. I suggest he's likely an American. He certainly sounded to be an American, with an accent. The ICBC board's selection committee was William E.S. Tennant, chairman of the committee. Mr. Tennant had been a computer consultant with ICBC in earlier days. Norman Manning was formerly a resident of The Guardian in Toronto and head of the Canadian Underwriters' Association, and a leading light in the Insurance Bureau of

[ Page 1966 ]

Canada. He could be probably known as sort of a cartel leader. I think we've heard of some of the workings, incidentally, of Guardian in recent months.

I just wonder why Price Waterhouse was chosen. ICBC had never used Price Waterhouse before. Price Waterhouse was Mac-Blo's consulting firm. Isn't that an interesting tidbit of information? Price Waterhouse was normally associated with Mac-Blo. It didn't do any work for ICBC, as far as I know, and I'm just wondering whether or not it would have suited some of the Mac-Blo people had Price Waterhouse come up with some answers that the ICBC board wanted to hear.

I would also like to know why Gillen was the only director who was virtually working fulltime for ICBC for months before the so-called search started. Why was he left off the selection committee list of names?

Anyway, Mr. Chairman, I conclude in this particular area by just saying this: there were people available in this country to do that job. I defy anybody to stand up in this House and tell me that there weren't. As a matter of fact, we had one out. I'm not going to tell you his name; he'd be blacklisted if I told you his name. But we had one out from Toronto early on in ICBC, a very talented individual. There are tons of them.

HON. MR. MAIR : Name names.

MR. COCKE : Don't tell me name names. I'm not going to name names. What do you want to do? Do you want us to start a search? You give me 10 days and I'll find you 10 men. You know it as well as I do. Oh, yes.

Mr. Chairman, the Minister of Consumer and Corporate Affairs (Hon. Mr. Mair) is doing his little trick. He would be terribly insulted if we said there were no lawyers in this country capable of doing a top job, and I suggest to you that there are lots of insurance people capable of handling that job. You know it and I know it.

HON. MR. McGEER : Mr. Chairman, perhaps I can reply briefly to the member's

questions. I would just make an observation first of all on a couple of aspects

of his remarks which may have some bearing on his disappointment that the corporation

was unable to obtain a Canadian candidate of the standards that the board of

directors had said were required for the particular job.

He said that Fotheringham had done a job on Gillen. I'm glad the member opposite made the observation that at least one of the representatives of the press was unfair to someone who had worked extremely hard on behalf of the people of British Columbia in his capacity as a director of ICBC. Later the member made reference to being able to come up with a name, but he didn't want to do that for fear the person would be blacklisted.

I mention these two illustrations just to bring out a point, Mr. Chairman. When people are unfairly attacked in the media, not only is it beneath contempt in a moral and an ethical sense that this should take place, it also jeopardizes the public service in British Columbia and the Crown corporations that operate under the public service. These people who serve on boards are unable to reply in a satisfactory way to character assassination.

It's difficult enough for elected people who have an opportunity to speak in the House. It's an occupational hazard for a politician. Most people who go into it accept that as one of the prices they have to pay for being elected. Many are surprised at the venom of some of the attacks that are unleashed, not always by elected critics but by others who are freely reported whenever they wish to say something that denigrates either a person who is elected as a government member or, just as frequently, as the member well recognizes, those who are representatives of the opposition party.

That kind of yellow journalism merely demeans the public service and the quasi-public service. It makes it less of a calling than it ought to be. All of us, as citizens, are the losers, not just those who are elected as politicians, not just those who serve on boards, but all the citizens of British Columbia because it makes public life a little cheaper and it makes the choice of people you can recruit to serve the public just a little narrower than it ought to be.

But having made those general remarks, I can only say that the board of directors of ICBC and the firm of Price Waterhouse that was hired to assist them in that endeavour made a thorough and conscientious effort to obtain a top executive from Canada who met the standards that had been laid down. I am sure there are lots of Canadians who would have liked the job, but the board of directors and the recruiting firm had a dilemma.

What should they do for the people of British Columbia? Find the best man they could possibly find anywhere in the world, or limit their horizons to the Canadian scene, one that had already been compromised to some extent by the very remarks made by the member opposite. Who would want to come and head up a firm like ICBC, when that individual would be subjected, almost as a matter of certainty, to the kind

[ Page

1967 ]

of mudslinging and unfair attacks that had marked the board of directors and the predecessors who had served in the corporation? I'll tell you quite frankly, it made a lot of people who might otherwise have been interested in being the chief executive of the largest insurance corporation in Canada simply not interested in that post. That's a very understandable and human reaction. Who would want to endure a character assassination? Mr. Member, it's as simple as that. That was one of the major reasons the opportunities were greatly limited in Canada.

We did give authority for that recruiting firm to hunt worldwide for an executive. I doubt that a more thorough job has ever been done in British Columbia in seeking out a chief executive for any of the Crown corporations in British Columbia. Mr. Sherrell was the recommendation that came out of that search.

Remember this: when ICBC was founded, of necessity the people who had to build that corporation were ones that needed to come from firms that had experience in government operated automobile schemes. It would have been ridiculous in those initial stages when such major breaks were being made with, traditional insurance methods in British Columbia to have come forward with people who had experience only in the private sector.

But here we were, Mr. Chairman, struggling to overcome some of the problems that we assumed. I'm not going to go into those again. I've done it many times in the House and it would just be boring to everybody if I started getting exercised about that particular side of it. But there were no senior executives at all in the corporation who had had the kind of broad experience at the top executive level in the private field at the time we went out and sought a chief executive.

Mr. Gillen as the acting general manager, and before that as the vice-chairman

of the board, had done a simply superb job in setting down the general guidelines

of the corporation and guiding it during an extremely difficult period. But

when the opportunity came for the board to have a president who had had the

kind of top executive experience in the insurance industry that they felt the

corporation most needed, they took the best of both worlds. They chose this

executive who wasn't a Canadian - he was an American - and made Mr. Gillen

the chairman of the board, a Canadian on a Canadian board of directors where

he would have the top policy and direction responsibility. So we've got

a Canadian in that post and we've got an all-Canadian board of directors

and we've got virtually all Canadians in the 2,000 employees in that corporation.

We do have one American. He's in a key post, but he's got the type of

experience that the corporation most needs at this time.

I don't think, Mr. Chairman, it will ever again be necessary for ICBC to go outside the corporation itself to get its future executives, and the reason is simply this: the corporation has now been in business for about four years, which is giving an adequate opportunity for the corporation to identify and train from within its own ranks the future executives of the corporation. One of the responsibilities of the president right today is to make certain that ICBC has developed an appropriate executive development programme.

It won't be my decision but I predict that never again will ICBC need to go outside its own corporate ranks to find the senior executives that it needs. This is a one-time-only step that was taken - a controversial step. Good heavenly days, we didn't make that appointment....

It fell to me, Mr. Chairman, after the cabinet had approved the appointment of Mr. Sherrell, to make the offer to him by letter, but we were quite aware that there would be all kinds of protests. And if we had to predict who would be out charging and leading those protests, of course we would had predicted the Vancouver Sun, a newspaper that's never reported a responsible thing yet about ICBC. It was perfectly in character for them to do that. So it certainly came as no surprise and we were well aware that we would be subjected to withering criticism for taking that step.

But I can tell you, Mr. Chairman, we've not shrunk away from making the correct decisions with respect to ICBC, because we felt we were going to face a little bit of criticism. We've made each of the decisions, difficult as they may have been along the way, in the interest of building a solid, successful continuing corporation. I would have thought that that would have pleased my friends in the opposition, because, after all, they were the ones who founded the corporation and they're going to get the credit ultimately for doing that.

It's been my unlucky lot in life to have to straighten out a lot of the mess, but I'm satisfied - and I hope the members will indulge me if I take just a little bit of satisfaction in this - that we've left that corporation in a little better shape than we found it.

Mr. Chairman, I don't know the cost of the Price Waterhouse search. I can't tell you the cost of bringing candidates to be interviewed, but I can assure you that it's minimal com-

[ Page 1968 ]

pared with the rewards that we may expect to obtain from sound management. The amount of money that was lost in the first year of that corporation's existence would have paid the chief executive officer, assuming he got $80,000 a year, for 450 years. The amount that was lost in the second year of operation would have paid the chief executive officer's salary for about 1,800 years. The plan that I took over - had I permitted that to go ahead -would have paid the salary of the chief executive officer for another 2,000 years.

I think perhaps I've earned a little bit of keep along the way by saving something of the order of $100 million in the turn-around in that initial year, because that's roughly the amount at which ICBC ran ahead of its projected budget.

The new president has come up with a scheme for cyclical renewals that will save several million dollars. He has done that within a few weeks of taking over the presidency. So he has already earned his salary for several hundred years. But, Mr. Chairman, an executive officer could, of course, make an error and blow a few million the other way. We hope that won't be the case. But when you're dealing with a large corporation like that, where millions of dollars are transacted every day, you don't need to let your concentration slip for very long. You don't need to be careless about many things before you've seen your salary come and go many, many times over.

That's why executives are in strong demand. That's why they obtain the salaries they do -because they assume high responsibility. They need to worry every single minute about the amounts of money that fall under their jurisdiction., Frankly, it's a high-risk proposition. Where high salaries become less acceptable is where there isn't that degree of executive risk, where there isn't that degree of responsibility in handling money, where people who make small mistakes that multiply into large amounts of money are going to be held severely accountable for those errors.

When you start seeing salaries mount up into this region without those gut-wrenching responsibilities, it's time to ask questions about the salaries that are involved - but certainly not given the stakes that ride every day on executive responsibility, on the acuteness of decision-making and the degree of responsibility that the person carries in managing the public purse.

I predict that Mr. Sherrell will serve the public of British Columbia and ICBC very well. But if the members opposite think that, in terms of his performance and his prospects for the future, it was a mistake and that the man should be dismissed, let them say so. I don't think so. I think a good decision was made. I think the future will bear that out.

MR. CHAIRMAN : Hon. members, just before recognizing the next member, who is the member for New Westminster, two members sent me notes and wished to do introductions. The member for Coquitlam is first. I believe leave is required. Shall leave be granted?

Leave granted.

MR. KERSTER : It gives me great pleasure to introduce Mr. Bill McLean, a teacher, and 35 young adults who are students at Centennial School in Coquitlam, a school that our community is especially proud of because it is noted as being one of the finest senior secondary schools in the province of British Columbia. I would ask all members present in the House to join me in welcoming these students, who just arrived in the gallery a few moments ago.

HON. MR. BAWLF : On behalf of the hon. Minister of Municipal Affairs and Housing (Hon. Mr. Curtis) , from his constituency in the gallery today are the students of Claremont Senior Secondary School with their teacher, Mr. Murphy. I would ask the House to make this class welcome as well.

MRS. JORDAN : I want you to introduce me so I can enter the debate. I have been waiting for two days.

MR. COCKE : Mr. Chairman, I listened attentively to the minister and found that he uses some specious arguments, talking in terms of how many thousand years could have been paid for under certain circumstances. Let me use one. Incidentally, his were quite wrong, even using his own figures. Here's a good one for him. For the amount that ICBC has stolen out of the pockets of British Columbians, you could have paid his wages for 2,500 years.

Anyway, I want to get off that situation. I just wanted to let the minister know that there were those of us with some concerns with respect to the selection procedure. One of the reasons I asked how much it cost is that I don't think it cost very much at all for that search. Where did you see the ads? They just were not available. They didn't search through any of the insurance associations that I could find; and there are insurance associations who do that work specifically. That aside, I want to talk to the minister for a moment or two about a case that he knows a great deal about.

[ Page

1969 ]

This is the case of a young woman, and I think it's one of the cases that

clarifies the need that ICBC - a Crown corporation - should be viewed as more

than just a corporation. It is a servant of the public of British Columbia.

It also shows me very clearly that this particular Crown corporation is not

living up to its social obligations.

This young woman, Susan West, lives in the constituency of the member for Delta

(Mr. Davidson) . She came to me some months ago, as a result of a hotline programme

I happened to be on, and asked if there was anything I could do to help with

a situation that had occurred - she found that she was left holding the bag.

This was as a result of an accident that took place in January, 1974, as I recall.

Her car had stalled going through a light and she was hit on the right side

by a car coming through on a through street. As a result of the accident she

suffered a good deal of damage, lost an eye and wound up with epilepsy. This

is a young woman, very confused about due process and about lawyers and all

the rest of it. She was made an offer by ICBC; as a matter of fact, she was

made three offers by ICBC. She didn't even know at that time that she was

being made offers by ICBC. She had a lawyer who, incidentally, to begin with

was appointed by ICBC to look after her side of this particular case and who eventually

took up her case. I have no quarrel with that, although still it was confusing

to her at the time.

The person that hit her in this car accident wound up with a settlement of

$28,000, as I understand. I won't name this person out of deference to the

person. Incidentally, Ms. West didn't quite understand who was doing what

to whom - whether it was ICBC she was contesting or the. person who hit her

or what ever. All she knew was that on October 13 there was an offer, a subsequent

offer on October 17, and then on the eve of the trial, a $40,000 offer to this

rather naive, young, innocent person, whose lawyer at that time said to her:

"That's getting more like it."

Well, in her mind, naturally, having been deprived of half of her eyes light,

having been damaged for the rest of her life in terms of epilepsy, I guess she

did feel that maybe there's something out there that should be justice around

this case. Unfortunately the case went to trial and it wound up in an eight-person

jury trial. There was a split decision, but unfortunately the decision went against

her. As a result of that, she winds up with $4,500, fees and costs. She winds

up where ICBC are now telling her, after having made her a $40,000 offer: "You're

out of luck. There's nothing for you." Now that, in my view, is not

maintaining its social obligation.

I know the minister has some ideas with respect to no fault and all the rest of it, but as far as she's concerned, she's out and her future financially and economically is relatively bleak. She got $4,503.30. She winds up owing - no settlement, no nothing. All I'm saying, Mr. Chairman, is that under these circumstances there should be some way of recompensing that person. Had she made the right decision, had she settled for the $40,000, which she could have on the eve of the trial.... Don't forget, in her mind she is totally innocent of that accident.

She drove to a stop sign., stopped, started up again and her car stalled. Now there's not a great deal you can do about that. Having this occur and then having a car come belting into her, naturally she feels innocent and she feels she's been put upon.

I'm just saying, Mr. Chairman, under these circumstances this company of ours should pay attention to those people. Talk about setting precedents and all the rest of it. As far as I'm concerned, I have gone to the minister with one case in the past two and a half or three years, and this is it. She's not a person from my own constituency. I've gone to the company a few times and told them that I felt they should have another look. And incidentally, I don't squawk if I don't get my way.

But I tell you right now, Mr. Chairman, I finally took this to the minister because I think this is a case where ICBC would be properly justified in having made an ex gratia payment, having taken it all the way through. I suggest to you that this person is naive, innocent and young. That should have been taken into consideration. That's the reason I took it to the minister and I haven't so far got any kind of measure of success in my plea. I'm not sure how the minister feels. I suspect that he feels somewhat along the line that I do, but you have a very tough executive board of ICBC that's saying: "No, no, no."

I say that's just too bad, because I say that this is one case where there should be an ex gratia payment made. Why do I say an ex gratia payment should be made and could be made? I say that because when we framed the Act, we know that situations like this would occur and that's why we put that clause in the Act, giving the board of directors the right to make ex gratia payments under circumstances such as this. So, Mr. Chairman, that's my plea. I would like to see a little bit of a social obligation, at least on behalf of the people of B.C., from ICBC.

[ Page 1970 ]

MRS. JORDAN : Mr. Chairman, I find this a difficult time to bring forth just a few very brief comments on my part, because I can appreciate the member for New Westminster's concern about that particular case. I'm not doing this to interrupt his trend of thought nor his plea on behalf of that individual, but I did want to mention one or two things in the debate the other day without prolonging the debate and would like to take that opportunity now. But before I do I would like just for the record to state my view about the Robbie Sherrell appointment.

You know, when one sits there in this House and listens to some of the most inflammatory and rather damaging and, I think, insulting statements that have been made about Mr. Sherrell - and he's not the only person; there are other people who have come from other countries to be employed in our province - one really wonders what we are thinking about, what type of a tenor or a tone we are trying to set in this province.

I certainly don't advocate wholesale importation of people. It's a difficult time employment-wise in our province. But nonetheless, Mr. Chairman, I think we have to look back at our history in British Columbia. I believe I'm correct in saying that up until about 200 years ago, there were few, if any, non-native human beings who had set foot in British Columbia.

History or anthropology may prove us wrong in time, but basically this province has been built and lived in, hopefully, through a co-operative effort of the native people who were here for thousands of years - and even they are thought to have come from other lands - and people who had a spirit of adventure, who wanted to change their lifestyle, who perhaps wanted to come to a land of opportunity, who perhaps wanted an opportunity to contribute to a new and growing area where they felt they could use these talents. They chose British Columbia.

Perhaps some were fugitives from justice in those days; perhaps some came to escape rocky marriages. Who knows their reasons? But by and large, Mr. Chairman, this province has been built by people who came from other countries to British Columbia, who brought their enthusiasm, their open-mindedness, their dedication and their talents to build this province into what we enjoy today.

I doubt - except for the member for Atlin (Mr. Calder) - that there is one member in this House today elected by the people of this province who is not a descendant of people who immigrated to British Columbia, largely from other parts of the world. 1 look at some of our current members who, in fact, themselves with their diligence, their inspiration, their vision and their wisdom came to this House from countries such as Jamaica or England, such as the two members for Burrard. As I would like to point out, from our side of the House the hon. Minister of Human Resources (Hon. Mr.

Vander Zalm) came to British Columbia and Canada from Holland. It might be well for us to remember this when we discuss Mr. Sherrell. The member for North Okanagan is herself a descendant from people who came from other countries. I'm glad they cam, I'm glad they had me and I'm glad I'm here to share in the benefits that they helped build.

I think that we often stand and praise the cause and fight for people to come to Canada who are political fugitives. I certainly know that the members opposite from the NDP fought very diligently to have the socialist refugees from Chile come to Canada and to British Columbia. I believe they even raised money to help bring them, or some of their members did. Mr. Chairman, are we to be a country that only allows political refugees to enter our borders, or are we to be a country and a province where where there is talent needed, talent willing to come, to be of such a mind that we say welcome? I believe we should.

I don't suggest that we should give them preference, but I suggest that if a position is available and these are the most highly qualified people, we must have an open mind, as did our forefathers when they came to this country.

I wish personally on behalf of the people in the North Okanagan to let Mr. Sherrell know that we are not anti-American. We're not antianyone; we are pro-British Columbian and pro Canadian. If he is the man who in their wisdom this government has chosen and ICBC has chosen, then we wish him well. But we feel that the proof of the pudding is in the eating, and if Mr. Sherrell does not do a good job, which I suspect won't be the case, then, of course, he will have to answer for it. But if he does the job that he's supposed to do, if he is the only man available, then we wish him well and we believe that all the citizens of British Columbia are going to benefit from his input and wisdom.

Mr. Speaker, I would like to touch for a moment on the subject of education. I don't intend to go into the detail or the negative approach that was brought forth on this floor the other day. But I would like to say that I believe this House is correct in addressing itself - as is the minister - to the problem of rising educational costs.

There is little doubt that we in British Columbia have some of the finest institutions, in terms of their construction and appearance, probably anywhere in the world. They are well dispersed throughout our province; there is

[ Page

1971 ]

hardly a

Section 1n this province that doesn't enjoy a fine elementary school, where it is warm, comfortable and equipped with the latest equipment. This would be largely the same for junior secondary schools, senior secondary schools, regional colleges, universities two million people with three universities and vocational institutes.

But I would suggest that there is in this province a very genuine concern about whether or not we can afford not high quality education, a good standard of education, but an education system that is measured - as seems to be happening in British Columbia, or was happening in British Columbia - solely by the percentage of provincial budget that it can gobble up.

It is the impression of this member that there are many people in this province, who are very pro-education, concerned that through the years we may well have built-in attitudes, practices, sections of our budget which are not meeting the need today, which is, in fact, the need of the student - through habit, through many reasons, maybe serving other factors than the student. We must remember that education is for the student.

Mr. Chairman, these people don't wish to approach the problem on a negative basis. They, like this member, don't believe and I'm sure the minister doesn't believe that there is an instant solution to this problem. But they do believe - and certainly I have been asked to express this on the floor of this House - chat there should be a responsible addressment made to this subject.

To reach a solution, a conclusion and perhaps solve the problem is going to require the utmost of open-mindedness, of responsible thinking and ability to look at new avenues, basically on the part of the three or four groups of people involved: the parents and taxpayers of this province; the school trustees; the teaching faculty - the service faculty within these institutions, the sanitary engineers, all the people who help make our schools operate -and, of course, the provincial government.

Certainly I wonder if there is not now an opportunity to examine our school system from a zero base point of view, as we have developed a core curriculum and as we have built in certain areas of flexibility within our educational system, and if it isn't still imperative that we look at the structures that have evolved and at the attitudes that have evolved, not with the view of saying they are wrong but with the view of asking if they are serving the core of what our objective is today and in the future.

We must not be embarrassed, and we must not be labelled anti-education when we ask the question: can we afford them? I think we have too long tended to suggest that anyone who dared ask the price of education was immediately labelled anti-education - and this is not the case.

In this area, Mr. Chairman, I think there are a number of matters that we could address ourselves to. The first is the matter of the trustees themselves. It is my impression that trustees are now in the position the student and the teacher were in two or three years ago, when they were not able to clearly define their role. I would like, before mentioning this, to certainly express my word of praise for those dedicated people in our education system - and there are many, whether they are teachers, service personnel, trustees or the students themselves.

But it has been brought to my attention that trustees themselves feel that they run for school board with certain objectives in mind. Sometimes that objective is quite specific and results from a personal experience or one thing that they see happening in the school system. There are others who may run with a broader view, but still don't have any real fundamental understanding of the school system or the function of a school board.

They tell me - and I want to say this positively - that there is a tendency, no matter how open-minded you are, to find yourself, after the first few months, becoming a captive of the very system that you are trying to inject new ideas into. They find that there is not enough preparation for themselves, there is not enough opportunity to get more specific information about the job they are supposed to be doing. Therefore they must rely on the system they are serving as it exists at the time they go into office. They feel, with the greatest of respect, that they tend to become captives of that system.

Within a year or two they find it very difficult to be critical of that system because they are so dependent on it - also because they really don't have the knowledge to constructively criticize the system as it has established itself.

Because of this, Mr. Chairman, I would like to recommend that the Ministry of Education institute broader and more specific and ongoing learning programmes for school trustees. I believe one should be in the area of budgeting. A school district budget, as most of us know, is a highly complex article. It is very difficult as a lay person who perhaps doesn't have any great financial background in management or fiscal audits to really bring forth a constructive suggestion on how to change those budgets. Therefore I feel, and so do many trustees, that the area of budgeting needs a greater opportunity of learning for the trus-

[ Page 1972 ]

tees.

There are other areas, too, but again I feel that the trustees themselves would like to have a clearer definition of what their role is. I believe we must make clear that part of that role is not only education but is financial. I don't feel any Embarrassment in saying this. I believe trustees must speak for the people as well as the teachers and students and service people in this area. They must, as all of us must, look to see whether in fact the dollars we are spending are really bringing the service that the public is expecting and that the students need.

I look around our own area and I feel that we are very fortunate in school district 22. We have an extremely good board and we've had many good years. But I drive around and I see the number of very expensive six-foot high, chain-link fences and I ask myself: do we really need chain-link fences around some of our senior high schools? If at the age of 17, in a residential area, you can't use some initiative in terms of your own conduct, then maybe you're going to have to pay the consequences and not the taxpayer.

I look at all our blacktop parking lots. I realize these are minor things and they're probably not that much in the budget. But can we, as citizens today, afford to provide free parking with blacktop for our students in a high school? I know that where I work and where my husband works they pay for their own parking. Perhaps as a small measure, if the students wish to drive a car to school, bless them, let them. But perhaps they must assume the responsibility not only of their insurance but of their parking, as we all must do as citizens.

Those are minor, Mr. Chairman. I didn't want to go into the other things

that do evolve in the education system itself because it requires much more

time than this point. I do feel though, Mr. Chairman, that no matter how hard

the institution of education has tried, there is a gap between the school system

and the parents. I do not think this is intentional. It's possibly a hangover

from the parents' days at school when, for whatever reason it was, they

did not feel that comfortable in school. As they've grown older, they feel

less comfortable in approaching the school and in approaching teachers. It seems

this is not confined to any particular economic interest or scale or any particular

walk of life. I've had bankers, doctors, plumbers and sanitary people say:

"You know, I just tremble when I go to the school on parents' night."

I believe if they're frank enough to say this, then we must help the trustees

and the teaching profession deal with this matter so that parents feel comfortable

in going to the school not only on parents' night but at other times.

I'm still concerned, Mr. Chairman, about opportunities and enrichment programme s for exceptional children in school. The matter of the handicapped has come up so I won't repeat it. I feel we must do more to help exceptional children broaden their opportunity for maturity not just in the academic field but in areas where their own particular personalities may be slow in developing. So often, highly skilled academic children have a slower development in their physical development or in their personality development and their social capabilities.

I believe that enrichment opportunities and enrichment take place in these areas, not necessarily in ever more academic pursuits, although these areas can be very practical and they can certainly add to their learning experience, whether it's in business or perhaps putting them into an enrichment mechanical programme. We should be looking at their total personalities, not just their academic personalities.

In all these I'm asking the minister if he'll do some of these things.

On the matter of absence from school, one appreciates the increase in attendance. Certainly we all want to encourage this. But without going into too many details, we know that the school Act stipulates a certain number of days that a student can be away from school. I understand it's absolutely illegal for the principal or the school board to authorize an extension of that, no matter what the reason, unless perhaps it is illness. Even then, I understand, it takes a special dispensation.

When we're talking about education today, I believe that we're recognizing there are experiences under certain circumstances that contribute to a young person's education. I would like to recommend to the minister that he have the committee on attendance address itself to certain specific areas where we might officially grant students the opportunity to be away from school and the opportunity to take make-up lessons with them. These would be areas where you have a student who is trying to develop extreme ability in one area. Perhaps you have got somebody who is a javelin thrower and is trying for the Olympics.

They might live in Fort St. John. The opportunity for this student to have the type of specialized coaching that they need, even on an intermittent basis, is severely hampered at times because of school attendance.

I feel that where the student's marks are

[ Page 1973 ]

above average or average, where the student is dedicating himself to the school work as well as this specific pursuit, and where that training programme does not exceed a very long period of time but requires him to go into a structured environment where there is physical fitness as well as expertise in what they're pursuing, this should be considered as part of their academic training.

They should have official leave from the school and the opportunity to take make-up lessons with them, or to make up those lessons after and not be penalized by having to write exams at the end of the year in subjects where they're highly proficient and where it has been, the case that they have As, Bs or Cs. I would hope the minister would ask the committee to address themselves to that.

Once again, I'll make my small plea for a small sum of money to allow the students at the universities as well as the regional colleges to have a textbook allowance as is given in other sectors. My understanding is that this wouldn't be a great portion of the education budget. It's not complicated to do. I think a rebate, perhaps starting at $50 per semester, for university and regional college students towards their books would do a lot to encourage them and help them realize that their efforts are being recognized.

While we expect them to pay their tuition and to maintain their standards, we also appreciate that they should be somewhat in a similar position as those students in other institutions where their textbooks are provided.

Thank you, Mr. Chairman, for this time, and I hope the minister will give me some idea of his feelings.

MS. SANFORD : Mr. Chairman, I was really interested in the initial comments made by the member for North Okanagan and really quite surprised. The defence that she gave for the minister's appointment of an American at $80,000 a year to head up ICBC was utterly ludicrous. What she said, Mr. Chairman, was that immigrants to this country have made a contribution over the years and therefore we should appoint people outside the country so that they can come in and run the show for us.

What I say, Mr. Chairman, is that the minister has insulted all of those people who have come to this country and who have made a contribution by overlooking them and saying in effect that they are not capable of performing the job and going outside the country and bringing in a chairman of ICBC at $80,000 a year. That was a ludicrous defence on behalf of the minister.

Mr. Chairman, I have a couple of comments that I would like to make with respect to ICBC.

MRS. JORDAN : I hope they're more intelligent than that one.

MS. SANFORD : Oh, the member for North Okanagan is now hurt because I dared to criticize her inadequate defence of the Minister of Education.

I would like to bring to the attention of the minister that ICBC at this stage is losing the good risks to those companies that are now operating in the province or are in the process of setting up their operations. As a result, the people who are insured with ICBC are paying rates higher than they should be paying. I'm not talking here at all about the money that ICBC is hanging onto needlessly, but I'm talking about the fact that people who come into this province and who are going to the private corporations for their optional insurance are forcing up the rates that other people in this province pay.

This was brought to my attention by a constituent who made inquiries. Because he's in the armed services, he gets posted back and forth across the country, and in each province the situation is somewhat different. He was alarmed when he came to British Columbia to find that even though he's had a safe-driving record for the past 15 years in this country, he was not entitled to any safe-driving discount under our Insurance Corporation because he had no t lived here long enough.

Now this particular constituent, who is posted to the air base at Comox, indicated that he had lived in Ontario, was then posted into Manitoba and found that there the insurance corporation, which is somewhat similar to the operation we have in this province, recognized the fact that he had a safe-driving record for the previous 10 years. As a result, they gave him a lower rate.

In B.C. we do not do that. What is happening is that the private insurance companies who are selling optional insurance say: "Oh, by all means, if you have a safe-driving record in some other province we will recognize that and will, as a result, give you a lower rate." Now these are the good drivers, those who are good risks, who go to the private company because they can get lower rates as a result of a safe-driving record elsewhere. ICBC has not recognized that and, as a result, their rates are higher than they should be.

According to officials in the Insurance Corporation, this is an area that is now being looked at by ICBC, because ICBC is losing the good customers. They're going to the private

[ Page 1974 ]

corporation that does recognize the safe driving record in some other province.

I would also like to complain to the minister responsible for the largest insurance corporation in Canada, with respect to the advertising that the Insurance Corporation has undertaken. Earlier this year, they were criticized by the Insurers' Advisory Organization with respect to the misleading, inaccurate advertising that ICBC was taking out. They were using erroneous figures, and they were giving the people of the province a false picture with respect to the rates in B.C. compared with rates in other parts of Canada.

For instance, Safeco in Ontario stated that the rates they actually charged their drivers there were $63 less than those used in the ads put out by ICBC trying to convince the people of the province that ICBC was one of the lowest in the country.

The other thing is that ICBC is fairly selective in the figures that are used. I suppose that a lot of people are selective in the advertising they undertake, but when it is erroneous it seems to me that the corporation should take out a second ad apologizing to the people of the province for giving misinformation.

As far as the selectivity is concerned, the company is always saying they don't make any reference to Saskatchewan rates or Manitoba rates because they are "subsidized." I have been hearing this for a couple of years from that minister, and I felt that it was time that we had a look at the so-called subsidy that takes place in Saskatchewan and Manitoba.

I have written to the corporations in both provinces and have some information about this so-called subsidy that the minister keeps referring to. And, of course, it points out in the ad, or it gives an indication in the ad, that if there is a subsidy there is no way that we could possibly draw any comparison with the rates here in British Columbia.

In Saskatchewan, 3 cents per gallon of gasoline is applied to the insurance corporation. If 'that three cents gallon were applied to your insurance premium, by how much do you think your insurance premium would increase?

If you take the average driver in this province and say he drives about 12,000 miles a year - that's probably higher than the average driver drives - and if you assume that the average car is getting about 20 miles per gallon - and I would assume that that figure is not accurate any more because there are so many more small cars; in other words, they probably get more than 20 miles per gallon -that means that the average motorist, driving 12,000 miles a year, buys about 600 gallons of gasoline.

If they have 3 cents on each gallon, that works out to about $18 that those people are paying as a so-called subsidy on their premium.

Now it seems to me, that if the Minister of Education in charge of ICBC were interested in giving some accurate figures so that the people of the province would be able to compare accurately what is happening across the country in terms of insurance rates, they could point out that in Manitoba the rate for a given car of a given make of a given year is such and such, then also point out that on top of that they may be paying as much as $18 through their gasoline tax.

Now if the minister went forward with that proposal, we would begin to have some accurate assessment of the insurance rates as they apply right across the country. I would like the minister to comment on the erroneous advertising which has been done by ICBC, and also to comment on the possibility of giving an accurate picture of rates right across the country by using that $18 figure added on to the rates that are now charged in a province like Manitoba.

HON. MR. McGEER : I will deal with some of these items in reverse order. First of all, the member who just took her seat alleged that the ICBC premium were forced up because people were going to the private insurers. Now, Mr. Chairman, that's the kind of ridiculous, stupid, nonsensical statement that demeans debate in the House, because the total amount of insurance in British Columbia that has gone into the private sector is less than 1 per cent.

That a member can stand up and allege that premiums are being forced higher in British Columbia because 1 per cent of the business is going into the private sector just illustrates the typical level of debate of the NDP. They simply cannot understand what is involved in the issues of the day.

Then, Mr. Chairman, the member stood up and started discussing criticisms by the Insurers' Advisory Organization and all of the false advertising taken out by ICBC. Again, this illustrates the level of debate that the NDP brings into this House. Where do you think the figures that ICBC put in its advertising were taken from? They were the figures published by the Insurers' Advisory Organization. We didn't take figures from anybody else, but the same published figures of the organization that the member refers to.

MR. COCKE : Did you take the figures from Manitoba and Saskatchewan?

HON. MR. McGEER : Now, Mr. Chairman, the

[ Page 1975 ]

member for New Westminster starts in about the figures from Saskatchewan and Manitoba. All right. We have prepared - or rather, ICBC has prepared - a rate comparison across Canada that involves, I think, 750 rate comparisons, choosing different examples of insurance. If one were to choose every one, it would run into several hundred thousand. Obviously one has got to make some choices, but one does these on a representative basis. Here's a kit which I will send to the lady member for her to study.

I want her to know that this kit was made available to the press and they could have published one of several hundred. At the end you will see sheets that are in pink -appropriate, I suppose - and orange, which are the comparisons between Saskatchewan and Manitoba and British Columbia. May I read these - just one or two - so they will be on the record?

This is a 1966 Chevrolet station wagon, $200,000 liability, $100 deductible collision, $50 deductible comprehensive, not driven to work, pleasure - premium comparison: Victoria, British Columbia, $117; Regina, Saskatchewan, $124; Winnipeg, Manitoba, $135. Now you can add the $18 - if you want to select that as the gasoline subsidy - on to the $135, and that gets you to $153 in Winnipeg versus $117 in Victoria.

We didn't add the subsidies in when these were prepared. They just took what you added in premium. What was slipped in by the side door through tax subsidies wasn't added in at all. Now, Madam Member, perhaps next time we ought to add not only the gasoline subsidy but the others, and show what the comparisons are.

Well, here's a 1976 Ford Granada - 10 years later - $200,000 liability, $100 deductible collision, $50 deductible comprehensive, business use: Victoria, $265; Regina, $248 -that's without the subsidies added; Winnipeg, Manitoba, $304.

SOME HON. MEMBERS : Why do you compare Victoria? Why not Vancouver?

HON. MR. McGEER : Because they're cities of comparable size, that's why.

Interjections.

HON. MR. McGEER : And I'll tell you this: there aren't great metropolitan areas in socialist provinces like Saskatchewan and Manitoba, and you know why there aren't great metropolitan areas.

Well, Mr. Chairman, I'll pass this across to the members opposite and they

can study these pinko sheets. And I hope in years to come that ICBC will continue

to print comparisons of this province versus other provinces in Canada so they

will see that the public of British Columbia is getting a great deal when it

comes to automobile insurance. And I'll tell you this: unlike under the

NDP, where we're still paying off the subsidies of their years in office,

there are no hidden strings, no subsidies; that corporation stands on its own

feet and it still gives good service and good rates.

Now, Mr. Chairman, getting to some of the sensible questions that were asked earlier, I want to make mention of the particular case raised by the member for New Westminster (Mr. Cocke) . I can only say that I completely sympathize with the circumstances and the case. I can only make this observation - which the member is well aware of - with regard to this particular situation - and that is that the case went to a trial. The plaintiff had an opportunity to settle beforehand. It wasn't like it was a judge; this was decided by a jury of the woman's peers.

When the decision was rendered it was the decision of her attorney - I don't know whether it was in consultation with the woman involved - not to launch an appeal.

The first thing that one does when one is dissatisfied with the decision of a court is....

MR. COCKE : Not in a case like that, Pat.

HON. MR. McGEER : It costs a minimum amount of money.

MR. COCKE : It costs thousands of dollars.

HON. MR. McGEER : Mr. Chairman, when I asked people who were more knowledgeable about these things than I am, they were universal in their reply that the court system is such that you don't second-guess what the decision is because there are so many trials that fall into this particular category. If one estimates that the injuries and the circumstances surrounding a bodily injury case are, let's say, $200,000, and if the judge and jury decide that the person is 100 per cent to blame, the award is zero. If they decide the other person involved in the accident is 100 per cent to blame, it could be $200,000.

If it's 75-25 per cent, it could be $150,000. If it's 25-75 per cent, it's $50,000. So you see, depending on the degree of blame that's assigned - and somebody has to make that decision - $252000, $50,000, $100,000 or $200,000 is the amount of money at stake.

Now in this situation the $40,000 offer was

[ Page 1976 ]

made on the basis that the claim was worth somewhere around $160,000. Therefore, if the corporation was lucky enough, if you like, to have that particular individual - Mrs. West, or whatever her name was - assigned 75 per cent in the way of blame, that would be $40,000. If it was 50 per cent, it could have been $80,000.

This is the degree of risk that is involved in every major bodily injury case. The problem with giving an ex gratia payment is that for every single case that is settled in court, it opens up a reconsideration of 10, 20, 30, 40 or 50 per cent blame that gets one right back into the high-stakes assignment of the fault business. It is high stakes; it is big business. It involves millions of dollars a year and it occupies a significant percentage of all the court time in British Columbia and all the lawyers' attention in British Columbia.

When you've got something which is as big a business as this and where the stakes are as high as they are, you can begin to see that.... The system itself is something which has many strong advocates. I don't happen to be one of them. If it were my choice and indeed, I suppose, if it were to be the consensus of the elected members of the Legislature to dispense with that system and get down to the far more sensible situation where you have a traffic victims' compensation board, just as you have a Workers' Compensation Board, then there wouldn't be cases like the one the member for New Westminster raised.

Because then people would be receiving compensation for their injuries regardless of the blame.

This particular individual did receive the no-fault benefit, but that's a far cry from the $40,000 that she was offered on the eve of the trial and a far, far cry from the $4,500 worth of debts that she wound up with as a result of her trouble. I can't think of a better example than the one raised by the member for New Westminster as to why we should bring about major reforms in our insurance industry in British Columbia. I said so publicly not too long ago, and I received a number of bitter complaints about the statements that I had made, every single one of them from lawyers.

MR. MACDONALD : Not from me.

HON. MR. McGEER : Not from the member for Vancouver East (Mr. Macdonald) . But, Mr. Member, if you wish to have the system changed and if you wish to extend the no-fault concept so that people don't wind up in the unfortunate situation of the case the member for New Westminster cited, say so on the floor of the

House now. It is within our power as elected members to bring about major reforms in the way we handle bodily injury as a result of automobile accidents. This woman, an epileptic, lost an eye. Her injuries are going to be exactly the same whether or not she is found 25, 50 or 75 per cent to blame. Her needs and what she deserves to have in compensation are quite unrelated to what a witness may state in court and what the decision of the jury may be as to her degree of fault.

If we want to bring true justice to bear in the matter of automobile injuries, which involve hundreds of millions of dollars a year, then we will bring major reforms in this system. I couldn't think of anything that would be healthier in debate when we are discussing the insurance question in British Columbia than to have an expression of opinion on this very important issue. If all sides of the House were determined to make that change, I can tell you it could be done in a year or two.

MR. COCKE : I'll say so now. I'll make a statement now in terms of how I feel about no-fault. I feel that it would be a step in the right direction; it would be the way we should go. I want to see no more of these decisions that come along and take a person like Susan West and put her in an absolutely impossible position. But no matter what we do now, Susan West winds up in the cold unless the ICBC board decides to make an ex gratia payment, which is their right by virtue of the law. There is nothing under the sun which could convince me that that person was 100 per cent at fault for that accident.

Witnesses, the court, a split decision - there is just no justice here. She gets a $40,000 offer one day and the next day she finds herself out in the cold with a $4,500 bill. She's damaged for the rest of her life, having lost an eye, et cetera.

Mr. Chairman, I want justice for Susan West and I want justice for people in the future. I agree with the minister when he's talking about no-fault. Get on with it if that's the way we're going to go. As I said before, love never, ever taken an ICBC case to the minister before, but this one was so outlandish, as far as I was concerned, that I had to. I'm not particularly fussy about bringing it up on the floor of this House, but I'll tell you right now, it's one that has to be talked about because there is injustice here.

A young person is suffering for the rest of her life and winding up with nothing more than a bill for $49500. It really is a most sickening situation as far as I'm concerned.

[ Page 1977 ]

When the minister says it's high stakes, I agree. It sure to blazes was high stakes as far as she was concerned. But she was a naive young person. She didn't take advantage of an offer, and do you know something? I think under those circumstances many of us wouldn't, particularly when we're absolutely assured that we're going to win the case. Nobody was more shocked than the lawyer in this case by the fact that he lost the case. It was a winner all the way and yet it occurred this way on a split decision.

So I'm just slaying, Mr. Chairman, that I really want to see justice done for Susan West. The minister has it within his authority to go back to that board and say to them: "Look, for heaven's sake, let ICBC honour its social obligation in this situation."

Mr. Chairman, I have some other areas that I would like to talk about, but I know that I'm standing in the way of other members, so I'll yield the floor at this point. But I do hope that the minister will take that message back because I think it's one that has to be taken back. Forget about establishment precedents. Let's get on and establish a new way to go. Let's see to it that Susan West is given her just due because there's no way she could have been totally at fault.

MR. KERSTER : It's a pleasure to rise and, I guess, kind of take a shot at one of my favourite Crown corporations - at least my second favourite - ICBC. There's one area of injustice that I think all members in this House would have to agree with me runs sort of rampant throughout the province as far as that corporation is concerned. I'm only going to cover one particular situation, and that's the so-called safe-driving discount. Mr. Chairman, I think the safe driving discount should be reexamined, totally reviewed and restructured so that it becomes a true safe-driver discount.

As it is, Mr. Chairman, that particular discount is a safe-car discount. It's based solely on the accident-free licence plate or accident-free vehicle that that plate happens to be attached to.

I'd like to put forward a couple of examples, Mr. Chairman. A father borrows a son's car. The father backs out of the driveway and backs into another moving vehicle or a parked vehicle. The father is very clearly at fault, yet he's not penalized at all. The son, be cause it's his car, because it's licensed in his name, loses his so-called safe-driving discount. The son is under 25, he's single, his rates are already high. This loss really hurts in a case like that.

Another example, Mr. Chairman, could affect any person on a fixed income because of what I think are real inequities in this so-called safe-driving discount. A senior citizen who uses her automobile less than average has her car damaged in a parking lot of her apartment overnight. Somebody backed into it. They drove away; they took off. It's hit and run. The senior citizen discovers the damage the next day and goes to the claim centre. The claim centre says she has to pay the deductible and she loses her safe-driver's discount. She has to prove hit and run.

Well, I don't think in anyone's view, Mr. Chairman, that's very fair and I think that whole system should be reviewed. I hope that you, Mr. Minister, will instigate a complete review of this policy with the idea of having the safe-driving discount attached to the driver, not to the car, so it becomes, in fact, a true safe-driver discount. That's the only just and fair way to implement a discount of this type.

MS. SANFORD : You know, the answers that the Minister of Education gave to the questions that I posed to him were really patronizing and arrogant. Mr. Chairman, he's one of the most obnoxious members in this House.

MR. CHAIRMAN : Hon. member, that's unparliamentary. Temperate language is always more correct in this committee. Please continue with temperate language.

MS. SANFORD : Well, Mr. Chairman, maybe I had better not say any more on that subject, because I might get unparliamentary. I just might get unparliamentary.

Mr. Chairman, the minister arrogantly asked across the floor of the House where I thought that the ICBC got the figures that were used in these ads. Certainly they came from the insurance advisory organization. Also, the minister knows that that organization uses those figures as a benchmark. They're the ones who criticized ICBC for putting them in the ads. And it was the insurance advisory organization that wrote to the company and said those ads are grossly misleading. The figures that were in there were completely inaccurate.

And when the Minister of Education stands up and arrogantly talks about where the figures are coming from, he's avoiding the issue that I raised. The issue that I raised is that those figures were wrong, the ads were misleading and therefore the Insurance Corporation should put in a follow-up ad, apologizing to the people of the province, saying: "I'm sorry; we misled you." That's what they should

[ Page 1978 ]

be doing.

The minister also spoke very arrogantly about the increase in ICBC rates as a result of the good risks going to those people who are already established in the private insurance sector in the province or in the process of getting established. Mr. Chairman, ICBC is losing the good risks to those companies. If ICBC were not concerned about the increase in rates that's going to result from this, why on earth would they have it under review at this time? They're reviewing it right now and I anticipate that they will change their present policy.

But I am pleased that the minister provided me with the information about the figures in Victoria compared to Regina and Winnipeg because I would like to give a little more of that information. The minister talked about a 1976 Ford and he quoted one set of figures. I would like to quote the rest, Mr. Chairman, so that we don't have the kind of selectivity that the minister likes to indulge in and that I'm accusing ICBC of indulging in through their ads. Here we have in Victoria a 1976 Ford Granada: $212. This is for the first classification - that is, pleasure, not driven to work.

In Regina it's $238 and in Winnipeg $192. Now the minister told us that, but let's look at underage 25, single male. In Victoria, Mr. Chairman - you listen to this - it's $685 as opposed to $273 in Regina and $234 in Winnipeg. But did he tell us that on the floor of the House now? Of course not. What about the underage 25, female? Victoria $313; Regina $273; and Winnipeg $234. Oh, we didn't hear about those, did we, Mr. Chairman?

I have no hope of the ads coming out of ICBC being any more accurate than they have been up to date when the minister stands up in the House, reads out those figures, reads just one of them and forgets the rest in the list. I'm going to complete the list, Mr. Chairman.

How about the business premiums? Victoria: $353; Regina: $261; and Winnipeg: $304. He didn't mention that. And Victoria is the lowest rate area in the whole province to start out with.

How about another category: pleasure, driven to work? I'll remind you again, Mr. Chairman, that these are the lowest in British Columbia but they, of course, have chosen to use those. Victoria: $264; Regina: $238; and Winnipeg$234. Now isn't that interesting? I'm really pleased that the minister sent those over this afternoon so we could add the rest of the categories and get some kind of a picture as to what is happening in Saskatchewan and Manitoba compared to British Columbia.

What else did he use? Here is one: a 1966 Chevrolet station wagon. The minister

used one figure. I'll use one figure out of this list and remind the Chairman

and the committee that there are all kinds of other figures in this particular

list. And look at this one: underage 25, single male. Winnipeg: $169; Regina;

$173; and Victoria - hold your breath, Mr. Chairman - $499. He didn't read

that out. Mr. Chairman. I'm tired of the arrogance of that minister.

MR. STEPHENS : Mr. Chairman, I would like to start out by paying a compliment to the Ministry of Education, which deals in correspondence education. I have had the opportunity of living outside of this country for a period of one year. Two of my children participated in that course, and I would like to make this statement. I have never seen a better organized course in my life and I have never seen children treated better than they were through the correspondence course of this province.

It's one, I think, that not only can we all be proud of, but I think that it is also probably a system which the public school system actively functioning within the province could take a very good look at if it was thinking of improving the standard of education.

MR. LAUK : Is that where you got your law degree?

MR. STEPHENS : That's where I got my law degree, right.

Mr. Chairman, I would like to deal with just a few matters in ICBC that perhaps the minister could satisfy me on. He previously made some statements concerning the restructuring of the settling of claims in British Columbia. He has said he had a number of complaints, every one of them from lawyers. I think I can perhaps say a few things in this regard, as the minister knows that I have not always carried a brief for the legal profession.

Some of the statements that the minister made in connection with the revitalizing or rejuvenating of the system really concern me. I am quite aware of the concerns of the division of liability. I am aware that hardship comes from the division of liability sometimes, but there's another aspect of claims that has to be considered very seriously, and that is the awarding of the amount - that is, what the claim is worth. The method suggested by the minister - that fixed awards should be given for fixed injuries - is simply not workable.

It's a very dangerous situation, I would suggest, to allow a public monopoly such as ICBC first to set the rates, secondly to investigate the events of the accident and

[ Page 1979 ]

determine the fault, and thirdly to determine what the injury is worth in each particular case - in other words, as I stated earlier, to act as lawyer, judge and jury on every aspect of a claim.

The minister has made some statements that one of the reasons why insurance rates have climbed in B.C. is because of the high court awards. I would like to ask the minister upon what he bases this statement. I would like to know precisely the facts that he is relying on, the information that he has from ICBC or other sources, so that he can show me, because I'm not yet satisfied that the amount of awards given by the court are in fact the major cause of the increase in ICBC costs.

I would like the minister to tell me how many claims for bodily injuries were received by the Insurance Corporation of British Columbia in the years 1975,1976 and 1977. 1 would like to minister to tell me how many claims for bodily injuries for each of the years 1975,1976 and 1977 were settled with the claimant without a lawyer. What was the average amount of such settlement in each year?

I would also like the minister to tell me how many claims for bodily injuries in each of the years 1975,1976 and 1977 were settled through the claimant's lawyer before rial. I would like to know what the average amount of such settlements was in each year.

I would like the minister to tell me, lastly, how many claims for bodily injuries in these years went to trial. How many of such trials resulted in an award to the claimant in each of those years and what was the average amount of such awards in each year?

I presume, unless I learn otherwise, that the minister has this information at his fingertips, because without this information he certainly could not have made the statements that he made previously and that appeared in the Colonist on April 27,1978. It is quite clear that he has information that I have not been able to obtain. I would appreciate it very much if he could justify his comments that claims should not be entitled to have lawyers and that the claim should be set through the minister's office or through ICBC under the ministers office without access to a lawyer and without the right to argue both sides.

HON. MR. McGEER : Mr. Chairman, just to answer some of the questions that the member raised, I obviously cannot give you those figures from memory but I'm sure I can obtain them for you. If the member would care to put a question on the order paper, we can get that precise information.

I'm not sure, however, that that would adequately convey the fact that the cases that are not settled by trial - that is, those that are settled before trial through lawyers or settled without a lawyer - all use as the bench-mark for settlement what the court awards. We had a case of $160,000 for a whiplash injury. Now why should not every person who doesn't So to court but has a whiplash injury be entitled to a comparable settlement? It is the ripple effect that suddenly builds a huge commitment.

We set aside this past year $79 million into increasing all the reserves that had previously been set aside for the settlement of claims, because the higher awards meant that those had had a reserve set up at this period in time, and out here two years later somebody gets a $160,000 award for whiplash. That means you have to go back and readjust all the reserves. This is required by the auditors.

[Mr. Rogers in the chair.]

You can shake your head and say, "No, you don't have to do that, " but the fact remains that you do have to do that. That's responsible management of an insurance corporation.

Here you had the member for New Westminster (Mr. Cocke) earlier today standing up and railing against the Hartford Insurance Company. This was the very complaint that %was made about the Hartford Insurance Company at the time that

article in Fortune was written. The fact remains that one high court settlement means that all reserves that have been made for comparable cases in the past, but where payment has not been made, now have to be re-reserved. They can't be reserved out of the past year's premiums, they've got to be reserved out of this year's premiums. So money that motorists paid for the premiums this year was taken out. They weren't available for safe-driving discount, they were taken out and added to the past reserves.

You couldn't at the time of the accident make those reserves high because you'd have been nailed by the Anti-Inflation Board and the auditors for doing so. You can't change those around until some court settlement is arrived at through a judge and jury that has a ripple effect back.

It may be that the $160,000 is justified, and all previous awards were far too small. But somewhere it has to be decided, not just what the right amount is for now, but what the trend should be. In the net effect, the average settlement went up 44 per cent in one year. That means that on the average they were settled this year for 44 per cent less than

[ Page 1980 ]

they were settled last year - the same accidents, the same types of injuries. So were they too low a year ago? Are they too low now? Should they be 10, 20, 40 or 50 per cent more next year? You have to know so that you can reserve properly, and when there are no firm guidelines this thing can go floating up with nobody really being aware that it's happened. Then you've got something that's not responsible operating out there. Whether one likes it or not, it's a form of inflation.

Now it may be that the awards were too low before. It may be that they are too low now, but to have an increase of 44 per cent a year is obviously unreasonable, and there are no guidelines. There are no really firm benchmarks that would allow a panel of adjusters, no matter how experienced, to predict what was going to happen in a system that appears to be essentially unpredictable. That's the difficulty with it, it's unpredictable.

The member said that I'm saying that the claims ought to be settled in my office without allowing people to be entitled to a lawyer. That's going a bit far. Why should it be different between somebody involved in an automobile accident at the corner of Government and Fort Street and somebody who is injured on the job as an employee of B.C. Forest Products a few blocks up the street? If he is injured he has no right to a lawyer or to a suit. He can't bring action against his employer. That's taken, away by

an Act of this Legislature, and for a very good reason.

If that weren't the case, we would have industrial chaos in British Columbia. The system works well. If it works in the field of industry, why shouldn't it work for everybody? That doesn't necessarily limit the amount of money that you or I might be entitled to out of an accident. We would understand from the beginning what the scale of payments was, and if we wished to buy supplemental insurance then we could go ahead and purchase that insurance.

What I find iniquitous about the system as we have it today is that you or I pay the same liability insurance as perhaps a labourer up at the B.C. Forest Products mill or one of the attendants in the building here - somebody whose income is less. If we are injured in an automobile accident, we are going to claim far more out of that insurance pool, providing that fault can be established because of someone else. We will get a larger amount out of that pool than the person who works in the mill or works, as an attendant in the building can possibly get out of that pool. Yet they pay the same insurance.

We don't pay more. In time of need, if we are in an accident, we are going to derive more out of that pool. Yet everybody pays the same. It is fundamentally undemocratic.

You say: "Well, it all depends on whether the other person is at fault. And really, why we are buying insurance is so that we can protect ourselves in case we injure somebody else." That's all very lovely and it salves our conscience. When you come right down to it, we are all paying the same amount of liability. But when the time comes to claim against that liability pool, what is taken out is based on how much you earn. It is taken out disproportionately.

one could easily say that the liability pool for insurance is a negative income tax; it is an income tax that is graded in the reverse direction. It hits the poor harder. That's what we've got. I personally don't think it is the correct system. I think we should be buying our own protection when we buy insurance. If we want to buy more than what the basic level of payments would be in case we are injured, then we should pay more for it. That's a very democratic system; it removes the fault but lets you claim what you paid for. That's not removing anybody's right to a lawyer.

You can go ahead and buy what you want beforehand. This business of everybody paying the same, but in time of need claiming a different amount out of the pool, to me is not very democratic. That's taking aside all of the big industry that is involved in legal business in the courts trying to establish the degree of fault and the quantum of payment.

I can get detailed figures for the member and I would be pleased to try and do so.

MR. STEPHENS : Mr. Chairman, I challenge the minister to produce those figures. I have attempted to do it. I have been in touch with ICBC and I am told that they do not have any such figures. What astonishes me is that the minister can make these statements without the facts. If they don't have those figures, I think perhaps it is time you should get them and have them available. When you have those figures available and you can show that it's the high awards because of skilful lawyers that are raising the insurance costs, then somebody might listen. The minister should not make these outrageous statements unless he has the facts to back them up. I think he's guessing.

The minister said that there was a whiplash injury of $160,000, and why should one whiplash injury be worth $160,000 and another worth $1,000? Mr. Chairman, that's the way it is. Some whiplash injuries are extremely serious. Some whiplash injuries cause people

[ Page 1981 ]

to be disabled for life; other whiplash injuries people can recover from very quickly. The minister seems to feel that he would like to put a label on an injury and say: "Oh, that's a whiplash injury. It's worth X number of dollars. It doesn't matter how serious it is."

Furthermore, I submit that it's an extremely dangerous thing to turn over the decision as to the value of a claim or the seriousness of a claim or the amount of disability that that person is suffering to an arbitrary board appointed by the minister or by ICBC.

In the newspaper report of April 27 in the Colonist, the minister was discussing this matter and he said: "In B.C., where there is only one insurance corporation for public liability, accident victims are actually suing their own company. In other words, ICBC is both prosecutor and defendant in every single bodily injury case, creating a paradox. I would suggest that the paradox be ended." In other words, we have established the monopoly. We now tell the insured: "Big Brother is looking after you. You don't have to worry. You pay what we require you to pay.

When you have an injury, you come back to us and we'll pay you what we think you should get." It's just a marvellous system that the minister had devised. He uses the Workers' Compensation Act as an excuse.

Well, let me say to the minister that I was not in this House when the

section of the amendment to that Act was passed which took away from the workers the right to sue. But, had I been here, I would have spoken out against that, as I speak out against this. You cannot continue to strip away the rights of individuals in this country and then, when you've succeeded in doing it once, use it as a precedent or an excuse to do it again and again and again. The minister would have every insurer insured by this public monopoly have no choice or decision in deciding what his claim is worth; he wants the board to be able to make that decision for the claimant.

And if we allow this to happen, Mr. Chairman, we'll then certainly be in a position where the individual will take just exactly what he gets.

The minister also said that there is a ripple effect, that when there is a high award in the court it is passed down through the insurance industry - and I think there is some truth in that statement. But it seems to me that what the minister is concerned about is not a fair settlement for an injured person, but only in keeping insurance costs down. And there is no doubt that, if he can have control over the fixing of the amounts of the awards, the insurance cost will drop.

The rightful entitlement to injured parties will go down -no doubt about that - and the minister will be able to keep the insurance rates down and will be able to save money. But it seems to me that the purpose of this insurance is broader than just saving money for the giant public monopoly.

Somebody has to make the decision as to the value of 'a claim, and I say that the system we've had in this nation for many years, where the individual still has the right to go to his lawyer and have the decision made before an independent tribunal, surpasses this in-house decision which the minister would impose upon all insurers.

lie says there are no guidelines; tie wishes to impose guidelines. Well, Mr. Chairman, there certainly are guidelines. There has been a great body of law developed in this land for many, many years. And the law has always had difficulty in keeping pace with inflation. It's happened perhaps in the last year or two that there has been a surge in increase of awards, but it is long overdue. And again, I say that the free system of the courts is a better tribunal by far to make this judgment than the insurance monopoly.

So, Mr. Chairman, again I hope that the minister has better luck than I've had in getting statistics that don't exist, and I will challenge him to produce them as quickly as possible. I would certainly be pleased to see them.

MR. MACDONALD : Mr. Chairman, I'd like to say that Mr. Justice Wootton, who had a very memorable report on this subject - it must be six years ago - performed a great service to the people of the province of British Columbia, and I think it was a landmark in the whole of North America, and maybe the western world, in terms of his analysis of the problem that we're talking about. He was assisted by the now Mr. Justice Rae, who also put a lot of work into that report. Now time has gone by and we've had more experience, but it's worth looking at in terms of what is now happening.

Having said that, I want to just say a couple of words to the minister on the point we've been debating here: $160,000 for a whiplash is totally untypical of whiplash settlements. You know, they range from $900 up to, in a serious case, $2,000, $3,000 or $4,000. But just for whiplash, I think the member for Oak Bay (Mr. Stephens) is quite right: you're taking a very simplistic approach to it when you say that a $160,000 court case - I presume it was a court case - is typical of something. It isn't typical of anything in terms of whiplash injuries. It must have been a very except-

[ Page 1982 ]

tional case of very serious injury to the party concerned if a court granted that kind of award.

Now I want to say that the minister has raised the ICBC premiums in the last two and a half years in office in a way that is totally unconscionable. And I've listened to the arguments, as the reserves have piled up in ICBC -that you've got to collect a reserve in 1978 as well as the amount that you're going to spend in 1978, to look after a claim that might be settled in 1981; and you can't predict what that claim is going to be in 1981. That's the way a private insurance company would look at the problem, because they've loved the idea of building up the reserves.

As a matter of fact, the private companies used to do as well out of their return on earned investments as they did in the come-and-go of ordinary insurance practice, the pay-in and the pay-out. But this isn't a private insurance company; this is a social agency. And you have a social agency like ICBC, a public body, that builds up in a period of two and a half years under the Socred coalition reserves that now total, I think, at the end of the premium collection period last February, $577 million. Now, admittedly, that has to include the pay-out in the year 1978-79.

There is not going to be $577 million; it's going to be somewhere in the area - and you can predict it - of $300 million and something.

Year by year those reserves have been growing, and for the newspapers to report the minister as saying that ICBC suffered an $8.6 million loss is totally misleading. It's an $8.6 million loss, the minister says, at a time when they're salting away investments. It's running around $316 million a year now, plus the stabilization fund, which is another $56 million. It's growing year after year.

This is a public body, and what the minister in charge of ICBC did to the public of British Columbia in the year 1976 was totally unconscionable and ruined the economy. Doubling and tripling ICBC premiums in that short space of time was

an act, now that the figures have rolled in, that we could see was totally bad economics, ruinous to the economy and an unconscionable thing to do to people. In this minister we have somebody who is a convert to the Social Credit Party, and there's no one more zealous than the recent proselyte or apostate. If you look at it from the Liberal Party, he's an apostate; if you look at it from what he's joined, he's a [illegible]. Did I get that right?

HON. MR. McGEER : They'll ask you to get the spelling right.

MR. MACDONALD : So he's going to be very zealous about the new bottom line. He's fallen in with a bunch of bottom-line guys, like the fellow in the Forty Thieves, Ali Baba. He's going to be more zealous than them and he's going to prove that he's really sharp-pencil. He's built up these huge reserves and taken them out of the economy in a period of economic difficulty for the province of B.C. He's proud of the fact that ICBC now makes $35 million a year in interest on its investment income, and it's going up, just like that.

Now everybody would say it's a good thing for the people of B.C. to have investment. That was always part of the original plan of the corporation, but not at that breakneck speed. The NDP proposed a 22 per cent increase in premiums for the beginning of 1976. If you look back and look at the figures, that would just about have done it, Mr. Chairman. It would be a rational, sane increase. No, it would not have increased reserves, and it might not have been sufficient. It might have to be looked at again; of course, these things are subject to review.

But a 100 per cent increase, 200 per cent increase or 300 per cent increase was totally unconscionable and uncalled for, and history will damn the minister for that kind of treatment of people and that kind of treatment of the economy.

I say that you have a public instrument here and that you should have some relationship between what you take in each year and what you expect to pay out. At the moment, I think, you are paying out 64 cents for every dollar you take in. At that rate, Mr. Chairman, of one thing you can be absolutely assured: the reserves are going to climb year by year. As much as we appreciate reserves, they're climbing far too fast and there is no question whatsoever that ICBC premiums at the present time are too high in relation to the money that ICBC is taking in in premiums into its reserves. It's far too high.

I think the minister, Mr. Chairman, has done a lot of this for political reasons. He's wanted to prove that the NDP were improvident in terms of ICBC. This has been the big pitch. The Minister of Agriculture (Hon. Mr. Hewitt) nods his head there, because this has been the pitch of the coalition. This is the only thing that justifies the coalition - all these people with different political opinions from Attila the Hun, and you can move left from there. They are all there, and they've got to justify their act of apostasy. So how do they do it?

You've got to prove that the NDP was going to lose money and was improvident. How do you do that? In a very simplistic way -they raise the premiums 300 per cent in some

[ Page 1983 ]

cases, and then say: "We had to do that because of the NDP." Well, the figures have made liars out of you. Last February 28 you had $577 million in ICBC. Even at the beginning of 1976 you were not going to empty the till, and you hadn't brought in the gasoline money that we had provided for and you had not brought in the increase that we provided for.

Now history will say that there was prudent business management in terms of rates of ICBC under the NDP, and that we've had a minister who, for political spite and political revenge and to justify his act of apostasy in leaving his own political party and his principles behind and joining that coalition, was determined to punish people. That's the result of it. I say on that basis that minister is not fit to be put in charge of ICBC.

Let's have a businessman in there with some heart - somebody with business experience, with some heart for the fact that this is really a social and public agency and not just one of the old-fashioned "make as much money as you can; pile up your reserves just as high as you can!' private insurance companies. That's the way you're running it, and in the private insurance world you'd be a colossal success. Imagine! In two and a half years you created that kind of reserve.

That would be a fantastic record of success in the private insurance world, but in the public world, in terms of the people who have been hurt, it's a disastrous failure.

ICBC rates have been shown to have been raised far too much. I'm not going to give the exact figures and try to look back and say what they should have been, but it is obvi