1986 Legislative Session: 4th Session, 33rd 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, MAY 26, 1986

Afternoon Sitting

[ Page

8337 ]

CONTENTS

Oral Questions

U.S. shake and shingle tariffs. Mr. Skelly — 8337

Assessment Amendment Act, 1986 (Bill 7). Committee stage 11 — 8340

Mrs. Wallace

Mr. Mitchell

Third reading

Insurance For Crops Amendment Act, 1986 (Bill 16). Committee stage — 8343

Ms. Sanford

Third reading

Income Tax Amendment Act, 1986 (Bill 8). Second reading. (Hon. Mr. Curtis)

Mr. Stupich — 8343

Hon. Mr. Curtis — 8345

Division — 8345

Municipalities Enabling And Validating Amendment Act, 1986 (Bill 25). Committee stage — 8345

Third reading

Health Improvement Appropriation Act (Bill 5). Second reading. (Hon. Mr. Curtis)

Hon. Mr. Curtis — 8345

Mr. Stupich — 8346

On the amendment

Mrs. Dailly — 8347

Mr. Cocke — 8348

Hon. Mr. Curtis — 8350

Committee of Supply: Ministry of Consumer and Corporate Affairs estimates. (Hon.

Mr. Veitch)

On vote 14: minister's office — 8351

Hon. Mr. Veitch

Mr. Lauk

Mr. Mitchell

Erratum — 8361

MONDAY, MAY 26, 1986

The House met at 2:04 p.m.

Prayers.

HON. MR. GARDOM: Mr. Speaker, I would like to introduce to

all members a man who needs no introduction, a truly great Canadian, a

great British Columbian and a great member from Okanagan South. We

thank you, Okanagan South thanks you, B.C. and Canada thank you for

your dedication, for your perseverance, for your hard work and for your

great vision, resulting in so many outstanding and lasting

accomplishments.

You have established a legacy, Mr. Premier, of remarkable

performance. May I express to you and to Mrs. Bennett, Audrey, our

every continuing and best wish over the days and the weeks and the

months and the years to come. Thank you so much.

MR. SKELLY: Mr. Speaker, if the comments can die down a

little bit over there, it's not often that the Leader of the Opposition

gets up in the House to pay any kind of recognition at all to his

political adversary.

But I do want the Premier to know, on behalf of the official

opposition, that although we haven't agreed on many occasions or even

had the opportunity to agree on many occasions, we do respect the

contribution that this gentleman has made to the public life in the

province, to the government and the Legislature; that we are aware of

the sacrifice that is entailed in choosing that kind of vocation. We

feel that over the past ten years the Premier has done a long and

difficult job in representing the interests of the province of British

Columbia in his own way.

We wish that the Premier and his family enjoy their retirement and

whatever future vocation — with some exceptions — the Premier may

choose to embark upon. So on behalf of the opposition, Mr. Speaker, our

very best wishes for his retirement.

HON. MR. NIELSEN: Mr. Speaker, I'd like the House to

recognize two distinguished visitors in the gallery today: the

president of the B.C. Medical Association, Dr. Gerry Karr, and Dr.

Norman Rigby, executive director of the BCMA.

MRS. JOHNSTON: In the gallery this afternoon we have some

Katimavik participants who have been visiting in the Surrey–White Rock

area: Greg Knebel from Ottawa, Maureen Brennan from Nova Scotia, Mike

Prince and Josee Lessier from Montreal, Dean Schutz from Vancouver, and

Marji Richey, Paul Wallach, Beatrice Tomaselli and Anna Dawson from

California. I would ask the House to please make them welcome.

HON. MR. GARDOM: Mr. Speaker, today is the natal day of a

delightful lady, Mrs. Beatrice E. Carty, from the riding of

Vancouver–Point Grey. Her horoscope reads that she is staunch,

determined and also has a remarkable sense of humour. Most of all,

she's a hundred years young today. I know all members would like to

congratulate her and wish her the best of welcome.

Mr. Speaker, I would like at this point to acknowledge and, I know, express

the heartiest congratulation from every member of the assembly to the Canadian

team on their very successful conquest of Everest, particularly the first North

American lady climber ever to climb the highest mountain in the world, Sharon

Wood, a former resident of Burnaby and of Field. I'd say all members should

join with me in an expression of congratulation to her and to Dwayne Congdon,

another Canadian Rocky Mountain climber, and to everyone associated with the

outstanding endeavour.

Oral Questions

U.S. SHAKE AND SHINGLE TARIFFS

MR. SKELLY: A question to the Premier. In the past few days,

protectionist measures taken against Canada by the United States have

cost jobs in the shake and shingle industry in this province and

threatened thousands of other jobs in British Columbia's major

industry. In view of the fact that comprehensive free-trade

negotiations could take months and even years, can the Premier tell me

what action he has planned to maintain jobs in the shake and shingle

industry in this province or in British Columbia's forest industry,

which is threatened by U.S. protectionist measures while these trade

talks are going on?

HON. MR. BENNETT: Yes, Mr. Speaker, because the concern over

the forest industry is not a recent concern but one we have been

fighting since 1982, assisting in the fight against the courts in the

countervail case, the decision on which was handed out in 1983, the

review, and also the political action that's been taken in the U.S. to

provide a political solution.

In regard to the shakes and shingles, while this may be a new and

instant issue to many who are now talking about opposing it, I wrote to

the Prime Minister on May, 7 and I will ask leave to table this letter

at the conclusion. I will quote from the letter:

"My Dear Prime Minister:

"As you know, an investigation has been conducted under

section 201 of the U.S. trade laws regarding imports of wood shingles and shakes

from Canada. The International Trade Commission has determined injury to U.S.

industry and has forwarded recommendations to President Reagan. The commission

is divided in its recommendations, with one half recommending no restrictions

and the remaining three commissioners recommending a 35 percent tariff be applied.

The matter now rests with the President, who has full discretion in deciding

what action, if any, is to be followed. He is required to announce his decision

on or before May 24, 1986.

"I am deeply concerned that the President may in fact

decide to impose a tariff, perhaps for extraneous reasons. He may

decide to show that he is not reluctant to act on

section 201 cases.

Furthermore, in view of the difficulties surrounding the Senate finance

committee decision to provide the President with fasttrack authority,

he may decide to demonstrate a tough posture vis-Ã -vis Canada.

[2:15]

"This matter is of great importance to Canada and in

particular to British Columbia. The jobs of an estimated 4,000

workers...are threatened. I urge you to contact the President directly

so as to convince

[ Page 8338 ]

him not to act in any way against Canadian shingle and shake

imports into the U.S.

"In making this overture, I assure you that Canada is

on good grounds. Any action taken against Canadian imports would not

assist the U.S. Industry, which is facing a shortage of domestic raw

materials and severe competition from substitute products. Moreover,

action against Canada in this regard can only threaten the climate for

Canada-U.S. trade negotiations. Your direct intervention on behalf of

Canadian industry and workers is most important and would be greatly

appreciated."

Yes, Mr. Speaker, we have taken this action — not after the

President made his decision, but well in advance in order to make sure

that Canada presented the case directly to the President, who had the

power to make such a determination.

MR. SKELLY: Would the Premier advise if the response to his

letter, if there is a response, is the same one that the Prime Minister

gave in response to his request for a standstill, and that is an

absolute no? Will the Premier advise the House if he is concerned that,

again, central Canadian interests are being traded off by this Prime

Minister against British Columbia's interest in preserving its markets

in the United States? Would the Premier advise whether he has had a

response to either of his letters to the Prime Minister?

HON. MR. BENNETT: I would love to respond to the leader of

the New Democratic Party in the House because, quite frankly, the

free-trade talks are not responsible for countervail actions or

hearings. In fact, most of these initiatives were taken in absence of

any talks being undertaken or committed to which would provide a forum

to both protect what we have and be proactive in accessing new markets.

Only those who oppose the free-trade talks — only the national NDP and

its leader, Mr. Broadbent, who oppose the free-trade talks — oppose the

only way in which we can effectively prevent such measures from taking

place, because advocating the status quo is to allow the United States

to go on taking measures of countervail, protecting their own industry

whether there is subsidy proved or not. They are the ones who have been

most cynical and hypocritical in the way they have faced these talks.

I would suggest to the Leader of the Opposition that he disagree

publicly with his national leader. He now has a reason to see the

benefit not only of saving jobs in British Columbia, where they are

attacked, but of being against further countervail measures, by having

free-trade talks with a standstill agreement.

Now I'd like further, because this issue is of such tremendous

importance, to talk about the solutions, because there is a method in

which we can do that. I want to talk about a further letter I sent to

the Prime Minister today, and I will ask to table this letter as well.

It says:

"My Dear Prime Minister:

"On May 7, I wrote to you in regard to the possibility

that President Reagan might impose a tariff on shake and shingle

imports into the United States. At that time I asked you to contact the

President directly to ensure that this action did not take place. Last

week the President did in fact impose a tariff of 35 percent on such

imports. The jobs of 4,000 British Columbians and a $250 million

industry have been put at risk as a result of the President's

unilateral punitive action.

"I share your view that the President's actions are a violation of the spirit of the free-trade negotiations."

MR. WILLIAMS: Whose ally are you, anyway?

HON. MR. BENNETT: I will deal with you later.

"Accordingly, I would once again ask you to contact

the President directly and ask him to reverse this decision, perhaps by

way of reducing the tariff to an absolute minimum. At the same time I

would urge you to ask the President not to accept the softwood lumber

countervailing duties petition that has been filed. I ask you to do so

not only for the reasons mentioned above, but because it is clear that

nothing has changed since the dismissal of a similar petition in 1983,

and the U.S. Industry is simply engaging in trade harassment.

"Until such a time as the President reverses or

modifies his decision, I understand the federal government is

considering a package of retaliatory measures to apply to U.S. exports

into Canada. In developing this package I would ask you to ensure that

the full benefits of such measures accrue entirely to the B.C. economy,

as it is our economy that will be damaged by the President's action.

"Furthermore, I would ask you to put in place a

package of measures to protect the jobs of those workers in B.C. who

might be laid off as a result of the shake and shingle tariff. Since

1971 the federal government has had available the Employment Support

Act to mitigate the effects of foreign import surtaxes and to support

employment levels in affected industries. This act established the

Employment Support Board, and made available to it a sum of $80

million. In my view, the President's action demands the immediate use

of this act and its provisions. For its part, B.C. would be willing to

have its commissioner of critical industries cooperate with the board

in preventing any job losses.

"Finally, as I suggested to you last week, I would

urge you to instruct Mr. Reisman to demand from his American

counterpart a standstill on any protectionist measures for the duration

of the trade negotiations. It is with regret that I noted Mr. Reisman

did not in fact make this demand at the initial meeting.

"I will be making this proposal to my colleagues at

the Western Premier's Conference and will raise this matter when we

meet next week in Ottawa. I believe a standstill is essential to

preserve the integrity of the Canada-U.S. trade negotiations, which we

both view as vital to the future of Canada."

MR. SKELLY: I guess I can assume from the attempt to eat up

question period that the Prime Minister has not responded to the

Premier's letters — which was the question I asked. In view of the fact

that Mr. Mulroney fails to respond to the Premier's suggestions and

that the United States President, according to his letter to Senator

Bob Packwood of Portland, Oregon, is intent on taking action against

the lumber industry in British Columbia specifically and the cedar

shake and shingle industry in this province specifically, can the

Premier advise me if he still goes along with the suggestion that we're

starting with all items on the table and

[ Page

8339 ]

no exceptions: "Therefore I take them at their word" — Prime Minister

Mulroney and President Reagan — "that we're going to have a full negotiation

on all items on both sides"?

Interjection.

MR. SKELLY: It quotes the Premier of this province.

HON. MR. BENNETT: Mr. Speaker, especially since the Prime

Minister's strong statement, reported over the weekend, against the

U.S. measures, and because of his concern that all items be on the

table and that there be no preconditions, I believe that is still the

Canadian position and it is one that I support.

What is difficult is to find those who are leaping on this issue at

the last minute for political reasons. Last Friday was a very busy day

for me, but I got home late that evening and watched a program called

"The Journal." I saw the Leader of the Opposition's brother on "The

Journal." He was appalled at what was happening to the industry in

British Columbia. He said it's obvious that what we have to have is a

lobby down in the U.S., and we've got to put in money and we've got to

get the U.S. lumber dealers and building-supply operators together in a

counter-lobby. My goodness, Mr. Speaker, I spoke, as Premier of British

Columbia, to U.S. building supply dealers in Seattle earlier this year

where they passed a resolution covering all of their national body and

all their dealers all over the United States doing that very thing.

I have been down with the Council of Forest Industries and others

effectively getting going the counter-lobby, and the Leader of the

Opposition's own brother doesn't even know that this has been going on.

At the same time they oppose the one avenue we have to deal with this

issue effectively, and that is to get a standstill and go along with

the freetrade talks. And here his brother is still talking about

separate negotiation and supporting actions that have already been done

by responsible elected officials who cared about this industry not just

this week when it was expedient, not just last week, but for the last

four years as the American lumber industry has attempted to attack the

Canadian industry and jobs.

MR. SKELLY: It is interesting that on the same day the

Premier announced his resignation, his brother was also on television

announcing that he was putting a racehorse out to stud.

Mr. Speaker, I know that the Prime Minister has not responded to any

of the Premier's letters. I want to ask the Premier if he intends to

attend the Western Premiers' Conference that begins in Manitoba on

Wednesday evening, if he intends to...

Interjections.

AN HON. MEMBER: Read it in the Blues.

MR. SPEAKER: Order, please.

MR. SKELLY: ...and if he has developed a position paper that represents

B.C.'s position on this trade issue and including the process of ratification

for any agreement that may come out of these issues.

We are concerned that in spite of all the representations made by

the Premier all over the United States, including to the United States

governors in Idaho, nothing has come of any representations the Premier

has made on behalf of this province — that they have been totally to no

effect.

HON. MR. BENNETT: One of the difficulties when they've got

pre-written questions is that they can't deal with an answer that has

already been given. So the Leader of the Opposition again has read a

question which has already been answered.

Mr. Speaker, I have said that I will be at the Western Premiers'

Conference this weekend. We have a very strong position, both there on

trade matters — obviously the only rational position coming out of

British Columbia from the political sphere on how to deal with trade

matters, protectionism, and with trade relations in a bilateral way

with the U.S. over the years to come. I will be very pleased to pass

this along to Premier Howard Pawley and my other colleagues at the

Western Premiers' Conference.

MR. SPEAKER: The bell terminates question period. On a point of order, the member for Coquitlam-Moody.

MR. ROSE: Mr. Speaker, I think that the discussions today

were on a most important subject, and I can understand fully that that

kind of a subject needs to be aired. However, I object to the use of

the forum of question period.

Interjections.

MR. SPEAKER: Order, please, hon. members. The member for Coquitlam-Moody has the floor and is on a point of order.

[2:30]

MR. ROSE: Typically, Mr. Speaker, when a word or two comes

from this side.... I don't have this prepared, so I might not be able

to read it correctly. Typically, an attempt is always made to shout it

down.

The point that I want to make is that I timed this. There were four

relatively brief questions and four terribly long and rather

opinionated, and, I think, out-of-order answers. Standing order 47A, on

oral questions, says: "Questions and answers shall be brief and

precise, and stated without argument or opinion." What the Leader of

the Opposition's brother has got to do with the questions that were

asked is beyond me.

Could I make this point of order, and ask for your consideration,

Mr. Speaker, of a ruling on this: that if there is an important issue,

such as the one we face now, a desperate issue for British Columbia, at

least the government and its ministers have the courtesy to bring a

statement on motions to the House, where we can use that kind of forum,

that kind of technique, that kind of rule, to discuss and argue that

particular issue. Who knows, there may be a substantial agreement on

both sides of the House for once in our lives. I think we've got to get

rid of this constant kind of behaviour that we've had in here today.

MR. SPEAKER: The point raised by the member for

Coquitlam-Moody is a valid one. The Chair will undertake to review the

matter and try to bring some guidelines back for members to follow.

[ Page 8340 ]

MR. MICHAEL: Mr. Speaker, I'd ask leave to present a motion dealing with the shake and shingle tariffs.

MR. SPEAKER: Hon. members, the request for a motion.... First of all, leave must be requested before the motion is put. Is there leave?

The opposition House Leader on a point of order.

MR. HOWARD: The point of order I have to put to Your Honour

is, sir, that we on this side of the chamber have risen under this

segment of the House's business a number of times asking leave to move

particular motions. The position Your Honour has taken is that this is

not the time to do it. Now you seek to be giving the hon. member for

Shuswap-Revelstoke the opportunity to seek leave. We're not averse to

giving him leave to deal with this very crucial subject matter; but

what we are averse to is selectivity in the process of applying the

rules.

SOME HON. MEMBERS: Oh, oh!

MR. SPEAKER: Order, please.

MR. HOWARD: If Your Honour is now seeking to give the House

the opportunity to give leave to the hon. member, then I submit that

Your Honour is then establishing a precedent — and I think it's a good

one — that this is the opportunity for any member so to rise and ask

for the same sort of courtesy.

MR. SPEAKER: Thank you. Hon. members, the point raised by the

member is a most valid one. I would ask the indulgence of the House for

one or two moments.

The point of order by the opposition House Leader is sustained.

MR. MICHAEL: Well, Mr. Speaker, thank you very much for the opportunity to present this motion. I will read the motion....

Interjections.

MR. SPEAKER: Order, please. Hon. members, the point of order

raised by the opposition House Leader was one in objection. The

objection was sustained, and properly so.

MR. MICHAEL: Oh, I understand. I'm sorry, Mr. Speaker, I thought that the motion....

Mr. Speaker, would you permit me to move an adjournment of the House

under standing order 35 to discuss an urgent matter of public

importance, dealing again with the shake and shingle industry? I will

read the motion, Mr. Speaker: "Be it resolved that the Legislative

Assembly of British Columbia (1) condemns the action of the United

States administration in imposing a 35 percent tariff on Canadian red

cedar shakes and shingles; (2) supports the Prime Minister of Canada in

asking for reconsideration of the decision; and (3) urges that any

retaliation not impair the Canada/U.S. free-trade talks."

MR. SPEAKER: Hon. members, the Chair will undertake to review

the matter as raised by the member and bring a response to the House at

the earliest opportunity.

Orders of the Day

HON. MR. GARDOM: Public bills and orders, Mr. Speaker.

ASSESSMENT AMENDMENT ACT, 1986

The House in committee on Bill 7; Mr. Strachan in the chair.

Sections I to 6 inclusive approved.

section 7.

MRS. WALLACE: I would just like to ask the minister.... I see

the Minister of Forests (Hon. Mr. Heinrich) isn't in the House. Perhaps

the Minister of Finance will be able to answer this. My concern is with

the determination of what is managed forest land and what is not

managed forest land. Who is going to police this, and how are we going

to know whether or not the land is being properly managed? We have seen

a great many reductions in the Forest Service recently. We have seen a

lot of the control measures that were formerly handled by the public

service being turned over to private entrepreneurs. I certainly have

some concerns about how we are going to be able to ensure that the land

which is getting this tax break because it is supposedly managed land

is being properly managed. Are we just giving another tax loophole here

to companies that can report that their land is managed when in fact

that land will not be managed?

HON. MR. CURTIS: I don't presume to speak for my colleague

the Minister of Forests, but I am responsible for this bill inasmuch as

it refers to assessment matters only, rather than the broader policy

issues in the Forests ministry. The precise

definitions, Mr. Chairman,

will be set out in regulations, passed by order-in-council, and will be

based on reforestation activity. I'm rather confident that we will be

looking to the Assessment Authority individuals who assess all sorts of

properties, as the member well knows now. It will be the responsibility

of employees of the Assessment Authority to determine that, in

conjunction with, I'm sure, the Ministry of Forests when and where

necessary. Properties that are categorized as unmanaged will then be

taxed at a higher rate than managed properties in order to encourage

reforestation, and the precise rates will be determined in the context

of the variable property tax rate system, which the member and the

committee will know we've had in place for some time.

MRS. WALLACE: I thank the minister for his answer, and

certainly I understand his position in this. But it's interesting to

note that he tells us that probably the employees of the Assessment

Authority will actually be doing the assessment on this thing. I wonder

if he has any concept of the kind of job he's taking on in trying to

determine whether or not those great masses of hectares of forest land

are properly reforested. How is he going to base it? On the number of

dollars that are spent on reforestation? Or is he going to base it on

an actual onsite check to see how many trees have been planted? Is he

going to check to see whether or not those trees have actually grown,

or whether that 50 percent that we hear about has died out there? And

is that classed as good management if you plant them and they die? Is

he going to base it on

[ Page 8341 ]

what happens as those trees grow in the way of

silviculture programs, juvenile spacing, conifer release,

fertilization, commercial thinning, all those kinds of things'? Has the

minister any idea of the monumental task he's taking on if in fact he

is going to assure that we get the best tax dollar return and that

those companies that say they are doing a reforestation job are

actually doing it'? Has he any idea of the size of the job?

HON. MR. CURTIS: Mr. Chairman, the short answer is yes, I do

have an idea, a very good idea, of the job that is entailed. But may I

explain through the Chair to the committee a couple of things. First of

all, the member will also know that until recently we had annual

assessment of all properties — land and improvements. We've changed

that to biennial, and we have relatively — now please, let's not

nitpick about it, Mr. Chairman, through you to the member — the same

size of Assessment Authority staff, and the workload is easier than it

was previously with an annual assessment.

The Assessment Authority, without again intruding into the Ministry

of Forests' activity, will require that plans be presented to it, will

audit those plans, will in every respect that is necessary review that

the managed lands or unmanaged lands, as the case may be, are properly

categorized.

I think it is important to stress for the committee that yes, it is

a considerable task, but what we are doing here is attempting to assist

the owners of private forest land in enhancing that private land. The

second

part is key: not just assisting the owners, but assisting them

in enhancing the forest land which they own, rather than Crown land

which occupies the very large majority of the forest base of the

province. So it's a not insignificant task, Mr. Chairman, but it's a

task which will fall within the capability of the Assessment Authority.

I have no doubt of that.

MRS. WALLACE: One last question: is it the intent to do this

assessment on a hectare by hectare basis or on a percentage of the

overall private holding'?

HON. MR. CURTIS: Mr. Chairman, the member is asking for me to

spell out all the regulations which are not yet finally crafted. It

would be wrong to prepare those regulations until this bill is given

royal assent. I'm sure that they are in draft form, but draft only.

Hectare by hectare'? On a spot-check basis; but again, in order to

receive the benefit which is proposed in this particular bill, the

owner of private forest land will be required to make all plans and

proposals available to the Assessment Authority representative, and

indeed I have every confidence that it will be done.

MRS. WALLACE: One last question. In view of that, a holder of

a given tree farm licence, say, on private land — would that all come

in either a managed or an unmanaged classification, or would you break

up a tree-farm licence into sectors'?

HON. MR. CURTIS: If I understand the question from the hon.

member, she proposes that there could be two types of land within a

particular private forest. Obviously that will be the case. The owner

of the land will choose to more intensively manage some

section of that

land. Again, I think in the request that will be made by the Assessment

Authority, with the full weight of law, that that individual or group

of individuals will be required to say: "Very well; over the next

little while this is what I propose to do on this portion of my land,

our land. This is what I propose not to do with respect to another

portion of my land, our land." That will be spelled out in advance, and

I indicated in answering the earlier question that there will be plans

required and those plans will be audited. I trust that I understood the

member's question. Clearly in one private forest there will not be the

same treatment over the entire property. I understand that.

Section 7 approved,

[2:45]

MR. MITCHELL: Mr. Chairman, I was wondering, with leave,

could I go back to

section 5? There was a question. I know the minister

is waiting for me to ask him, and you ran through the first two or

three so quickly that I never had a chance to make a comment. I ask

leave to ask the question.

MR. CHAIRMAN: Well, leave is not required, or should.... But we'll let the member ask a question. Please proceed.

MR. MITCHELL: Thank you, Mr. Chairman. It's dealing with

section 5 — "eligible residential property," and specifically

subsection (4). We've had a lot of discussion over a number of years on

this section. 'That is where a senior citizen has owned property for a

long time. It used to be that you had to own it prior to 1959 now it's

for ten years. The minister in this bill has restricted this ownership

of the property that allows the person who owns the property, or his

wife, to keep it at residential assessment and not, if the property has

been rezoned and it's gone up to industrial or commercial.... They have

limited it to 2.4 hectares — I believe it's approximately five acres —

limiting it to three premises. Now what is going to happen'? I'm not

trying to predict the problems that will arise. A lot of this is farm

property and a lot of these farm properties are going to have

residential areas for farm help or family scattered through a large

piece of property. I'm a little worried about what'll happen if you try

to subdivide those houses off; you're going to have lots that run like

snakes through the property, or you're going to set up a real

bureaucratic nightmare. I've had a few properties in my own riding

where they already subdivided the residence on one and there are other

pieces of property that are subdivided off. I still think that where a

family or older people have held a piece of property for ten years and

in so many cases for 40 or 50 years, to bring in now this 2.5 hectares

is going to establish a worse condition than there was before. I mean

some of the properties have been held for 40 years and they are

benefiting from the residential taxation because they're still farming

it, and there is urban sprawl and industrial sprawl all around them. I

think if people want to hold on to that particular piece of property

and to continue it as their residence, one way or another....

I think bringing in this amendment is going to cause a lot of

constituency problems for MLAs and it's going to bring in a lot of

problems for individuals. I ask the minister what thought has gone into

bringing this one in. I mean, you settled my argument here a year ago

when you brought in the amendment to amend it back down to ten years.

Why do we now have to chop that up at this point?

HON. MR. CURTIS: Thank you to the hon. member for Esquimalt–Port Renfrew. He is correct in his closing remark

[ Page 8342 ]

that we did this earlier in another legislative

session. and he even thanked me at that particular point in time

because he and I had discussed it, and indeed I had discussed it with a

number of members of the executive council and the government caucus.

Following the approval which was given previously by this House, we

framed these considerations in regulation. Subsequent to that,

legislative counsel in their wisdom, Mr. Chairman, felt that we did not

have the authority to do this by regulation; rather it should be

incorporated into the statute. So essentially what you have before you

today is the reverse of that which we are often accused of doing. We

are taking something which was in regulation and putting it in the law

of the province of British Columbia. That is why it is here. It is here

for no other reason, on the basis of the strong recommendation and

opinion offered by legislative counsel.

Now, Mr. Chairman, it is very much a judgment call. I appreciate

that the member foresees some difficulties. I recognize there may be

some difficulty, but may I pose this proposition to the hon. member and

to the committee? If in this old 1959 rule, which we're calling the

ten-year moving rule.... If someone has a residential property and 80

acres.... The member is instantly computing that, transferring it into

hectares; but let us say 80 acres. Is it the intention of both sides of

the House to authorize or to permit the lower valuation over all of the

80 acres'?

Now the member may say: "Well, that's an extreme. You're taking 80

acres, and how many instances are there where there are 80 acres'?" We

have selected 2.03 hectares, which is five acres, as the member will

know, as being reasonable and as covering most of the cases where this

assistance is being rendered. So it limits the application of the tax

relief to a ten-year owner or occupier of parcels of property with five

acres. There will be some who will not be assisted over the entire

property, as the member has observed. But I think they are going to be

in the minority. When you are attempting to assist a particular group,

I think the best you can do is to attempt to assist the largest

possible majority, and I believe this achieves that.

MR. MITCHELL: I want to thank the minister for what he said.

Also I want to thank him — I slipped when I was up before — for writing

me and bringing it to my attention because of my previous interest in

it.

Really, this whole section.... To say that it wasn't proper, and

legislative counsel have recommended this particular change.... Well,

the other piece of legislation was in since 1964, I believe, and it

served British Columbia since 1964. At that time it gave five-year

ownership. It only protects a very small

section of the population who

have lived on a piece of property for many years. If they are caught in

this squeeze.... Knowing the experience of one particular family that

were caught in it, it broke them. It literally broke them to chop out

five acres. They might own 160 acres, not 80 acres. There are people in

British Columbia that were homesteaders. They homesteaded property.

They have inherited, and they have been there a long time.

You might as well say, when you have a large piece of property like

that.... You're only protecting those few individuals. I think this way

we're going to go right back to what it was before. You are going to

break them financially. They're going to have to unload it, and where

you have a small working farm and you do have family in residence

scattered throughout the property, just the way it is subdivided is

going to be hard to administer. I think for the few people who are

going to be affected, the original changes that were brought in last

year were sufficient, and they have held. In British Columbia we have

dealt with it since 1964, and I think it was good wording.

HON. MR. CURTIS: The member should know that farms are not

assessed at highest and best use. So with respect to large properties

which have been "homesteaded," that assistance falls in another part

of the Assessment Act and is not at issue here.

What the member is really speaking about would be an individual or a

couple who have a large parcel of property that is not being farmed,

just sitting there. If he proposes, under this particular section, that

we grant that lower rate to someone who holds considerable acreage,

then I'm afraid I cannot agree with him.

If we may, without contravening the rules of the committee, Mr.

Chairman.... We had what is referred to as the 1959 rule. As I

indicated a few moments ago, we earlier changed that to a moving

target, and that corrected an inherent unfairness. When the 1959 rule

was put in — I believe the member is correct — in 1964, it was fixed.

Now we add a year, year by year, and drop one off at the other end.

That's what has happened; that has already been done. I don't

anticipate any great difficulty with the proper application of this.

Again, it was not the 1959 rule, not the earlier legislation, that was

felt to be ultra vires; but the process by which we put the replacement

of the 1959 rule into regulations was felt by legislative counsel

likely to be found ultra vires.

MR. MITCHELL: Mr. Chairman, I believe that the only two people in the House who know what we're talking about are the minister and myself.

I'll bring some examples to the minister. He talks about people who

continue to hold their farm status in areas.... I have Metchosin,

recently incorporated as a municipality, and they are losing their farm

status. But there are still large blocks of land, which people at one

time were farming, frozen in the ALR. There are ten-acre subdivisions —

you can't chop it up into less than ten acres. But because of the urban

sprawl around there, the assessment of that property has gone up quite

high in some cases. There are areas in Langford bordering on commercial

with the same circumstances. That's just one little area that I'm

familiar with.

I know that throughout British Columbia there are many other areas

where you are going to have that effect. All of a sudden a property has

an inflated value, but because of other circumstances, that particular

family cannot cope with it. I think at the present time, with the

present legislation, they are managing to hold on; they are protecting

their homes; they are living out the rest of their lives in dignity —

it's only good for the husband and the wife. I state seriously that

there is going to be a problem for a lot of people. I can see it

happening just with the small experience I've had since I've got

involved in it. I ask the minister, before he enforces it, to really

give it another look.

HON. MR. CURTIS: Mr. Chairman, we spent quite a bit of time

on this particular subsection of

section 5. The five acres did not just

appear from the bureaucracy, or the 2.03. It was very carefully

considered. The member has taken a

[ Page 8343 ]

particular interest in this, as have other members.

If experience shows that we have really interfered with a number of

people who have much more land than this, and it is not farmland, then

I'm sure we will be in a position to adjust it. But it seems to me

that, as with other benefits which are extended, you want to cover as

many people as you possibly can without overdoing it; and 2.03 acres

was the decision I reached with respect to assisting the greatest

number of people in the province. I know the member will continue to

watch it, but I am not prepared to change it, Mr. Chairman.

Sections 8 to 20 inclusive approved.

Title approved.

HON. MR. CURTIS: Mr. Chairman, I move that the committee rise and report the bill complete without amendment.

Motion approved.

The House resumed; Mr. Speaker in the chair.

Bill 7, Assessment Amendment Act, 1986, reported complete without amendment, read a third time and passed.

[3:00]

HON. MR. WATERLAND: Committee on Bill 16, Mr. Speaker.

INSURANCE FOR CROPS AMENDMENT ACT, 1986

The House in committee on Bill 16; Mr. Strachan in the chair.

section 1.

MS. SANFORD: I just wanted to ask the minister whether this

increase is, at least in part, a result of the additional subscribers

from the Peace River who have recently joined the program. As the

minister knows, the Peace River farmers were forced to join the crop

insurance program in return for the special assistance they had because

of the difficult times they have faced up there as a result of the

weather problems.

HON. MR. WATERLAND: No, Mr. Chairman, that's not the reason.

In fact, the joining of those Peace River grain farmers would have the

reverse effect by having more premiums come in. This is simply a result

of a number of years of misfortune in crops and weather conditions, and

the deficit has accumulated.

Section I approved.

Title approved.

HON. MR. WATERLAND: Mr. Chairman, I move the committee rise and report the bill complete without amendment.

Motion approved.

The House resumed; Mr. Speaker in the chair.

Bill 16, Insurance for Crops Amendment Act, 1986, reported complete without amendment read a third time and assed.

HON. MR. WATERLAND: Adjourned debate on second reading of Bill 8, Mr. Speaker.

INCOME TAX AMENDMENT ACT, 1986

(continued)

MR. STUPICH: Mr. Speaker, the purpose of Bill 8 is really to

reduce the corporation income tax rate from 16 to 14 percent — a

permanent reduction. I suppose no changes can be described as

permanent, except that temporary taxes, once introduced, soon become

permanent taxes, but this certainly proposes that in the long run there

will be a reduction in the taxation rate for corporations.

According to the Ministry of Finance, the reduction will be

substantial in terms of the amount of revenue that the Crown will

forgo: 1986-87, a loss in revenue of $2 million; 1987-88, $32 million:

1988-89, $64 million. So it is indeed a very substantial reduction and

will affect some 2,000 businesses with taxable incomes over $200,000.

It seems to be a case of giving to those who have. The government has

on previous occasions shown its intention to take away from those who

have not.

The amount of money forgone by this reduction in the tax ate of

those corporations which have proven their ability to pay is comparable

to the amount of money that the government saved itself by taking away

from those of our citizens who are unable to pay. I'm thinking of the

low-income tax credit plan that was done away with by an announcement

by the minister some eight months. I think, before we saw the

legislation, and a renter's tax credit, two programs that put

purchasing power into the pockets of thousands of our citizens who have

no ability to pay; they've proven that by being eligible for the kind

of income tax credits that were available under those two programs. It

was good for them and it was certainly good for the economies in the

communities where they live that they had this money to spend.

They were people whose incomes were so low that they would certainly

spend it on living — not on high living, but on living costs. It

perhaps gave them an opportunity to indulge in some elective

expenditures but not very much. As say, to be eligible for either one

or both of those programs, hey had to prove they had very little money

to spend. Yet the government took away from those, and is now giving a

similar amount of revenue to corporations which have proven...by being

able to benefit from this program, they've proven that they don't

really need it. They're doing very well, thank you. So the minister

says, "Since you're doing so well, we're going to offer you some

encouragement by doing a little better."

[Mr. Ree in the chair.]

One has to question the fairness of this, Mr. Speaker. Really,

that's part of what it's all about. The Minister of Finance said that

the tax is being viewed by some as a penalty imposed on the successful.

Well, of course; isn't that what our progressive tax system is supposed

to do? Those who have the ability to pay pay at higher rates. They

certainly don't pay larger amounts, but they do pay at higher rates than

[ Page 8344 ]

those who don't have the ability to pay. It applies with corporations; it applies with personal income tax.

But this seems to be going in the opposite direction, and I have to

wonder at the long-term program, what the minister has in mind over the

long term in this matter of tax reform. Is he going to continue to

shift the load from those who can pay and impose it upon those who

can't? It's a principle which has been attacked in the escalating tax

burden put on the middle class as well. They're certainly paying more

than they used to. It just seems to me that the ones who are most

wealthy, the ones who are most able to pay, are the ones who are

benefiting most from the government's changes in programs.

It's interesting, too — and it's not really part of this discussion

— that while the minister is proposing these substantial reductions in

corporate tax rates, at the same time he is estimating in the budget a

28.5 percent increase in the revenue from corporation tax income. In

the press release that was put out at the time this bill was

introduced, it was described as legislation to encourage new job

creation investment. Well, unfortunately I wasn't here to hear the

minister introducing second reading of Bill 8, but I would venture to

say that on the basis of previous experience there is no evidence

presented in the minister's opening remarks to show us that any of

these programs have resulted in any increases in job opportunities.

I would suspect that the minister, in introducing this bill, said

nothing to show any evidence that a study has been made that will show

that employment will increase as a result of cutting back on the tax

rate to those very successful corporations which are going to be

encouraged by this change. Indeed there is a lot of talk about tax

reform these days. The federal minister has been talking tax reform;

the provincial government has been saying this is one more step in tax

reform.

There is a good deal of tax reform being talked about in the United

States, and of course we often follow the direction that they

establish; not always, but we often do follow the direction that they

establish. A senator, Bob Packwood from Oregon, came into today's

debates earlier on quite a different subject. He is heading a U.S.

committee on imposing radical changes in taxation. They've been going

to some extent in the same direction that we have, shifting the load

from those who can pay and imposing it on those who can't. Some of the

proposals coming forward make very substantial changes, but I think

this sums it up — and I'm quoting now from an

article in the Financial Post last week: "Overall, though, the tax burden on corporations would rise while individuals would pay less."

So that committee's recommendations are proposing that we move in

the opposite direction of that being presented to us now in Bill 8. If

I could quote further from the article: "The Packwood initiative

reflects the widening, disenchantment with tax breaks as a means of

stimulating economic activity." I think it's time that people started

taking a look at this method of stimulating economic activity. For

three years we've been going along this road in the province of British

Columbia in the last three budgets, where we have been imposing more

taxes on individuals, and in particular on those who are least able to

pay — withdrawing benefits from them, and yet at the same time

relieving industry and business from paying any extra taxes.

To some extent, those wealthy individuals who are paying very high

income tax are paying a higher rate, but certainly not a higher tax.

Nevertheless, in the States at least, there is this widening

disenchantment with using tax breaks as a means of stimulating economic

activity. The new thinking is that they — that is, the tax breaks —

distort business and investment decisions and clutter the tax code.

Well, Mr. Speaker, you'll recall in last year's budget and the one

before — particularly last year's — we had quite a long list of gifts

to business and industry in an attempt to encourage them to increase

employment.

Had the minister come along in second reading of this and I could be

proven wrong; perhaps he did it, since as I say I wasn't here, but I

doubt very much that he did.... If he had, in introducing this

legislation, shown the House evidence to convince the members that the

tax breaks initiated in legislation last year had some effect on

increasing employment, then I might be more willing to consider

supporting the legislation before us now.

I suggest there is no evidence to prove that, and I suggest that the

minister should be trying to catch up. If there is indeed, as this

article says, a widening disenchantment with this theory of encouraging

the wealthy by giving them more wealth and taking away from those who

don't have it, well, then, let's have some evidence; let's see the

documentary evidence as to why the minister expects this to work.

"According to this view, scaling down preferences while lowering

rates would return decision-making to fundamental economics." I'm not

opposed to that part of it, as long as those who can afford to pay end

up paying more in the long run. But let's make it business decisions

rather than decisions that are based upon attempts to get another

government handout.

There's also an equity argument. Tax breaks largely benefit the

well-off or, on the corporate side, certain industries ahead of others.

That's obvious. The material that came out said that the successful

corporations are going to benefit from this. The especially successful

ones are going to benefit more than those that are just marginally

successful. In the absence of any evidence to convince me that this

will do something positive for the economy, I just can't vote for the

bill before us now.

The federal minister at least, in imposing a tax increase on the

population at large, did go in the direction that B.C. did some years

ago, and from which it retreated about three years ago. Quoting from a

story in the Globe and Mail on April 14, 1986: "Two months ago

Mr. Wilson raised the sales tax but added a refundable tax credit for

low-income earners to offset the negative impact on the poor." So more

and more, Mr. Speaker, I think people are realizing the importance of

keeping spending power in the hands of those in particular who have

very little of it and who will spend all that they get. That will help

keep the local economies going. It will be good for local communities.

People will have the money to spend in their own communities.

This legislation before us now will do nothing to put more spending

power in the hands of individuals. It will simply give corporations

more surplus, which they may distribute by dividends or which they may

use to invest in British Columbia or somewhere else. Because there are

certainly no strings in this legislation, or anywhere else, where the

government will put pressure on any of these corporations to use the

money that they're saving with the one form of tax break after another

that we're prepared to offer them; no strings that they will be

required to hire more people no strings that they will be required to

do more research and development here in

[ Page 8345 ]

British Columbia; no suggestion that they should be

encouraged in any way to increase their investment in British Columbia.

It is simply another handout from government to thank them for having

invested in the past; nothing for the future.

As I say, Mr. Speaker, unless the minister has some evidence or some

good arguments that this will have a positive effect on the economy,

then we cannot support it.

[3:15]

HON. MR. CURTIS: Bill 8, the Income Tax Amendment Act, 1986,

should not be seen in isolation; quite the contrary. As I indicated in

moving second reading the other day, it is the logical next step in

terms of a series of tax reforms which were undertaken following the

tax tour I made in the fall of 1984. I will not bore the House by

restating all the communities we visited and all the briefs we heard.

Nonetheless, the whole reason for this graduated corporation tax rate

decrease is that we, on this score and on others, found ourselves not

competitive with jurisdictions that in fact are competing with us. We

therefore had to restore the tax structure in British Columbia to a

more moderate level, not only to encourage new development but to

ensure and encourage the expansion of existing business in all parts of

the province.

I will send the member, as I happily send to a number of people in

the province, a series of positive economic indicators, which are

produced regularly. The hon. member for Nanaimo talked about more money

in the hands of individuals. Well, we see and have seen for a number of

months that retail sales, if he wants one barometer, in the first two

months of 1986 were 10 percent higher than in the same period of 1985.

And in 1985 retail sales were up 8.8 percent from 1984. Retails sales

increased 6.1 percent in 1984; that was the first larger-than-inflation

increase since 1981. Sales tax data for the 1985-86 fiscal year show an

increase of 9.6 percent over 1984-85. We're talking about two different

animals, Mr. Speaker: retail sales generally, including all that which

is not taxed, and then the actual sales tax numbers. There are a host

of positive economic indicators: bankruptcies down; investment

intentions by business, large, medium and small, up. Satisfaction. A

recent survey conducted not by the government or the Social Credit

Party, or by the Ministry of Finance, but rather by a firm noted for

this sort of thing in conjunction with the Vancouver Board of Trade,

shows that there's been a remarkable recovery of confidence by greater

Vancouver businessmen in particular — business people, to be more

correct. Of those responding to the survey, 64 percent — two-thirds of

those surveyed — said that their businesses are better off today than a

year ago. And 85 percent expect that they will be better off two years

from now. When asked what was most likely to occur in their business in

the next two years, 67 percent said they would expand, 28 percent said

they would stay about the same and only 5 percent said they would

contract.

Mr. Speaker, the tax changes which have been the subject of debate

in 1985 and again in 1986 in this chamber — without reflecting on

previous votes — were all designed to do, as I said earlier, two

things: the first omnibus goal being to encourage more economic

activity, more employment, more business in British Columbia for

British Columbians, and the second being the recognition that prior to

1985 we were not competitive.

Mr. Speaker, I have no doubt whatsoever that this particular

amending act, Bill 8, is yet another positive step on the obvious. the

definite, the clearly defined road to economic recovery. I move second

reading.

Motion approved on the following division:

YEAS — 29

Brummet

Waterland

McClelland

Segarty

Kempf

Heinrich

Veitch

Richmond

Pelton

Schroeder

Michael

Davis

Mowat

McCarthy

A. Fraser

Nielsen

Gardom

Smith

Bennett

Curtis

Ritchie

Hewitt

Rogers

Reid

Johnston

Parks

Strachan

Ree

Reynolds

NAYS 19

Macdonald

Dailly

Cocke

Howard

Skelly

Stupich

Lauk

Nicolson

Sanford

Gabelmann

Williams

D'Arcy

Brown

Hanson

Rose

Lockstead

Wallace

Mitchell

Blencoe

Bill 8, Income Tax Amendment Act 1986, 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. GARDOM: I call committee on Bill 25, Mr. Speaker.

MUNICIPALITIES ENABLING AND

VALIDATING AMENDMENT ACT, 1986

The House in committee on Bill 25; Mr. Ree in the chair.

Section I approved.

Title approved.

HON. MR. RITCHIE: Mr. Chairman, I move the committee rise and report the bill complete without amendment.

The House resumed; Mr. Speaker in the chair.

Bill 25, Municipalities Enabling and Validating Amendment Act, 1986,

reported complete without amendments, read a third time and passed.

[3:30]

HON. MR. GARDOM: Second reading of Bill 5, Mr. Speaker.

HEALTH IMPROVEMENT APPROPRIATION ACT

HON. MR. CURTIS: Mr. Speaker, I move second reading of Bill 5, the Health Improvement Appropriation Act.

British Columbia has a health care system in which all of us can take pride,

but the system does face difficult challenges as it adapts in the latter part

of the 1980s to population

[ Page 8346 ]

shifts, changing expectations and new technology.

Careful and sound long-term planning and new approaches to the delivery

of health services are clearly needed to help meet these challenges.

To assist in this effort and as announced in the budget for 1986-87,

the government has combined a commitment to stable base funding with a

special three-year health improvement fund that is to be established

through the act before us now. The act provides for the expenditure of

$720 million over three years, with up to $120 million available in

fiscal year '86-87. The health care community is being invited to

submit proposals to access the fund, and that same community will also

assist in developing priorities for the application of the money.

Establishment of a three-year fund, as elsewhere, will provide a

framework to ensure the most effective utilization of available

dollars. During this first year, quick decisions will be made to meet a

number of urgent operating requirements. However, where possible,

maximum consensus will be sought relative to all decisions.

This fund will provide for adjustments to the operating budgets of

hospitals and other health care providers, and for special initiatives

and innovative approaches to the delivery of health care services.

Already several areas have been identified for possible funding, and

I'd like to remind the House of them now. In order to improve the

quality of hospital care, additional funding can be provided for

greater numbers of transplants, new drugs, advanced cancer treatment

and AIDS therapy. In conjunction with new procedures and therapies,

funding could be provided to open and to operate new hospital beds. In

addition, preventive programs to keep people of British Columbia from

becoming ill in the first place will be a very high priority, as will

care programs that enable patients to be treated outside the hospital

setting, when that is more appropriate for them.

There is a long list of challenges for the fund, but the government

and my colleague the Minister of Health (Hon. Mr. Nielsen) agree that

the health improvement fund is an effective way to deal with those

challenges and to build an even better health care system in British

Columbia, as I say, through the balance of the 1980s and into the next

decade.

MR. STUPICH: Mr. Speaker, this bill is very similar to one

that we started discussing and that was adjourned — Bill 4, to set up a

similar fund for education. My response would have to be very much

along the same lines as what I had to say with respect to Bill 4. It's

one of the two funds described in the Vancouver dailies as pork-barrel

politics and political slush funds. I can't disagree with the need for

any of the programs about which the minister spoke, but we've had a

similar need forever in the province, and governments have always dealt

with it by listening to proposals and either dealing with them within

the budget as voted upon by the Legislature, or by bringing them into

the next year's budget. There is no need to give any minister the

authority to spend $720 million without coming to the House and saying

what he or she was going to do with this money. Of course, that's what

this bill does.

The minister pointed out that the Minister of Health may spend up to

$120 million in the first year, and indeed the Minister of Health may

do that. But also, Mr. Speaker, the Minister of Health may not. The

bill also allows the minister to spend the whole $720 million in the

first week after March 31, 1987, because he can spend the whole $720

million by the end of the fiscal period March 31, 1987. Any time up to

the end of that the whole $720 million may be spent. If he is going to

start spending it in this first fiscal period, then the Minister of

Health is limited to $120 million.

I think the difference between this fund and the education one, at

least as far as I know, is that in the education one so much of it has

been committed already, before the bill ever comes up for discussion;

whereas in this particular bill establishing the health improvement

fund, I don't know that any money has been committed out of it. The

minister did tell us that several proposals have already been

identified. In several areas proposals have been identified, but I take

it from that that no money has been committed yet. Indeed, Mr. Speaker,

while it looks now as though the election may be postponed a little

longer than I thought a week ago, or even four days ago perhaps — it

would seem now as though it's going to be later rather than sooner —

that being the case, it's quite conceivable that the government will

spend none of the money out of the health fund and most of the money

out of the education fund in the heat of an election campaign sometime

in 1987. Mr. Speaker, I have to disagree with that principle.

The Minister of Health, in dealing with this fund, will be seeking

maximum consensus. Well, of course, that's commendable; it's great. But

why has the Minister of Health not been listening to the health

community up to this point in time? I believe the Minister of Health

has. I believe the Minister of Health, as every other minister,

continually listens to representations made from the community that

that particular minister is serving. He brings forward these proposals

in the normal budgetary proposal, goes before Treasury Board, gets

approval there, comes into the House and explains them all, answers

questions which are asked about any of the proposals and the money is

voted. The members in the House retain the right, the opportunity, to

ask questions of the minister, detailed questions about that minister's

spending plans.

But in the case of this legislation, budgeting by setting up funds

over which the minister will have total control and need not report

back until some time after the fact is something that the present

Premier fought against very hard when he was Leader of the Opposition.

I quoted from him at some length in discussing Bill 4, which is still

before us.

I would have hoped that from that discussion the Minister of Finance

might have taken the message back to the present Premier and said:

"Look, this is not what you promised when you were campaigning in

1974-75. At that time you promised to restore democracy to the

Legislature. You promised to give the MLAs the opportunity to ask

questions in detail." We can't insist on answers, but we can ask

detailed questions about ministers' spending programs. In bringing this

kind of legislation before the House, you're taking away from the

members the opportunity to ask questions about those spending plans.

What you're doing is saying that they can go ahead and spend this

money; and some time later, when public accounts come up, then the

members may be able to take a look at how the money was spent. That's

really all we're able to do. A long time after the money has been

spent, we'll be able to ask questions.

When I was discussing Bill 4, I quoted the present Premier, on many

occasions travelling around the province, speaking before large

audiences, and telling the people that his group would never agree to

the spending of one dime without debate. Yet here we're being asked to

approve of the Minister of Health spending $720 million, all of which

could quite conceivably be spent in the four weeks of an election

[ Page 8347 ]

campaign; all of that spent that way, without giving the members the opportunity to vote on the spending of that money.

Mr. Speaker, it's not good enough. It's not democratic. I agree with

the present Premier when he said that a procedure such as that would

not be democratic. It's no more democratic for $720 million than it

would be for ten cents, Mr. Speaker. If it was just ten cents, maybe it

wouldn't matter so much. But we're talking about giving the Minister of

Health carte blanche to spend up to $720 million if, as, when, where

that minister feels it would be advisable.

There is a quotation from the present Premier that I didn't use when

I was speaking on Bill 4. The current Premier said on May 16, 1975:

"...the issue is not the amount of money involved, but the

accountability of the cabinet ministers charged with spending the

money. The Legislature must have the right to question the conduct of

the ministers."

Mr. Speaker, I agree with that sentiment. We weren't denying that,

but that doesn't matter. His criticism then was not appropriate at all.

But in this instance the Premier could well be excused for standing up

in this Legislature and making the same kind of speeches in opposition

to this legislation as he made travelling around the province in 1975;

as he made to some extent in the Legislature; and while I haven't had

the opportunity to check Hansard

in detail, the same kind of speeches that I expect the present Minister

of Finance made on this same issue — "not a dime without debate" — in

the Legislature in 1974-75.

Mr. Speaker, if he was opposed then to the principle of cabinet

ministers not having the authority to spend ten cents without proper

debate in the Legislature, how can that minister, on behalf of that

government, in all conscience or in any conscience, stand up now and

bring in legislation that gives to the Minister of Health carte blanche

to spend $720 million whenever and wherever?

No matter how good the cause, no matter how convinced that minister

may be that it's the right thing to do, nevertheless, Mr. Speaker, how

can the minister condone a procedure that we have before us now,

proposing legislation such as this, which takes out of the hands of the

MLAs the opportunity to deal with the spending of public money in the

way in which we should deal with it?

Mr. Speaker, there's no point in my repeating all the arguments;

they're the same arguments with respect to Bill 4. I'm encouraged by

the fact that Bill 4 is just sitting there waiting to be picked up, and

I hope that it never comes back. I would hope that the same thing

happens to Bill 5, but I can't predict that.

I would hope that the minister himself sees that he is transgressing

the principles of democracy in bringing forward this legislation, that

it is the wrong way to go, that there is a proper way to control

spending. There is a proper way in which the MLA should have the right,

the opportunity and even the responsibility to question ministers'

spending programs, not to deal with it one or two years after the fact.

Mr. Speaker, I move an amendment. I move that the motion for second reading

of Bill 5, intituled Health Improvement Appropriation Act, be amended by deleting

all the words following the word "that" and substituting therefore

the following: "it is not in keeping with proper fiscal policy and Health

policy to have funds for Health expended other than through the normal budget

of the Ministry of Health."

The motion is seconded by the hon. member for Burnaby North (Mrs. Dailly).

DEPUTY SPEAKER: Hon. members, I find at this time that the

reasoned amendment is in order. It follows a similar amendment which

was also in order.

On the amendment.

MRS. DAILLY: Mr. Speaker, the words which we just heard from

our Finance debate leader I don't think it is necessary for me to

repeat, because those words and the points he made have already been

brought up before in the Health estimates debate. The main point of our

concern...and I wish to make one statement on a repetition of his

remarks, and then bring in some of my own on this amendment.

The amendment, our Finance critic has pointed out, is a complete

rejection of the whole manner in which the government has chosen to use

these moneys for Health. We do not feel that any government has the

right to bring in a bill which is going almost to force the members of

this Legislature to vote for something which has no accountability to

each member of this Legislature. Therefore, as said in the reasoned

amendment, we reject this kind of fiscal policy brought in by the

Social Credit government.

We consider this debate to be very frustrating, because we know by

the sheer numbers of the government that this bill will obviously go

through. We know that the words which we are speaking on this motion,

and even in our recent amendment, will probably have no effect on the

basic outcome, on what happens to this bill. However, as is our right

and our duty as members of the official opposition, we take this

opportunity to condemn the government for presenting to the members of

this House what we consider this most unreasonable bill. That is why

the amendment which we have produced makes that point to the House.

[3:45]

To back up some more of the concerns we have about this kind of

bill, I notice that the health association's members, who make up the

trustees and management of the hospital and care facilities of this

province — the people who have to deal every day with health and its

problems — express grave concern about this way of handing out moneys

for health in the province of British Columbia. They particularly

express concern that there seems to be a basic difference between the

words spoken by the minister in his budget speech, and repeated again

today in the notes he used in addressing the bill before the House, and

what he stated on both those occasions with the actual estimates. For

example, if I can make my point on this, there is an explanation of

this new health appropriation fund in the estimates book, which states

that the purpose of this fund is stabilization of base funding,

"encouraging local initiative, improving the quality of service,

responding to economic and population changes, and increasing

productivity." That's what we find in the estimates book.

But the Finance minister, in addressing the House and in some of his

notes today, stated that the proposals and the priorities for this fund

will be determined in consultation with the health care community. "We

cannot fulfil every wish in the health care system, so we will have to

make choices. The views of the health care professions and of the

general public will be crucial." After looking at what has been said in

the estimates book and then looking at the minister's statement, the

concern of the people who have to work with the problems of health care

day in and day out in this province — and I'm

[ Page 8348 ]

not just talking about the people who work in the

system; I'm talking about those who are put in charge of managing it —

is that, as our amendment is trying to point out, because of this kind

of legislation the various health sectors in our province will find

themselves pitted against each other in trying to prove their

requirements. Can you imagine all the time and energy involved — which,

of course, will also mean money — the hours and hours of burning the

midnight oil, so to speak, that the trustees and management of our

province's hospitals, long-term care facilities, etc., will have to

spend trying to deal with how to best put forward their needs to the

ministry?

I know that the minister has stated that there will be consultation.

But I think that if you look at his words in the budget speech and then

at the estimates, there is a feeling that the government has already

pretty well prioritized the kinds of things they will be expecting the

money to go on. I don't think the people in the health field are really

fooled by all this. I think that we're all aware that this is just

another crass political move by the Social Credit government in a

pre-election period. We can already see the various cabinet ministers

and MLAs of the government side trotting around the province making it

very visible, with the cameras and the pictures — you name it, Mr.

Speaker. We've seen it before in the handing out of other cheques. We

can just see how visible it is going to be made when these moneys for

health are handed out. The minister, in his closing remarks, may try to

disabuse us of this idea we have that this is going to be used

politically. But I think there is no question at all that if it were

not to be used politically, why did you not just simply give the

hospital boards and the other health facilities their necessary base

requirement through the budget so that they who deal with it every day

and know right at this moment exactly where their needs are...? Why was

the money not just placed in the Health estimates?

I think the minister has to explain to the House. I would hope he

would, anyway, in closing tell us why it was decided to take this route

and not place it in the Health budget. As I have stated, in the minds

of the members of the opposition and people who are not politically

aligned one way or the other it is quite clear that this has been done

strictly to enhance the chances of the Social Credit Party of winning

the next election.

We repudiate it that at a time when the health needs of the people

of this province are so urgent and at a time when so many health boards

and hospitals are right down to the very basics — in fact, some of them

are even stripped further; they don't know if they are going to be able

to keep up basic standards — we find that this government would,

instead of handing out the needed moneys through the budget so it could

be accountable to the members of the Legislature and of allowing the

boards themselves to make the decisions on this matter, crassly decide

to use it politically prior to an election.

Let us just look again. I went through some of these facts during

the health estimates, so they are already on record; I don't intend to

take up the time of the Chair in going through them all again. But I

think we are aware that the present budget that we were faced with in

Health this year provided a zero increase for homemakers, adult daycare

and group homes for the handicapped. In the whole area of home nursing

care and community physiotherapy there were cuts of $100,000. There was

a $5 million long-term care facility cut. Here the hospitals are crying

out to get rid of long-term care patients in their acute beds so they

can put them in long-term.

Why didn't you just let that money stay in the budget so that the

hospital boards could immediately make use of it for the betterment of

all our citizens, not just for the benefit of one political party?

Because, after all, it is taxpayers' money. It does not belong to the

Social Credit Party to enhance their election chances; it belongs to

all the people of British Columbia.

There was $4.6 million taken from ambulance services and a 9.3

percent cut in forensic psychiatrist services, areas of prevention

which are so important, particularly the forensic services. Yet the

minister stands up and says: "We are hoping that this will go for

prevention." Yet at the same time the Minister of Health has cut out

areas of prevention.

There was $1.3 million cut back for mental health, and yet they are

saying to the people who are dealing with health today: "You come and

see us and tell us what you need." The hospital boards of this province

have already presented to the government what their needs are. What a

farce this is, when you think about it! What a farce! The hospital

boards have pointed out their needs very carefully and very

responsibly. However, the government has said: "You do it all over

again, but do it according to our terms, because we have a certain

amount of money, a certain appropriation which will be only handed out

from our level."

The opposition has nothing to do with it. What kind of a democratic

process is that? I know that the member for Nanaimo (Mr. Stupich), our

finance critic, has already expressed his concern about the

undemocratic manner in which this health fund is being used.

I also want to point out to you, Mr. Speaker, and through you to the

Minister of Finance, that the opposition has called for a number of

years now for an all-party committee to study the health needs of the

people of this province so that there can be a planned health approach

to the problems of this province. We are not averse to that. The thing

that we find very sad is that the opposition has not only been denied a

chance, through a committee, of working with the Ministry of Health to

bring forward some of our ideas on the whole area of how health care

moneys should be expended in this province and how we should plan for

the future. We've not only been denied that, but through this bill we

are even denied, as members of this Legislature, the opportunity and

the right to vote on moneys that are to be appropriated millions of

dollars taken away from us.

As the member for Nanaimo — the Minister of Finance for the NDP

government — has stated, we all remember well the cry of the Social

Credit government up and down this province: "Not a dime without

debate." How quickly people change through the years, and how sad it is

to see the cynicism of a government that has been in power so long that

they think they can actually get away with these blatantly undemocratic

things that take away the accountabilities of the members of the

Legislature.

I have other speakers who want to follow me. I simply want to say,

in speaking to this amendment, that we would hope someone on the

government side would not vote the party line on this, would realize

that if they don't support our amendment it means they're endorsing an

undemocratic principle in this House. They're endorsing a move to use

health funds on a political basis, and we in the opposition — and many

of the people of this province — reject that.

MR. COCKE: Mr. Speaker, if ever there was a bill that needed amending, it's this bill. This bill is asking us in this

[ Page 8349 ]

House to ignore the tradition of parliament, to

ignore the committee of the whole that discusses each vote, each dollar

spent and the direction of the expenditure; and the Minister of Health,

who is going to be the one working out the largess of this bill, isn't

even here to listen to debate on the bill that hands him $120 million

this year — that ain't peanuts — another $120 million next year, and

another $120 million the succeeding year. What I see here is a bill

that actually sets up a fund of $720 million in total, and the minister

doesn't have to account to the Legislature. Oh, you can say, "But he

has to account to the public," or "He has to account to his cabinet

colleagues," or something like that. What's the purpose of electing a

Legislature in this province if we're going to hand away all of the

responsibilities to the government and to individual ministers? It's

absolutely absurd.

What we're looking at here is a lottery syndrome. This government

has become very used to dishing out the proceeds of the lotteries. They

dish them out anywhere they think those proceeds can produce a

political response. We all know that. The member for Burnaby North has

spoken about it at length in days gone by. Now they decide that by

legislation they're going to insert money into the provincial budget

and say to the minister: "Go out and see where there's a need and

respond to that need." What preposterous nonsense! This government,

which is noted for its overexpenditure in any event, which provides us

with almost a string of warrants as long as your arm — and then some —

before the Legislature sits each year, money that was not voted upon,

now wants, in advance, hundreds of millions of dollars to expend in any

way the minister feels is fit. That is absolutely in contradiction to

everything that Parliament stands for.

[4:00]

Why in blazes there isn't a hue and cry in this province about this

bill is beyond me. Oh yes, I've seen the odd editorial, the odd story

that the government is doing something they shouldn't — tut tut. There

should be a hell of a scream in this province. And of all people, the

man who brings it in, the Minister of Finance, who has built himself

quite a conservative reputation over the last few years, now comes in

here and tries to justify the unjustifiable. He comes into the

Legislature with a bill that says: "Give us carte blanche to spend $120

million wherever we want as long as it's on health care." Mr. Speaker,

we have an estimates book. In that book is a number of votes and each

of those votes the minister has to be responsible for. He has to....

Interjection.

MR. COCKE: Yes, it's in the estimates. And what good is it in

the estimates? This is the only place we get an opportunity to discuss

it. The minister knows full well that every other estimate vote is

directed at a specific obligation for dollars.

[Mr. Ree in the chair.]

If it's in there for forensic psychiatric care, if it's in there for

mental health, if it's in there for hospital care, you know exactly

what you're voting for. Here the minister says: "Well, maybe we could

put a few dollars into Prince George, or if it's politically astute,

let's throw a bunch of money at Eagle Ridge." Which is what they seem

intent upon doing at the moment — divesting the Royal Columbian

Hospital and sending programs out to Eagle Ridge. But anyway, aside

from that, this gives the minister that kind of opportunity. There's no

debate. We can't sit here in Committee of the Whole and discuss

intelligently the utilization of these $120 million dollars this year.

Pretty good picking.

It should be that the back-benchers in government, while I don't

expect them to vote against this bill, should be up right now asking

questions about this $120 million and why it is necessary to give this

kind of latitude to a minister, a minister who is so self-assured that

he's going to get the $120 million — because he knows that he's got a

whole bunch of little robots over there to vote for it — that he

doesn't even present himself in this chamber during the debate on this

bill. Interesting, too. And for the debate on the education bill, which

is exactly the same, the Minister of Education was nowhere to be found.

Mr. Speaker, you're getting restless. I'm talking in terms of a

cabinet which is irresponsible producing a piece of paper which says to

a minister: "Go and spend to your heart's content. Spend until your

$120 million are gone. And then, if it's politically advisable, we'll

tell you what we'll do. Before the next session of the Legislature

we'll bring in some more special warrants." I can't understand why

there isn't a hue and cry that continues on. I know there have been

some diversions. There's a bloodletting in the Social Credit Party

going on at the present time.

Interjections.

MR. COCKE: "To the bill" my foot! As far as I'm concerned,

that is diversionary, among other things. People are not paying enough

attention to what's actually happening. The press, as usual, are having

their extended coffee break.

DEPUTY SPEAKER: Order! On the bill and the amendment.

MR. COCKE: Mr. Chairman, I'm speaking on the bill. You know,

it's amazing to me how sometimes I listen to members on that side of

the House making analogous statements, talking in terms that they feel

are related. I'm saying there should be a hue and cry in this province

about this bill, and nobody seems to be listening.

If they're not listening, I'm going to damn well say what I have to

say about this disastrous piece of legislation. And it is disastrous.

It creates a precedent whereby we will rue the day it was created. It's

all very well for the Socreds at the moment. They can say: "Oh well,

you know, it's our responsibility. We're doing it and we will go on

doing it forever as long as we want." You wait and see what happens if

the NDP, once coming to power — and that's going to be very shortly —

pull something like this off. There would be a repeat performance of

Bill, when he went around the province screaming at the top of his

lungs: "Not a dime without debate." And Don Phillips, the former member

from South Peace....

MR. MACDONALD: Where are they now?

MR. COCKE: That's right. He with his leather lungs spewed

forth fire across this province. You know what that was about? It

wasn't about giving ministers $120 million to flip around wherever they

want. It was some kind of constraint upon the length of time that we

would debate particular

[ Page 8350 ]

estimates: oh, what a terrible, terrible travesty!

That, contrasted to this, was angel-like. This is indeed a travesty

This runs counter to everything that parliament stands for. Try to pull

something like this off in Westminster. I'll tell you, they'd be there

forever and three weeks, Mr. Speaker. This is a giveaway bill to a

minister who can walk around the province and say: "Well, if you vote

right, I guess we can give you a piece of the action. If you don't

happen to vote right, sorry, none for you."

You see, first they cut back the estimates on Health. They cut

Health to the bone, and then they come up with this largess. You know,

my baby, the ambulance service — the emergency service in this province

was cut back $4.6 million. Is there any reliance on their getting that

back out of this $120 million? Not if the minister doesn't feel like it.

That, Mr. Speaker, is absolutely dead wrong. This is the kind of

bill that sets parliament back years. Once you get away with this sort

of thing, it continues. I have stood in my place in the last ten years

in this House, where legislation is brought in. It is called enabling

legislation. Nice, easy words to say: enabling legislation. What does

enabling legislation do? Enabling legislation takes away from the

Legislature its right to argue bills and puts it in the hands of the

cabinet ministers to bring in regulations instead.

This province is run from behind those oak doors down the hall,

totally. The Legislature is becoming absolutely irrelevant because of

this kind of legislation. It is an absolute intrusion on democracy, an

intrusion on democracy that should never, ever be permitted. There

should be a constitutional fight about this sort of thing. But no. A

little debate within these four walls. Let's pretend nobody can hear.

The odd person, given plenty of time, might pick up Hansard and say: "Holy smokes, what's going on in British Columbia?"

I'll tell you, it is so bad that they can't even find one member on

the government side to debate the bill. We have had three people on the

opposition side. Except the Minister of Finance.

MR. MACDONALD: Is he a hopeful?

MR. COCKE: He is a leadership candidate, I am told. God help

the rest of us if he makes it. Bringing in this kind of legislation,

Mr. Minister of Finance, shows that there is no way that you should be

considered, but you will be. This is not proper legislation. This is

legislation that gives carte blanche to a government member to go out

there and spend it wherever he wants. That's why we have moved this

amendment.

The amendment restores this money directly to the estimates, where

it belongs in the first place, where this committee as a whole can then

debate the expenditure of those dollars knowing exactly where those

dollars are going and then either give the minister approval or not.

That has nothing to do with this piece of disastrous legislation. We're

setting a very unfortunate precedent, a precedent that says in the

future ministers will be given discretionary money.

I remember when I was Minister of Health. I had some discretionary

money for what we called very, very significant health problems that

occurred, and people couldn't take care of them — a few thousand

dollars, so that a family with hemophiliacs could be looked after and

their situation could be looked after by the department. Something like

this would have been absolutely unheard of. Just go back in your minds,

Socreds. Just remember, just think: if the now member for

Nanaimo (Mr. Stupich), as Minister of Finance, had brought this bill

into the Legislature and I, as Minister of Health, had been given $120

million to go around and deal out, what would have been the cry then?

I can remember a few of those actors. They would have gone out of

their trees on that issue, and rightfully so. This is not the kind of

legislation that we should ever look at approvingly in the Legislature

of British Columbia. We have walked away from our responsibility the

minute we pass this bill. We have walked away from our responsibility

the minute they vote against our amendment. The only thing that can

make this bill stand the test of time is that amendment, which restores

the dollars to the estimates.

[4:15]

I'm not the greatest prophet in the world, but they're going to vote

against that amendment. They're going to stand and vote against that

amendment. In voting against that amendment, they're going to be voting

against the very thing that they were elected to do, and that was to

serve the people honestly, properly, in the province of British

Columbia to the best of their ability. They will have divested

themselves of that responsibility without even a sense of remorse. It's

a very sad day for this Legislature in the province of British Columbia

when we look at this kind of bill and this kind of action taken by a

government that's so totally starved for policy, for platform, for

direction, that they would resort to this kind of political shenanigan.

DEPUTY SPEAKER: Pursuant to standing orders....

HON. MR. CURTIS: On the amendment, Mr. Speaker.

DEPUTY SPEAKER: The minister rises on the amendment.

HON. MR. CURTIS: Mr. Speaker, thank you. I did not wish to

correct the Chair. I'm speaking to the amendment which has been

proposed by the official opposition.

Well, the hon. member for New Westminster is correct on one thing.

He just made a prediction. The government rejects the amendment for a

couple of reasons which I would like to spell out. I recall the "not a

dime without debate" era when the NDP was briefly in government in this

province, and the record will show that upon the elapsing of a given

period of time all remaining estimates not debated would have been

passed. That was what that debate was about.

I will not reflect on another bill which is before the House, but we

have heard the same argument in that connection as well. We have 28.6

percent of the provincial budget comprised in the Ministry of Health in

all its activities — the largest allocation of any ministry. That's

$2.755 billion, an amount more than the total budget of some provinces

— not many; an amount more than the total budget of some states in the

United States of America; a very significant amount of money.

The impression should not be left with those who follow these

debates that this fund cannot be debated quite apart from the debate

which is occurring now establishing the fund. The fund appears in the

estimates for 1986-87. It is on page 116, and in subsequent years — in

year two of the three years; in year three of the three years — I know

of no rule in this Legislature which will prevent members of the

opposition and members of the government party from questioning the

Minister of Health with respect to what has been done

[ Page 8351 ]

with that money. One of the hon. members on the

other side did say that it is an amount to be spent in health. Another

member went a little too far, I think, in excitement over opposing the

bill and suggested that the minister can spend it on anything he or she

likes. It is clearly money for health care in the province of British

Columbia.

Mr. Speaker, let's just look at this thing in a slightly broader

context; I think it might be useful — and with respect to another bill

as well; if possible, I'll say the same thing at that time, but I will

not intrude upon that bill at this moment. The fact of the matter is

that in the health improvement fund the government is saying to the

health care community — in all its forms, Mr. Minister of Health — that

we have limited resources. That's a constant in any Canadian province.

British Columbia is no different, no better, no worse, than any other

province in terms of the availability of dollars for something as

important, as major and as expensive, if I may say so, as health care.

We're saying to the health care community: "Bring us your ideas; bring

us your suggestions: bring us your views as to how best to use that

limited amount of money; be innovative; be creative; look at preventing

people from getting into the hospital, preventing it being necessary

for people to get into hospital; bring us all the ideas in the world."

One member opposite also said: "People in the health care industry

are going to have to be up burning the midnight oil" — I think that was

the phrase — "working and reworking suggestions." Well, they're not. I

have confidence in people in the health care community. They have

endless ideas and thoughts with respect to utilizing those scarce

dollars: new programs, new techniques, a new form of care, outpatient,

whatever it may be. The members of this Legislature know that surely,

Mr. Speaker. There are a host of ideas held by the health care

community; that's what this fund is all about. That's what we're saying

to them: $120 million this year, and additional millions in years two

and three; bring us your ideas.

Mr. Speaker, notwithstanding their concern, let the members opposite

at least acknowledge that as the money is allocated and reported upon,

the Minister of Health of the day will have to stand in this chamber

and announce and defend the decisions that have been made.

Interjection.

HON. MR. CURTIS: I listened quietly, Mr. Member for New Westminster.

MR. COCKE: What nonsense!

HON. MR. CURTIS: Don't say "What nonsense." The Minister of

Health will have to defend the allocations made under this vote and

will have to answer not only to the House but to the community. Mr.

Member, I am speaking of a year hence, when some allocations have been

made, the approximately $120 million which is alluded to on page 116 of

the estimates and which was talked about in the budget. We have $120

million for the fund in year one, fiscal year 1986-87, out of a total

expenditure for that ministry in this fiscal year of $2.755 billion,

28.6 percent of the total provincial budget, approaching one-third of

every dollar that is spent for government in the province of British

Columbia.

Mr. Speaker, the government, as I said earlier, rejects the

opposition's amendment. But more importantly, the government, through

Bill 5, says to the health community: "Bring us your ideas; bring us

your suggestions; bring us your programs; bring us your thoughts with

respect to" — wonder of wonders, Mr. Speaker — improving health care in

British Columbia." The Health Improvement Appropriation Act: improving

health care for the people of this province, not only this year or in

year two or year three but in years which follow. In the health

services we provide through this Legislature.

We cannot accept the amendment, Mr. Speaker.

I move adjournment of this debate until the next sitting after today.

Motion approved.

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

ESTIMATES: MINISTRY OF

CONSUMER AND CORPORATE AFFAIRS

On vote 14: minister's office, $212, 804.

HON. MR. VEITCH: I'm very pleased to introduce debate on

estimates for the Ministry of Consumer and Corporate Affairs for the

1986-87 fiscal year. In considering our expenditure plans for the

upcoming year, I'll demonstrate my ministry's commitment to full

participation in the economic development plan of this government.

The last fiscal year was a landmark for Consumer and Corporate

Affairs, and I believe this year will be even more productive. More

than ever before, the focus of activity has been on innovative ways to

improve and to streamline our legislation and policies to encourage

economic development in the province while still ensuring the public is

protected in the marketplace. I'm proud of the role my ministry plays

as a partner in the process of economic renewal. We extend that

partnership to the various industries and businesses that we regulate

and to the consumers we have the privilege of serving. We share

responsibility for making sure everybody gets a fair deal and for

helping all British Columbians realize their full potential as

marketplace participants.

Mr. Chairman, we must be careful not to overlook the vital role the

marketplace plays in our society. It has been proven that the

alternative to a free functioning marketplace is government control.

History has shown us that that is not the most attractive solution. It

may have been appropriate in the past to think of the Ministry of

Consumer and Corporate Affairs as a ministry whose chief purpose was to

place regulations and controls on the marketplace. Not today. We are

playing an increasing role in helping develop a stronger economy in

British Columbia. Our goal is to build a marketplace that is seen to be

honest and fair, a marketplace that has integrity, a marketplace that

serves the interests of consumers as well as those of business.

I assumed this portfolio at the time the fiscal year for 1985-86 was

about to draw to a close. I was delighted to learn of the progress the

ministry has made, and using the resources allotted to it in the most

constructive and efficient manner possible. Staff should be commended

for working extremely hard and for working well. They have effectively

administered our existing programs and have helped to develop new

legislation and policies to respond to marketplace

[ Page 8352 ]

dynamics, whether they are felt in our consumer and

tenancy relations, corporate and financial relations, liquor control

and licensing, liquor distribution or management support services

programs. I look forward to continuing the momentum and to working as

minister responsible for an organization committed to improvement and

change in order to meet the government's goal to serve the people of

British Columbia more effectively.

Looking back on achievements during '85-86, it's easy to see how

we've arrived at this point, when signs of economic renewal are all

around us. As I indicated when I spoke during the budget debate, one

important sign of economic renewal, and a sign of confidence that

British Columbia is a good place in which to do business, is the number

of incorporations. There were 14,052 incorporations in 1984; in 1985

there were 15,581 more. Staff working in the companies office strive

for a 24-hour turnaround time for the registration of new companies.

Commitment to the highest possible level of customer service continues

to be the operating philosophy in the companies office as well as in

the central and mobile home registries. Implementation of a new

computer system in central registry has been completed, and that means

faster responses on searches and in general more accurate and timely

information to our various clients.

[4:30]

Mr. Chairman, we have passed a new Securities Act and a Commodity

Contract Act to provide better protection for investors and a more

efficient regulatory structure for raising capital in British Columbia.

I'm sure this legislation will provide consumers and investors with

increased confidence and incentive to invest in British Columbia. The

Securities Act is designed to ensure that fair dealing is the rule of

the marketplace and to encourage bona fide investment in business and

industries which will help create jobs for the people of B.C. The new

act restricts self-dealing in mutual funds and prevents

non-arm's-length transactions between mutual fund insiders. It also

prohibits insider tips about takeover bids and provides for continuous

disclosure of material changes in circumstances relating to a security.

Stiffer penalties for wrongful dealings have also been provided as an

authority to create a securities commission. That new Securities Act

will, we hope, be proclaimed very shortly. An important component of

our estimates is funding to establish the commission so that it may set

directions for the future of securities regulation in the province of

British Columbia.

[Mr. Strachan in the chair.]

Another important initiative will enable the ministry to improve

regulation of financial institutions. We will be launching very soon

further consultations with British Columbians on opportunities for

economic development of the financial institutions sector and

improvements we can make to improve regulation and enhance the climate

for economic development in this province. Views are being canvassed

from industry, business and consumer groups. We want input as an

important first step to finalizing changes to the legislation of

financial institutions under provincial jurisdiction and preparing

proposals on how development of the financial services sector can be

fostered.

We shall also continue efforts to make the establishment of an

international financial centre in Vancouver a reality. Growth in

international trade is crucially dependent on a world-class financial

services industry. By attracting financial transactions among

non-residents, we can complement development of our domestic financial

services sector.

Our new superintendent of financial institutions will be serving as

a central figure in the strengthening of confidence in an already

strong British Columbia financial services industry. He will join with

the superintendent of brokers and real estate and the deputy

superintendents of insurance and of trust companies, credit unions and

cooperatives to help guide the process through to completion. In

looking for ways to encourage economic development of the financial

services sector, we are conscious we must not lose sight of the need

for continued and effective regulation. To that end we propose

increased resources to improve our capacity to investigate and audit

financial institutions, and to provide new technology to enhance our

ability to identify and to respond quickly to potential problem

situations.

As you can see, Mr. Chairman, the importance of financial

institutions in British Columbia will be underscored by continued

activity in this important sector of the marketplace throughout 1986

and 1987.

Turning to our consumer and tenancy relations program, I'm pleased

to acknowledge a number of significant achievements of the past fiscal

year. The Travel Agents Act was amended to improve administration and

to help minimize future risks to the travel assurance fund. The

registrar of travel services now has increased powers to monitor and to

control high-risk registrants. No government can be expected to prevent

all business failures. We can ensure, however, that our regulations are

sufficient to minimize the risk to consumers. This is our aim with the

travel services program, and through our travel assurance fund —

compensating customers for travel services not received as a result of

the difficulties of British Columbia travel companies is the goal. I

would like to acknowledge the support the travel industry provided

throughout the development of our legislative proposals. Their

continued involvement with my ministry will help us ensure that the

needs of the travel business and of the citizens who are their clients

are properly met. We particularly look forward to regular input from

representatives of the industry through an advisory council which will

soon be appointed.

Mr. Chairman, our consumer credit and debtor assistance branch will

make a high priority of continuing to provide a high level of service.

In the 1985-86 fiscal year more than 5,000 debtors were assisted

through personal interviews, and another 9,000 or so British Columbia

residents received assistance over the telephone. Through the efforts

of the hard-working staff of this particular branch, more than $3

million was returned to creditors who would otherwise have had to write

off these debts. Increased use of computer technology by the branch

proposed for the upcoming fiscal year will strengthen the branch's

ability to disburse cheques to creditors in a timely manner and to

improve overall administration of the debtor assistance program.

The motor dealer licensing branch will administer its legislation by

registering, inspecting and responding to complaints respecting motor

dealers in the province of British Columbia.

Staff in our cemeteries division will continue inspections, 189 last

year; financial reviews of perpetual care funds, 78 last year; and

funeral plans, 20 last year.

Trade liaison staff will work with business and consumers to increase awareness of ministry policies and of legislation;

[ Page 8353 ]

and our consumer education officer will ensure

information flows to schools in support of the compulsory consumer

education course in British Columbia's high schools.

The new residential tenancy branch has completed its first full

fiscal year in operation. During the first ten months 2,504 arbitration

applications were processed, over 76,000 telephone inquiries answered,

almost 600 information files resolved, and just over 9,700 office

interviews conducted. We have found our arbitration system to be fast,

fair and far less expensive than court proceedings. Fears of massive

rent increases as a result of removal of rent controls have not

materialized. Many tenants have enjoyed more moderate increases since

the ceiling was removed. With increased understanding of the respective

rights and responsibilities of landlords and tenants under our new

Residential Tenancy Act, we are finding that British Columbia's

regulation of landlord-tenant relationships is very effective indeed.

In liquor control and licensing we have responded to the unique

nature of our world's fair by developing rules and establishing liquor

licensing procedures for Expo 86. Our involvement with Expo is expected

to continue so that we may ensure successful licensing during British

Columbia's sponsorship of this wonderful world-class event.

During the past fiscal year we also took

part in continuing

discussions with the grape and wine industry in British Columbia. Those

discussions ultimately led to British Columbia's agreement to join with

a Grape Marketing Board, the Wine Council of British Columbia and the

federal government in a program to replant red grape acreage into white

grapes and to eliminate the red wine surplus. Some of this replanting

is now underway. The then-Minister of Agriculture and Minister of

Consumer and Corporate Affairs were party to the decision to offset the

shift in consumer preference from red to white wines and to protect the

grape wine industry in the province of British Columbia.

The ministry also implemented changes to liquor policies which

followed cabinet review. British Columbians were asked for their views

as part of that process. The changes allowed licensed hotels and

neighbourhood pubs to sell refrigerated beer, cider and British

Columbia wines off the same site as their establishments, permitted the

establishment of British Columbia winery shops, allowed lounges at

Victoria International Airport to serve liquor on Sunday for the

convenience of the travelling public, and enabled the sale of draft

beer in restaurants. More recently we allowed public houses and hotels

as well to remain open during their normal hours and to sell their

wares seven days a week.

In our own liquor operations, LDB earned some $390 million,

introduced modern retailing, opened new agency stores using private

retailers to serve rural customers, and continued to provide the access

of domestic and import producers to the marketplace. Mr. Chairman, we

also amended regulations to add wine coolers to the list of permissible

products for ordinary off-sale premises.

Administratively we will continue to support program activities for

the provision of personnel, operational review, policy, public affairs,

financial and information system advice. All support services are

designed to improve the efficiency and effectiveness of the operations

of the entire ministry.

Mr. Chairman, these are just a few of the activities that have

occurred, and new initiatives will be coming before hon. members of

this House in the coming year. I am pleased to report that our plans

for the upcoming year will require only a moderate increase in

expenditure. Many of our initiatives are possible because of the

significant savings achieved over the last few years.

Mr. Chairman. I look forward to debate on my ministry's estimates,

and I know we all share the desire to see even greater improvements in

the service the government provides to the marketplace of British

Columbia.

MR. LAUK: Well, if the minister is going to invite debate,

far be it from me to turn him down. The minister has been in office for

such a short period of time, it is very difficult to blame him for

everything.

I rather think it showed a remarkable lack of self-confidence when

the minister took office to muzzle his staff so abruptly and come down

on them so hard. I mean, there was no significant public display of

press leaks from the minister's office. I think that he was being a

little bit too nervous and showed, as I say, a little bit of lack of

self-confidence.

There is a problem with consumer protection. I want to ask one or

two questions of the minister with respect to it. The two major items I

want to talk about are uninsured financial institutions and the current

spate of foreclosures and bankruptcies with respect to fitness

businesses. These are two areas that have ripped off ordinary British

Columbians rather badly over the past few years.

In particular. as an example on the financial institution side, an

uninsured financial company like Victoria Mortgage Corp.... There were

several people who bought debentures with this corporation and, within

a few days of their renewal, with the mere rumour that Victoria

Mortgage Corp. was going to go belly-up or into receivership, went in

and were told that it was all right to renew their debentures. Others,

in the face of public statements by the officers of this corporation,

allowed the automatic renewal provisions of their debentures to take

place. A few days later receivership, or intended receivership, was

announced. On the face of that, that's fraud. It is at the very least

what the legal beagles call "innocent misrepresentation," but

misrepresentation nevertheless, to the extent where people have lost

their life savings or a good part of them.

To say, as the minister did — and I am sure it wasn't just rhetoric

— that he wanted an honest and fair marketplace.... Those were his

words: a marketplace with integrity, in the interests of the consumers.

I think these were the phrases the minister just used in introducing

his estimates.

[4:45]

I wonder if the minister can explain the inaction of both his

department and the Ministry of the Attorney-General not only to deal

with the people involved with the mortgage corporation that I've just

mentioned, but to deal with them forcefully, quickly and firmly as a

deterrent to others who would deceive people and who would rip them

off. There is no other expression to be used in that situation.

It seems to me there is a prima facie case in the case of Victoria

Mortgage Corp. — a prima facie case without explanation — of deliberate

deception, where investors were asking whether their debentures should

be renewed or cashed in. They were told everything was all right days

before receivership was contemplated by the officers of the corporation.

I asked the Attorney-General last year, and the member for Victoria

also asked, whether or not an investigation was underway with a view to

enforcing all statutes of Canada and

[ Page 8354 ]

the province against people who may have been

guilty of wrongdoing in this regard. I may have missed his report, but

as yet there has been no report with respect to such an investigation.

I have no vendetta. I am not out to get the people that ran Victoria

Mortgage Corp. But I think it is incumbent upon the administration to

make examples of those who would do that to innocent investors in the

province.

The other question that was raised by the opposition at that time

was this, if you like, contextual misrepresentation that since Victoria

Mortgage Corp. and others under similar names were not insured —

whether or not it is fair and honest and in keeping with the integrity

of the marketplace to require such corporations to advertise and make

known to would-be investors that they are not insured. They are clearly

set up and present themselves to the investing public in such a way

that they appear to be like other financial institutions that are

insured. An unwary or inexperienced investor with life savings is not

adequately informed of that non-insurance.

The other issue that the minister has allowed to slip by, and which

cannot be described as an honest and fair situation in the marketplace,

is fitness spas which are hard-selling memberships — some of them

lifetime or many-year memberships for large amounts of money — to

people who are not likely to be experienced in this kind of thing and

not likely to beware of this kind of thing. I would suggest that this

experience with fitness centres is a very old experience; it is not

just a new one, although it's come up in the news again. But surely

there is some protection in the law for deliberate deception, and there

has to be deliberate deception when you buy a lifetime membership in a

fitness centre, as has been described in the press if the press reports

are correct, and a few hours later there is an announcement that it has

gone bankrupt, with apparently no opportunity to recover their money.

We're talking about people that don't have much and can't throw it

around. Platitudes and promises of good things to come are not going to

help these people. It seems to me that the minister can encourage the

Attorney-General to look carefully at prosecutions in some clear cases

to make an example of these fitness centres. A situation may arise

where a conviction under the Criminal Code may be upheld by a judge.

They should be watched very carefully.

Over the years I've owned a Mercedes-Benz. It's an old car; it's

over 20 years old. I've found that even during a depression such as the

one we've had in B.C. for the last three or four years, the price of

parts for that old vehicle goes up several percentages a year. It's a

ripoff to the extent that there's a captive audience. With Mercedes, I

understand, you have to go to Germany for six months just to learn how

to take off the gas cap. All of this mystique about imported cars has

added to the price of the parts. They are overpriced 10 and 20 times

their value in Europe and their true value in this country. Those of us

who want to use imported cars, especially old ones, and have to buy

parts to replace them I suppose are not going to find too much sympathy

out there. But I wonder if an examination couldn't be made of this kind

of overpricing and competition. I use it only as an example to the

minister, who started off saying that he believed in a free

marketplace, honest and fair, with an integrity, etc.

A free enterprise marketplace, a free market system, has

competition. When it doesn't have competition, it fails. In a sort of

free marketplace the competitors, or would-be competitors, try to

destroy each other, to the extent where sometimes they're successful.

When they are successful, they end up with the whole ball of wax; and

it is no longer a free marketplace. Somewhere in the minister's theory

of free enterprise he's got a solution to that problem that's plagued

economists for years. It may be a very serious attack on the minister's

rhetoric in support of free enterprise.

The more serious situation is elderly people, particularly women,

who are driving automobiles. I had a case recently involving a member

of my family. For years she'd taken an automobile into the same garage

and had it tuned up every three months. Because of a recent illness, I

was forced to go over her affairs, and saw the bills for every three

months for a tune-up. So I had a friend of mine who is a mechanic look

at her car and he found that the plugs and the points were set up

precisely to cause this particular engine to need to have a tune-up

every three months. Here's a woman on pension, in her seventies,

deliberately being cheated by a neighbourhood mechanic. The minister

can't be in all places at all times. We can't have a consumer cop on

the comer. But talk about unfairness: limited, fixed-income people

being cheated like that! Is that honest and fair? Is that the

marketplace? The marketplace has to be watched. We've taken action, as

a family, to deal with that particular issue. But sometimes people like

that, alone, do not have the resources that you and I have to protect

ourselves in the marketplace. That's the job of the minister, to set up

programs and to.... I would like to see in automobile repairs and in

body shops a self-policing situation, but it's not happening.

The two major points that I have for the minister with respect to

consumer protection are these fitness centres and the financial

institutions like Victoria Mortgage Corp. Ltd. There are clear breaches

there, and certainly clear wrongdoing; whether or not we can find a

statute to fit it under, I don't know. Insofar as that's concerned, I'd

ask the minister to respond to those points.

HON. MR. VEITCH: I want to thank the hon. second member for Vancouver Centre for those observations — for most of the observations.

The whole matter of uninsured financial institutions is something I

have certainly been very concerned with. As a matter of fact, it's

something that we're going to be addressing in this new paper which

soon will be released, called "Perspectives for Growth in British

Columbia's Financial Sector." There are a lot of questions that need to

be asked, not only, as I mentioned in my opening remarks, of the people

within the financial institutions, but of the consumer groups and

others, as to what we should be doing in order to have a proper,

increasingly viable, functioning financial sector in British Columbia.

There are a lot of so-called financial institutions in one form or

another, hon. member, that are not covered under deposit insurance of

any kind. Some of these institutions are