1994 Legislative Session: 3rd Session, 35th 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)

THURSDAY, MAY 26, 1994

Afternoon Sitting

Volume 15, Number 19

[ Page 11115 ]

The House met at 2:05 p.m.

Hon. R. Blencoe: We have today some very special visitors to our gallery and to our buildings, whom I have just been meeting with. It's my pleasure to introduce to the House His Excellency Maurice McTigue, the newly appointed High Commissioner for New Zealand to Canada. He is accompanied by Mr. Irvine Paulin, the consul general and trade commissioner of New Zealand in Vancouver. These gentlemen were here to talk about many things of interest to the governments of both British Columbia and Canada.

And of course, we talked about the Commonwealth Games and the expectation of New Zealand doing well at the Games; I didn't comment on that particular issue. Ladies and gentlemen, would you please welcome our guests today.

L. Stephens: In the precincts today we have 50 grade 7 students from Langley Meadows school in Langley, accompanied by several of their parents and their teacher, Mrs. Brenda Randa. Would the House please make them welcome.

Ministerial Statement

B.C.'S CREDIT RATING

These ratings confirm that we have turned the corner and put B.C.'s fiscal house in order. We've cut the deficit. We've frozen taxes for three years, while continuing to provide health and education services that ordinary British Columbians depend on. All the rating agencies have noticed that B.C. has the lowest debt levels in the country. Despite the severe negative impact of federal off-loading -- $2.5 billion to our province in this fiscal year alone -- B.C. has one of the strongest economies in Canada. In three years we've cut the deficit by 60 percent, and we will eliminate it entirely by 1996.

This year, spending will be limited to a 3.5 percent increase, which, after adjusting for inflation and population, means a real cut in spending of 1.3 percent. The rating agencies recognize that the working people and the business community in British Columbia have worked very hard and made sacrifices to ensure that our economy will continue to grow. We expect a 3.4 percent growth rate this year and a 2.8 percent growth rate next year.

By working cooperatively in partnership with all sectors of the economy in the interests of all people in the province, we have led the country in job creation, and we will create more jobs this year and next -- 47,000 jobs this year and 37,000 more jobs next year. The strong economy has attracted people from across Canada and around the world. In 1993, nearly one in five immigrants chose to move to British Columbia; traditionally the number has been one in seven.

In the first four months of 1994, employment was up 4.2 percent from the same period in 1993; retail sales in the first three months of 1994 were up 6.7 percent compared to the same period in 1993; and after a record year in 1993, housing starts remain strong, fuelled by population growth and increased employment.

We have one of the strongest economies in Canada, and we're bringing down the deficit without cuts to services that British Columbia's families rely on. We are creating a climate for investment in this province that's very positive. The credit ratings are confirmation that we're on the right track, and that benefits us all. The results are increased consumer confidence, increased investment confidence, and increased job creation.

When this government took office, we started out with a sound fiscal plan, and we've delivered on that plan in each and every budget. We will continue our course of action. We said we would eliminate the deficit in 1996, and we will ensure that we do that.

F. Gingell: It is with mixed feelings...

Interjections.

The Speaker: Order, please.

F. Gingell: ...that I stand to respond to the ministerial statement. The difficulty with being in opposition, as we all recognize, is that it is far too easy to continue in the role of naysayer and never acknowledge any positive results. I'm really pleased to hear that the province's credit rating has been affirmed by North America's four major bond-rating services. This rating tells me that we have been given a reprieve. We have one last chance....

Interjections.

The Speaker: Order! Hon. members, the member who has his place is having some difficulty responding due to the constant interjections. I would appreciate it if the members would allow him to speak without interruption. Please proceed, hon. member.

F. Gingell: We have one last chance to lay the groundwork for the long-term growth and success of this province's economy. The minister claims these ratings confirm that this government has put B.C.'s financial house in order. What these ratings confirm is the powerful effect that high levels of migration have had on our economy. They confirm the impact of the low interest rates during the past year, and the strong performance of our forest industry. They confirm that our province has performed well in the short term, despite the measures that this government has taken, which have put B.C.'s financial house in disorder rather than in order.

Yes, B.C.'s debt levels are the lowest in the country. But during this government's tenure, debt has increased by 60 percent, and much of this will be up for refinancing over the next few years -- possibly at significantly higher rates. One of the bond-rating services, Moody's, uses tax-supported net debt as a percentage of GDP as their key measure of economic health. This government has almost doubled tax-supported net debt as a percentage of GDP during their administration. There is no reason to believe that this government has the discipline to ensure that this trend will not continue.

How long will it be before our rating is downgraded? Debt services have grown by 43 percent under this government. We have the largest per capita spending of any province. Taxes have grown under this government by 40 percent, and they continue to take an ever-larger slice of the economic pie.

[2:15]

[ Page 11116 ]

Mr. Speaker, I want to encourage this minister to take the steps that need to be taken to get our affairs in order. One of those steps is to finally drop the window dressing and the bookkeeping shenanigans that show we're doing better than we really are. In my response to the budget, I demonstrated how through sleight of hand the minister turned a $1.2 billion deficit into a $900 million deficit. This government has also done its best to ensure that the benchmark in 1992 was so bad that it couldn't have been any worse. I was interested to see that 1992 was the one year that B.C.

Hydro did not pay a dividend to the government. What this did was to worsen the deficit for that year and make all subsequent years look better -- no real improvement, just fancy bookkeeping.

In conclusion, I would ask the minister to take some time from her enjoyment of this good news to look into the future: look to taking decisions that will control and start to reduce the debt that this province carries -- I personally would prefer our debt to be $28 billion and going down, rather than the $25 billion that it is and continually going up; look to taking decisions that encourage rather than discourage investment; and look to taking decisions that guarantee strong bond ratings in the future.

J. Weisgerber: It shouldn't go without notice in this debate that when this government took office in 1991, it inherited the best credit rating of any province in the country. This government inherited the lowest per capita debt of any province in this country. In the three budgets since then, this government has managed to double the net debt of the province to equal the debt accumulated over 120 years, and it has allowed debt in relation to gross provincial product to rise from 21 percent to 28 percent. This government has also managed to cause indebtedness to the tune of $7,800 for every British Columbian in the province.

Yes, this province is in better shape than the other provinces in Canada. But for this minister, whose

government has borrowed more money in three years than any other government in the history of British Columbia, to stand here and take credit for the credit rating of this province is a little hard to take. It's especially hard to take from a government that deliberately withheld the true extent of the deficit from taxpayers. The NDP....

Interjections.

The Speaker: Hon. members, please permit the member to respond without interruptions.

J. Weisgerber: This NDP government claims to have reduced borrowing by 60 percent over three years, and that's patently untrue. First of all, they deliberately inflated the deficit in 1992 and are currently hiding huge chunks of borrowing under the guise of B.C. 21. It's time that this government came clean with British Columbians about the true extent of debt in this province. It is by far the most important issue facing British Columbia today.

It's disturbing to see a government that, rather than recognizing a problem that it is facing, stands here and smugly brags about maintaining a credit rating that it inherited three years ago. If indeed that's all they have to brag about, it is really a record that doesn't bear much repeating.

The Speaker: The hon. member for Powell River-Sunshine Coast rises on what matter?

G. Wilson: I seek leave to respond to the ministerial statement.

Leave not granted.

The Speaker: The hon. member for Okanagan West rises on what matter?

C. Serwa: I request leave to respond to the ministerial statement.

Leave not granted.

The Speaker: The hon. member for Mission-Kent rises on what matter?

D. Streifel: I seek leave to make an introduction.

Leave granted.

D. Streifel: I apologize to the assembly for interrupting at this important time, but I have a group of students from my constituency visiting us here today. There are 70 of them altogether, in two sections, led by Mr. Larry Jepsen. They're from Edwin S. Richards Elementary School. I bid the House make them welcome.

Oral Questions

PUBLIC SERVICE APPEAL BOARD CHAIR

F. Gingell: There aren't many ministers here today, but I think I'll select the Minister of Finance for this question, if I may. The question concerns Joy Leach, the former NDP mayor of Nanaimo, who we understand has now been hired as the new

full-time chair of the Public Service Appeal Board, at $78,000 plus benefits, even though last year the previous chair was paid on a part-time, per diem basis. Why has this minister embarked on yet another patronage giveaway to an NDP friend?

Hon. E. Cull: I'm surprised that the opposition would attack a person like Joy Leach, with her impeccable reputation. She did some excellent work for this government as part of the Round Table on the Environment and the Economy. She developed an excellent paper on the Georgia basin initiative that is being pursued by this government. And she has had a long history of administrative service to the college system and the people of Nanaimo. I think she is an excellent candidate for this service.

The Speaker: A supplemental, hon. member?

F. Gingell: I simply don't understand what those particular things have to do with the appointment of the chair of the Public Service Commission. Fifty percent of the Public Service Commission's work in past years has dealt with appeals from external applicants. Last year external applicants were denied the right of appeal. How can this minister justify paying Joy Leach more than twice the money for half the work?

Hon. E. Cull: The public service appeals process has been considerably revised and revamped by this government. It was debated last year in this House. It was part of a process that was worked through to put in place a rational, fair system of appeals for public employees in this government. This particular function is going to involve a fair system for all our employees. I think Ms. Leach will be an excellent candidate to carry out that responsibility.

The Speaker: A final supplementary, hon. member.

[ Page 11117 ]

F. Gingell: The Liberal opposition has learned that the Public Service Appeal Board is moving -- to where? Nanaimo. Coincidentally, the new chairman, Joy Leach, lives in Nanaimo. In the past 71/2 years only one appeal has come from Nanaimo. How can this minister have such little regard for her taxpayers and so much for her NDP friends? Why has she once again allowed the wishes of friends of the NDP to come before the best interests of British Columbia taxpayers, by moving the appeal board to Nanaimo?

Hon. E. Cull: I guess since the Liberal opposition represents such a small geographical area in this province, they are opposed to seeing any government service moved outside Victoria or Vancouver.

Interjections.

The Speaker: Order, hon. members.

Hon. E. Cull: I think it's an excellent idea to be moving this service to one of our regions whereby we can provide more services and employment in other parts of the province.

PUBLIC OPINION POLLING BY GOVERNMENT

M. de Jong: Outside the House on Tuesday, the Minister of Finance stated that the poll -- bought and paid for by her ministry -- didn't ask any questions about how the people of British Columbia felt about her. Of course, that's precisely what question 3 in the poll does ask. Yesterday the minister refused to answer any questions about this abuse of public funds, so I'll ask her again today: was it the taxpayers of British Columbia who paid for the questions contained in the Finance ministry's prebudget poll?

Hon. E. Cull: I'm amazed that this opposition continues to ignore the positive initiatives that were made in this budget and can find only one thing to focus on. They've just heard that the major bond-rating agencies in North America have given us the highest credit rating of any province, and they're focused on an opinion poll at this point. That poll determined that people wanted to see the deficit down, jobs up and taxes frozen, and that's exactly what we've done.

The Speaker: Supplementary, hon. member.

M. de Jong: Accountability in government means telling people where their tax dollars are being spent, so let's have a little accountability. I've got a simple yes-or-no question that deserves a simple yes-or-no answer. Was the poll, which contained questions this minister admits are inappropriate, paid for by the taxpayers of British Columbia?

Hon. E. Cull: I have no problem in answering the question and saying that I think it is entirely appropriate for us to find out what people in British Columbia think about the economy, about budget measures...

Some Hon. Members: Yes or no? Answer the question: yes or no?

The Speaker: Order, please.

Hon. E. Cull: ...and about taxes, and then, knowing what they want and what their priorities are, to act on them in this budget as we have.

The Speaker: The final supplementary, hon. member.

M. de Jong: We have great difficulty getting a straight answer from the minister, so I'll put it in terms that maybe she can understand. Does the minister strongly agree, agree or disagree -- one of the above -- that the Ministry of Finance has commissioned inappropriate polls and that the NDP should be reimbursing the people of British Columbia for the cost of collecting that partisan data? The fourth option, of course, is: "I don't know."

Hon. E. Cull: I strongly agree that this government commissioned a poll so that we could determine what the people in this province wanted in their budget, and I strongly agree that we've delivered on that in this budget.

DELETIONS FROM DOCUMENTS OBTAINED THROUGH FOI PROCESS

J. Weisgerber: My question is also to the Minister of Finance. We finally received one of the internal audits we requested two months ago. This one happens to deal with the procurement process for photocopiers, fax machines and computers. The minister has been given a copy of this censored report, and I wonder if she would tell this House whether she agrees with the method by which it was censored by her staff.

Hon. E. Cull: I have not yet reviewed that report, but I'd be happy to take the question on notice and get back to the member.

The Speaker: The question is taken on notice, hon. member. Do you have a different question?

J. Weisgerber: Yes, I think I have a new question.

One of the areas in this report, which was indeed censored, dealt with the meter charges paid by the various ministries of government -- pretty simple, straightforward information. I wonder why the minister would feel it necessary to censor that kind of information from a public report.

Hon. E. Cull: The member seems to be under the impression that I personally take these documents and a black felt pen and mark out all the lines in them. I hate to inform him otherwise, but there is a Freedom of Information and Protection of Privacy Act. We do have staff hired and in place to implement that act, and they make those decisions. If the member doesn't agree with them, there is an appeal process to the commissioner.

[2:30]

The Speaker: Final supplemental, hon. member?

J. Weisgerber: Well, I wouldn't have dreamt that the minister had done this herself. Had she, I'm sure she would have marked in the relevant sections of the FOI Act beside the areas that were blacked out; secondly, she would have done it well enough that one couldn't hold them up to the light and read the silly stuff that was censored.

The Speaker: I don't believe there was a question.

EFFECT OF GOVERNMENT POLICY ON FISHING INDUSTRY STABILITY

R. Chisholm: The Minister of Agriculture is in Washington today discussing the Canada-U.S. Pacific Salmon Treaty. He is lobbying the U.S. government to get

[ Page 11118 ]

involved in treaty negotiations that would enhance and stabilize the fishing industry in British Columbia. Meanwhile, with the introduction of the Fishing Collective Bargaining Act, the Minister of Labour is destabilizing the fishing industry. Can the Deputy Premier explain why the government is going in two different directions at a time when this industry needs as much stability as possible?

Hon. E. Cull: I would be glad to take the question on notice for the two ministers.

The Speaker: The questions are taken on notice, hon. member. Have you a different question?

R. Chisholm: I have a new question to the Deputy Premier. Considering the gravity of this and other issues, is it the policy of the government to have their ministers discuss and negotiate issues before introducing bills to this House to enact laws?

Hon. E. Cull: I believe I have already taken this question on notice, hon. Speaker.

The Speaker: The member has a further question?

R. Chisholm: I have a new question to the same minister. I have four letters -- one from the fishing vessels association and three from the native fishing associations -- stating that the minister has not met with them, and has in fact avoided meeting with them. Can the Deputy Premier explain to this House who in this government negotiates with these people? Are the fishers telling the truth, or are the ministers telling the truth?

NEED FOR DECISION ON WCB PRESIDENT

K. Jones: One thing that people tell us in our WCB review panel meetings is that there is no leadership at the top of the WCB. Many point to the fact that the chairman of the board, Jim Dorsey, is also acting president. People are concerned that he cannot do both jobs effectively. We understand that hundreds have applied for the position of president. We now learn that after months of interviewing, there is still no decision. My question is to the Deputy Premier: why has it taken so long for the WCB to find a president?

Hon. E. Cull: It seems to be my day today. With respect to the WCB, I know that a process is underway of looking for a suitable head. Beyond that, I can't provide the member with any further information. If he has further questions with respect to this search, I will take them on notice for the minister responsible for the WCB.

The Speaker: Supplementary, hon. member.

K. Jones: We understand that the chairman of the WCB is getting an additional $30,000 as interim president. Mr. Dorsey clearly has no interest in finding a new president. Will the Deputy Premier show leadership and set a deadline for finding a suitable president to get the WCB back on track?

The Speaker: The member for a final question.

K. Jones: This delay at the WCB is intolerable. The WCB is in chaos. Injured workers are waiting longer and longer for services, and the unfunded liability is skyrocketing, but the WCB still sees no urgency for finding a new boss. The workers are looking for leadership; the staff are looking for leadership; the employers are looking for leadership. The Deputy Premier must concede that....

The Speaker: Order, hon. member. Do you have a question?

K. Jones: The Deputy Premier must concede that the person responsible for finding a new president has no incentive to find a replacement.

The Speaker: Hon. member, if you have no question, you may take your seat, please.

K. Jones: Will the Deputy Premier guarantee that a WCB president is hired immediately?

Hon. E. Cull: I'm glad to see that the opposition is concerned about the future of the WCB, and I look forward to their support when the person is appointed.

G. Farrell-Collins: I can guarantee the minister that if the person hired is a capable person and not an NDP hack, and if the search is done properly, we'll be glad to give unqualified support.

TENDERING PROCESS FOR OGDEN POINT PROJECT

G. Farrell-Collins: My question is to the minister responsible for just about everything. He knows who he is, hon. Speaker. The minister stood up in this House last week in response to a question taken on notice concerning the Victoria Line and talked about rejigging the contract after it had already been tendered and the low bid had come from a non-union firm. Can the minister tell us why that non-union firm was not involved in the consultation determining what the new project would be and did not have an opportunity to participate in bidding on that contract?

Hon. G. Clark: As I stated in the House, we saved the taxpayers some $300,000 by doing it in-house. The management team at Victoria Line did manage the contract itself rather than contract it out. They did attempt to contact all of the parties for the one subcontract that did go out. Unfortunately, the lowest bidder was not available at the very time in which the communication took place. Nevertheless, it seems to me that it's very hard to complain in the defence of any particular company when the taxpayers are so well served by the people at Victoria Line saving some 50 percent of the contract price by doing it

in-house rather than contracting it out.

The Speaker: The bell terminates question period

The hon. member for Chilliwack rises on what matter?

R. Chisholm: I rise to table documents.

The Speaker: Would the hon. member state the purpose of the documents, please.

R. Chisholm: The documents are letters from the Aboriginal Fishing Vessel Owners' Association and the Fishing Vessel Owners' Association of British Columbia.

Leave granted.

[ Page 11119 ]

Hon. A. Charbonneau: I rise to answer a question taken on notice.

The Speaker: Proceed.

POSSIBLE CONFLICT OF INTEREST FOR EDUCATION MINISTRY SUPPLIER

Hon. A. Charbonneau: On May 18, a member asked this question:

"The Ministry of Education has been negotiating with Magic Lantern Communications of Toronto to be the government's exclusive duplicator and distributor of educational videos for B.C. school boards. The problem is that Magic Lantern would be pushing their own products, while at the same time having responsibility for distributing their competitors' products. Does the Minister of Education agree that this constitutes a conflict of interest on the part of Magic Lantern Communications?"

The answer is that I thank the member for bringing this matter to the attention of the House, but there are no inherent conflicts in the selection of Magic Lantern Communications. The concerns raised are being addressed in the current negotiations with Magic Lantern.

Orders of the Day

Hon. G. Clark: I call Committee of Supply in Committee A, the estimates of the Ministry of Social Services. In the main House, I call second reading of Bill 41.

COMMUNITY FINANCIAL SERVICES ACT

(continued)

On the amendment.

The Speaker: The debate on Bill 41 was adjourned by the hon. member for Richmond Centre. Is the hon. member proceeding? Concluded?

I recognize the hon. member for Vancouver-Langara.

V. Anderson: I rise with mixed feelings to talk about Bill 41, which is for the purpose of establishing a banking facility in the downtown east side of Vancouver. I am quite aware that such a facility is greatly needed in the downtown east side. I am aware that the Royal Bank of Canada attempted and for some time did undertake that kind of community banking facility within the east side of Vancouver. It was greatly appreciated, and it was a sad time in the community when they withdrew that bank from that area. I am very aware that the people who live on the downtown east side have grave difficulty in undertaking the normal banking activities that other people take for granted.

It wasn't too long ago that -- in making a cheque available to a group of young people in the process of developing a private enterprise business of their own -- I learned that they could not find a place to cash my cheque because they could not find a bank or anywhere else where they could open an account. In order to deposit the cheque, they needed to open an account. I must say that through some intervention and encouragement, they were able to open an account at the VanCity Credit Union. They were able to begin their process of building a business for themselves.

I commend their initiative and their undertaking but not the obstacles in their way. However, this is a problem not only on the downtown east side of Vancouver but an obstacle throughout British Columbia and many other places as well.

When I was able to tour the province with the aboriginal legislative commission, I was very much aware of people within the aboriginal community who, likewise, were unable to have the banking facilities that they needed. It's not simply a matter of cashing a cheque; it's a matter of being able to get all of the services that a bank enables people to have. That's a very fundamental part of community life in which we are now engaged.

I'm also aware, having grown up in rural Saskatchewan and lived in very small communities that in many of those places there were no banking facilities. So the people of the community came together and began their own individual credit unions, which they were able to build up both individually and collectively and interrelate with the credit union system throughout Saskatchewan.

I'm also very much aware, through my activities in world development education through the church, of the credit union movement which began in the Maritimes and in which we train individuals to operate in that movement throughout the world. In developing countries and where people have far less financial ability and opportunity than we do -- even among many of our poorest here -- they are able to set up their credit union and co-op facilities and undertake savings, development, business development and many other aspects, because of the opportunities that have come through the education they got in Saskatchewan, the Maritimes and across Canada.

So I'm very much aware that there are opportunities for people to be involved in their own grass-roots objective of developing a system. I cannot understand why, with that kind of experience and expertise that we export around the world, we are not able to undertake that kind of development -- with support, if you like -- here initially in British Columbia. I cannot understand why this apparently has not been researched and developed within the credit union movement in British Columbia.

I'm sure that this opportunity could be available, as it must be, in the downtown east side -- and not only there but in Victoria and in the smallest place within British Columbia -- at far less cost than what's being undertaken in this particular venture.

We need to build up a banking credit system for all of the people of British Columbia, because that's part of the equality and rights they should automatically have. Unfortunately, we do not yet have in our human rights legislation that you cannot be punished or prevented from having services because of your economic situation. If we are to represent all the people of our province, then we must move forward to develop a system where all the people of our province have the opportunity for banking privileges, which they must have if they are going to participate freely and openly in our democratic society.

To legislate that opportunity against them as we have been doing is not right nor just on their behalf.

[2:45]

Having said that, as other members of our caucus have said, I'm very much in favour of the principle of making banking facilities available in a manner that all of the people of our province are able to make use of them. I have difficulty with the particular act before us, though, because it does not make those facilities available to all of the people of the province. It only makes it available to a very small portion of downtown Vancouver.

Most of those people who would make use of those facilities a few miles away in Burnaby, New Westminster, Surrey, Cloverdale or even Marpole, where I live -- those people fortunate enough to have co-op facilities but who do not have the opportunity of economic financial ability to do as they would like -- will not be able to take

part in this particular program. Even

[ Page 11120 ]

though they live in the same city, they are unable to travel to that particular opportunity -- when there are credit unions and facilities next door to them that are not serving them. I cannot for the life of me understand why the research committee of this government did not go through, find that particular opportunity and make it available to all the people of this province.

Having said that, I am not in favour of this particular action of establishing a private corporate bank in downtown Vancouver when we need a credit and banking system that is equally available to everybody in this province and can be managed and undertaken by electing managers, as they do with the credit unions, and controlling the dividends, however small they may be, which then come back to the shareholders.

Every person in this province should be able to be a member or shareholder in a credit union set on this basis, no matter how small their initial contribution, which in due course can help them grow with education and investment opportunities in a value-added way through the credit union system. So I fail to understand why this government has been so stupid, if I can put it that way, to bring forth this suggestion instead of one that would serve all the people in the province.

On the other hand, I have to acknowledge that as stupid as it is, it still may be better than nothing at all. It is still an indication of a promise that is only partially fulfilled, but a promise that is only partially fulfilled, that is inadequate and that will break down in due course may be better than no promise at all.

One of the realities is that the people of the downtown east side who represent not only themselves but others throughout this province in similar situations have been promised again and again that their interests would be taken into account and they would be able to participate, like others, in the province's banking system. I could not stand it if once again we were to promise and then, because we had a more rational argument and could do it a better way, tell them to wait to another day. We cannot continue to tell people to wait to another day.

Mind you, we will be saying that to most people, because if you don't live in downtown Vancouver, you're out of luck. That's not fair to the other people in Vancouver or to other people throughout the province.

I'm in a quandary because I cannot accept that what has been brought forward is a logical way of meeting the financial needs of the people in this province. On the other hand, I cannot personally stand by and say that those people who have been promised again and again should be totally let down without even a symbol that their need is recognized and responded to. That's all this is -- a symbol. In all of life, when you have nothing else to fall back on, symbols can be very important. Symbols at least recognize that you're there, that you're to be responded to and that you have been recognized as important.

It is important that we do not turn back and once again say: "You have been promised the world and ended up with nothing at all." Even though this nothing-at-all is not much more than that, at least it is a symbol of recognition that in this little corner of British Columbia at least -- which happens to be, of course, close to the riding of the Premier and of the minister who is bringing the bill forward; that has nothing to do with it, of course.... But it is important that at least that kind of symbolism not be destroyed.

I'm not that unrealistic; I recognize that this may cost us a great deal of money. It has the possibility of losing money in the process and of being a bad financial deal. But if so, we'll know who to call to account for the bad financial deal they have brought forward.

But I must acknowledge that even though it is a bad financial deal, and even though it is an expenditure of money which will not necessarily bring financial dividends, it is a symbol of other dividends which are important and must be supported.

There are many things in the downtown east side, not the least of which is the Carnegie Centre. It is a good centre that has brought hope, promise and new abilities to many people within that community. When it was brought forward, there was an argument that it would cost money, that it would be expensive, and that it would not provide the opportunity that people needed. However, the program went forward, the opportunity was there and the people themselves have made it function effectively and with great promise. They are to be proud of what they have done -- not of what other people have done for them but what they have done for themselves when the obstacles were taken away from them.

If this symbol helps to remove obstacles and helps to make these people aware that there are opportunities and that they can take charge of this and make it work, so much the better for them. But even if it fails, there are lessons learned within it, and there are opportunities. One can write it down, as we do with so much in life, to experience. Nothing succeeds in life or education like experience.

When this is underway, I trust that the government, we in the opposition and all the members of this House who have said that this is not a good deal will get to work and find a deal that is better. Perhaps before this even gets underway, we'll say: "Whoops, we have now triggered concerns and opportunities." And now perhaps the credit union itself will come forward and say: "Hey, we can do a better job than what you're doing." Perhaps there is another opportunity, so let's not throw it all out and say there is not another way to go.

In putting this forward, I must acknowledge that I will vote for the amendment. But if, by chance, the amendment should have to be defeated.... I don't understand why, when it's so logical that we should take it back and bring everyone on board, with an understanding of the process we've had, to discuss it in a rational way rather than emotionally, as we've done here. That's what legislation should be about: bringing it forward, having time to put it into committee to examine and improve it, and to come together with a more rational process that everyone can support. So I support that process.

Even this government has said -- believe it or not -- that they believe committees should be functioning more effectively, dealing with legislation as it comes forward and improving it before it goes on the books, not simply saying: "Here is a fait accompli; take it or leave it" -- with all of its warts and ill-fated conditions.

I challenge this Legislature and this government to give it an opportunity to be examined by everyone, by bringing forth a committee together. But having said that, I want to be able to say -- in fairness to the people in East Vancouver, who are a symbol around this province -- that my own caucus is well aware that I will vote for the amendment -- maybe not with their agreement, but with their support. And if that should happen to fail, I will vote for the motion as a symbol.

Even if that symbol fails, it's an opportunity for people to get in there and say: "We want to be a part of getting a financial system in our province that works to our benefit." True, I don't expect that this particular one will work well. I don't think it will serve the purpose it was meant to serve, even on the east side.

We will learn lessons from it. The people of the east side will learn that it is not a corporation that they want. What they want is a financial system that they're a part of, that they

[ Page 11121 ]

control and that deals in a language and a format that's typical to their way of living. They need something that belongs to them, not something that belongs to the government, that will be controlled by the government, that will be dictated to by the government and that in the long run will deprive them of the opportunity to manage the very thing they're being promised.

They've been given a false promise. I have to admit that sometimes when you're desperate, sometimes when you want to look to the future, even a false promise can be a symbol worth hanging on to. It can be the starting point for something better, much more effective and much more meaningful.

H. De Jong: I am pleased to rise to speak on the amendment to Bill 41, proposed by the opposition. I have some difficulty with this issue, because we're dealing with the very serious situation of providing something to people who do not have all of the things to their avail that other people may have. It's always difficult when we deal with that issue by way of another vehicle, in this case the creation of a bank.

I'm not sure if I'm right in what I'd like to say. It would appear, in the government's view, that this bill is an idealistic attempt to provide hope and opportunity for those who have fallen through the cracks of society and are badly used by the current banking system. If that is true.... I believe it was the member for Nanaimo who spoke yesterday and said that these people cannot cash their cheques. They have to go to banking machines or an institution where they cash cheques after hours and take a percentage of that cheque.

If the situation is that people who are unemployed or on welfare do not have the time to go to a bank, which is usually open for about seven or eight hours a day, how do employed people have the time to go to a bank? The logic doesn't seem to fall into place. I believe that a lot of people on welfare certainly have the time to get to a bank.

[3:00]

I have yet to hear of any bank that would refuse to cash a government cheque. I have never heard of it. I don't think there is a bank in British Columbia that would refuse to cash or start an account on a government cheque.

Interjection.

H. De Jong: The minister says that it's true. I'd like him to give some specifics on that. I do not believe there is a problem there.

The minister commented at the time of introducing this bill that it would help people cash their cheques and also help to avoid abuse in the social services system -- the abuse that has happened and is still happening today. I cannot for the life of me see how this would help avoid the abuse of social services money. I think the potential abuse in this bill and what it will create is going to be awesome. I don't think the government has really given any thought to that.

I had a visitor to my office a couple of months ago. He has a family of three or four children and had been on social services for several years. This individual has a fairly good job now. When he went to the tax office to fill in his income tax forms, it was suggested that it would have been better for him to stay on welfare, because at that time he was able to buy some RRSPs. His income, now being much lower in total, did not provide him the opportunity to buy RRSPs, because he had to look after his family. If it's possible that a person on welfare can make more money on welfare than by having a job of some $34,000 a year, then I think something is absolutely wrong.

I believe that the creation of a special bank in this case.... I'm not saying that all the people in East Vancouver are that kind of people. But the suggestion is that this would cut down welfare abuse. I firmly believe that the creation of this new bank may well encourage abuse instead of decreasing it, because it would provide them an opportunity to put their welfare cheques in one bank and go to another bank with the other moneys they earn.

I'm not convinced that this is really what we need. If it appears that there are only a few of these people.... I'm not so sure about that, either. I get quite a number of calls from people on welfare in my community, asking for this thing and another thing. When you're on the line discussing their problem with them for a little while, quite often you get asked: "Would you please hold the line, because there is another call coming in." Surely most people drawing a fair wage in our province can hardly afford to have two telephone lines come in to their place, but people on welfare can. At least I wouldn't be told to please hold the line if there wasn't another phone ringing.

I'm not so sure that a bank is the answer. The previous member spoke very eloquently about why credit unions were created, and in the old country where I come from they were created for the same purpose. In fact, there were special credit unions for farmers and for non-farmers. So there was even more distinction there in terms of helping each other, and that's what credit unions have stood for. While this government may well have a private member's bill in front of it at the present time to throw another carrot out to the credit unions, this bill is a direct affront to the many well-run and well-meaning credit unions throughout the province.

If the Vancouver credit union cannot comply with these kinds of things or does not want to be bothered, the credit unions in the big city have missed the mark as to the real purpose for which they were created in the first place. If there really is a special need in East Vancouver for a special bank or a special credit union, why would these people not be asked by the government or on their own initiative through Jim Green or whoever has the concern that this bank is needed...? Why wouldn't they be advised to start their own credit union and have it open at specific hours so that these people can easily have access to it? I simply cannot see why this bank is needed.

Besides that, if the government is so sure that this new bank is not going to create a problem in terms of overrunning their budgets or expending money and not getting money back, why do they need this continual government guarantee? Why do they need the continual supervision of the Minister of Finance? Is it simply to protect the $10 million that's going in there at the beginning? I don't think so. I think that there will be a continual draw. There is the same reference in this bill as there was in B.C. 21: the borrowing is without limitation. That's the scary point, hon. Speaker.

Last year during estimates debate of the Ministry of Municipal Affairs, the former member for Vancouver-Quilchena, Mr. Cowie, referred to a suggestion made by the Minister of Municipal Affairs that the government was looking at various alternatives to deal with the poor people in East Vancouver. One of those was to establish a bank, and some reference was made by the member for Vancouver-Quilchena that this bank would loan up to $50 or perhaps even $100 to welfare recipients in order for them to make it to the next welfare Wednesday.

I'm not so sure whether that was really the answer to help people who do not know how to handle money. I'm sure that every one of them would like to know how to budget and how to handle their money so

[ Page 11122 ]

they wouldn't run short $50 or $100 before the next welfare Wednesday comes along.

Again I must ask myself the question: why another Crown corporation that will be responsible only to the Minister of Finance and not to this Legislature? Why not try and educate those people, if it's education they're lacking? Or is this bank needed because of the lifestyle of some of these people? I'm not sure. But I'm sure that those who are familiar with East Vancouver and the people there know what the real problem is. I'm convinced that if these people were given the opportunity to start a credit union, that would be the way to go -- if they really need another financial institution. But it should not be a Crown corporation, a citizen-backed institution in terms of continual funding.

I'm not sure whether there were a lot of studies done. I'm sure that Mr. Green has pushed very hard for this proposal. I'm sure his heart is in the right place, but I'm not sure whether his proposed actions or the proposed actions by this government are the answer to the problem before us today. In my opinion, the problem is really not about the ability of the people of East Vancouver to do their banking; it is much deeper. I believe that the government should aim its resources at helping to educate them with regard to problems that lie much deeper than the billfold in their back pocket.

[D. Lovick in the chair.]

I'm surprised that the Leader of the Official Opposition has brought in a motion to refer this matter to the Select Standing Committee on Finance of this House. I could fully support the idea of referring it to the committee which deals with the social matters of people in British Columbia. I do not believe it is a financial matter to begin with. I, for one, cannot support the motion on the floor at the present time, because I believe it is referring the bill to the wrong committee.

If there is a problem regarding a lack of access and a lack of ability of the poor people in East Vancouver to do banking, it's not because the financial institutions are not available to them; it's either because of their lifestyle or their lack of knowledge about how to budget.

[3:15]

In conclusion, I want to say that I am of the firm belief that there is no need for this Crown corporation bank facility in East Vancouver. If that were the case, perhaps the government should also be looking at providing a grocery store, a clothing store and everything else that goes along with it. Perhaps the only answer would be to give them vouchers instead of money, and that would eliminate the need for a bank.

I am opposed to sending the amendment to the Select Standing Committee on Finance. I could have supported a motion to refer this matter, in terms of the real needs of the people of East Vancouver, to a social committee for further study. Overall, I'm opposed to a banking institution of this kind, as I have explained.

R. Chisholm: I rise to address this amendment. I have to support the amendment. First of all, I have to commend the government because they are trying to tackle the problem in Vancouver. But they must realize that this problem is not just in Vancouver; they have this problem around the province. We have to look at this issue in a little bigger domain.

Creating another Crown corporation is definitely not the way to go. After all, we have had our experiences with Crown corporations, such as B.C. Hydro, B.C. Rail, B.C. Transit and B.C. Ferries. They've all proven to be rather inefficient,

ill-run places to put favoured people. This is not the route we need. We need a route that is not going to eat up the resources of the taxpayer but is going to facilitate the needs of the poor of this province. There are many ways we can go about this, which is why I have to stand and support this amendment.

Send it to the committee. Let us take a look at it a little longer and find out exactly what the most efficient and inefficient ways are of doing this. When we have done this, we'll come back here and probably have a good solution. It would be very easy to support this bill at that point in time, because it is very necessary for us to solve this problem no matter where it is in the province.

I personally think that the credit unions might be a way to go. After all, they are throughout the province. They have the facilities and the infrastructure. This would be a good way to approach this problem.

As for this government getting into the banking industry, it is beyond me why we would even want to. Not only does this government intend to cash cheques, it intends to have the full range of banking services. That doesn't tell me that this is a facility that just cashes cheques for the poor. That tells me that we're going to be giving out loans and doing all the banking business that is available at any other institution. Since when is the Canadian Imperial Bank of Glen in competition with the Canadian Imperial Bank of Commerce? It's time we thought about getting into something a little smaller that can facilitate the problem throughout the province.

The community has asked for this service. They did not ask for the extra costs of banks, and they definitely did not ask for a Crown corporation. As I said, Crown corporations are just another arm of bureaucracy, and that arm is ill-controlled by this government.

As a matter of fact, Crown corporations are at the discretion of cabinet, and the boards of Crown corporations are at the discretion of cabinet. Here we have a government that will regulate this Crown corporation, and it has to report to cabinet. It will never report to this institution. The people of British Columbia will never look at the books of this Crown corporation. We've seen this in the past with the B.C. Ferry Corporation and B.C. Hydro. We've seen where we ask for reports, and they're all whited out. I'm sure this government has stock in white-out manufacturers.

Is that the way to go? Do we need another arm of bureaucracy? This government has enough employees as it is. If it keeps on going, we'll all be working for this government. We don't need another bureaucratic arm.

If we take our time to look at this problem and use a little innovation, a little initiative, I'm sure we'll come up with the proper solution. I have to say that I'm dead set against a Crown corporation. They have been far too manipulated in the past, and there's absolutely no reason why they will not be manipulated in the future.

If we look at the duplication in the bureaucracy and start talking about ministries and why we shouldn't have Crown corporations, consider B.C. 21. Just what is the role of the Ministry of Highways at this point in time? Nobody can figure that one out. Just who is controlling that ministry -- a Crown corporation or the ministry? Forest Renewal is another Crown corporation. Who's controlling that? Is it the Ministry of Forests, the B.C. Forest Service or the Crown corporation?

We have to take a long, hard look. Just what do we want to accomplish here? Do we want to build another bureaucracy? Or do we want to facilitate and get rid of a

[ Page 11123 ]

problem that we have, which is the delivery of a service to the poor of this province?

I'm not going to say much more at this stage of the game, other than that I am going to be standing in support of the amendment. I want to save a bit for the second reading of this bill. But I do wish the minister and this government would look at the direction they're going and at how they're going to deliver the service. Is this the most efficient way? Do we need a $100 million bank? Or can it be done through the ministry or a trust company? Are the facilities or infrastructure there? Do we need to guarantee $100 million worth of funds to support this?

It is being done in other jurisdictions far more efficiently than what we're debating here today. If you look at Alberta, they have a very efficient system of delivering the funds without the problems we're going through. Maybe it's time we started looking outside our own boundaries and taking notice of what they're doing. It might help us to guide ourselves and be a little more efficient in how we do business. On that note, I'll sit down and save the rest of my speech for second reading.

F. Gingell: When the Minister of Employment and Investment spoke in second reading of this bill yesterday, he talked about the needs of this specific geographic area, limited in size, and just a special-purpose institution to meet the special needs that all of us agree need to be met. He likened it to an embryo Alberta Treasury Branch and to a potential South Shore Bank of Chicago.

I want to tell you that our economy in British Columbia in 1994 does not in any way compare to the prairie economy of the Dirty Thirties, which caused the Alberta government to create the Alberta Treasury Branch to meet the needs of the citizens of Alberta at that time. The downtown east side of Vancouver is not the South Shore of Chicago. I know that the minister and I have been in them both. I can assure this House that the South Shore of Chicago is very different from the east side.

Hon. G. Clark: It's more affluent.

F. Gingell: It wasn't when I was there. That's not because of the bank, necessarily, but it may be.

That's not what we're trying to accomplish here. What we're trying to accomplish surely is not to set up a huge new bank organization. The purpose of the exercise is to meet the needs of the people who live there, because if it wasn't that, we wouldn't limit it to this geographic area. We would set it up so that it could be used in all kinds of various things. We wouldn't have the restrictions in the bill that restrict the businesses that it can carry on, even through subsidiaries.

The one issue that I would like to put to bed is that I said yesterday in second reading of this bill, very definitely and very clearly, that if the minister allows this bill to be sent to the Select Standing Committee on Finance, Crown Corporations and Government Services, the official opposition will make a commitment that if it can get back in here within a reasonable time, we will allow the bill to be passed in this House, as much as is within our power. Perhaps we can co-opt the cooperation of the other opposition parties, because we really do want to seriously look at other alternatives that I believe have not been properly canvassed.

The members for Nelson-Creston and Cowichan-Ladysmith and the Minister of Forests all suggested that we were trying to delay and put it off. That simply is not true. I make a real commitment, and I'm sure the minister will take me at my word. The expression was that all the Liberals do is talk, talk, talk. I would like to suggest that the one thing this government should do in this case is look before they leap. I am sure there is a better alternative.

The member for Cowichan-Ladysmith also said there really wasn't any risk of any guarantees that are made. Well, as someone who's a little older and has been through these exercises, I would like to advise the member for Cowichan-Ladysmith that every safe bet that you put a guarantee behind is a very real risk indeed. We in Canada should know that well. We have had two major financial institutions fail. They were regulated by federal government and by an independent authority with a great deal of power, and they both failed.

In fact, I can think of three, without counting the international Bank of Credit and Commerce, which perhaps didn't touch us here. But let's recognize that risk does exist. This institution can be run in such a manner that risk can be reduced. That means they won't make mortgages. That means they won't do a whole bunch of things. I suspect that that may not be the long-term plan. Maybe there is an opportunity that this bank could be used for more than just the social purposes that are put forward at this time.

[3:30]

At the moment, how is this bank going to be financed? They are going to take in deposits from pension funds. They are not going to be able to get any government ones, because there was an amendment today to Bill 44 which I think will stop them being able to get any deposits from government trust funds, pension funds, etc., that are administered by the government. But they are going to invest in the same things that those pension funds would invest in, and take 80 points -- I think that is the correct measure -- or maybe 75 points....

Interjection.

F. Gingell: It's down to 60 points now. So they're going to borrow $100 million, invest it, and pay the depositor a return of 60 points less than they hope and believe they can invest that money for. Now, why is anybody going to invest at 60 points less? Why don't they make the investment directly? Here's why: this government is offering a $2 million guarantee. So the pension fund decides that they will accept 60 points less -- why? -- because they will now have this government guarantee.

Now, all these things are risk-evaluated. Someone has made a decision that the risk is worth 60 points, and that number will change. That's the first thing that tells you that the $100 million of taxpayers' money is at risk. The real estate market can die; the Dow Jones can lose a thousand points.

Interjection.

F. Gingell: All of these kinds of things can happen. I don't know what you expect "Oh!" to do, but it is real.

Now I do agree that properly run, sensibly administered and regulated with an eagle eye, the amount of risk can be reduced. But who is going to regulate it? A federal institution? Oh no, it's going to be regulated by the Financial Institutions Commission. So the government is going to regulate itself.

FICOM's responsibilities, as we all know, are to regulate all of the financial institutions that come under provincial jurisdiction: the credit unions, some trust companies, some insurance companies and similar organizations. FICOM has very real powers and very real authority. Since it is the government, it can stop them from being in business, revoke their licences, cause them to do audits and cause investigations. It has an active role, and I believe that it does it very, very well. In this particular case, it's being asked to regulate its own employers, and that

[ Page 11124 ]

doesn't work. That simply doesn't work. So I'd like to suggest that the issue of risk is not quite as straightforward as has been stated by these members.

This morning, when we were dealing with Bill 44.... I would like to draw the attention of the minister to the particular sections of the Finance and Corporate Relations Statutes Amendment Act, because the government has changed the investment criteria for provincial trust funds this morning -- or it will when this passes.

Instead of a series of criteria that all trust funds must meet -- things like being listed on a recognized stock exchange, having paid a dividend for so many years, and those kind of criteria -- they have changed it to a term that I would call that of the prudent investor: "...the minister may invest or loan the money and in doing so shall exercise the care, diligence and skill that a person of ordinary prudence would exercise in dealing with the property of another person." Clearly it would be inappropriate for the government to invest one penny or make one penny deposit into the Community Financial Services Act.

Why? Because you would be accepting 60, 70 or 80 points less in the rate of return for your own guarantee. Nonsense! You cannot guarantee your own actions. A guarantee has to be a guarantee by a third party. I seriously think that you will find this a bind and a barrier to such plans, if such plans are part of your overall strategy.

This government has a lot of authority; it has a lot of power; it runs big bank accounts. It does a lot of work with not only the Canadian Imperial Bank of Commerce but with other banks, too. I am sure that we could find a bank to find a solution to this problem.

That brings me to one other thing that the member for Nelson-Creston said yesterday. He speaks quite often in his charming fashion about city folk who haven't been in the country. Yesterday he should have talked about country folk who haven't been in the city, because he described this particular area -- the area outlined in red on the map -- as one in which there are no financial institutions. The

longest-standing Royal Bank of Canada is just across the street. The whole area is just full of financial institutions. In fact, I believe that there are more financial institutions in a square mile around there than in any other place, perhaps other than in downtown Toronto. The other thing that he talked about was lack of police service. In fact, it is right next door to the Vancouver central police station. So I don't think he has been there. I understand that. But we should recognize that you have to know the area and think about how you solve the problems that face us all.

I'm really sorry that the member for Abbotsford is not willing to support this amendment to refer this to committee because he believes it is the wrong committee. I don't think that it's the wrong committee, because I think that we all understand what the problem is. We all want to see a solution. The difference between us is what the solution is and what the most effective way is of accomplishing it on behalf of all British Columbians at the least risk and the smallest cost. It is a Crown corporation that they're setting up; it is a matter of finance.

I must admit that I drafted the amendment, and I thought that it was the appropriate committee, because the social issues have been well defined.

Mr. Speaker, I will close by reiterating my commitment to the minister. If he will allow this to go to the select standing committee to look for a better solution -- a solution that I believe will be better for everyone, a solution where they won't make $25 on every identification card.... They're planning on selling identification cards at $30 a crack to these people living on welfare, and they are only going to cost $5. It's all in the report. That's one of their sources of income. For a government that keeps talking about ripoffs, I'm surprised that they would be promoting the ripoff of charging people on welfare $30 for an identification card that they can get produced for $5.

Let's just for once allow this to go to a committee, look at it and see if we can come up with a better solution, and put a definitive time line on when they must report back so it cannot in any way be delayed. Set a time line that gives us the assurance that Bill 41, in whatever form it finally takes, can in fact pass this Legislature before it prorogues. With that, Mr. Speaker, I thank you for the opportunity to speak to the amendment today.

Hon. G. Clark: I'll be speaking in closing debate, so I won't make a major speech now. I simply have to respond very briefly to the reasoned tones of the member opposite, because I've been there, hon. Speaker -- so have you. I've been five years in opposition and seven and a half years in this House. I don't want to sound like a veteran, but there are two parliamentary tactics which the opposition can use to demonstrate their opposition to a bill -- in fact, to attempt to kill a bill. One is a hoist motion, and the other is a reasoned amendment. This is what's called a reasoned amendment to refer it to committee.

It is nothing short of a parliamentary tactic designed to oppose the legislation. It is not designed, as the members opposite say, as a reasonable attempt to have a discussion about alternatives. It is simply a tactic, disguised in reasonable tones, to oppose the bill.

[3:45]

We know, from all of the speeches on the bill and on the amendment, that all members on the opposition side are ideologically, fundamentally opposed to this legislation and to this institution. We know that, and we hear members opposite. So this pretense that somehow we should vote in favour of this amendment and we'll have a reasonable discussion about alternatives is patently false. As a result, hon. Speaker, the government will be voting against this amendment.

Amendment negatived on the following division:

YEAS -- 10

Chisholm

Dalton

Farrell-Collins

Hurd

Gingell

Symons

M. de Jong

K. Jones

Warnke

Anderson

NAYS -- 35

Edwards

Charbonneau

O'Neill

Garden

Perry

Hagen

Dosanjh

Hammell

Lortie

Giesbrecht

Smallwood

Cull

Clark

MacPhail

Barlee

Blencoe

Janssen

Randall

Beattie

Farnworth

Doyle

Streifel

Jackson

Kasper

Krog

Brewin

Copping

Lali

Hartley

Boone

H. De Jong

Neufeld

Hanson

Serwa

Wilson

On the main motion.

Deputy Speaker: I recognize the member for Powell River-Sunshine Coast. Member, I'll just ask you to wait a

[ Page 11125 ]

moment, if you will, and we'll give members an opportunity to return to their other duties.

Will those members not participating in this debate please take their seats or otherwise give room to the member for Powell River-Sunshine Coast, who will make his comments on second reading debate.

G. Wilson: I'd like to open my remarks on Bill 41 by really commending the government for attempting to take care of a problem that is in need of attention. If we were to be honest in our approach to this so that the people of British Columbia have some understanding of what's being attempted here, we would try to keep the political rhetoric to a minimum and talk to the principle of what we're trying to do.

The government has recognized that there is a problem, and the problem exists in an area of downtown Vancouver and East Vancouver where residents require a banking service that is less than conventional -- or perhaps it is more than conventional; we might argue it from that angle. The fact is that the charter banks and the credit unions could provide the service -- there's no question that they could -- but they have chosen not to provide the service.

In fact, they have expressed a lack of interest in providing that service for a whole series of reasons, which are reasonable to them because trying to engage in the kinds of activities that this particular financial institution would warrant would not be viable.

In my comments to the amendment, I talked about not wanting to send this off to a committee. The reason that I don't believe it's sensible to do so is that this proposition has been studied and studied. The Montgomery report has been tabled and reviewed. As I pointed out in my comments on the amendment, it certainly has been in the public domain since the middle of February this year. There's no surprise in this. I talked about it publicly in late February and again in March. I had an opportunity to meet with people from East Vancouver to ask them whether or not they believe that this is the proper service to be provided.

I have differences with the government in the philosophical direction they have taken with respect to financing this bank and in what this bank will be able to achieve with respect to the moneys on deposit and the investments that will be there by virtue of the government guarantee. That is really at the heart of the major first concern I have.

The second is a question that comes from one that was asked by the member for Delta South. He was talking to the amendment when he asked why anybody would invest if there was going to be a return that would be 60 points less than if they went through a conventional banking system. The more appropriate question is not why would anybody invest. The question is: who is going to invest? What is the incentive?

The answer to that can be found under the guarantee

section of this bill, where we see: "The maximum amount payable by government under subsection (2)...." Without getting into too much detail, a $2 million guarantee is provided for certain kinds of depositors. Those certain kinds of depositors are "(

i) a public sector pension plan, or (ii) an entity prescribed by the Lieutenant Governor in Council...." I'm told that that language was deliberately put in there. I had some extensive discussions with people from the east side of Vancouver who were consulted about this. I also had one meeting with Mr. Green, who was very forthcoming, and I appreciate that. That language was put in there primarily to capture private pension funds.

We are looking at an opportunity for union pension moneys to be invested in this bank in order to provide the base investment necessary for this financial institution to remain solvent. Those who argue that there is no risk are incorrect. The member for Delta South has spoken to that, and I don't intend to repeat his words. There is risk involved in this venture, and it lies primarily with the taxpayer. Ultimately the taxpayers will have to secure those investments if the bank enters into investments which fail, or if it becomes insolvent as a result of less than prudent investments.

I want the members to remember Principal Trust, how it failed and what happened when it failed. An awful lot of people out there are still out of pocket a lot of money because of the failure of Principal Trust. An accreditation system that a former government engaged in failed to protect the securities that investors had deposited in that organization. Principal Trust is perhaps a different proposition, but I raise it as an example because it is important for us to understand that the risk in this venture is very clear and lies primarily with the taxpayer.

Philosophically, I disagree that the government should be entering into the banking business. It is providing a $200 million guarantee for union or for public sector pension funds invested into this bank in order for the bank to make investments into sanctioned social projects -- housing and land developments -- that are underway. It is important that we recognize that this has been happening in this province in a much more aggressive way over the last number of years.

Members know, as people in the province know, that I have raised the issue of the propriety of union pension investment with respect to the Bamberton land development and those kinds of investments. I have also raised the question of the Vancouver Land Corp. and its involvement in the casino and gambling operation. Their own prospectus suggested that there was going to be $35 million in revenue coming to the government. We have to go back to that prospectus when we review and consider this community bank proposition.

Certainly members from the east side of Vancouver whom I had an opportunity to meet with had some reasonable expectations that the dividends from gambling were going to be available for investment into the bank. Mr. Green has told me categorically that that is not true, and I have no reason to doubt him. Regardless, we must disagree on principle with putting taxpayers' money at risk by entering into a banking system of this magnitude and with this latitude in its operations. What we're really trying to solve is the hardships of people on low income in East Vancouver who need some place for financial security, a place that cashes cheques and looks after their individual financial needs.

[4:00]

When I spoke to the amendment, I said that it's important for responsible members of the opposition to say what we would do differently. I mentioned the Trillium Account, a government of Ontario initiative that was set up in 1922.

If you review it to understand why that account was originally established by the United Farmers, and if you start to look at how it has fulfilled its mandate over the years, you can see that one of the alternatives this government might have chosen -- and one, I would argue, they should have chosen -- was to provide some form of savings association or government facility, not unlike the Trillium Account, that would allow the opportunity for banking to be available in East Vancouver.

Clearly, had the government chosen to do that, they would not be looking at the relatively high risk they are going to be looking at as a result of the legislation we're putting in place here.

[ Page 11126 ]

When I put that question to members of the east side of Vancouver, they said: "Right, that's exactly all we want." All they want is somewhere to have that security. They don't necessarily need a bank that is going to attract union pension moneys, essentially, and then have an opportunity for investment and become part of the banking system of British Columbia. Furthermore, they didn't necessarily have an interest in seeing the level of community control directed so closely by government.

That raises a second very important point about this question of a community bank. If we're going to have those services available to members of the downtown east side, it's critically important that they have an opportunity to control that operation. I simply don't believe they are given that level of control in Bill 41, because the directors will be appointed by government and their mandate is going to be absolutely specific: to maintain the solvency of this institution. At least, we should hope it will.

It's bad enough that we're providing the $2 million guarantees for the union pensions that are being invested in blocks under

section 19. But it's important to recognize that those directors' mandate will be the solvency of this institution and that the needs and concerns already expressed by the members of the downtown east side are going to be lost in the long term. This will become more of a vehicle through which those investments can be directed into real estate, social housing and other land developments -- which may well seem socially desirable and, who knows, may well be necessary -- than one providing the service for which it originated.

I think there is much to suggest that's exactly what's at stake. When I met with the members of the downtown east side, they provided me with an opportunity to take a look at some of the memos that came out of the development process that provided guidance to the government -- from the Attorney General's office legislative counsel, for example, one of which dates back to January 26, 1994, and discussed issues around the first draft of this legislation.

Members of the east side had this, so I assume that it is not a secret memo -- as other colleagues seem to be able to come by -- but was clearly put out there for general discussion. Even back in January, when members of the community were consulted on this and these questions were put forward, there were, very clearly, two functional parts to what was being discussed: one, how do we provide the service; and two, how do we create an institution that's going to remain solvent and not become a long-term burden to the people?

It's on the second part that I have some philosophical differences with this government. I think those differences are legitimate and need to be put forward. I think the Trillium model, the Ontario model, provides less risk, the same kind of community service and, I think, a greater guarantee to the public -- to the taxpayer -- that whatever venture capital is put out by this bank or whatever investments this community financial service gets involved in, it will not cost the government in the long term. That's in terms of either the guarantees if it should fail or -- what I suspect is going to be more relevant -- the level of moneys that will be needed for this institution to remain solvent.

I confess that I'm not an expert on banking or banking systems. I've never pretended to be so, and I don't stand here and pretend to be so now. In February, when this legislation came to my attention, members of the east side asked that I meet with some of them and talk about what is going on here. We had just learned about the new casino proposal for downtown, and we learned that there had been discussions in community meetings about revenues from a government-owned casino flowing through this community bank. That immediately made me concerned. I was concerned that we were essentially setting up gambling as a means to generate revenue for government to provide social housing.

Philosophically, I think that is entirely the wrong way to go. I don't think we should be developing revenue on the basis of an addiction in order to provide social services, especially not for the downtown east side, because the people living in the east side of Vancouver don't support it. For example, the people trying to protect the Crab Park area don't support it. The people who are going to be the benefactors of social housing -- when and if it should develop, such as with the Woodward's development -- don't support it.

Similarly, people who are looking at the overall need -- and many of those people have multiple drug addictions and very low incomes and are in very difficult social systems -- don't support it, because they know that the competing influences and changes in that downtown east side area are going to be an overall negative for them, not a positive.

The question is, then, if all of the people I've just alluded to don't support it.... In the past many of these people have supported this government, and they may or may not in the future. They certainly have been addressed by this

government, because the government has had many community meetings. I know, because I actually tried to attend one but was escorted out because I didn't have the right political card. Nevertheless, that's another issue.

Hon. G. Clark: What?

G. Wilson: In fact, it's true; it happened at the Carnegie Centre on Main Street. Nevertheless, that's another issue.

Hon. G. Clark: You should have talked to me.

G. Wilson: I couldn't get there; there was too big a crowd for me to get through to ask permission.

An Hon. Member: Was it a big guy who threw you out?

G. Wilson: Let's not get onto that.

An Hon. Member: I thought it was a very petite woman.

G. Wilson: The member suggests it was a very petite woman, which just shows the respect we pay to all people, whether they're large males or petite women. I respected her authority when she threw me out. The member knows to whom I allude.

Nevertheless, the reason for this is not so much to talk about being thrown out of a meeting, which I was told was a party meeting....

An Hon. Member: It's probably not the first time, nor your last.

G. Wilson: That is true: it was not the first time, and it probably won't be my last.

The point is that there has been widespread consultation with members in East Vancouver over this. The reason I raise that is that what we were trying to get to the bottom of in our discussions around this particular issue was why the government would be looking at the kinds of guarantees they're placing in this. Clearly, in all of the interministerial memos and in the memos that were drafted for the meetings

[ Page 11127 ]

I've just alluded to, the reason was that they were attempting to attract particular kinds of funds that would ordinarily be going into other forms of investment but not necessarily into commercial banks or credit unions. It was intended that this community financial service not be a direct competitor to credit unions and financial institutions.

I then took the issue to the credit unions and financial institutions and sought some advice, from people who know far more about banking than I, about how this bank is going to operate. They really didn't have a problem with it. Most of them didn't think it was going to be an issue in terms of their own operation. Philosophically, I think they -- like I -- argued: why would the government want to go into the banking business? Every one I spoke to said that this is going to be a money loser and cost us money.

Every one of them said that the $2 million guarantee is something that could come home to roost on this government if this gamble fails -- and it is a high-risk gamble that we're dealing with here.

That's why I have to give credit to the government. You have to give credit where credit is due; otherwise, you have no credibility when arguing that it is not deserved. In the original proposal the investments were much greater. This government has indeed backed away from that. That signals to the people of British Columbia that this is a high-risk venture. As a result of that, we have to be very mindful, when we get into committee stage on this bill, that there must be some adequate monitoring and protection of the taxpayers' money with respect to those guarantees.

When we come back to

section 19 to look at the entities prescribed by the Lieutenant-Governor-in-Council, that has to be fleshed out. When we start to talk philosophically about the operation of the bank and the powers of the directors to invest, we have to know where those investments are heading, what kinds of parameters are involved, and what kinds of returns we're expected to see guaranteed from them. If we fail to do that, we are really going to be putting the people of British Columbia very much at risk with respect to the maintenance of this bank as a credible financial institution.

Let me close my remarks now and suggest that in principle we do not support the manner by which this bank is being established. We recognize very clearly that there are two different parts to the bill. One is the service that is needed in East Vancouver. We recognize that there is a way to do it. We would have preferred to see the government move toward an Ontario-style model, such as the Trillium Account, which has proven to be successful, rather than move toward the community bank, which is essentially going to put the British Columbia taxpayers' money at risk.

Philosophically, we recognize on the second point.... I put it on the record now. Let those who say I'm wrong prove me wrong. This bank is going to be an instrument through which there will be substantial union pension moneys deposited and reinvested. Through that reinvestment those moneys are going to be going into large-scale real estate developments, as we've already seen with the union investments into VLC, Bamberton and Okanagan Land Corp.

I say that the reason they have to have this bank set up this way is to provide them with the guarantees that they cannot get now when they put money into high-risk venture capital. The real estate industry is high risk. VLC has a lousy track record in this province in terms of delivering on its contracts to provide service to the city of Vancouver. It was the creation of the former mayor of Vancouver, along with a Vancouver businessman, who did not deliver on the real estate properties that they were contracted for. It has a terrible track record.

Hon. Speaker, be forewarned that those in the Alliance are certainly going to watch with interest as moneys flow into this bank and as moneys flow out. We would serve notice also that we will vigorously oppose, with every fibre we have and with every act we may have at our disposal, any hint that the government is going to start to run profit gaming to generate profits to filter into this institution to assist those union pension investments. We do not believe that profit gaming is the way this government should be generating revenue. We believe that prior to any kind of implementation of that connection, there better be a provincewide referendum with respect to it.

In principle we can't support the way the bank is being proposed. We applaud the government's attempt, however, to solve a very pressing need for the people of East Vancouver. We would urge them -- and we have urged them for the last four months -- to reconsider the manner by which they would address that need. Had they taken the time to review the Ontario model more carefully, I believe they would have found that that model would have put the taxpayers' money less at risk and would still have provided the same kind of service to the people of East Vancouver.

H. Lali: I request leave to make an introduction.

Leave granted.

H. Lali: I have the great pleasure of introducing a group of constituents from Yale-Lillooet. Visiting us in the galleries today are 27 very inquisitive grades 4 and 5 students from Bench Elementary School in Merritt, my home community, with their teacher Ms. Lisa Fabbro and 14 adults. Would the House please make them welcome.

[4:15]

Deputy Speaker: I am not sure which member was standing first. Will you decide for me?

C. Serwa: I thank the hon. member for Port Coquitlam for giving me the honour of standing and speaking on second reading of Bill 41, Community Financial Services Act.

I have to say the few good things before I really get into what I'm going to say. I'm not going to say an awful lot of good things about the philosophy and principles behind this bill, because I consider them suspect. But the one good thing I will say is that the minister himself has been in constant attendance during the debate on this, and it's to his credit.

Hopefully the minister is listening and hearing a great deal of the comment that has been put forward, because I think a lot of it has been well-intentioned with respect to the responsibility we all share as representatives of British Columbians in this Legislature. So I will give that to the minister. It's to his credit that he has been here, and I hope he has been listening.

It's been said a great deal that members in the opposition are ideologically opposed to the concept. I really don't believe that's true at all. As a matter of fact, for myself, there's not a substantial difference between Her Majesty's Loyal Opposition and the government of the day. Voter preference swings either way, just dependent on who is going to win. Sometimes I think that familiarity breeds contempt, and perhaps that's evidenced in the rebuttal that goes back and forth.

If wasting taxpayers' money is something ideological, then I suppose I have to be opposed. I think if you expose a great deal more of the taxpayers' money -- in the case of this

[ Page 11128 ]

venture, perhaps up to $100 million -- then I have to be opposed. I don't see that as being ideological. I see that as maintaining the public trust and confidence and the public interest as a whole. If it's something ideological to use taxpayers' dollars to provide all sorts of high-paying, perk-type jobs for friends and insiders of government, then I stand very proud in being opposed to that, because I don't think that's an appropriate use of taxpayers' dollars for anyone. If obtaining maximum value for every dollar differs from the ideology of the current government, then I have to agree and stand proud that I as a Social Credit member am opposed to that.

I suspect it's a given that most of the individuals who are here as legislators really do care about other individuals. I think that is the initial incentive to seek election for this responsible role. I think it's a given, too, that there is a need for banking services. The minister has spoken about the need, albeit of welfare recipients, to maintain deposits and to write cheques. I have no difficulty understanding that need and the principles behind it -- and certainly the need to reduce the mugging or crime that takes place, with the loss of cash dollars that are not traceable.

I think that need exists in many other areas in the province. I'm not confident of it, and certainly not to that intensity or degree, but there will always be a certain amount of need.

But before I make all my comments, the first thing I want to do is refer members to the city-state of Athens of 2,500 years ago. When we think of that city-state, we're mindful that the democracy we have at this point in time is a derivative of a concept that was developed in Greece in that relatively small community of 50,000 people. But what most people fail to understand about the decline of that city-state is that after achieving democracy, the population decided that their goals should be comfort, security and freedom from responsibility. In striving to attain that, they lost everything. Athens has never again re-established the philosophical greatness that existed some 2,500 years ago.

The reason I say that, hon. Speaker, is that when we're talking about helping the poor -- and I can certainly quote from the

preamble of the New Democratic Party's constitution that the abolition of poverty is one of their goals -- we have to really understand that simply throwing money at the situation doesn't dismiss that level of poverty. We have to be realistic in understanding that if throwing money eliminated poverty, then.... Over the years the hundreds of millions of dollars that have been directed that way have not eliminated poverty. The reality is that there are a variety of causes of poverty. We talk about economic poverty, and we can measure it in different ways.

We can measure relative poverty, which is not a realistic measurement. We can measure absolute poverty, where we are required to provide adequate food, shelter and clothing for individuals. We can also talk about the unmeasurable aspects of poverty: poverty of the spirit and of the soul. Those have a vital influence on whether an individual can or cannot succeed -- or will or will not succeed -- because they have a great deal to do with attitude. That's why I referred to Athens seeking comfort, security and freedom from responsibility.

Many will say that the move by the hon. Minister of Employment and Investment is nothing but a shallow, poorly veiled attempt to get political support in perhaps one of the last strongholds of New Democratic Party support in British Columbia and ensure re-election of that member, the Premier perhaps, and a few others in that particular area. Others will see it simply as a boondoggle that will utilize hard-earned tax dollars and venture them simply for the partisan political purpose of

re-election. The creation of the Crown corporation is interesting, because the minister has a mania, probably, about creating and collecting Crown corporations. As a matter of fact, even Mr. Carter with his pills is hard-pressed to stay ahead of the minister in his creation of Crown corporations. Is that the appropriate way to make more room for friends and insiders? Is that the appropriate way to help the individuals who need the banking services the minister has referred to? It's certainly my understanding and awareness that there is a real need. Is that the solution? I don't think so.

The minister and the government always attempt to make these things sound altruistic. I have to give them and their spin doctors a great deal of credit, because it's easy to sell. It's like selling motherhood; you don't really have to do a great job once you make reference to the altruistic motivation for this. I don't think we are going to help those individuals in that area or ordinary British Columbians who work in all areas of the province. As British Columbians we all work; that's what builds this strong economy. We have to help people to help themselves.

Hon. G. Clark: This does.

C. Serwa: But it doesn't, hon. minister; it doesn't help people to help themselves. Eighteen years ago a credit union was formed in the downtown east side by a small group of people who were willing to make deposits without any assurance that there would be a return on the investment. That was the CCEC credit union -- Community Congress for Economic Change credit union. That group accomplished something very elemental and very necessary. But it was within the community itself, and when the community works within itself and supports and helps others in the community, there is the realization of expectations and the acceptance of responsibility.

Interjection.

C. Serwa: Members on the government's side are having a good chuckle about people accepting responsibility. British Columbians should be well aware that the government members think it's funny that individuals should and must accept responsibility. I believe that they not only should but must accept responsibility, and with that acceptance of responsibility for one's self, we start to develop opportunities for ourselves.

Does the government really want to help those individuals? Are the intentions of government pure and honourable? I think not. I think the intention of this has more to do with the forthcoming election, and that's the sadness of the whole issue. If it wasn't to do with the forthcoming election, there would be no absolute hurry. There are other community financial institutions. If they were given similar consideration, credit unions or chartered banks could provide the service. The minister knows that full well, but that way he won't have a Crown corporation; that way he won't put taxpayers at risk.

But for a small amount of money -- and the minister referred to Atlin, where $300,000 is spent annually by the government to keep a bank open in that area -- we can do the same thing; we can certainly sweeten the pot.

The government handles billions of dollars in transactions back and forth. The government has a tremendous influence on the chartered banks. To ask the chartered banks to handle the service and to sweeten the pot so that they can effectively handle the service makes more sense than creating a Crown corporation, staffing it with directors who

[ Page 11129 ]

have no real responsibility, and creating a situation where the public assumes all of the risk. However, if the investments -- perhaps made with union pension funds -- prove satisfying and rewarding in the real estate field, then they will make profits. That's really interesting. But if they lose, then it's not they that lose; it is the public, the taxpayer, the ordinary British Columbian who loses. That's the tragedy of this whole thing.

The opportunity is there for the community to be involved within itself. If the government is sincere about that, they can genuinely help others to help themselves without the creation of a Crown corporation and without exposing the taxpayer to this massive risk, and the minister knows that full well. The reality is that there will be no great political credit. You have institutions that already exist in that adjacent area. Chartered banks could take care of the banking needs of those individuals. The government will lose a tool that they can use for political manipulation of those areas.

There is no question that the intent of the bill is good. The objective of the bill is valid, but the direction the minister is going is neither realistic nor responsible. That's the issue at the moment.

[4:30]

If this government, after two and a half years, was genuinely concerned with helping the poor.... We just heard the Minister of Finance talk about the wondrous results that this government has attained. When we were in government, I used to hear a great deal from members in the opposition about food banks. Have they eliminated food banks? I don't know of one that has been eliminated. I don't know of one food bank that has had any reduced demand on its services because of this government.

The government, in its wisdom, gave a small increase to welfare recipients with one hand; with the other hand, this very same government increased the provincial tax by an additional 1 percent and put that additional tax onto services. What they gave with the one hand they've more than taken back with the other hand. Clever politics, perhaps, but it doesn't seem like a significant or sincere commitment to alleviate the difficulties that the poor face.

In that same period of time....

Interjection.

C. Serwa: I hear a member heckling. He has now returned to his seat so he can heckle more effectively, and that's fair enough.

In that period of time, this same government that purports to help the poor has actually increased welfare expenditures in the province by over 40 percent. When I look around Victoria -- and I don't think Victoria is any different from Vancouver or Kelowna -- I see more and more young people who should be working but who are not. Government policies have encouraged those individuals to become wards of the social services system. Government has acted very differently. When churches were responsible for looking after those who needed assistance, there were expectations of commitment and acceptance of

responsibility. Individuals helped those who needed help to become better people. It gave them the opportunity to learn life skills and fend for themselves. The simple giving of money does not do any of those things.

We have a situation in the province where we've had an enormous increase in the number of welfare recipients. We're encouraging it more and more, and it's not simply the government. I'm afraid it's also those who look after welfare recipients. They create an arena and an environment of opportunity that pulls them onto it and maintains them on the system, because everyone in the system is more empowered, busier and happier -- except the public, which is ill-served by that. The tragedy of that is the loss of human potential in individuals who lose those formative and productive years. The minister and others in this Legislature have to understand that.

It is not a joke. Unfortunately, if you don't get going, you're almost looking at a lifelong situation where you're enveloped in that, and it's hopeless. In East Vancouver and other areas of the province, we have third- and fourth-generation people on the welfare system. There has got to be something dreadfully wrong. The reality is that we have to create opportunities for these individuals to become productive members of society again. They are not suffering from any type of disability. The largest-growing group of individuals in the social services system at present is single employable men.

There, again, is a real tragedy. There are opportunities in the workplace to provide jobs for these individuals. We'll never solve the problem by attracting more and more people onto the system. In British Columbia, one out of ten adults is now on welfare, one out of eight children is now on welfare, and one out of ten, or probably more, are unemployed. Considerable latitude has been allowed in this discussion. That was done by the minister himself, and I thank the minister for that precedent.

Yesterday we heard the Minister of Forests speak, and he got really excited about Bill 41. I think he was venting his frustration with what has happened with his six-fold increase in royalty rates. When Peter Bentley, the head of Canfor, complained, there was a reassessment, and coastal royalty rates are coming down again. I think we can dismiss his words as just venting his spleen and take them for what they were worth, which wasn't very much.

What are we going to do with these individuals? How are we going to serve them best? It has been stated that there are a variety of other opportunities available to the minister. Granted, they are practical and realistic, and they are

cost-effective for the taxpayer in the province. There are credit unions that provide community financial services. There are chartered banks that are capable of providing these services. If the minister is genuine and is bearing his responsibility to British Columbians, as he must as a minister of the Crown, then he should be looking at these other alternatives. I am confident that within the time lines he has set out prior to the next provincial election, it is entirely possible that the CCEC Credit Union could put this credit union in place and not have that type of exposure.

The minister's proposal is not a quick fix; it's not even an attempt at a fix. It's merely a self-serving Crown corporation that can be utilized for partisan political purposes. If there is a sincere commitment on the part of the minister, and if the minister has been listening, then he must acknowledge that there are better ways to not only serve those individuals in his constituency who are in need of the banking services but serve, in a responsible manner, the requirements of all British Columbians and fully bear his responsibility to the taxpaying public of British Columbia.

I sincerely ask that the minister reconsider and perhaps withdraw the bill.

Some Hon. Members: No!

C. Serwa: Some of the members say no, and that's strong support. I understand why: for partisan political purposes.

But the reality of the situation is that there has been a lot of good dialogue on this matter, and an understanding that a

[ Page 11130 ]

problem does exist and a solution is required. It's up to the minister to take those words in a responsible manner, and I am confident that he will at least think about them.

I have to conclude my talk by saying that I am soundly against the principle and philosophy of the establishment of this Crown corporation, although I sincerely believe in the intent and the objective of providing banking services for those individuals, for their safety and security.

M. Farnworth: It's a pleasure to rise today and speak on Bill 41, a bill that seems to have caused a great deal of consternation, angst and anguish among the members of the opposition. It's some great conspiracy, some plot to undermine the foundations of democracy -- the fall of Athens -- and undermine the family and the moral fibre of this province. People in the galleries have been listening to this, and they must be wondering what on earth this government is doing that is so evil, so profound in its effect on this province, that members are just tearing their hair out over this bill.

An Hon. Member: Speak for yourself.

M. Farnworth: My hair was torn out long ago, hon. member -- long before you got up to speak.

What are we doing? We're creating a bank, a financial institution, in the poorest neighbourhood in this province and one of the poorest in this country. Those people are not served by a financial institution. The only financial institutions they have are the usurious institutions that charge them a fee to cash their welfare or GAIN cheques. Because the big banks don't make a profit, it's too difficult to service them.

What are we met with when we decide to address the needs of these people so that they can start to help themselves and have the same dignity as everybody else in our society and take advantage of the same services that all the rest of us take for granted? We're told by the Leader of the Opposition to establish a petty-cash machine, because the problems they face are petty problems that just require a petty-cash machine. The leader of the Social Credit Party said: "Sweeten the pots for the big banks. Don't spend taxpayers' money to get this institution off the ground. Oh no.

Go the Bank of Montreal." A teller there pays more in income tax in one year than the bank pays on its entire $1 billion profit. The leader of the Social Credit Party wants us to sweeten the pot for the big banks so that maybe they will provide a service. I am appalled. The hon. member says that this institution is similar to what led to the downfall of Athens. Providing tax breaks and sweetening the pot for the Bank of Montreal or the Royal Bank would do more to undermine public confidence in this province's system of government.

T. Perry: It's the Socreds who led to the downfall of Athens.

M. Farnworth: The member says that the Socreds led to the downfall of Athens. No, they just led to the downfall of their own government and party. But that was the solution of the Social Credit Party.

As I said a minute ago, the Leader of the Opposition wants a petty-cash machine, because the problems of the poor are really very petty. You know, you have such petty problems in the downtown east side. You can't find a place to cash your cheque, and when you do, you get mugged or rolled, or you're gouged by some unscrupulous landlord. Such petty problems, hon. member. The leader of the Opposition has such a petty solution. I'm surprised that they didn't ask for a return to the "poor laws" or maybe some more prisons or workhouses to get the poor off the streets altogether.

The poor really are a conundrum for the Liberal Party. On private members' days and on December 25, the Liberal Party likes to portray itself as a friend of the poor, but the rest of the year they get in the way of who the Liberal Party really represents: the big banks, the money on Howe Street and those who go to the glitterati social events. They can go to those events to be seen, to hobnob and to generally talk about what a great thing it would be if they were in government.

But then issues come up, and legislation comes from a government that cares about people and recognizes that when the institutions in our society don't meet the needs of people and neighbourhoods because there's no profit to be made or because it's too difficult to service a particular group of people in a particular neighbourhood, and when the government comes up with a creative solution that may bring some stability to the lives of people, may give them some hope and offer them some alternatives to the

usurious-money lenders in the area, they don't know what to do. They condemn the government. Then they find one of their own and release that person from the obligation to vote with the rest of the caucus as some sort of token approval. It would be much better if they'd take the position of the Social Credit Party or the Reform Party and just come straight out and say, "We don't like this; we don't approve of it," instead of trying to play both sides of the fence once again.

[4:45]

All that's being done here is creating a financial institution to provide services to one of the poorest neighbourhoods in Canada. We're not providing an $80 million loan to Louisiana-Pacific to put a fibre plant up north and then have that loan written off. We're not looking to provide no-interest loans to party supporters and friends so their businesses can prosper at taxpayers' expense. We're looking to fulfil a need in society for people who are struggling to make ends meet on $700 or $800 a month. I know that's a petty amount of money to the leader, who believes that the solution to this thing is a

petty-cash machine.

Hon. R. Blencoe: Which leader is that?

M. Farnworth: The Leader of the Opposition. But you know, when that $700 is all you have, that's not a petty amount of money. It's everything that you have: it's your food, it's your shelter; it's your life. Those people should be able to have a financial institution that they can go to. If the institutions we normally rely on are not willing or able to service this segment of society, then government has a responsibility. The hon. member said: "These people need to learn responsibility." All I can say, hon. member, is that these people are our responsibility if the institutions that are in place are not living up to their responsibility.

I don't know what all the fuss is about. This is a project, a piece of legislation, that will stand the test of time. It is going to service a need and help a particular neighbourhood. It will serve as a model for other parts of this country where there are similar neighbourhoods with similar problems. I'm extremely proud to stand up and vote in favour of it.

A. Warnke: I find myself in an interesting situation. This is one situation where I actually asked for leave this afternoon, yet I've spent the entire afternoon in debate. That's a new definition of leave, I suppose.

[ Page 11131 ]

An Hon. Member: That's dedication.

A. Warnke: I appreciate that comment by the member opposite. Once in a while it's nice to be appreciated.

When I rose to speak on the amendment that was put forward by this side, I just asked a couple of simple questions. Essentially, what I was looking for from members on the other side was some reassurance that when the legislation is put forward it would not be a way to allocate patronage. I was looking for legislation that would not have an ideological bent. Those are just a couple of questions that I want to raise again.

The reason I raised those questions was to invite a response from the other side, because the bill states very clearly in its explanatory note that its purpose is to create a Crown corporation. It's very clear that it is to provide "a full range of financial and related services." I emphasize that very strongly, because what some members have put forward is that what this legislation intends -- and I believe that the previous speaker stated this once again -- is really simple in scope. Indeed, when it is simple in scope, members on this side have suggested that the intent of the bill is therefore good. We'll see.

There's always the prospect that we could support this bill. There's always that prospect, because what this side is looking for -- I know it's what I'm looking for -- is some reassurance from the government that certain conditions will be met.

When we see that the intent of this particular bill is to create a corporation that offers "a full range of financial and related services," that has to be emphasized. Because what it suggests is quite contrary to what has been mentioned by some members, which is that this is a simple piece of legislation just designed to help the poor in a certain part of Vancouver. When I look at the explanatory note, I see something quite different. I don't see a simple piece of legislation; I see a very complex piece of legislation -- at least I see complex implications of the legislation being proposed here.

Setting up a Crown corporation is not a simple matter; setting up a Crown corporation that has to meet several criteria and that has several intents and purposes is something else. Therefore it's quite legitimate to once again ask the question: will the public and the taxpayer be subject to a liability? Will they have to pick up the tab? What kind of tab are we looking at? Is it just a small amount, or is it potentially a huge amount?

All I'm looking for is some reassurance that the intent of this corporation is simple in scope -- simple enough that the public and the taxpayer will not be subject to one heck of a serious liability down the road. Because whatever the intent of this government is -- or this minister, for that matter -- it is quite possible that unless it is written in a certain way, we could have a very serious liability down the road. Some members from all parties on this side have made some reference to that.

Secondly, is it simply to serve members of the community? We've said that it is to serve a select group in a certain part of Vancouver, the very poor of Vancouver. Does it simply serve their interests, or are the interests much broader than that? When I see "a full range of financial and related services" to be provided to persons, I wonder what that means. The legislation proposed here is vague enough that I'm not so sure, not so convinced yet, that it is to serve a certain very select community within Vancouver. Perhaps the minister could address that.

I'm not yet convinced that the government is not setting up a situation where they're really entering the banking business. Many members on this side have pointed out that that's what should be avoided. If it's a matter of serving a specific community within Vancouver, note that it can gain support on this side of the House. But if the intent of the legislation ends up being one of setting up a Crown corporation that enters the banking business in a very complex manner, with a full range of financial and related services on top of it all, then I'm not so sure this legislation does not camouflage some real problems we'd be facing down the road.

So what is the intent of the legislation? By answering that question, perhaps the minister can reassure us that no, the purpose of this legislation is not to enter the banking business whatsoever. We want something concrete to illustrate that.

I raised a point earlier. I noticed that it was not addressed by any member from the other side following the question I posed, so I'll pose it again. If in fact the purpose of this corporation is to serve a certain community, what we need to do -- and it's really based on an argument put forward earlier by the Minister of Forests.... Is not this corporation essentially one that will be filled by patronage? We have to be very careful. I just want some reassurance that this is not a corporation that's going to be set up in such a way that it benefits someone other than whom it's really intended for, and that's certain members of the community in central Vancouver.

The depositors have to be protected, the public has to be reassured and the community has to be reassured that it is exclusively for them. We have to be reassured that the government is not entering the banking business. We have to be reassured about who is to be appointed to those boards. These are legitimate questions that I want to raise once again and that I will be looking for in the response by the minister.

The rhetoric in this chamber has at times been sharp that somehow this is such a critical piece of legislation, and that this clearly illustrates the division of two classes and how they're represented in this chamber. Well, that's nonsense; it's just plain, darned nonsense.

There are some really interesting questions that should be raised, and it's not a matter of Liberals having it both ways. It's just a neat little series of questions that I think we're posing to ensure that this legislation is specifically targeted in purpose and intent to benefit a specific group of people in the central part of Vancouver. That's what we want to be reassured of.

If we do not get reassurance of that in very clear and unequivocal terms, then the problem that the opposition has on this bill is quite legitimate, no matter who has opposed it -- the leader of the Social Credit Party, the leader of the Reform Party or ourselves. It's not because those three parties have something in common, or the fourth or fifth party, or whatever.... As a matter of fact, we approached this problem from different vantage points, but we have raised some legitimate questions. So the onus is still on the minister.

[The Speaker in the chair.]

I would hope that in the final closure -- which will hopefully come in a couple of minutes -- unlike in his opening statement, the minister will avoid political rhetoric, examine the questions that have been put forward by us, answer them unequivocally and possibly obtain our support.

The Speaker: The hon. minister closes debate.

Hon. G. Clark: In the seven and a half years, or a little longer than that, that I've been here -- hon. Speaker, you've

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been here longer than me -- I cannot think of opposition speeches that have been more patronizing, more condescending, or more insulting to a group of citizens than those we've seen from across the way. We have heard them say: "Those poor people in the downtown east side. Oh yes, the government has to do something about them. Oh yes, we should get on our knees and ask those great bankers in Canada with that great social conscience to open a branch in the downtown east side. That's more appropriate. Yes, those poor people need help."

The leader of the Social Credit Party -- one of the last two Social Credit members in British Columbia -- said we should rely on charity to service those poor people in the downtown east side. The Leader of the Opposition said we should rely on the banks to service the people in the downtown east side. In fact, he said: "There are banks next door that people can use if they decide to use them." That's absolutely false. You know that, hon. Speaker, but I don't know if other members do.

[5:00]

There is a Bank of Montreal in the downtown east side, and yesterday -- on welfare day -- there was a lineup a block long outside that bank, in the rain, for people to cash welfare cheques. That's the only bank -- to their credit -- that will even cash a welfare cheque in the downtown east side. You cannot go into a credit union in British Columbia and have your welfare cheque cashed. You cannot go into a bank and open an account with your welfare cheque and have it cashed immediately. They won't do it; very few institutions will.

Vancouver City Savings has recently announced that they will be cashing welfare cheques. But in the downtown east side there is one institution -- and they're not happy about it, because banks and credit unions don't make money from welfare accounts. They don't make money when someone gets $540 a month to live, and at the end of the month it's down to zero. They don't like it. They don't want to do it. They will, reluctantly, if we force them -- if we work with them. And one bank, to their credit, will cash the cheques.

Those people cash their entire month's cheque, then they go down the street and get rolled. We are losing $3.8 million a year because people get their cheques stolen. Only if they have a police case number will we replace it. Half of all the cheques stolen from welfare in British Columbia are in the Vancouver region, because they don't have access to banking services. I don't think that members in this House have a clue what it's like not to have a bank account -- not to be able to go into a bank, deposit your cheque and take money out over the course of the month. That's what most people take for granted.

It doesn't exist for thousands of British Columbians, not just those in the downtown east side. Certainly it's acute in the downtown east side. The Leader of the Opposition is simply wrong when he says other banks will serve them.

Worse than that, the Leader of the Opposition asked why we should do this in the downtown east side. He said the demographics are changing: big changes are coming and they won't live there ten years from now, so why should we? Gentrification is coming; they are being moved out. This is like Expo, when there were evictions. Where was the Leader of the Opposition when he was active in city politics, when hundreds of people were carted out of their homes and dragged away to make room for tourists coming here for Expo?

Where was the Leader of the Opposition when he was mayor of Vancouver, when senior citizens were evicted to make way for bulldozers and expensive condominiums? Where was he? He was nowhere.

We're seeing his attitude exemplified again in the debate on this bill. He says not to worry about the downtown east side. Those poor people won't live there ten years from now; they'll be pushed away. They'll be pushed out of there; they will be somewhere else. He says that we shouldn't do anything, but that if we do do something, then we should work with the banks and get them to open a branch and help these poor people, who should be charity cases of