1989 Legislative Session: 3rd Session, 34th 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 19, 1989

Afternoon Sitting

[ Page

7607 ]

CONTENTS

Routine Proceedings

Tabling Documents –– 7607

Oral Questions

Hazardous waste storage in Cranbrook. Ms. Edwards –– 7607

Privatization of family court counsellors. Mr. Sihota –– 7608

TRY campaign. Mr. Jones –– 7608

Vocational services for TRY clients. Mr. Jones –– 7608

E&N Railway. Mr. Lovick –– 7609

Privatization of family court counsellors. Mr. Harcourt –– 7609

Ministerial Statement

Knight Street Pub investigation. Hon. L. Hanson –– 7610

Mr. Sihota

Estate Administration Amendment Act, 1989 (Bill 33). Second reading

Hon. S.D. Smith –– 7614

Mr. Clark –– 7614

Mr. Lovick –– 7615

Mr. Sihota –– 7615

Hon. S.D. Smith –– 7617

Health Professions Amendment Act, 1989 (Bill 40). Second reading

Hon. Mr. Dueck –– 7618

Mr. Perry –– 7619

Hon. Mr. Dueck –– 7619

Assessment Amendment Act, 1989 (Bill 48). Second reading

Hon. Mr. Couvelier –– 7619

Mr. Clark –– 7621

Hon. Mr. Couvelier –– 7621

Committee of Supply: Ministry of Finance and Corporate Relations estimates.

(Hon. Mr. Couvelier)

On vote 76: new programs –– 7621

Mr. Clark

Mr. Davidson

The House met at 2:06 p.m.

Prayers.

HON. MR. PARKER :

Visiting us today from Kitimat are some 26 grade 7 students from St.

Anthony's Catholic School. Accompanying them are their principal, Ann

Herz, their teacher, Cathryn Bolton, their physical education teacher,

Troy Greenfield, and one of the parents, Maurice Michaud. Would the

House make them welcome, please.

MR. SERWA : On

behalf of my colleague the second member for Okanagan South (Mr.

Chalmers) and myself, I would like to introduce three constituents from

that beautiful constituency: Chris Schandl, Teresa Schandl and their

daughter Tara Schandl. Chris is promotion manager with CKOV, the oldest

radio station in Kelowna, and of the Lizard, CKLZFM. Teresa works as a

producer for the Barrie Clark talk show. Would the House please make

them welcome.

MRS. McCARTHY : In the precinct and

later in the House today will be Sir John and Lady Swinson from

Belfast, Ireland. They are here on a mission for business for British

Columbia but also to tour British Columbia and take advantage of our

tourism facilities. I'd like the House to give them a warm welcome.

MR. JACOBSEN :

On behalf of our Minister of Finance and Corporate Relations (Hon. Mr.

Couvelier), it's a pleasure for me to introduce to the House two

distinguished guests who have come to the Legislature this afternoon to

observe our deliberations. Here on a brief visit to Victoria is Mr.

Brian A. Smith, a financial counsellor with the Canadian Embassy in

Tokyo, Japan. Accompanying Mr. Smith is Mr. Phil Halkett, Deputy

Minister of Finance and Corporate Relations. Will the members of the

House please join me in bidding our visitors a warm welcome.

HON. MR. REID :

In the gallery today is Mr. Bill Goldie, who's sitting close to Mr.

Phil Halkett. I hope they're talking about how they can help fund

activities in the province of B.C. Would the House please make Bill

Goldie welcome.

MR. PETERSON : Mr. Speaker, in your

gallery are Harry and Frieda Fassbender from Langley, their daughter

Heide Bell from Port McNeill, and a very good friend visiting them from

Germany, Brigitte Hoene. I should like to mention that Mr. Fassbender

is a seniors' counsellor for Langley; in addition, just last Friday

night he was awarded the Langley Senior Citizen of the Year award.

Would the House please join me in congratulating him and in wishing

them all a very warm welcome.

MR. JONES : Joining us today in the gallery are two educational leaders

from the college community:

Paul

Ramsey, current president of the College-Institute Educators'

Association, and Mr. Ed Lavalle, president-elect of that organization.

Would all members join me in making these two gentlemen welcome.

HON. S. HAGEN :

I too would like to recognize Paul Ramsey and Ed Lavalle. I've

appreciated my relationship with Paul Ramsey over the last year in his

term as president, and I look forward to continued meetings with Mr.

Lavalle. Please join me in making them welcome.

MR. RABBITT :

I'm very pleased today to have some constituents visiting Victoria, Mr.

Speaker. In your gallery are Dave and Sharon Keyser and their son

Gordon. They're free-enterprisers and supporters of the free enterprise

system, and category 2 small business sawmill operators. Accompanying

them is Mayor Bob Baird of Merritt. Would the House please give them a

warm welcome.

MR. SIHOTA : In the gallery today are

strong trade unionists and strong supporters of the provincial

ambulance service. I'd like to introduce to the House the president of

the union, Robin Jones, vice-president Bill Murray, and Adrian Kroll,

Geraldine McGuire and Joe Donofreo who are with them. Would all members

give them a warm welcome,

Hon. Mr. Reid tabled the Public Service Commission annual report for 1988-89.

Oral Questions

HAZARDOUS WASTE STORAGE

IN CRANBROOK

MS. EDWARDS :

In the absence of the Minister of Environment (Hon. Mr. Strachan), I

would like to address my question to the minister of the Kootenay

region. The Minister of Environment has moved against a municipal bylaw

by giving a permit to Kelly Douglas and Co. to store dangerous PCB

wastes in a warehouse in Cranbrook. Given the intense local opposition

to the storage of these PCBs from other areas of the province in the

centre of the city, does the minister agree that these hazardous wastes

should not be returned to the Cranbrook warehouse before the

Environmental Appeal Board has held public hearings on the matter?

HON. MR. DIRKS : I would be pleased to take that question on notice.

MS. EDWARDS :

A new question to the minister. Will the minister advocate on behalf of

the citizens of the city of Cranbrook to the Environment minister, so

that they do not allow the movement of the waste back into the city

before the appeal process is complete?

HON. MR. DIRKS : I think that that question relates to the first question that I took on notice.

[ Page 7608 ]

PRIVATIZATION OF

FAMILY COURT COUNSELLORS

MR. SIHOTA :

My question is to the Solicitor-General, and it relates to the

privatization of family court counsellors. The province announced some

time ago that they would privatize them right across the province.

There were no contracts; no one was interested. It was then announced

that it would take place April 1 on Vancouver Island — no

contracts; no one bid. Is the minister now prepared to tell this House

and to tell family court counsellors in British Columbia that there

will be no privatization of those very important services?

HON. MR. REE : Mr. Speaker, no.

MR. SIHOTA :

The government has not been hiring any family court counsellors,

because of its ideological bent in terms of wanting to proceed with

privatization. Obviously, there is no interest there. Is the minister

now prepared to tell the House that the government would now begin to

proceed to fill some of those vacancies with respect to family court

counsellors in British Columbia?

HON. MR. REE : The same answer, Mr. Speaker.

MR. SIHOTA :

Could the Solicitor-General tell this House, then, why the government

is not prepared to end its stated intent of privatizing the family

court counsellor program?

HON. MR. REE : Mr. Speaker, yes.

[2:15]

MR. SIHOTA : Could he answer the question and tell the House why the government is not prepared to reverse its decision?

HON. MR. REE : The matter is still under considerable study, Mr. Speaker.

TRY CAMPAIGN

MR. JONES :

I have a question for the Minister of Labour and Consumer Services, the

minister responsible for the TRY campaign. That campaign was

established to increase awareness of the problems of alcohol and drug

abuse and also to encourage people who have that sort of problem to do

something about it. Can the minister confirm, as a result of two

factors — the growing demands on the alcohol and drug treatment program and also a tremendous lack of staff — that counsellors have been led to limit treatment to individuals in need?

HON. L. HANSON :

Mr. Speaker, that is just not true. There certainly has been an

increase, as a result of the TRY campaign, in the awareness of the

public and of family members and others associated with people who may

not have recognized that they do have a problem. We have increased the

funding tremendously to the alcohol and drug treatment

section of the

ministry. I don't have the figures in front of me, but there are almost

double the number of out-patient counselling centres. We have more

in-patient treatment centres. We are continuing to develop programs in

all of the communities as a result of the community action plan.

While

the member may be able to point out a situation where someone should

have had treatment and was delayed a day or so, the people who phone

the 1-800-TRY line are put in touch within 24 hours with someone who

will counsel or give them advice. It's interesting to note that calls

to the TRY line continue to increase, and we continue to increase the

number of people who are there to respond. The proof that the program

is working is quite simply in the number of people who have now become

aware that a friend, a relative, an associate or someone else may have

a difficulty, and they are able to get the advice they need to start on

the road to recovery.

MR. JONES : The minister has

indicated that there is definitely an increased need for these kinds of

services. I'm wondering if the minister has decided, as a result, to

expand the number of drug and alcohol counsellors to meet that

increased workload.

HON. L. HANSON : I thought that's

what I had said. Obviously the message doesn't get through. The fact

is, Mr. Speaker, that through the TRY program and community assistance

programs there has been a tremendous response from the public and from

the government-funded agencies. The response to the various community

programs that have been put in place for counselling in almost every

part of the province — some on a volunteer basis, some on a partially funded basis, some on a totally funded basis — has just been tremendous. We should be proud of our community's reaction to that.

VOCATIONAL SERVICES FOR TRY CLIENTS

MR. JONES :

I have a supplementary for the Minister of Advanced Education and Job

Training. It's my understanding that there has been a cutback in the

eligibility for vocational services for people on this program. Can the

minister confirm that the clients of the alcohol and drug program are

no longer eligible for vocational services?

HON. S. HAGEN : No, I cannot confirm that.

MR. JONES :

Has the minister then decided to set a provincewide policy making it

clear that people with drug and alcohol dependency problems are

eligible for vocational programs?

HON. S. HAGEN : My

ministry is working very closely with the Ministry of Labour and

Consumer Services on this particular item. If the member is aware of

some specific problem, I'd be pleased to discuss it. Otherwise, things

are progressing the way they should.

[ Page

7609 ]

E&N RAILWAY

MR. LOVICK : My

question is to the Minister of Transportation and Highways. It has been

widely reported everywhere now that the federal government has decided

to scrap Via Rail's Esquimalt and Nanaimo rail line. I'm wondering if

the minister can inform this House what specific steps this government

has taken to save the E&N.

HON. MR. VANT : I can

assure the first member for Nanaimo that the future of Via Rail and its

operations in this province are of great concern to this government.

The continuation of rail service in every corner of the province — not just the Esquimalt and Nanaimo Railway —

is of concern to us, and we have certainly indicated that to Ottawa. We

are not jumping to any final conclusions of any adjustments to the

service until we get the final official report, which is currently

underway.

I have had meetings with officials of Via Rail.

Indeed, this was quite some time ago, and I have since followed up with

a very strong letter to my federal counterpart, the Hon. Benoit

Bouchard, in Ottawa. I am very pleased that the initial report, which

was leaked through the Globe and Mail , that the daylight Rocky Mountain run — which is a primary tourist run.... That initial, unofficial report indicated they were actually going to expand that service.

MR. LOVICK :

Well, I'm pleased to hear from the minister that this is of great

concern. I would remind him, however, that that's the answer he gave me

almost a month ago. I would also remind him that he told me almost a

month ago that he had written to Bouchard. Have you written

subsequently to Bouchard? Have you spoken with him subsequent to the

newest announcements that clearly put the E&N in jeopardy? I refer

specifically to the E&N railroad.

HON. MR. VANT :

To be specific about the E&N, the manner in which that line has

been operated has been of concern to me for many months. It doesn't

seem to make an awful lot of sense to me that whenever they have

difficulties with one of their Budd cars, they have to ship it all the

way to Montreal for repairs,

whereas right here in the province we have

excellent facilities operated by our own railway, B.C. Rail, which has

considerable experience at rebuilding Budd cars. Indeed, I communicated

directly at a one-to-one meeting with the federal Minister of Transport

regarding that particular issue and some concerns I had about the lack

of quality service currently offered by the E&N Railway

I'm not only just concerned, Mr. Member, about the future operations,

but about the quality of that service. I have communicated that

directly on a one-to-one basis with the federal minister.

MR. LOVICK : It's interesting to hear those reassuring words, and

I'm sure all your predecessors have said the same thing, though it hasn't

made one whit of difference in terms of the operation of that railroad.

simple question designed, obviously, for all those other members there

so they can understand, too. Has the minister made any formal

representation to the National Transportation Agency regarding the

continuation of the E&N service?

HON. MR. VANT :

As the Minister of Transportation and Highways for the province, I like

to deal with the minister responsible at the federal level. I like to

deal with the organ-grinder, not just the monkey.

Interjections.

MR. HARCOURT :

That's does leave an opening. What a way to start a week. I will try

and get you off to a good start and pass that one up, Mr. Speaker. The

Minister of Highways does leave himself open, but we want to move into

a much more mellow spirit than that answer would provoke.

PRIVATIZATION OF

FAMILY COURT COUNSELLORS

MR. HARCOURT :

My question is to the Solicitor General. I found his response to the

member for Esquimalt-Port Renfrew (Mr. Sihota) very unfortunate. I

worked in family court for my first five years in practice. It's the

court where the more vulnerable members of our society go, and I have

seen the government bring in moves to save money on welfare, to save

money for the government. When will the minister end this privatization

fad in family court and address the real issue, which is the women,

children and families in crisis in this province and resources for

those families?

HON. MR. REE : I don't think concern

for the unfortunate people of this province is any greater on that side

than it is on this side, and the Leader of the Opposition knows that,

because most of these services have been put in place by this

government. There was very little done during the period of '72-75 by

the NDP — there was nothing. It's like the concerns that the

people on the other side have with respect to education: not one

college or one university was put in by the NDP during its three years,

or anything else like that. This province went backwards instead of

forwards between '72 and '75, the same way it would go if the NDP were

elected as government here in B.C. — and Lord help the province if it ever happens.

Our

concerns with the family, Mr. Member, are every bit as great, and that

is one of the reasons we are looking to possibly putting it to

privatization. We have not made a firm decision about it at this time;

we will decide in due course which action we'll take.

[ Page 7610 ]

Ministerial Statement

KNIGHT STREET PUB INVESTIGATION

HON. L. HANSON : During my ministry's estimates and the subsequent question periods, the members opposite — specifically the member for Esquimalt-Port Renfrew and the Leader of the Opposition —

have repeatedly raised questions with respect to the Knight Street Pub,

my ministry's investigation and allegations involving myself and

others. The purpose of my statement is to respond to those questions

and to demonstrate my belief that the opposition has sought only

political sensationalism instead of truth in a responsible way.

[2:30]

During the opposition's questions, it was my intention to respond at

a later date and at one time to all the questions posed by the

opposition. You will appreciate that these specific dates, times and

events required close scrutiny and confirmation where possible.

However, Mr. Speaker, the opposition has chosen to pose the same

question each day. They have not been in pursuit of the truth but in

pursuit of the media.

Accordingly, I advised the House on

Thursday last that I would advance my response today. I chose to

respond not because of the vexatious comedy of the member for

Esquimalt-Port Renfrew but because I believe the public deserves the

truth. The opposition does not represent the truth.

MR. SPEAKER : The Leader of the Opposition rises on a point of order.

MR. HARCOURT : A point of privilege. I think that colouring of individual members — let alone the whole opposition — as not representing the truth should be withdrawn.

MR. SPEAKER :

I would remind the minister that ministerial statements are not to be

debate and not to be political argument. I would ask him to continue.

HON. L. HANSON :

I would now like to respond to the questions which have been raised. I

wish to remind the opposition of information which I willingly made

available last year and to indicate that the information that the

opposition now seeks was in fact available to them and to the public

some time ago. The opposition has a memory of convenience: it's a

failing memory held by a failing opposition.

MR. BLENCOE :

On a point of order, Mr. Speaker, you have requested the minister to

reflect on his statement in terms of accuracy in making a ministerial

statement. He has already accused the opposition, and should have

withdrawn, in terms of reflection on truth. Now he's making further

reflections Mr. Speaker, I ask you to take this minister to task.

HON. MR. RICHMOND :

On the point of order, Mr. Speaker, I would just remind the House and

you that day after day after day in this House, the opposition got up

in a most political fashion and made allegations and asked questions in

the most political manner possible. I would submit that since

ministerial statements are not provided for in our standing orders, and

have evolved over the time of parliament, the minister should be

allowed to answer the endless allegations that came from that side of

the House.

MR. SPEAKER : I might refer the minister, before he continues, to the second edition of Parliamentary Practice in British Columbia , pages 50-51, where it says:

"The limitations placed on ministerial statements and replies....

"'General arguments or observations beyond the fair bounds of explanation...are out of order....

"It has long been the established practice of this Legislature

for ministerial statements to be made upon the Orders of the Day, and it is

traditional that cabinet ministers should, as a courtesy to the House, if the

House is in session, make any major policy statement or announcement in the

House, prior to announcing the same outside the House. Each of such statements

should be brief, factual and specific."

It must also be understood that a debate cannot take place.

I would ask the minister to continue to the specifics of the issue.

Interjections.

MR. SPEAKER : Order, please.

HON. L. HANSON : Mr. Speaker, I would like to respond as follows.

Wednesday, May 31, the member for Esquimalt asked whether Mr. Doney

knew of the telephone call from Mr. Poole to Mr. Hick prior to the

writing of his report. The answer is yes. The information was public in

the media last year. If the members opposite need assistance with their

clipping service, I would be pleased to provide that from my office.

Interjections.

MR. SPEAKER : Order, please.

HON. L. HANSON : It appears we must not only do the research for the opposition but that it requires some help with its reading.

Thursday, June 1, the Leader of the Opposition, in one of his periodic

visits to this House, questioned why I did not, and I quote, "expose

the truth last year" and why I only admitted I "knew that Mr. Hick

lied" when questioned by the opposition. His voice rose hysterically

when he asked why I did not expose it last year. Mr. Speaker, I did,

last year.

The Leader of the Opposition further questioned why I did not report Mr. Hick's statement of June 6, 1988 — of the press conference —

to the police. I reviewed that matter with Mr. Hick after the press

conference and considered that the ombudsman, who worked cooperatively

with the ministry, would deal with the matter in his general

investigation. When

[ Page 7611 ]

that

investigation was completed, I could determine what action should be

taken. I wanted all the information available, including the

ombudsman's report, before proceeding formally. The appropriate

personnel actions were taken in short order.

Mr. Speaker,

the Leader of the Opposition asked why I did not advise my deputy

minister about the phone call between Mr. Poole and Mr. Hick. I was

first asked about the referendum and Delta Media Services by BCTV

somewhere in the period May 16 to 19, 1988. I immediately contacted the

general manager of liquor control and licensing, who advised me of the

process of adding Delta Media Services to the approved list of firms to

conduct referendums.

On that occasion Mr. Hick indicated

for the first time that he had discussed the matter with Mr. Poole

almost a year before. His explanation to me of this conversation with

Mr. Poole was that of a casual and informal contact and was very

different than the discussion and meaning of the call as it was

subsequently reported by the ombudsman.

My discussion with

Mr. Hick was followed on May 20 by a memo from him which expanded on

our conversation respecting Delta Media Services and made no reference

to the telephone call with Mr. Poole or its effect, if any, on his

decision. That memorandum, Mr. Speaker, is reported in the ombudsman's

report.

I was aware of the call, but at the time I had no

reason to believe that the call weighed directly or in any way on Mr.

Hick's decision. It was my understanding that Mr. Doney subsequently

became aware of the call in a meeting involving ministry staff and Mr.

Hick in the period of May 23-24. Mr. Doney and I did not directly

discuss this information at that time because we both honestly believed

that it was not relevant in the decision that was ultimately taken in

respect of Delta Media Services. In retrospect, this may have been an

error.

Inquiries and telephone calls to staff of the liquor

control and licensing branch are not uncommon. It is the occasional

practice, perhaps unwise, that MLAs will contact the general manager or

other senior staff with respect to licensing issues generally, and in

some cases on specific licensing or appeal issues. I would suggest that

perhaps the opposition House Leader would like to canvass that matter

with his members and discuss with them such contacts, as well as recent

telephone calls which may have been made. I can tell the members

opposite that I respect their right to make inquiries and to fairly

represent constituents, and I will stonewall any attempt to give out

that information.

The Leader of the Opposition asked

whether I had contacted Crown counsel respecting what was discussed

with the Premier. Mr. Speaker, this is the worst form of innuendo and

untruth, and that's because I had no discussions with the Premier at

all on this issue.

The Leader of the Opposition has

inquired whether waiting to correct the public record was consistent

with ministerial responsibility. The public record was correct a year

ago, as was reported many times in the press. It is apparent that the

opposition leader's prolonged absences from the House prevent him from

having any sense of time.

On June 6 the member for

Esquimalt-Port Renfrew again asked whether I was advised of the

telephone conversation by Mr. Hick or Mr. Doney. As I previously

indicated, I was advised by Mr. Hick. The member further asked if Mr.

Doney was present when I was advised. The answer is no.

The

member for Esquimalt-Port Renfrew considered it a revelation that I

would read the report by Mr. Doney before it was issued, and that

knowledge of the telephone conversation between Mr. Poole and Mr. Hick

was relevant to Mr. Doney's investigation and subsequent report. Mr.

Doney's report was focused on the specific allegations respecting the

conduct of the referendum by Delta Media Services.

The

reasons Delta Media Services was added to the approved list of

referendum companies were not part of Mr. Doney's terms of reference.

Neither I nor my deputy had any reason at that time to suspect that

Delta Media Services was authorized to conduct a referendum other than

through the normal approval process. It is extremely relevant in this

context to note that while the ombudsman found serious deficiencies in

the ministry report, the ombudsman did not think it relevant. The issue

of a telephone call was not raised in the ministry report, and the

ombudsman did not think it was relevant. Why could that possibly be?

Because I know, the ombudsman knows and the public knows. Everyone

seems to know but the members opposite. They seem to know that the

issue of Delta Media Services being put on the list was not the issue

being investigated at the time and was not relevant to the ministry

report. The member for Esquimalt-Port Renfrew reports this as an

omission, Mr. Speaker. The omission is that of the member in his

research and his questioning.

The member for Esquimalt-Port

Renfrew asked why I did not correct the report to reflect the

conversation between Mr. Poole and Mr. Hick. I have already stated that

I did not honestly believe that the conversation was relevant to the

decision to have Delta Media Services undertake the referendum.

The

member for Esquimalt-Port Renfrew asked who had advised the

Attorney-General with respect to the telephone conversation. Mr.

Speaker, I cannot attest to the original source of information to the

former Attorney-General. Indeed it may be inappropriate for me to have

such information, as the member for Esquimalt-Port Renfrew should

certainly know. It is my understanding that the former Attorney-General

discussed this matter at some time with a member of his legal staff,

who was also advising the Deputy Minister of Labour at the time in the

conduct of his investigation. Mr. Speaker, I cannot be sure that this

was the first awareness of the issue by the former Attorney-General. In

any event, the former Attorney-General would have, and did, discharge

his duties in the independent way required by his office.

is my recollection that at approximately the same time, I discussed the

telephone conversation between Mr. Poole and Mr. Hick with the former

[ Page 7612 ]

Attorney-General,

but in an informal way, leaving a cabinet meeting. Again I honestly did

not believe that the telephone conversation constituted a problem, and

therefore did not pursue the matter.

[2:45]

I certainly did not raise the issue with the former Attorney-General

in a formal way requesting any action by him. At approximately the same

time, I had written to the Attorney-General on the subject of the

licensing of the pub in response to a letter received from a concerned

citizen.

In closing my statement, I would like to add some facts surrounding these issues. During the course of this questioning — this mock inquisition by the opposition —

I have been very concerned with respect to the casual and careless use

of facts and the skilful use of near-facts employed by the opposition.

Mr. Speaker, they do no credit to this House, and I think the record

must be clear.

There were deficiencies in the ministry's

report. I acknowledge those, and I take some responsibility The public

interest was well served by the ombudsman's thorough study of the

issue. The opposition, however, has not been as thorough in its reading

of the ombudsman's report. I accepted the ministry's report,

recognizing that the deputy minister and a number of his staff had

attempted to honestly and fully analyze the specifics of the referendum.

In my view, the findings of that report represented an honest effort by my staff. Indeed, as the ombudsman's report noted — and this is critical —

if testimony had been given truthfully to the ministry investigators:

"...the ministry's investigation would have taken a different tack."

When the report was revealed by the ombudsman's subsequent

investigation to be misguided, incomplete and in some cases inadequate,

my deputy minister approached me and tendered his resignation. In my

view he was prepared to meet the highest test of the public service

required by senior staff. I chose not to accept that resignation,

because it was my view that the ministry report had been — and not in a minor way — compromised

by the testimony which was falsely given to the ministry investigators.

I determined that I could not hold staff members accountable for the

untruths of others. The opposition, however, does not seem to have such

a standard.

I have attempted during the course of my term

as minister responsible for liquor licensing to bring improvements to

that process. That has included a significant study on liquor licensing

policies and, most recently, the announcement of a commission under Mr.

Bazowski. He is to develop policies which will ensure that liquor

licensing decisions enjoy the confidence of the public through a public

process separated from the administration of this branch. We will

continue in our efforts to improve that system.

Thank you, Mr. Speaker.

MR. SPEAKER : The Minister of Labour.

HON. L. HANSON : Mr. Speaker, I rise on a matter of privilege.

June 15 the member for Esquimalt-Port Renfrew alleged that the

government, and specifically the former Attorney-General and I,

conspired to fabricate "a two-track strategy," including an internal

report by the ministry to indicate "that there was no problem"; and

secondly, an arrangement with the former Attorney-General "for a matter

of fixing the dilemma."

I have already pointed out in my

statement to the House that the former Attorney-General discharged his

duty in the independent way required by his office. I have also

indicated the basis of my ministry's internal report and my honest

belief in these matters.

Mr. Speaker, the member for

Esquimalt-Port Renfrew has maligned my office and that of the

Attorney-General. He has done so wilfully and has discharged his duties

to this House in a dishonourable fashion. I demand an apology to this

House, to the former Attorney-General and to myself.

MR. SPEAKER : Is the member for Esquimalt-Port Renfrew rising on the point of privilege?

MR. SIHOTA : On the ministerial statement first.

MR. SPEAKER : I would first advise the minister that I will take his comments under advisement and report to the House later.

MR. SIHOTA :

The obvious strategy, I guess, for the minister is to go on the

offensive against the opposition and try to blame the opposition for

the government's woes.

I find it particularly insulting — and somewhat orchestrated — that the Minister of Labour would now decide that he wishes to leave the chamber and not hear the reply.

Interjections.

MR. SPEAKER : Order, please.

MR. SIHOTA :

It's astonishing that the minister would make the type of statement

that he has made in this House, put out the matters that he's put out

before the House and then not stick around to hear the reply.

HON. MR. RICHMOND :

Mr. Speaker, I point out that it is inappropriate for a member to

comment on the presence or absence of another member in this House. I

further point out to the member, Mr. Speaker, that you cannot argue

with facts.

MR. SPEAKER : Order, please. The minister

makes a good point, and I would suggest also that the opposition had

concerns about the minister keeping his statement relevant. We've been

going a few minutes now. If the member was to look at May, twentieth

edition: "A reply to a ministerial statement must relate to content of

the statement and not constitute debate." I would ask him to reply to

the statement.

[ Page 7613 ]

MR. SIHOTA :

In response to that point of order from the government House Leader,

the Minister of Labour made comments about the attendance of the Leader

of the Opposition.

In any event, let me continue. The point

that I was making is that we on this side of the House, in the

opposition, have an obligation to Her Majesty, to you, to the political

process and to the public to ask critical questions of the government.

In terms of our criticism of the government, we focused on the fact

that the government, through its ministers, ought to be here to listen

to those criticisms in order to react to them.

Interjections.

MR. SIHOTA : I listened carefully to the Minister of Labour's response. The Minister of Labour made a number of cheap shots — I think that is the best way to describe them —

towards various members of this House. I used to say that the

Attorney-General (Hon S.D. Smith) was the Ron Hextall of politics. I

think the Minister of Labour has now become the Ron Hextall of politics.

want to deal with the comments the Minister of Labour made. First of

all, on the matter of whether or not members of the opposition should

be raising these types of issues. Mr. Speaker, I say that we should be

raising these types of issues. That is particularly so mindful of what

has transpired here This was a case that began at the doorstep of the

Premier's campaign office, involved his campaign manager and took us to

the doorstep of the Premier's office here in Victoria, and it involved

several of the closest advisers of the Premier, let alone the Minister

of Labour and his ministry. There remain, in my view, a series of

unanswered questions which the Minister of Labour still has not

attended to in the course of his comments today.

The first

of those is his failure to respond to what I raised during the course

of estimates vis--vis the relationship between Mr. Toigo and the owner

of the Knight Street Pub, Ms. McRobbie, and whether or not any

investigations were carried out by his ministry with respect to any

financial arrangements that existed between the two. That must be

addressed in light of the government's policy that only one person can

have a liquor licence in this province.

Left unanswered by

the minister's response today was the question that I raised during

estimates as to the matter of whether or not Mr. Toigo continued to

lobby with respect to that licence after he purportedly sold it off to

Ms. McRobbie.

Left unanswered as it relates to some of the

players in this entire scheme is why it was that someone would decide

to build a pub of this nature during a time when there was a moratorium

on pub licences and then get the licence shortly after that moratorium

was lifted. It is true that the opposition has a responsibility to ask

those questions in the face of the type of suspicion that those actions

raise.

The minister says that Mr. Doney was aware of the

conversations between Mr. Poole and Mr. Hick. He ought, from my point

of view and from the point of view of this side, have referred to that

during the course of his internal report. It is a critical failure on

the part of Mr. Doney not to have recognized the importance of that

call. That critical failure is compounded by a minister who failed to

recognize the importance of that call. The ombudsman, in the course of

his report, recognized the importance of that call. The ombudsman

recognized it. The former Attorney-General, to his credit, recognized

the significance of that call. I want to come back to that call in my

closing comments as well.

Left unanswered by the minister's

response is the role of the Attorney-General's lawyer, who sat through

the internal investigation, and what information he provided to that

ministry and to the Ministry of Labour. Left unanswered by what the

minister had to say today was the whole matter of the police

investigation and his role in the investigations of the RCMP and the

Crown counsel. I note with interest that he says that he chose not to

or did not discuss the matter with the police. That, of course,

warrants further questions, and I'll put the minister on notice that we

will continue to ask some questions in that regard. There are a number

of issues that remain outstanding with respect to what the minister had

to say.

He accuses the opposition of having a memory of

convenience, yet he himself sat through a press conference on June 6,

1988, a year ago, and listened to an official of his lie and did

nothing about it at that time. If there was ever an example of a memory

of convenience, that was it.

Mr. Speaker, I didn't have the

benefit of the minister's statement in advance, unfortunately but I

guess not surprisingly. The minister, to some extent, relied heavily on

the report of the ombudsman in trying to suggest that it lent support

and comfort to his position. Let me state what the ombudsman said on

page 65 of the report: "While this office may agree with the substance

of the majority of the ministry's conclusions vis--vis the 63

allegations, it cannot commend the process by which those conclusions

were reached. The ministry's investigation was inadequate and too

narrowly focused; irregularities were either not noticed or not

questioned." The minister, in his reply, still has not told us why that

report was narrow in its scope, and we will continue to ask questions

in relation to that.

If the Attorney-General keeps this up, maybe he'll get back the title of the Ron Hextall of politics.

[3:00]

On page 66 of his report the ombudsman says: "It was the inherent

responsibility of the ministry to be thorough and exacting in the

investigation of complaints concerning its past administrative actions.

In these circumstances, it is concluded that the ministry failed to

meet this standard." We have a minister who failed to recognize the

responsibilities that are put on his shoulders as a minister of the

Crown. We as the opposition say that with pride, and the ombudsman said

it as well with some dignity.

[ Page 7614 ]

have a minister in this House who fails to recognize political

interference when it occurs, fails to appreciate the consequences of

that call. On August 27, the Vancouver Sun said

as follows in dealing with that call: "At the least Mr. Hanson was

apathetic or blind, if not irresponsible, in failing to act on what he

was told by Mr. Hick. Such poor judgment ill qualifies him for a major

cabinet position. He should carefully consider, and so should Mr.

Vander Zalm, his effectiveness after this episode."

MR. SPEAKER : I would remind the member that he does not use members' names in this House.

MR. SIHOTA : I apologize for that, Mr. Speaker. I'm just quoting what the Vancouver Sun had to say.

MR. SPEAKER : It doesn't matter. The member knows he cannot quote and use a member's name.

MR. SIHOTA : I apologize for that. I didn't mean it in that sense. The point here is that the Vancouver Sun

was bang on in terms of its analysis of the situation. They were

correct in saying that the minister should resign. We're going to

continue to ask for the minister's resignation in light of the errors

in critical judgment that he has demonstrated throughout this whole

fiasco.

Orders of the Day

HON. MR. RICHMOND : I call second reading of Bill 33, Mr. Speaker.

ESTATE ADMINISTRATION

AMENDMENT ACT, 1989

HON. S.D. SMITH :

I have today the distinct honour to move second reading of Bill 33, the

Estate Administration Amendment Act for 1989. In moving second reading,

I wish to describe to this House very briefly some of the background

and major features of this bill.

As members of the House

may know, the official administrator function exists for the purpose of

ensuring that the estate and other affairs of deceased persons are

concluded in a timely fashion and in the interest of any of their heirs

and of the public. This bill will enable the official administrator of

the province to exercise a more precise monitoring role over the

activities of deputy official administrators and other agents appointed

for that purpose. It is intended that the public trustee will be

appointed to that position. This bill will thus complement the Public

Trustee Amendment Act, 1989, which changes the public trustee's

financial affairs.

This bill provides that the official

administrator can delegate his responsibilities as official

administrator to others, while at the same time assuming a more

exacting role in the monitoring of deputy official administrators'

activities. This will ensure greater protection for heirs and for the

public. In addition, the bill provides for authority for the public

trustee to deal with moneys from estates now paid to the Minister of

Finance. It expands the power of the Attorney-General to ensure that

appropriate accounting practices are followed in respect of estates

administered by private official administrators.

This bill

further provides that rather than several official administrators

reporting directly to the Legislature, all reporting of finances

respecting estates of deceased persons will flow through the official

administrator in the person of the public trustee. Since the public

trustee is subject to the Financial Administration Act, financial

controls on the operations and reporting of the deputy official

administrators will be more stringent than they are presently.

has been said by one member of this House that this legislation

privatizes existing functions. That statement is false, deliberately

misrepresents the existing structure and discloses a very real

ignorance of the current system we have.

Since improving

the system with the current changes, we've added up to 20 new staff

members to improve service. As well, currently there are 12 private

sector official administrators in place, each of whom has a separate

reporting role.

What this bill does is create one official

administrator for the province. That person also happens to be the

public trustee, who will then name deputies, several of whom may very

well be the people now serving in that role. The changes will harmonize

the official administrator side of our trust responsibility with the

public trustee side and will enable all areas of the province to

benefit from expanded service levels unrestricted by the old county

designation.

I hope that in debating this bill, members

will not be moved by any false statements that deliberately

misrepresent the facts of the situation.

At present the

public trustee is the official administrator for most areas of the

province. Because of the size of populations, in some areas of the

province remuneration calculated on a percentage base has not been

sufficient to attract official administrators in all areas. By removing

the reference to counties and establishing the areas for which a deputy

official administrator will be appointed, and by providing flexibility

on the setting of remuneration, it is intended that firms and

individuals will be appointed to deliver service throughout the

province, either as a deputy official administrator or as an agent.

The

bill will enable the public trustee, as official administrator, to

delegate the responsibility to competent firms or individuals who will

contract to carry out the official administrator tasks in designated

areas of the province.

This bill will provide for more

localized service to clients, more carefully safeguarded interests of

heirs and beneficiaries and more stringent accountability to government.

Mr. Speaker, I move second reading.

MR. CLARK : Unaccustomed as I am to speaking on these legal matters, I may, for a few minutes, while my colleague re-enters the House.

[ Page 7615 ]

behalf of this side of the House, I do take exception to some comments

the Attorney-General made which I believe were unparliamentary. But we

didn't at the time ask for his withdrawal, so I certainly won't at the

moment. I must say, though, that it seems to me not very good protocol

for the Attorney-General to engage in that kind of debate.

The

Attorney-General and the previous Attorney-General in this House have

at great length talked about the office of the Attorney-General, and I

think, in keeping with that office, it might be more appropriate for

the Attorney-General to deal with the specifics of the bill at hand

rather than engage in a kind of critique of the member for

Esquimalt-Port Renfrew (Mr. Sihota). It's kind of interesting that his

critique and the velocity of his critique generally indicates that on

this side of the House we may have landed a few blows with respect to

the Attorney-General's concerns. It's clear that the intensity of the

remarks from the Attorney-General meant that he was stung by the

criticism of the member for Esquimalt-Port Renfrew.

But at

this point in the debate I might defer to the first member for Nanaimo,

who I'm sure is more learned on the question of estate administration

and the privatization of the public trustee than I am.

MR. LOVICK :

I think all of us were listening rather carefully to hear what the

justification for this particular measure was, and we heard reference

to the fact that this measure would perhaps enable the business of

estate settlement to be done in a more timely fashion. We also heard an

allusion to a more precise monitoring role and we heard that this

particular measure complements the Public Trustee Act.

What

didn't get mentioned in all of that, of course, is what certainly

appears to be the real reason for this particular measure: namely, the

simple and straightforward fact that the government is still embarked

upon its ideological quest to privatize the entire province — or as much as they can.

I'm

suggesting that the absolute, first, primary and, indeed, only reason

for this thing is an ideological crusade. The reason behind this is

clearly to try and take yet more workers out of the public sector.

There is no other explanation, Mr. Speaker.

Interjection.

MR. LOVICK : The Attorney-General is making some blustery kinds of comment from across the way, Mr. Speaker, and I can't quite hear it.

HON. S.D. SMITH : Sit down and I'll tell you.

MR. LOVICK :

We can't sit down; it's second reading, Mr. Attorney. You ought to know

the rules a little better than that. But don't worry, Mr. Attorney, you

and I will have a chance in committee to perhaps interact on some of

those kinds of questions.

The essential issue here is that

the bill deletes

section 41 of the existing Estate Administration Act.

It doesn't explain that. It just takes it away. And what is

section 41

in the original? Well,

section 41, of course, says that the official

administrator is a public service employee, and the rest of the

section

simply outlines the implications of that about public employees.

What

I want to do is tell the Attorney-General just a little bit about the

existing branch, because, with all due deference, I don't think he

knows much. If he did, he would know that there have not in fact been

problems in its administration, that there isn't in fact any kind of

good evidence on the face of it to suggest privatizing that operation.

The average length of service in the branch is 15 years. The newest

employee has been there 10 years. And the question is obviously: what's

wrong with the existing operation? Why do we have to suddenly change it

all? What's the point?

Interjection.

MR. LOVICK : My, you are feisty today, aren't you? You're really practising.

What

we are dealing with here is, as I say, merely another manifestation of

the same kind of mindless commitment to downsizing the state and to

doing something about the government employees' union; the same kind of

thing, by the by, we picked up in listening to the response to the

question raised earlier in question period from the Minister of

Transportation and Highways (Hon. Mr. Vant). Do you recall what he

said, Mr. Speaker, when I asked whether this government had made

representation to the National Transportation Agency? The response was:

"Well, I don't talk to the monkey; I talk to the organ-grinder." In

other words, all of the bureaucrats, all of those people charged with

carrying out policy, are perceived somehow to be either stupid or

public enemies, rather than servants of the public. And that,

regrettably, seems to me precisely the logic behind this particular

measure. Certainly, from listening to the Attorney-General's

introduction, one can see no other.

I have considerable

difficulties with this. It will take a great deal to persuade me that

my colleagues and I ought to support this particular measure, Mr.

Speaker.

MR. SIHOTA : Mr. Speaker, I should actually

thank you for letting me stand all the time. I didn't mean to do that

in any disrespect; I hurt my back over the weekend.

I want

to respond to the comments I heard from the Attorney-General, and to

the bill that's before us. I'll make a number of comments. First of

all, I was at a meeting over the weekend, and an individual from

Penticton came up to me and gave me a copy of a story featuring the

Attorney-General and the speech that he made in Penticton to the local

Social Credit constituency association. The headline was: "NDP Has

Secret Agenda, Says A-G." I don't actually have that here.

I had an opportunity to read the press release that accompanied this bill, which emanated from the

[ Page 7616 ]

Attorney-General's

office. During the course of coming out with the press release on this

bill, the Attorney-General talked at some length about the need to

provide service around the province with respect to estate

administration. I'd say that's a laudable goal. It's one that we, of

course, agree with as well; there ought to be full opportunity for

individuals in the Kootenays, as much as people in downtown Vancouver,

to engage in the good services of the public trustee's office.

[3:15]

What was not mentioned during the course of the Attorney-General's

press release on this bill was the fact that the objective of this

legislation is to bring about the privatization of a public trustee's

office that has served us so well. If there ever was a secret agenda

that was not revealed in the course of a press release, that was it; no

mention of the intent of this legislation. That's what the purpose is:

to further the ideological bent — the obsession — that government has with respect to privatization.

The

Attorney-General, of course, is a booster of privatization. He thinks

we should privatize highways maintenance in this province, despite the

fact that most people recognize the lack of wisdom in doing that. He

supports the privatization of the environmental labs when most people

have a sensitivity to the environment and realize that air and water

quality testing ought to remain in the public domain; the same with

things like milk-testing laboratories. Now we see that ideological

obsession being exercised in the case of the Estate Administration Act,

particularly in the role of the public trustee.

I for one

think the public trustee's office has served this province rather well

over the years. It performs an important function. As a lawyer

practising in Esquimalt I've had dealings with the public trustee's

office, particularly with respect to comity applications. To be honest

with you, I had a frustration at the time with the public trustee's

office, because I thought it took a fair bit of time for that office to

fulfil its mandate in terms of looking after these types of

applications. But as I studied the matter, it became apparent to me

just why that has transpired, and in itself it's an example of the kind

of mindset that we see within the Social Credit administration.

have, first of all, a well-functioning public sector activity, whether

it be the public trustee's office or the contracting of highway

maintenance in the province. The government then comes along and, under

the banner of cutbacks — so-called restraint, but under the banner of cutbacks —

cuts back so that the quality of the service suffers. When the quality

of the service suffers, the public begins to complain about the nature

of the service: how long it takes, how it's not so efficient. Then the

government says: "Well, the answer to that is to privatize it."

[Mr. Pelton in the chair.]

This

is the modus operandi of this government in terms of its justification

for privatization. It takes a well-established, well-functioning public

sector realm of responsibility, slashes it so that it can't do its job,

gets complaints from the public and says: "Look how bad it is. The only

thing that can occur here is to allow the private sector to do it

better." The new Attorney-General of this province has embraced this

modus operandi with great vigor. This is the true secret agenda of the

government.

The Attorney-General should know better than to

go around the province saying, "There's a bogeyman somewhere off

yonder," when the person delivering the speech is the bogeyman. It's

the Attorney-General himself when he makes those types of comments in

Penticton, when he engages in activities and tries to blame somebody

else for his failings in his responsibilities. If this Attorney-General

had true commitment to the type of historical, vital service provided

in this province by the public trustee's office, he would take concrete

steps to expand the activities of that office throughout the public

realm. He would expand them more than he alluded to when he made his

comment earlier on. He would expand it so that people in Kamloops,

Prince George, Penticton, Smithers, Terrace and Cranbrook have the type

of publicly run service that they deserve.

We're not

dealing here with just a nominal activity. We're dealing with an office

which I understand.... I stand to be corrected on the actual number,

but the last number I heard, it has under its possession $57 million in

trust funds, at least in Vancouver. We established the public trustee's

office in this province because as a society we thought — and so did the Social Credit administration that brought forward the establishment of the public trustee's office —

as a society that the funds of those people who are incompetent and

incapable of managing their own affairs ought not to be left to the

private sector. They ought to be in the domain of the public trust, so

that public officials — accountable through this Legislature and responsible to the Attorney-General — would

engage in the type of investment and monitoring that's required when

you are dealing with the funds of people who are least able to make

judgments about their own financial well-being.

The public

trust is placed in the public trustee's office for good reason. The

Attorney-General has forgotten the historical reasons for establishing

that. He has forgotten the potential for fraud that exists in the

private sector; he would prefer to allow this to be invested under an

act that allows for investments on the Vancouver Stock Exchange. We'll

have more about that when we deal with the Minister of Finance.

there ever was an example of how far this government has come from the

Social Credit Party of W.A.C. Bennett, this bill demonstrates it — ideological considerations paramount to safeguarding the public interest and to looking after the public trust.

wonder, when the next Social Credit leadership convention occurs, if

the Attorney-General will go around the room and point to this as one

of those hallmark pieces of legislation that he introduced, which

allows the private sector to get its hands on the $57 million worth of

trust funds that exist there. Will

[ Page 7617 ]

point to this with a level of pride as one of the things that he's

done? I say not. He'll point to the Access to justice, but he'll put

aside those types of ideological motivations that are inherent in his

actions.

Mr. Speaker, this is a regressive piece of

legislation. We will be voting against this piece of legislation, and

we will be dealing with it in some more detail during committee stage.

HON. MR. BRUMMET :

The Attorney-General had to step outside for a moment, and I see his

moment is up. He had asked me to take notes of the brilliant

dissertation of the member opposite, so that he could respond if

necessary. I have taken these notes and am now apprised, through mental

telepathy, that the Attorney-General is prepared to respond or pass

second reading of this bill — whichever is most appropriate.

DEPUTY SPEAKER : Hon. members, pursuant to standing order 42, the minister closes debate.

HON. S.D. SMITH : One of the things that most characterizes debate — or should, in a parliamentary system —

is an attempt to speak honestly and to try to do the public's business

in a way that gives credit to the notion of veracity, and that gives

credit, in some way, to an attempt to inform the people.

There

are a number of ways to do that. One of them is to try to apprise

yourself of the facts and to do your research in such a way that you

can go ahead and serve the public, your community, your constituency

and this House. The other way is to set up straw men and then knock

them down with untruths. That is another way of doing business.

When I introduced this legislation the other day, I noted a statement in the Times-Colonist which

contained a number of things which are simply untrue; I suppose one

could claim they were untrue because of inadvertence. But having

listened today, Mr. Speaker, I think there is no inadvertence involved

whatsoever I think they're untrue because they are deliberately

undertaken to not correctly inform the people of British Columbia about

the essential facts of this legislation.

MR. BLENCOE :

On a point of order, Mr. Speaker, I bring your attention to the

Attorney-General's comments about truth and making reference that my

colleague's statements are untruthful. Perhaps you could remind the

Attorney-General of the honourable rules of this House.

DEPUTY SPEAKER :

The hon. member makes a good point, and I would just remind the

Attorney-General that we are dealing with second reading in principle

of the bill, and we are closing second reading at this point.

HON. S.D. SMITH : I am too, but one of the things that it behooves all of us to do in this institution is to make certain —

particularly people who are covered by this kind of legislation and who

need the assistance of the public trustee's office.... I will not stand

idly by and watch members of this Legislature crawl up on the backs of

the elderly, the sick, the unhealthy and the lame who need this, in

order to score their cheap little juvenile political points. I will

never let that happen. If there are members in this Legislature who are

so consummately immature and smart-alecky that they are going to

continue to do this kind of thing on the backs of the elderly in this

community, that's for them to do. But I won't do it; nor will I let it

go by without mentioning it.

To address the principles of

this legislation one more time, a great deal was made of moving into

the private sector. Mr. Speaker, the official administrator moves out

of the private sector and becomes the public trustee and can deputize

deputy administrators. We now have 12 of them around the province. Most

of those will be redeputized to continue to do the work they now do.

Section 41, which was referred to during debate, is a

section which has

not had anyone under it within the public service since early in 1950.

To hold that up as some example of moving people outside of the civil

service is just consummate claptrap. It is fatuous untruth, and it

ought not to go unmentioned in this House. Mr. Speaker, we have added

20 people to the public trustee's office in order to do more service

around the province of British Columbia.

This could be done

in committee, but the reason it is being done here is because I'm not

going to let the falsehood of a straw man stand unchallenged. I am not

going to allow that to stand unchallenged, because the people deserve

better.

MR. BLENCOE : We have continued to see this Attorney-General abuse the rules of this House — the honourable rules of this House —

and I ask you once again to bring this member to order, Mr. Speaker.

We're tired of the rules being abused by this member. My colleague the

House Leader quite accurately says that this member has become quite a

bully in this Legislature. We're tired of you abusing these rules.

HON. MR. REE :

Mr. Speaker, on a point of order, I haven't heard the Attorney-General

identify any member in this House with reference to his comments, and I

notice that member for Victoria standing up objecting. Do the shoes fit

that member?

HON. MR. BRUMMET : I guess the point has

been made by the Solicitor-General, Mr. Speaker, in that I distinctly

heard the member talk about the falsehood of a straw man. I didn't know

that anybody was going to identify themselves in that category.

DEPUTY SPEAKER :

It might be an appropriate time to once again remind hon. members of

the necessity for parliamentary language in this House. I would just

remind hon. members that good temper and moderation are the

characteristics of parliamentary language. Parliamentary language is

never more

[ Page 7618 ]

desirable than when a member is canvassing the opinions and conduct of his opponents in debate.

The minister closes debate on second reading.

[3:30]

HON. S.D. SMITH :

Mr. Speaker, I agree with you wholeheartedly. The most parliamentary of

all language is the truth, and that's what I'm asking be spoken in this

place.

To go back through the principles of this

legislation, to enumerate them so that even the first member for

Nanaimo (Mr. Lovick) can understand them, this legislation parallels

legislation which we brought in with respect to the public trustee's

office. In both instances we have provided a situation where the moneys

that are paid into the public trustee's office are directed not through

general revenue but back to the services for the people who most need

them. We have enhanced the service level in the public trustee's office

greatly this year as a result of that. We have added more people to

provide service, we have added new technology to provide service, and,

in all, we have greatly improved the service.

We have

identified an area under the official administrator's situation where

the standards for administration are not evenly applied all across the

province of British Columbia, and the authority for that application

does not rest in anyone who is responsible directly to this

Legislature. We are going to change that around by making the public

trustee the official administrator for the province of British

Columbia. That — if these screaming great twits who have been debating this thing could understand it — is

the opposite of privatization. That brings the responsibility into the

hands of the official administrator, who is the public trustee. Then

that individual will be able to appoint deputies from around the

province of British Columbia who, not coincidentally, will likely be

the people who already have been doing that.

Why are we

dealing with

section 41 in this bill? Because it is redundant; it has

not been used since early in 1950 in the province of British Columbia,

so it makes no good sense to leave it there and let it clutter up.

That's why it has been done, and that was answered as well. So any one

of these people could get this information, instead of building this

phony straw man in order to alarm the aged and the infirm and crawl on

the backs of people who least need this abuse, in order for them to

score some cheap, fatuous, political points by that member for

Esquimalt-Port Renfrew. Mr. Speaker, I move second reading of this

legislation.

Motion approved.

Bill 33, Estate

Administration Amendment Act, 1989, read a second time and referred to

a Committee of the Whole House for consideration at the next sitting of

the House after today.

HON. MR. BRUMMET : Mr. Speaker, I call second reading of Bill 40.

HEALTH PROFESSIONS

AMENDMENT ACT, 1989

HON. MR. DUECK : The principal item being dealt with in this bill is the authority for professional groups — chiropractors, optometrists, podiatrists and physiotherapists —

to regulate the use of corporations by members of the respective

associations. While there are no objections to the use of corporations

by these professionals, there has previously been no authority to make

rules about the use of such corporations.

The earlier

concerns of respective licensing bodies about such matters as

professional liability of individuals and shareholdings within the

corporation have been addressed in these amendments. The actual

provisions are the same for each profession, with the exception, of

course, of the name of the profession and the type of corporation.

Included

in the amendments are the following items: delivery of professional

services is restricted to either a member of the professional group or

a person supervised by him or her; corporations will be approved by

each regulatory body using a permit system; voting shares can only be

held by licensed members of the profession; all directors of the

corporation must be licensed to practise that profession; no

professional corporation may engage in any activity other than that

profession that gives rise to income from business; no person other

than a licensed professional may use a proxy voting, trust or other

type of voting agreement; the personal liability of a professional for

negligence is not affected by the use of a corporation — in

particular, the professional will continue to be subject to the laws

relating to judiciary, confidential and ethical relationships.

Improper

use of a corporation or contravention of various sections of the act or

rules may result in a reprimand or fine or in suspension or

cancellation of the permit. A standard rule-making power is conferred

on the board to deal with the procedural requirements related to these

amendments.

The amendments related to corporations are the

only amendments that are being made to the Optometrists Act and the

Podiatrists Act. In the case of the Chiropractors Act, there are two

additional matters being addressed with these amendments. Firstly, the

chiropractic association is being converted to a college. The effect of

this is that the licensing body will now be restricted to matters

related to regulatory concerns. That is, the British Columbia College

of Chiropractors will deal with registration and discipline of

chiropractics and chiropractic corporations. It will not be involved in

economic or other professional interests — for example, negotiation with the Medical Services Plan over annual payment schedules.

Secondly,

amendments are being made to the act that would permit the

establishment of a school of chiropractic in British Columbia. If a

decision is made to establish such a school in the province, these

amendments will ensure that students and teachers at such a school will

be able to carry on with the study

[ Page 7619 ]

of chiropractic without being required to register under this act.

connection with the Physiotherapists Act, changes in addition to the

corporation provisions relate to the means by which remedial gymnasts

can be registered under the act. Amendments made late in 1987 were

discovered to have been based on incorrect information and as a result

were never brought into force. These amendments will repeal and replace

the incorrect provisions. Because of the more limited training that has

been received by these individuals, there is provision for limiting the

scope of practice of remedial gymnasts at the time of registration. One

further matter in this act relates to the authority for

physiotherapists, under the direction of a medical practitioner, to

either administer drugs or treat a fracture of a bone.

The

last item of this bill relates to the Psychologists Act. There are two

basic aspects to the amendment. Firstly, as with the chiropractors, the

association is being converted to a college. Again, this will have the

effect of limiting the licensing body strictly to regulatory issues.

Secondly, the college has had very inadequate provisions relating to

discipline These provisions are being replaced with much broader, more

comprehensive provisions. For example, the college can now deal with

former members Previously a person charged with incompetence or

misconduct could resign at any time prior to a hearing and avoid any

blemish on his or her record As well, there will be new authority to

attach conditions to a licence or suspend a licence prior to a hearing

if the board considers that there is sufficient risk to the public

without such action. Such an order can be appealed to the Supreme Court.

Mr.

Speaker, these amendments strengthen the authority of the licensing

bodies to regulate their respective members, and I am pleased to have

the opportunity to propose them to the Legislative Assembly.

MR. PERRY :

I had a very pleasurable walk with the Minister of Health last Friday,

and it's a nice situation to be able to rise to support one of his

bills.

We've reviewed the bill, and I'm pleased to thank

the minister for the courtesy of the briefing by his officials. That

was greatly appreciated. His officials took extra time out of their

schedule at short notice and enabled us to study the bill more

comprehensively and, I think, to prepare a more intelligent response

than we might otherwise have been able to do.

I think the

minister has really stated for the House the intents and purposes of

this bill. There is not really anything terribly controversial in it. I

would simply note that in

section 19 the definition of "psychologist"

is repealed, and none is substituted. I might ask the minister to

respond to that later.

section 22, I might simply serve

notice to the minister of a question that I may bring up in the

clause-by-clause reading: the bill as written appears to imply the

ability of the College of Psychologists to compel attendance by a

patient as a witness. I have some concerns about whether this might

violate patient confidentiality, and I suspect they can be answered.

Having said that, we have the delight to announce our support for the

bill.

DEPUTY SPEAKER : Hon. members are notified that pursuant to standing order 42, the minister closes debate.

HON. MR. DUECK : Mr. Speaker, I move that the bill be now read a second time.

Motion approved.

Bill

40, Health Professions Amendment Act, 1989, read a second time and

referred to a Committee of the Whole House for consideration at the

next sitting of the House after today.

HON. MR. BRUMMET : Mr. Speaker, I call second reading of Bill 48.

[3:45]

ASSESSMENT AMENDMENT ACT, 1989

HON. MR. COUVELIER :

This bill makes a number of amendments to the Assessment Act. First,

appeal procedures are improved by enabling the Assessment Appeal Board

to become the registrar of board appeals. This means that the board

will assume the administrative responsibilities for accepting appeals

to the board, scheduling the hearing of appeals and ensuring that the

necessary people are notified about the filing of the appeal and the

hearing date. Presently the assessors assume these responsibilities,

which could be seen to be in conflict with their role as a party to the

appeals.

In general this amendment makes the procedure for

appealing to the Assessment Appeal Board simpler, easier to understand

and therefore more accessible to members of the public. Additionally,

specific statutory dates are now set for the filing of appeals and the

notification of parties, to prevent surprise appeals and to ease

scheduling difficulties.

Secondly, Mr. Speaker, this bill

introduces an objective method for setting rates used to value

improvements owned by utility companies such as cables, towers,

pipelines and railway tracks. Utility property has historically been

assessed on the basis of rates set by the assessment commissioner. The

Assessment Act provides that these rates are subject to appeal, but it

does not set out the manner in which the assessment commissioner is to

establish the rates. Consequently the B.C. Assessment Authority and

concerned utility companies have spent a great deal of time in court

arguing about the proper method for setting the rates.

[Mr. Speaker in the chair.]

The

method of setting the rates used to assess improvements on

utility-class properties needs to be clarified. Only by establishing an

objective method of setting these rates can we maintain the stability of

[ Page 7620 ]

municipal

tax bases. Generally the new rates will be based on the present cost of

constructing or installing the item being valued. Once these rates are

set at the beginning of each assessment cycle, they will continue to

remain effective for the full two-year assessment cycle.

The

bill also provides that appeals to the Assessment Appeal Board may be

made with respect to the rates set by the assessment commissioner if a

taxpayer believes the assessment commissioner did not follow the

required methodology in setting the rates. If the appeal is successful,

the board shall require the commissioner to review his rates for the

purpose of setting new rates.

The sections of the bill

dealing with the setting of rates for utility properties by the

commissioner will be effective beginning with the 1987 taxation year.

This validates the methods actually used to establish the

commissioner's rates for utilities properties since that time. Appeals

already in progress against the rates shall be heard and decided only

on the basis of the methodology set out in this bill. If the assessment

appeal board has already heard and made a decision on an appeal of

utility rates between 1987 and 1990, the appeal may be remitted to the

board for reconsideration. Retroactive validation of the commissioner's

rates for utility class properties is necessary to prevent the

possibility of large tax refunds and to ensure the future stability of

municipal and rural area tax bases.

Recently, pipeline

companies unsuccessfully appealed the rates on their pipelines to the

assessment appeal board for the 1987, 88 tax years. That decision has

now been appealed to the B.C. Supreme Court. The companies argue that

the commissioner's rates for these improvements cannot be validated.

The same companies have also appealed the commissioner's rates

applicable to their pipelines for the 1989, '90 tax years. In addition,

other rates for railway trackage and power lines have also been

appealed by various companies. If the pipeline companies' appeal

against the 1987, 88 rates for pipelines is successful, significant tax

refunds will be required to be made to those companies by affected

municipalities. The appeal of the 1989, 90 rates increases the

potential for further large tax refunds. This bill also provides that

unless the rates are successfully appealed on the basis of the rate

methodology set out in the bill, they are validated.

Thirdly,

this bill deals with two further court decisions which may also create

property tax instability. This is a perennial problem. The Assessment

Act is vague and unclear in many parts and provides ample opportunity

for legal dispute. These disputes can often have effects that ripple

through the system causing disruption for municipalities and taxpayers

not involved in the initial disputes. The government is determined to

deal with this problem through a comprehensive administrative rewrite

of the Assessment Act. However, in the interim, we must once again deal

with particular current problems. To do this, the bill introduces

legislation to validate a number of orders-in-council and regulations

passed since June 30, 1984 in respect of classification, valuation or

eligibility for exemptions for assessment purposes. This is being done

to overcome the effects of a recent B.C. Court of Appeal decision which

held that where a regulation was passed after June 30 in any year, it

could not be given effect so as to change the value of a property for

the next assessment roll. The Assessment Act sets the valuation date

for the purposes of the assessment roll at the immediately preceding

July 1. It had previously been thought that changes could be made

between July 1 and September 30 issuance of the assessment roll.

also takes action to validate the classification of churches and church

halls for 1989 taxation. This is necessary because a court decision

resulted in this classification being changed last fall. Subsequently,

the government made an amendment to the property classification

regulation to specifically reinstate a previous classification of

churches and church halls. However, there was some question that this

may only be effective for the 1990 and following tax years. This bill

validates the regulation to ensure the correct classification of

churches and church halls for the 1989 tax year.

Fourthly,

this bill also addresses several concerns of taxpayers, such as those

owning mobile homes who suffer the destruction of their mobile homes

late in the year. The present Assessment Act has no provision to permit

their assessment to be changed quickly to reflect the reductions in

value caused by the loss of their mobile home. This means that in the

following tax year, a taxpayer must pay taxes on his property as though

his mobile home still existed. In the event that a new mobile home was

moved on to the property before the end of the year, the Assessment Act

requires that it be assessed. This can result in double taxation. This

amendment provides that in these circumstances, assessments can be

immediately changed to prevent tax hardship in the following year.

Similarly, where B.C. Hydro — which is entitled to a partial tax exemption —

buys or sells property late in the year, there was no provision in the

Assessment Act to change property assessments to show a change in the

exemption status for the following tax year. This bill provides that

this change can be immediately made to the assessment roll and

therefore be applicable for tax purposes in the following year.

Finally,

the bill makes several small administrative changes. For example, it

grants the Minister of Finance and Corporate Relations the ability to

replace members of the court of revision who have become unable to

complete their term on the court. Until now, the

Lieutenant-Governor-in-Council was required to make all appointments to

the court of revision. This amendment should ease the administrative

burden on the Lieutenant-Governor-in-Council by also allowing the

minister to make appointments which are necessary to complete a term.

The Lieutenant-Governor-in-Council will continue to make all full-term

appointments.

Mr. Speaker, Bill 48 is an attempt to improve administration of the assessment appeals system,

[ Page 7621 ]

maintain

property tax stability, address concerns of taxpayers with respect to

inequitable assessment and tax treatment and improve administration. I

move second reading of this bill.

MR. CLARK : As the

minister said, it appears that virtually every year there are

amendments to the Assessment Act, and they're generally reactive in

nature to particular court cases. I suppose that in a perfect world

that wouldn't be necessary, but it's always been the case, and I think

it's necessary, by and large, in many jurisdictions.

this side of the House we look forward to a comprehensive rewrite, as

the minister suggested, which would clearly be a more desirable way to

deal with the changes necessary.

I have a number of

questions regarding specific changes with respect to valuation of

utility property, which I think is of great interest to some rural

areas, small towns and communities that I've dealt with in B.C. The

questions are really simple ones: who wins, who loses by the new

valuation methods and the like; and some other queries regarding

specific sections. But in general, on the surface, I don't see anything

in this bill which would cause concern, or at least opposition, on this

side of the House. Some of the concerns we'll deal with in committee

stage.

MR. SPEAKER : Pursuant to standing orders, I advise the House that the minister closes debate.

HON. MR. COUVELIER : I move second reading of the bill.

Motion approved.

Bill

48, Assessment Amendment Act, 1989, read a second time and referred to

a Committee of the Whole House for consideration at the next sitting of

the House after today.

HON. MR. BRUMMET : Committee of Supply, Mr. Speaker.

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

ESTIMATES: MINISTRY OF FINANCE

AND CORPORATE RELATIONS

On vote 76: new programs, $45,000,000 (continued).

MR. CLARK :

I would appreciate it if Mr. Hyndman, who I'm sure is here or on his

way here at the moment.... The minister nods his head. It's not that

the minister isn't fully aware of these issues, but it would be

desirable to move into them with his staff here. As the minister knows,

I will continue for a while yet raising concerns about the Vancouver

Stock Exchange and particular players.

I might say, though,

in Mr. Hyndman's absence, that I have been much impressed with attempts

by Mr. Hyndman, Mr. de Gelder and others. They have clearly been moving

in the right direction with respect to the regulation of the Vancouver

Stock Exchange. Having given kudos to Mr. Hyndman before he got here,

now we can proceed with the less desirable aspects of my remarks.

left off with matters relating to Ferdinand Marcos and the Vancouver

Stock Exchange, and I will proceed with those in a few minutes.

[Mr. Rogers in the chair.]

think I will just recanvass, very briefly, Juan Carlos Schidlowski,

because more dealings of Mr. Juan Carlos Schidlowski have recently been

brought to my attention, and I thought I might canvass them with the

minister. As I stated before, Mr. Schidlowski is involved with Zurfund

on the Vancouver Stock Exchange through subsidiaries of Zurfinanz. I

might note that the newspaper reports of that account, I think, are

wrong, and I don't think that was my fault, but they may well have

been, because I think Mr. Schidlowski owns 96 percent of Zurfinanz and

not 98 percent.

It's come to my attention that Zurfund has

also been involved with another company on the Vancouver Stock Exchange

called Kap Resources. This is an interesting one. I know it's not

appropriate before I do that to show pictures in the House, and I won't

do that. I know that Mr. Hyndman and probably the minister are aware of

these rather spectacular graphs from Napa Resources and Zurfund. I just

might make note that Napa Resources had 2,115,001 shares and shortly

thereafter, when it was renamed Zurfund International Ltd., after the

RTO, it had 12,974,228. As I said in the House the other day, Mr. Juan

Carlos Schidlowski received in exchange for the RTO about 7.6 million

shares, which would have made him — just crudely — about 60

percent owner of Zurfund International Ltd. on the Vancouver Stock

Exchange. So very clearly Mr. Schidlowski, at least at that time, was,

and I'm sure remains, a major player in that VSE company, albeit

currently through the subsidiary.

In terms of the major

Zurfund International Ltd. on the VSE, I don't know how many shares Mr.

Schidlowski continues to hold. He may well have got out at $3, which

would have been rather worthwhile for him to do, I'm sure. He probably

got rid of a few shares at that time.

Anyway, Kap Resources

was brought to my attention this morning as a result of newspaper

accounts on the weekend. Kap Resources is quite interesting. The

company, Kap Resources, went from 60 cents to $4.50, and it was a

rather interesting VSE deal. I'm just reading from Stockwatch —

I'm sure the minister and his staff know about Stockwatch — where it

says that Mr. Donald Busby, who is with Kap Resources, reports: "An

agreement in principle has been reached for the company to participate

in a joint venture project in South America. The participants in the

joint venture will be Zurfund International Ltd. and the company. The

company has agreed to acquire its interests from the previous joint

venture partner" — and so on.

[4:00]

[ Page 7622 ]

Kap

Resources, partly as a result of this announcement and the involvement

of Zurfund, soared in price from 60 cents to $4.50. I'd like to give a

little pat on the back to the Vancouver Stock Exchange, because on June

9 the VSE halted share transactions in Kap Resources at $4.85, which

was a little bit late. Nevertheless, they did seem to catch that this

was a perfect shell company with which Mr. Schidlowski could undertake

his normal activities. Of course, nothing has happened to Zurfund, who

participated in Kap; so it might twig some regulator's attention that

Kap has been frozen in terms of its actions and to this day is not

allowed to be traded. It might cause regulators to look beyond Kap and

at Zurfund International.

While doing that, I think it

would be important to draw to the minister's attention that private

placements, of course, play major roles in these kinds of shell games,

and private placement Kap Resources was with Charterhouse Bank and

Trust — 175, 000 shares. The minister might be aware of

Charterhouse Bank and Trust, because it's the phony Bahamas bank used

by Carter and Ward and their companies. It's the bank used by Capital

Reserve, which was Bobby Schlichter's. It was also the bank used by

Macrotrends, which was the subject, of course, of the Barron's

article

on Norty Cooper. So Charterhouse Bank and Trust is a perfect laundering

vehicle and has in fact been, I submit, a laundering vehicle in

connection with previous issues on the VSE.

What happens — just so that the minister knows —

is that dirty money ends up going to the Bahamas, which is through

Charterhouse Bank and Trust. It then purchases shares through private

placements on the VSE. It's an exempt institution, so as an exempt

institution it can trade in those shares immediately Dirty money is

placed in the Bahamas in the Charterhouse Bank and Trust, and that

money is then used to buy private VSE placements. Given the track

record of Charterhouse Bank and Trust, given the fact that it has been

involved in the most notorious VSE deals in the last few years, might

it not be appropriate that Charterhouse Bank and Trust not be allowed

to be an exempt institution and not be allowed to buy private placings

on the VSE? I wonder if the minister has any comments before I proceed.

It's

certainly possible that the reason Kap Resources trading was halted on

June 9, just a couple of weeks ago, is that it came to the attention of

the VSE that Charterhouse Bank and Trust was involved. If that's the

case, I commend them for reacting to the presence of this notorious

phony Bahamas bank, but I'm not sure of that. Perhaps the minister

could tell us whether he shares our concern about Charterhouse Bank and

Trust and whether he realizes it has been involved in many of the major

scams in the last little while and is now involved with Kap Resources,

which incidentally is connected by way of joint participation in a

project with Zurfund International

HON. MR. COUVELIER :

If the member has specific evidence that there is wrongdoing, the

Securities Commission, of course, would like to hear of it. As I

mentioned on Friday, it isn't sufficient for a regulator to be reacting

to mere innuendo or suspicions. Hard evidence must be obtained. That is

a longstanding principle of law, and one that I think most British

Columbians would like to see remain in place.

I'm not in a

position, as I've said before, of confirming or denying the state of

current investigations, so as you know full well, hon. member, I cannot

speak to the individuals you have mentioned here today. I can't add

much to the level of knowledge in a public forum. I repeat my offer to

you, which I've made to the previous critic: if you have a genuine

desire to obtain updates as to the state of investigations and the

obtaining of evidence on any specific allegation, we would be pleased

to share that with you on the assumption it would be treated

confidentially. Because of my statutory responsibilities, I am unable

to deal with your innuendoes in this public forum.

Dealing with the issue of the holding-period for some of the promoters' stocks, you might be interested to know — if you didn't notice —

that we brought forward an order-in-council in recent weeks which had

the effect of requiring those people to hold their stocks for a minimum

of 12 months.

MR. CLARK : I wonder if the minister

could clarify that. I was asking about exempt institutions such as

Charterhouse Bank and Trust. Does this order-in-council deal with them?

HON. MR. COUVELIER : This would put a 12-month hold on private placements to exempt purchasers.

MR. CLARK :

That's indeed commendable, although it may have been easier to deal

with the exempt institutions like Charterhouse Bank and Trust than to

deal with all exempt institutions by such an order. It's simply a

question of whether it might be administratively easier to say that all

exempt institutions must do X — which is what it appears the

minister has said, and that's fine. It may also have been that there

are several clear... The minister might agree that Charterhouse Bank

and Trust — and I'll get to some others in a minute — has

such a notorious record with respect to the Vancouver Stock Exchange

that it would have been extremely easy to simply say that Charterhouse

Bank and Trust no longer can purchase private placements. It seems to

me that their record is so notorious....

I don't

necessarily expect you to confirm this, but my great suspicion is that

the reason the VSE halted the trading on June 9 was that it was brought

to their attention that Charterhouse Bank and Trust was involved. That

may well have been the trigger with which they came to realize that

this shell company was being manipulated by Juan Carlos Schidlowski,

and the Charterhouse Bank's involvement may have twigged them to that.

If that's the case, that's certainly worthwhile.

I won't deal at great length with Mr. Schidlowski. I am sure things are proceeding on that. I might just

[ Page 7623 ]

say

that the Kap Resources experience is also a classic case, given the

share.... They start out with tight shell companies essentially — or tight companies, as Napa Resources was —

and then they move on to issue shares to themselves. So they go from 2

million to 12.9 million, and then the cycle starts proceeding. They

keep deluding the investors about the quality of the shares, and they

keep moving money through.

Kap Resources is another classic

example of a company that was at 1.8 million shares, and the process

was just beginning, while the Vancouver Stock Exchange has now halted

trading. Again, I want to make it clear that it is certainly worthwhile

that they have moved to deal with that.

Mr. Chairman, I'll just be one moment; I've got so many tips — as they say in this business — that I've got to think and look at the same time.

The second member for Delta wanted to contribute, so I'll defer to him at the moment.

MR. DAVIDSON :

Mr. Chairman, I'd like to make a few comments regarding the VSE, and

they're very much along the lines of what I said last year. I think

there's a growing tendency for the minister's staff to forget that the

VSE is a venture capital market, and that we don't need the same rules

that exist in Toronto, and we don't want the same rules that exist in

Toronto. When you have a venture capital market, it's not the same as

an established market in Toronto. You don't need quarterly reports.

It's very unfortunate that your staff has inflicted on the Vancouver

Stock Exchange some of the toughest rules that little venture capital

companies have to deal with anywhere in the world. If you add the costs

of the legal fees, the accountants' fees and the need to send out

quarterly reports, you can't....

MR. MILLER : All those details.

MR. DAVIDSON :

They are little details when you're dealing in a venture capital

market, Mr. Member, because you can't.... You don't understand You see,

Mr. Chairman, this is the unfortunate part of the opposition; they

don't understand the difference between a venture capital market and a

market that has to be closely regulated and scrutinized.

It's

really sad that Vancouver has such a golden opportunity, and I must say

to the minister that we're losing it. We are losing the venture capital

market that Vancouver always had; we're losing it to Toronto. It wasn't

an isolated incident when Barron's and that other famous magazine, Forbes ,

happened to come out with an attack on the VSE at the very same time

They're supposed to be two separate magazines What a strange

coincidence that these two eastern dominated magazines would suddenly

come out and attack the VSE. Mr. Chairman, we have been trying to keep

a marketplace in Vancouver that's unique; it's called venture capital.

You don't put money into a venture capital market the way you put it

into stocks, bonds and other securities. It's venture capital.

It's

unfortunate, but I believe one of the problems is that some of the

members of the commission have been listening too much to the IDA. The

problem there is that they want our market to be like the Toronto

market. It's not like the Toronto market; it's a totally different

market.

MR. CLARK : You've got that right.

MR. DAVIDSON :

Again, Mr. Member, you have to understand that the Vancouver

marketplace has performed a vital service to many companies which

otherwise would never have gotten started. You know the list. Yes,

we've had scams; yes, we've had problems, and those problems have to be

corrected. But we're not going to correct them if we simply abolish the

Vancouver Stock Exchange as we've known it.

The idea of the

eastern-control people is to put Vancouver out of business. That's

simple: "Hey, what we'll do is keep feeding ammunition to the

opposition. Let them keep the smear, the slur and the innuendo going."

Make statements in the House that you wouldn't dare make outside; one

or two members have made statements outside which they may yet regret.

Mr.

Chairman, there are some very serious shortfalls in the Vancouver

marketplace right now, and they can be corrected quite easily. We have

two separate markets. We have a need, however, for a curb exchange to

be developed in Vancouver.

AN HON. MEMBER : Does that mean penny stock?

MR. DAVIDSON :

That means penny stock. It means that when you invest your money in the

curb exchange, don't expect a quarterly report, because there's not a

stock out there that, by the time the quarterly report is finished,

hasn't significantly changed from when it was printed. The cost factor

of some $50,000 a year to keep a little company in the venture capital

fund going is becoming ridiculous. It's outrageous that this kind of

money has to be put forward. It has no particular value, except to

drive our legitimate companies to the Toronto exchange and leave those

of less substance here in Vancouver.

There are a couple of

other things that could be done. We need to put in some different rules

for the directors who are currently in place. We need to make directors

of companies responsible for actions. We need to say to these people:

"If you are going to mislead the public deliberately and intentionally,

and you're doing so by any manner of fraud or whatever, we have a place

to look after you. It's called the courtroom system." We put those

people into court.

[4:15]

MR. CLARK : You know all about that, Walter.

MR. DAVIDSON : Yes, I know all about that. So do you, and you'll find out.

You

know, it's just not enough to simply say that Big Brother government

can do it all, because it can't. Right now the Vancouver Stock

Exchange, to a large degree, is a result of its own actions. It has

failed to address some of the basic needs their responsibility

[ Page 7624 ]

charges

them with. We must have directors of the Vancouver stock market who

will give full disclosure of their own personal holdings. It's not

enough to sit as a director of the Vancouver Stock Exchange unless you

too are prepared to give full disclosure. What's wrong with that? Why

shouldn't the general public have access to the disclosure forms of the

members of the Vancouver Stock Exchange, so that when actions are taken

or not taken, the general public and others can judge those actions

accordingly? These same directors must also be responsible for their

staff, their own brokers and their floor traders.

If we are

going to make some positive change in the Vancouver market, we need to

accept the fact that the Vancouver market is not the Toronto market. It

simply will not function with the rules you've imposed — the minister has imposed —

on the marketplace. It's not fair or reasonable or financially possible

for some of the smaller companies to conform to the rules and

regulations which the minister's office has put forward at this time.

It's

not enough that we have a situation where we have an overregulated

exchange. We have our own special animal called the assessment board,

made up of a group of engineers who actually pass judgment on whether a

property has any value or not. I don't know of any other exchange in

the world that has a group of people who actually pass judgment on the

property coming forward in any particular prospectus. There are

engineers in other jurisdictions who check the authenticity of the

statements being made, who reflect it on the engineering reports, but

to pass judgments on an actual piece of property sitting in a board

room? That's not their role. That's yet one other hurdle for the

Vancouver exchange.

I say to you, Mr. Chairman, that the

Vancouver Stock Exchange is as much in trouble today because of the

ineptitude of the exchange to direct its own activities as it is by our

regulators to try and put us onto the same course and same plane as the

Toronto Stock Exchange. It isn't going to work. Toronto has a long

history of firm, major companies. It's connected to the London exchange

and the NASDAQ exchange; it's got direct dealings with Boston.

are a venture capital exchange, and when we start to make the Vancouver

Stock Exchange sound like all the other exchanges in the world, it's

not fair. When the IDA and others put forward suggestions for rules and

regulations, they're not saying that this is to try and make Vancouver

better; it's to try and make Vancouver weaker, so that the rest of our

business goes to Toronto.

I say to you, Mr. Chairman, and

to the minister, that if we don't seriously re-evaluate the kind of

rules and regulations we've forced onto the venture capital companies

in this province, in this exchange, we jeopardize the entire Vancouver

Stock Exchange and the venture capital market that we've relied on.

I'm

not taking away for one moment the points being made by members of the

opposition or members of the public who say that there are glaring

examples. But we're not alone. It's not just Vancouver that has the

glaring examples. Wherever you're going to have a market like

Vancouver, Toronto, New York, London, Singapore or Australia, you're

going to have people who try and circumvent the rules and try and come

in for the quick dollar. But to try and broad-brush the entire

industry — as some members of the opposition are doing in this chamber —

is not fair, not responsible and not what is needed right now if we are

to turn the Vancouver Stock Exchange around and make it the venture

capital exchange it deserves to be.

HON. MR. COUVELIER :

I enjoyed that little dissertation. It cast my mind back to about a

year ago when the tenor seemed to be coming from a different direction

in the sense that at that time, the member — if I remember rightly —

was of the view that the Vancouver Stock Exchange might not have any

useful long-term purpose. But the member does us a valuable service by

dealing with the points he raised this afternoon. There's a delicate

balance that must be struck between the contributions that the

Vancouver Stock Exchange has made over the years to the development of

emerging new companies, principally in the resource sector —

although hopefully with the technological focus that's being brought to

new listings these days.... We might in the future be able to talk

about technology-related companies who have graduated to senior

exchanges like Toronto.

I do believe that it's true as a

general statement for us in British Columbia that about 20 percent of

the volume on the Toronto exchange is attributable to companies that

started in Vancouver. As they grew and developed, they migrated to

where there were larger sums of capital available to them. They became

more investment grade as they grew, and as a consequence, needed that

larger market to distribute their shares in.

Let's not lose sight of the fact that — as the hon. member points out —

the Vancouver Stock Exchange has had many successes. It is a high-risk

exchange, of course, because it's dealing basically with companies with

no track record. As a consequence, there will be a higher preponderance

of losers on the Vancouver Stock Exchange as opposed to other exchanges

dealing with senior stocks. A corollary of that is that when a venture

is successful, having started on the VSE, the potential for huge gain

is there. As a consequence of the great potential for gain, the

Vancouver Stock Exchange continues to attract a certain unique type of

investor: an investor looking basically for short-term gain, who moves

pretty quickly and plays the market much more aggressively than what

you would find on a more senior exchange. That's not negative.

hear the member of the opposition laugh. I don't see that as a negative

function at all. It seems to me it's a very necessary, useful device

which ensures that there's volatility in the Vancouver market and that

the opportunities that might be inherent in a stock are quickly

appreciated. So there's quick action and reaction all the time. That's

a dynamic that's normal with junior exchanges.

[ Page 7625 ]

The second member for Delta (Mr. Davidson) mentioned what he called the assessment board — I believe he was referring to the mining evaluation committee —

and spoke in less than complimentary terms about its performance. My

information is that that committee has done yeoman-like work, and has

prevented the sale of much "moose pasture" in British Columbia, and so

it does seem to me an appropriate agency, and I've not heard it

criticized in terms of the quality of their judgments. It's not to say

that the people they reject aren't disappointed. Nevertheless, I've

generally heard complimentary remarks about their performance.

The

great potential in the Vancouver Stock Exchange, of course, is

something that the member and I are ad idem on, and therefore we have

determined that we certainly don't want to throw the baby out with the

bath water, and we certainly don't want to destroy the viability of

North America's only regulated junior market. You think about that. If

Vancouver cannot perform properly in the interests of the consumer and

the marketplace, then no regulated junior market will be able to

perform anywhere. Vancouver has got a long lead in terms of managing

its operations. We, of course, since we took office, have only had the

Securities Commission for two years, so we don't have yet that vast

historical experience in the commission. But the record since the

commission has been in place, I think, illustrates the value of its

judgments. They have been successful in taking at least 60 players out

of the Vancouver market, and they continue to have something in the

order of 1,200 active files under investigation. So they are performing

a useful work, and they're making good progress.

The member

also made the point, which has troubled me now for a year and a half,

that the Toronto Stock Exchange seems to have been jealous of the

successes in Vancouver for financing junior companies. Principally, as

I understand it, Hemlo, that tremendous Ontario find, was financed on

the Vancouver Stock Exchange, and prompted the concern of the

government of the day in Ontario that they should not be financing

their junior companies in Vancouver but should rather be doing it at

home in Toronto. It's interesting. The Vancouver Stock Exchange is

presently where the Toronto Stock Exchange was about 40 years ago:

basically junior resource listings, and with the image that junior

companies attract.

Those who watched Toronto attempt to

move into junior markets were critical, and suggested they couldn't do

both: that is to say, run Canada's premier senior exchange and at the

same time attempt to put together a venture capital exchange. The jury

is still out on their success, but I do advise the hon. member that my

information is that within recent weeks, if not the last month or so,

there seems to be a waning of interest in central Canada in terms of

their ability to deliver a venture capital exchange, notwithstanding

they would much prefer to do so.

In any event, we are extremely sensitive to the possibility that we could be

over regulating the Vancouver Stock Exchange, and thereby could damage its long-term

viability. At the same time, we are of the view that there's much more that

we must do if we are to provide the consumers of the information they disseminate

with some modicum of comfort that the players have been investigated and the

project is deemed to have a possibility of success. Sometimes those attributes

haven't been evident in the past.

[4:30]

I could get into a little discussion about the future of the

Vancouver Stock Exchange, but I think I won't get into that subject at

the moment. There are many different directions that might be pursued

by the exchange in fulfilling its future and its opportunity. Let me

just tell the House that we as the regulators of the exchange are aware

of those options, in terms of future direction, and are discussing them

actively with many of the players.

MR. DAVIDSON : I

thank the minister for those replies. I would like to enlarge a bit or

maybe get a response to the aspect of creating a secondary or a curb

exchange.

There's no question when the minister says that

the public wants certain information and they want it in a timely

manner, etc. On an established company, that's certainly

understandable — a company that would be a long-term success and

would qualify for a full listing on a Vancouver Stock Exchange. But

there are many others that don't have that track record, the asset

picture, the growth record and the dividends. They are, in fact, an

idea — a big idea — that starts from an idea that someone

has. They put forward a prospectus and get some of their friends

involved, etc. But I say to the minister that to expect these companies

to comply in the same way as a major company which has at its disposal

an accounting firm and a legal firm to look after all the requirements,

to say to even the little companies: "You too must follow these rules;

you too must submit these quarterly reports...."

In a small

company, the fact is that from quarter to quarter there may be dramatic

changes or no changes, but the cost doesn't change. They still have to

make their same payments to the Vancouver Stock Exchange for their

quarterly listings. They still have to pay the accountant, the lawyer,

and all the other costs incurred, and in some cases that's a real

hardship.

I don't think that there are many companies on

the Vancouver Exchange today who, if they comply with all the rules and

regulations using the lawyers and the accountants who charge the

necessary fees, plus pay their fees, can stay in business for less than

$40,000 to $50,000 in a given year. That's a tremendous amount of money

for a venture capital company.

All I'm saying is that I

would hope that as we examine where we can go and what possible changes

we can make, one of the avenues we can look at seriously — and which was done before — is the establishment of a curb exchange, which basically says one very simple thing to the people who invest.

[ Page 7626 ]

Interjection.

MR. DAVIDSON :

Exactly. Buyer beware. We're saying: "Venture capital of the highest

nature." But if you want to put your $500 or $1,000 in and possibly

lose it all, you know what you're getting into.

MR. MILLER : You could buy lottery tickets.

MR. DAVIDSON :

You could buy lottery tickets. You could go to the racetrack. You could

go to Vegas or Reno. You could do all these things, or you could say:

"I believe that this little company has a real future. I believe that

this little company, which has identified this little piece of ground,

this little process or this little machine has a real chance of

success, and I'm prepared — instead of buying lottery tickets —

to put $500 or $1,000 into that company." But again, the rules can't

possibly be the same for this company as they are for the larger

company. All I'm asking is that instead of forcing the same regulations

as exist with the major companies who have the financial wherewithal to

comply, we simply say: "Yes, we will establish a curb exchange with

different rules, because it's a different scene."

[Mr. Rabbitt in the chair.]

HON. MR. COUVELIER :

The fact is that we do have quite a few special rules for VSE-listed

companies. We have local policies that allow special capitalization

rules for start-up companies. There are special exemptions for private

placements by VSE companies at lower thresholds than Ontario allows,

and our listing requirements permit start-up companies to trade on the

only regulated stock exchange for venture capital in North America, if

not the world.

As I understand it, the member is referring

to curb exchanges in the sense that they would be unregulated. Of the

prominent curb exchanges that I'm aware of, Denver has collapsed and no

longer exists; it has basically been discredited to the point that

investors lost confidence in it.

The Vancouver Stock Exchange board of governors is intending to create two boards, at least —

a junior and a senior board. It would be our hope that the senior board

would attract more and more investment-quality listings and that the

junior board would remain the venture board for start-up companies.

place a high degree of hope in the VSE growing as the world's premier

venture capital market. In order to capture the growth that I believe

is inherent in the potential, I believe that it has to be regulated. I

believe that we have to acquire and exhibit our ability to regulate

effectively, given the nature of a high-risk market, in order to

attract offshore companies to list on the VSE for their start-up

ambitions. I believe we'll have to give consumers around the world some

comfort that we are able to regulate those entities. I believe we're

doing it, notwithstanding the Forbes and Barron's articles and

notwithstanding the criticisms of the members opposite.

As the second member for Delta would know, the increase in foreign trading on the VSE is significant

There's

quite a bit of European capital attracted to the VSE. As a matter of

course, they understand the nature of the market, they understand the

opportunity for a big gain, and they also understand that the law of

averages being as it is, there will also be a majority of losers.

If we do our job effectively as regulators — that is, if the Securities Commission does its job effectively —

we should be able to continue to attract more and more foreign

interest, and that will build up the knowledgeable infrastructure in

the financial community in British Columbia which is one of the key

elements of this government's economic strategy.

MR. CLARK :

I might say that the comments from the second member for Delta are

similar to those of a lot of my friends who operate on the Vancouver

Stock Exchange. It's interesting that there are a lot of east-enders

who find their way down as promoters on the Vancouver Stock Exchange,

and they're constantly regaling me with remarks that the exchange has

become overregulated and bureaucratic, and it's defeating the purpose

of promoters. It's an interesting question which we could get into:

whether we want a stock exchange equivalent to the Toronto Stock

Exchange, with government money invested in it and the like, or a

venture capital exchange such as we have had over the years.

People who lose money in the exchange legitimately can all accept the caveat emptor

notion. The problem is that we're really dealing with international

criminals, fraud, wash-trading, high sales and the like. As the second

member for Delta says, that's a different matter. I know the minister

doesn't agree with this characterization, but it's my intention very

strongly to support the notion of caveat emptor within a game that

doesn't have rigged rules, within a game that screens out notorious

criminals, international swindlers and the like.

It's with

that in mind that I raise questions about people like Juan Carlos

Schidlowski and how it is, with their track record, that they're

allowed anywhere near the Vancouver Stock Exchange. It's in the same

spirit that I raise questions about banks — phony banks, essentially —

like the Charterhouse Bank and Trust and how they are allowed to

participate on the exchange, given their track record. Contrary to what

members may think, the second member for Delta and I share some of the

same concerns. We may differ in our approach, but I recognize it as

legitimate debate regarding the role of the Vancouver Stock Exchange

and how it participates in our financial structure.

It's very clear that the government's intention is to emulate the Toronto Stock Exchange and — we'll get into this debate in another bill —

to use public money, in addition, to elevate the Vancouver Stock

Exchange to compete with the Toronto one. That appears to be the

intention.

I will now leave Juan Carlos and Kap Resources and Zurfund for a bit, and I'd like to turn again, if I can — because I didn't get any answers from the minister — to the firm First Vancouver and its

[ Page 7627 ]

association

with Ferdinand Marcos or people connected to him. I don't want to

recanvass all that I said the other day, but it seems to me there are

very serious questions remaining about the ability of the stock

exchange and the Securities Commission to screen the type of

individuals who become involved in the Vancouver Stock Exchange —

again in this case not just a company listed on the exchange but a

company buying a seat on the Vancouver Stock Exchange. I see a seat was

sold today for $35,000, which was less than First Vancouver paid, but

then again, they had lots of money from other sources.

Maybe

we could deal with some specific questions with respect to First

Vancouver. As I said the other day, the two individuals involved — three really, but two directly involved —

in lining up the funds for First Vancouver were Mr. Delmas and Mr.

Mabanta. I want to ask some questions regarding why the Securities

Commission took no action against those two individuals, particularly

in light of what Mr. de Gelder very clearly said in evidence before the

Securities Commission regarding Mr. Delmas. He said:

"There's one person in Vancouver who's supposed

to be running the day-to-day operations but who doesn't really have effective

control of the firm, because his capital is small and he depends on major capital

infusions from these other sources. He didn't know who these people were,

either, or else he did and wasn't telling anyone, and either of those is

a rather alarming prospect."

Can

the minister tell me why, in light of Mr. de Gelder's comments, no

sanctions have ever been taken to this day against Mr. Delmas and he

continues to operate for the successor firm on the Vancouver Stock

Exchange?

HON. MR. COUVELIER : I'm advised by the

chairman of the Securities Commission that Mr. Delmas brought this

whole issue to the commission's attention. As I mentioned on Friday to

the hon. member when he raised the same issue, Mr. Delmas no longer has

the company. Mr. Delmas seems to have not benefited from the

consequence of his actions. Indeed, it might be said that Mr. Delmas,

having been the one who brought it to the commissioner's attention in

the first place, is the one who seems to have suffered a large amount.

I mentioned to the member before, it's not for the government to

explain these things. It is for the Securities Commission to respond to

them, and if the member has any criticisms in that respect, we invite

him to discuss them with the Securities Commission.

When I

said this same thing last week, there were howls of criticism across

the floor. Admittedly, the gallery was larger at that time than it is

at the moment, but nevertheless, the suggestion seemed to be that

political interference in this process was a desirable thing. At that

time I went to some lengths to explain to the members opposite that

it's important that the regulatory body be removed from political

interference.

I realize that socialists might have