1982 Legislative Session: 4th Session, 32nd 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, JUNE 10, 1982

Afternoon Sitting

[ Page

8117 ]

CONTENTS

Routine Proceedings

Oral Questions

Foreclosure writs. Mr. Lea –– 8117

Expenses of Premier. Mr. King –– 8118

Committee of Supply: Ministry of Municipal Affairs estimates. (Hon. Mr. Vander Zalm)

On vote 63: minister's office (continued) –– 8119

Mr. Levi

Mr. Leggatt

Mr. Mitchell

Mr. Macdonald

Mr. Barber

Mr. Davis

Hon. Mr. Nielsen

On the amendment to vote 63 –– 8142

Mr. Segarty

Mr. Barber

Division

On vote 64: operations and administration –– 8143

Mr. Barber

Division

Presenting Petitions

Mr. Ree: Seaboard Assurance Company Act, 1953, Amendment Act, 1982 ––

THURSDAY, JUNE 10, 1982

The House met at 2 p.m.

Prayers.

HON. MR. BENNETT: It's a pleasure to

introduce the top five high-school athletes in our province, who are in

the gallery today. They have won this year's Premier's Athletic Award

Scholarships, worth $2,500 each, to continue their post-secondary

education. With us today are: Rod Corriveau, a speed skater from Fort

St. John, with his mother, Wilma: Derek James, a wrestler from Burnaby,

with his mother and father, Evelyn and Allan, and his grandfather Ed;

Erminia Russo, a volleyball and basketball player from Kelowna, with

her mother, Amerinda; Diego Marchese, a basketball player from

Vancouver, with his mother, Victoria; and Patricia Wellmann, a

track-and-field athlete from Victoria, with her mother and father,

Alida and Gunther. These talented athletes, who were chosen from more

than 350 students applying for the Nancy Greene awards, represent a

combination of athletic achievement, scholastic ability and leadership.

would ask the House to join with me in congratulating these outstanding

young British Columbians and in welcoming them and their parents to the

Legislature today.

MR. BARRETT: May I add my words of

congratulations to those of the Premier, particularly to the parents.

Parents today deserve all of the public recognition possible from

legislators. I would like to say to the parents that we admire and

respect what you've done. May your achievements with your children be a

model for all parents in the province.

MR. RITCHIE:

It's my pleasure indeed to introduce to the House today my constituency

secretary, Chris Haley. With Chris is another constituent and good

supporter, Glenora Braun. They are both in your gallery, Mr. Speaker,

and I would ask the House to welcome them.

MR. BARBER:

Ken and Beryl Arnott are in the gallery today. They are active

supporters of the New Democratic Party, residents of Saanich, and I ask

the House to make them welcome.

HON. MR. WOLFE: I ask

the House to welcome 22 very well-behaved school children from York

House School in Vancouver, together with their teacher, Beatrice Reed.

MR. LOCKSTEAD:

We have in the gallery today two visitors from Powell River, Mr. Tony

Hannon, chairman of the Powell River Teachers Association, and

vice-chairman Mr. John Andrews. I ask the House to join me in welcoming

them.

HON. MR. ROGERS: Three visitors and a

personalized tour guide: Nancy Heywood and Ilene Stern from Los

Angeles, and Barbara Roberts from Vancouver. Mrs. Judy Strongman, who

is well known to many of the members of this House, is acting as their

personal guide in their tour of the buildings today.

HON. MR. NIELSEN: I'd like the House to acknowledge and welcome

40 youngsters from Acton, Ontario, who are here as part of an exchange program

with students from the J.N. Burnett School in Richmond.

MR. RICHMOND:

In the gallery today are three gentlemen who are engaged in the

agriculture business in the constituency of Kamloops: Mr. Wes Barron,

Mr. Bill Hadath and Mr. Wayne Johnson. I would like the House to make

them welcome.

MR. DAVIDSON: Visiting us this afternoon is my sister, Mrs. Donna Mackey. I ask the House to make her very welcome.

MR. STRACHAN:

Visiting in the precincts today because of a Bar Association gathering

in Victoria are friends of mine and of the Minister of Labour (Hon. Mr.

Heinrich), Mr. and Mrs. Grant Hughes.

MR. HOWARD: I'd

like the House to join me in welcoming a former member of this

illustrious chamber, now a member of the bar in Vancouver, Tony

Gargrave. He was the MLA for Mackenzie some time ago.

Oral Questions

FORECLOSURE WRITS

MR. LEA:

I have a question for the Minister of Lands, Parks and Housing. Records

at the Vancouver courthouse show that foreclosure writs were issued at

the rate of three per working day — or every 20 minutes for every hour

of every working day — in the first six working days in June. In view

of the fact that this matter has been raised with the minister on two

previous occasions in question period, has the minister now taken steps

to determine the extent of the foreclosure epidemic facing British

Columbians?

HON. MR. CHABOT: The question was asked

by the member for North Island (Mr. Gabelmann), who is absent today,

and was taken as notice. I'm in the process of attempting to get as

accurate an assessment of this issue as I possibly can. It’s a very

serious problem not only in British Columbia but in other provinces as

well. In fact, in Manitoba foreclosures are three times what they are

here.

Interjection.

HON. MR. CHABOT: In

socialist Manitoba, yes. I will bring the information back to the House

as soon as I possibly can, but I just wanted to apprise you of the fact

that in socialist Manitoba foreclosures are three times what they are

in British Columbia,

MR. LEA: Has the minister

developed a program of mortgage assistance to assist people who are

losing their life savings as a result of this fantastic foreclosure

rate"

HON. MR. CHABOT: That's an ongoing policy

issue. It's one which is being examined, and in due course we'll have

some material on our housing policy.

MR. LEA: Let's hope they show more concern in socialist Manitoba than they do here.

[ Page 8118 ]

Has

the government decided to bring in a mortgage moratorium for dwelling

foreclosures in the province of British Columbia — the same as

socialist Saskatchewan brought in before they were chucked out?

HON. MR. CHABOT:

Mr. Speaker, it wasn't that successful in former socialist

Saskatchewan. I want to say that we don't have such a policy in this

province at this time.

MR. LEA: In previous question

periods, the minister stated that he didn't see that there was any

problem, and that nobody brought it to his attention that there was any

problem. Is the minister now saying that he does see it as a serious

problem in British Columbia?

HON. MR. CHABOT: Well,

as I said before, I'm getting the information, which I will put

together to determine whether it is a problem or not. As soon as I have

that information compiled, I'll be glad to bring it back to the House.

I appreciate very much the substitute critic for the Ministry of

Housing bringing this issue to my attention now. I'll bring the matter

back to the officials of my ministry to make sure that I get the

information as quickly as possible. I know there are people out there

who don't want to see the degree of foreclosures that are taking place

in Manitoba reaching British Columbia, so I'm concerned too. Even

though they are substantially less in British Columbia than they are in

socialist Manitoba, we're concerned, and we're going to be examining

the issue.

EXPENSES OF PREMIER

MR. KING:

Mr. Speaker, I have a question for the Premier. Can the Premier explain

why two bottles of Johnny Walker Black Label Scotch whisky were bought

for the "Premier's entertainment" on December 12, 1980, at the

taxpayers' expense?

HON. MR. BENNETT: I think the

member is incorrect in the question. I think he's referring to an

expense which was brought to my attention as one incurred by the press

officer for the Premier's office. It had nothing to do with my own

expense. Therefore I would like to caution the member in making those

sorts of statements that would attribute it to myself. I'm now looking

into the matter to see how the press office in the Premier's office

works with the press gallery and the press in British Columbia.

MR. KING:

Mr. Speaker, I appreciate the Premier's caution. I have had occasion

and opportunity to investigate and personally view the voucher, which I

have copied. The voucher number is listed as A498985. It is noted to

code "reciprocal entertainment, H. Leiren, Premier's Office,

Buildings," and on the actual receipt it says "Premier's entertainment."

All

I have to go by is the voucher and the cancelled cheque. I wonder if

the Premier can explain to the House precisely what reciprocal

entertainment means.

HON. MR. BENNETT: Mr. Speaker,

from my preliminary investigation of this voucher, which is over a year

old, I found that it has to do with the press officer reciprocating to

the press gallery or members of the press. Although it is incurred by

Mr. Leiren, the press officer for the Premier's office, I'm assured

that it is to do with events which the Premier does not attend.

However, I would say that, quite clearly, if it's to deal with the

press gallery trying to improve the Premier's image with the press

gallery, it obviously hasn't worked.

MR. KING: Mr.

Speaker, I, my colleagues and, I'm sure, the public are sympathetic to

the need to improve the Premier's image. I think we just wish that the

Premier would do it at his own expense rather than the taxpayers'.

Can the Premier tell us where this party took place?

HON. MR. BENNETT:

I'm certainly attempting to find out the way in which the press office

deals with the press gallery, both on a daily basis and on a regular

basis, and whether they have copied procedures from the past. I

certainly would hope that any vouchers from the year 1980-81 that the

members would wish to question...and let them know that my deputy

minister would be pleased to appear before public accounts and go

through all the procedures that they administer in my office over the

people that work in the Premier's office, whether it's the press

officer or anyone else, and deal with both the items and the manner in

which they're dealt with. I'm certain that then he would be able to

bring a statement from Mr. Leiren, the press officer, on how these

things are carried out, recognizing that it is an important function as

an extension of the Legislative Assembly itself that the public

accounts committee be given an opportunity to review, on behalf of the

government, the expenditures incurred not only by the government side

but also MLAs in their constituency expenses. I would expect that all

those undertakings will take place in that committee. I want to make

sure that my deputy minister gets a chance to appear, although the

deputy minister of that day, Lawrie Wallace, was a distinguished public

servant who set up and administered the office procedures.

MR. KING:

The receipt attached to the voucher does not mention Lawrie Wallace. It

shows that a public servant, who is paid around $45,000 a year, I

think, was dispatched from the Premier's office to buy these two

bottles of Johnny Walker Black Label.

AN HON. MEMBER: Two-bottle Bill.

MR. KING: Well, it may have been for two-bottle Bill, or it may have been for someone else. I don't know.

MR. SPEAKER: Order, please, hon. member. Debate is not permitted in question period. Please proceed.

AN HON. MEMBER: Who ordered the corn flakes?

MR. KING: I don't know that either.

would like to ask the Premier if he has read the Treasury Board

directive which was over the signature of the Minister of Finance and

directed to all ministers and deputy ministers, giving specific

instructions on expenditures for entertainment — specifically for

liquor — and how they were to be handled.

HON. MR. BENNETT:

Let me again correct a statement that the member for Shuswap-Revelstoke

made in his zeal to probe. He said: "The press secretary was dispatched

from the

[ Page

8119 ]

Premier's office. It was an expense he would have incurred of his own volition."

The press secretary may have felt that within the nature of his job it would

be an expenditure that he would not normally make. I don't know if the press

secretary would normally entertain the press at his own expense or feel that

it was an important part of press and media relations that he is bound to do

in his role of government.

do know that those things are administered in my office by the deputy

minister, and I would be pleased to have him appear before the public

accounts committee to deal with any and all vouchers, even those

vouchers that are turned in by myself as expenses on my behalf. He can

also explain vouchers turned in as expenses on behalf of the various

people who work in the Premier's office.

MR. KING: Is

the Premier now suggesting that his press secretary is answerable to

the Legislature and the people of the province of British Columbia? The

cheque and the voucher are clearly identified "Premier's office." There

used to be a doctrine of ministerial responsibility, Mr. Speaker, where

ministers of the Crown did not attempt to slough off their

responsibility onto underlings.

MR. SPEAKER: Order, please.

MR. KING: Does the Premier accept, on sober reflection, that this was an inappropriate expenditure?

HON. MR. BENNETT:

Mr. Speaker, I can't comment on the different types of reflection the

member for Shuswap-Revelstoke may have. But I do say that in the final

analysis, if during the perusal of public accounts and vouchers

relating to members of my office who have been given tremendous

responsibility, these are proven to be excessive, then, of course, the

office will make those changes, because those people work for me. I

will accept the fact that they work within the Premier's office.

am advising the member very clearly, though, that the people in my

office, although few, are given great responsibility, and when the

member asks me to rationalize in this very important part of our

legislative day, which allows for questions of urgency and public

importance to deal with matters of today.... Under his definition of

"urgency" are matters that can be dealt with inPublic Accounts on

accounts that are over a year old. I would be pleased, day after day,

to bring these matters back to the House. But perhaps the public would

be better served having us discuss, during question period, the economy

and the difficulties faced in British Columbia — perhaps the restraint

program, which will save the public hundreds of millions of dollars. As

for those areas where there are vouchers, deal with them in the

extension of this chamber, in Public Accounts. I want to say they'll

get every cooperation from my office, because we want to improve the

system if it needs improving, and we want to see the public gets full

value. I intend to do that, and I hope the opposition will assist me.

HON. MR. CURTIS: I ask leave to table a photocopy of a document to which I referred earlier this week.

Leave granted.

Orders of the Day

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

ESTIMATES: MINISTRY OF MUNICIPAL AFFAIRS

(continued)

On vote 63: ministers office, $205,621.

MR. LEVI:

I want to ask the minister whether he's had an opportunity to consider

a policy matter that I brought to his attention some weeks ago

concerning what I characterized as discrimination in respect to a

certain group in our community. The minister will recall that I wrote

him a letter about an aspect of the homeowner grant that excludes some

people over 65. These people, although they served in the war as

merchant seamen, do not qualify for that

section of the homeowner

grant, while other people over the age of 65, or people who are in

receipt of war veterans' allowances, do qualify for it. I wrote to the

minister and asked him to consider that matter, and in his letter he

said he would have his staff deal with it. It's a gross piece of

discrimination, one that has existed in this country for many years. It

has been settled in some jurisdictions, but it has not been settled

here. I hope the minister recalls what I wrote to him about and what

I'm dealing with. It's the only exception in this province. Veterans

who served in the merchant navy do not qualify under the

section that

deals with the war veteran's allowance; obviously they're not in

receipt of that kind of allowance. You need to include in that the

civilian war veteran's allowance.

Several months ago I

suggested to the minister that that policy should be remedied, and I

want to know whether he intends to do anything about it. Several

hundreds of people over the age of 65 who made an excellent

contribution in the Second World War are being discriminated against

because of the category they were quite wrongly placed in by the

national government more than 35 years ago.

HON. MR. VANDER ZALM:

The availability of the homeowner grant to various groups in our

communities who are perhaps more in need has been very well addressed

by this government. We extended it not only to those who are 65 years

and older but also to the handicapped, and to people living in

accommodations that were previously not eligible, such as various

rental accommodation. The program is continuously under consideration.

Our record of having addressed requests from various segments is

excellent. As I mentioned to the member in my response to his letter,

we will definitely consider suggestions from the members opposite, or

otherwise.

MR. LEGGATT: I'd like to ask the minister

a couple of questions. One concerns referendum by municipal councils on

the subject of disarmament or nuclear weapons. The minister has taken a

very forthright stand at this point and has suggested it's illegal. I

think he has also suggested that he's against it, whether legal or

illegal, and that it's improper and a waste of municipal taxpayers

money. That is the position he has taken.

My first question

is this: if in fact he receives a legal opinion that it is legal for

municipalities to do this, is he still opposed to their using their

authority under the Municipal

[ Page 8120 ]

Act to question the residents of their communities on the subject of disarmament and nuclear weapons?

HON. MR. VANDER ZALM:

The Municipal Act and its provisions are very clear. It states, in

short, that a municipal council may, by bylaw, call for a referendum at

the time of elections on those matters over which it has some

jurisdiction or about which it can do something. As I pointed out

publicly, we do not intend to stop municipalities from putting forth

such a referendum. We felt it only fair to advise councils and regional

districts — particularly councils, of course — that they could be

challenged by anyone in the community. If someone deemed it to be an

expenditure which was not provided for in the Municipal Act or if

someone deemed it to be a waste, he could challenge, whatever the

grounds, the municipal council for having called such a referendum and

expended moneys on it, at which time the judge would decide exactly

where it stood legally and what, if any, the penalty might be for

having done something contrary to what may be provided for in the

Municipal Act.

MR. LEGGATT: Mr. Chairman, I'd be a

lot happier with that answer if the minister would just come out and

say that he doesn't want the question because he's afraid of the

answer. That's one of the reasons he doesn't want the question.

The

fact is that every municipality has a responsibility in terms of

evacuation and emergency measures. There's nothing that more intimately

concerns municipalities than the whole question of disarmament, peace

and nuclear weapons. They are the most immediate victims of the arms

race. For the minister to sit here and, in public, say that it's

inappropriate or wrong that this question should be asked is the same

kind of provincial, centralist arrogance we've been getting from this

minister ever since he became minister. These people are elected to do

a job. They have a responsibility to save the people in their

community. They have a responsibility in terms of evacuation. The

minister knows there are emergency procedures in every community. There

are emergency evacuation procedures in the one he was mayor of. That's

intimately and directly connected with this question.

boggles my mind that the minister would take a position which says that

you cannot ask the people of your community about nuclear weapons or

disarmament. That is wrong, and the minister knows it. What he's doing

is inflicting his own biases on the municipalities — in fact, using a

big provincial stick. He's already scared North Vancouver out of it. I

hope the rest of the communities have enough sense not to listen to the

minister, and proceed to ask people in their communities about this

vital and serious question. There are communities all across this

country who are now asking this question. Thank God someone is asking

this question. Thank God someone is dealing with the question of

disarmament and peace. This is a movement that's growing all around the

world. It's growing in North America. No matter what the Minister of

Municipal Affairs thinks about it, and no matter how much he tries to

interfere with the due democratic process at the municipal level, those

questions are going to be asked; those answers are going to be given;

and this province is going to make a contribution in terms of a

movement which tries to control the craziness of the world arms race,

which is leading us on to destruction.

There's another

question I want to ask the minister, a little less excitedly perhaps.

It's the question of the commuter rail running up the valley in my

constituency. The latest press release the minister issued on the

subject indicated that he had found a new way to bring negotiations on

with the Canadian Pacific Railway over that subject. I'm pleased to see

that there's some effort, because my reading of this is that the

intransigence continues to be with the CPR in terms of movement forward

in completing the commuter rail service. I presume the completion date

is now being moved ahead.

One of the key questions in

solving the lower mainland's commuter problem has to be the use of

existing rail arteries for the movement of people to and from

Vancouver. I haven't heard any political opposition at all to the

provision of the Budd car system on the CP track. The idea is one that

has absolutely unanimous support throughout the valley and the lower

mainland. I would appreciate it very much if the minister would bring

the House up to date on the status of the present negotiations with

Canadian Pacific Railway and provide us with a completion date — if he

has anything in his

schedule for the commuter car system, which is

completely vital for those people who live outside the Vancouver area,

particularly on the north side of the Fraser River, who have been

desperately looking for a way to stop driving burnper-to-burnper to

Vancouver. Over the last ten years, an hour or more out of every

person's day has been consumed behind the wheel of their car. The buses

are completely loaded in the lower mainland during those busy hours,

and it's still a long way off before the ALRT is in place. The commuter

rail system is inexpensive, practical and can carry a very large number

of people. I know the minister supports the concept. I would appreciate

it very much if the minister could bring the House up to date on where

we are and perhaps give us a target date or something up to date in

terms of a completion date for this service. Perhaps he could advise us

of the CPR's position. Are they now ready to cooperate in terms of the

upgrading procedure so that we can get on with the job?

HON. MR. VANDER ZALM:

When the member was speaking about the nuclear arms race, I am sure

that for a moment he felt he was back in the House in Ottawa. However,

I certainly agree that perhaps there, and anywhere and everywhere, it

is our place to express our concern about the question. Frankly, being

a father of four children, I can understand. Furthermore, I have been

there before. I was in Holland during the Second World War, so I know

the damage and tremendous destruction it leaves. On the other hand, as

Minister of Municipal Affairs, I am sure the member would agree that I

do have a responsibility to tell the municipal councils what the act

provides for. Once we've advised the councils that they are expending

public moneys on a matter which no doubt will be debated far and wide

and once they know what the consequence of their doing it may be if

they were challenged, then they can decide. I think I have that

responsibility. On the basis of that I felt it my duty to advise them.

With

respect to the commuter rail line, I am very pleased to announce that

while there was some considerable delay for a while because of the

position that had been initially taken by CPR, negotiations are

extremely fruitful and progressing very well. As a matter of fact, we

expect to have a draft agreement available next week and we look toward

a target date of June 1, 1983, for the commuter train to be running.

MR. LEGGATT:

I would like to thank the minister for his last answer. June 1983 is

better than nothing at all. June 1983 is a year away. We had an earlier

date, as I recall, of the

[ Page 8121 ]

fall

of 1982, so it has gone forward a little bit, but I appreciate that the

minister is trying on the subject. If the minister wants any help from

anybody at the municipal or political level to put pressure on to move

those negotiations forward, I want to tell you that he's got the

cooperation of everyone on the commuter rail question. There is

unanimity on the question of getting that commuter rail on. It is

obviously going to come on stream before ALRT. We would like to see it

work. We would like to demonstrate that local people can organize,

promote and support relatively inexpensive commuter travel. A lot of

people in our area are looking forward to the challenge of ways to

promote this new commuting system.

That is only one thing,

of course, that the minister has to consider. One thing that is outside

his jurisdiction, but which I hope he is pressing for, is changes to

the 401. We have to look at changing the commuter lane system on the

401. We have to look at the Seattle experiment, which has worked

extremely well in reversing lanes during the day so that in the morning

commuter hours we add lanes going into Vancouver and in the evening

hours we add lanes coming out.

MR. BARBER: Like the Lions Gate Bridge.

MR. LEGGATT:

Yes, exactly the same thing. For a relatively modest expense you can do

it with the existing lanes that are there. With a fair expense there

will have to be some reconstruction of overpasses. We should really add

at least two more lanes on the 401 so that we can start moving commuter

traffic.

The traffic situation on the lower mainland is such

that I wish there was a single solution like ALRT to solve our

problems, but the ALRT is only going to barely scratch the surface on

the major commuting problem in the unique kind of geography we have on

the lower mainland. We are probably, from a geographical configuration,

the worst area in North America to provide commuter service because of

the way we're squeezed between the U.S. border and the mountains. That

being the case, we don't have corridors that we can acquire. They're

too expensive. There's no point in acquiring new rights-of-way; we've

got to use the rights-of-way we have intensively. Therefore we start

with looking at the 401 in terms of traffic patterns. We move into CP

commuter-rail service, which will make a dent in the problem. The

Barnet Highway has to be reclassified and expanded into four lanes.

That is a very quick and good way to move people from the north side of

the Fraser River into Vancouver.

Those are only three things

we can do, along with ALRT, which, frankly, from the point of view of

the north side of the Fraser River is not going to add too much for a

long time — it's only substantially down the line that there will be

new stations for people in my area. Therefore we feel there must also

be emphasis from the Minister of Highways (Hon. Mr. Fraser) in terms of

lane changing, additional lanes and reversing lanes. The increase of

travel lanes on the Barnet Highway is absolutely vital. Last but not

least we would be delighted to see the commuter service begin, so the

local community can demonstrate its support and so the local chambers

of commerce and everyone in our community can get together and sell

annual passes and do what we can to promote what should be one of the

more successful systems for moving people.

MR. MITCHELL:

Mr. Chairman, I have a couple of short questions, and I would like some

answers and maybe some ideas from the minister about what particular

plans he may have for the Western Community. Before I get into that, I

would like to join with my colleague from Maillardville-Coquitlam (Mr.

Levi) in bringing to the minister's attention the issue of the need for

some additional reviewing of those who qualify for the senior citizens'

type of homeowner grant. There is a growing number of people in the

community who, because of illness and the stress of our growing

government, etc., have to take an early retirement. They are just like

those on an old-age pension; they are on a very fixed income that is

being eroded day after day by inflation, by the increase in the cost of

living and by the increased taxes that this government is foisting on

the homeowner. They should qualify for the additional benefits that are

given to those who are taking an old-age pension.

The

pension for those over 65 is not based on income. It is not based on

the minimum amount that a person may get either through GAIN or through

the federal government's Canada Pension Plan, but is based on a

person's age. It's believed that at the age of 65 people are retired

and are on a fixed income. I think the same need is there for those who

are on a fixed income for health reasons, and I ask the minister to

give that serious consideration. I know that he too is getting a lot of

requests for assistance so people can remain in their own homes when,

at the present time, they are being priced out of them.

But what I would like to bring to the minister's attention.... The

large part of my riding that is commonly and affectionately known as the Western

Community — View Royal, Colwood, Langford, Metchosin and Sooke — is believed

to be the largest unorganized area in Canada, and I believe that the type of

development that is taking place there needs some firm guidance from the department

of municipalities. As I said, it is unorganized, and I know there is a large

group of people there who would like to participate in democratic municipal

elections. They feel that they have a responsibility to make decisions affecting

themselves, but because of the lack of information, the lack of leadership or

the lack of direction by the government, they're not sure where they will

go.

Over

the years a number of committees have got together and have pioneered.

They have made a lot of amateur studies, in cooperation with the

Ministry of Municipal Affairs, of what it would cost, what particular

grants they would receive and what money they should be getting back in

the tax bases. Because of the last 20 years' developments in that area,

a lot of the problems that any municipality would be facing if

incorporation took place are the problems that were left by the present

government and the past Social Credit government, because of the large

number of subdivisions that have been allowed to develop that are not

connected with the community. If someone happened to buy a farm and

that farm was flat, the subdivision went through and homes were built

on it.

Because of all this development there are major

problems with the north-south roads going through that community. In

some cases the Highways ministry has required that certain developers

dedicate areas for future roads. Other subdivisions have been allowed

to go ahead with no dedication for future north-south roads. Not only

that, Mr. Chairman, these subdivisions have created a major flooding

problem each winter. The three flood areas — Bilston Creek, Craigflower

Creek and Millstream Creek — that are draining the subdivisions that

have been allowed to go through have not been

[ Page 8122 ]

developed

as a proper solution to the floods that are taking place. If any future

policy of the government is going to insist that a municipality be

incorporated in that area, the citizens of that area should have some

firm commitments as to what responsibilities and what grants this

government is prepared to make to cure some of the policies that they

have allowed to develop — what input for roads, what input for future

town centres, and what money is available, especially to cover the

problem of flooding that has taken place which I have brought up each

year since I've been here. I normally bring it up in the Highways

ministry estimates. The government must be prepared to take partial

responsibility for those problems and, if there is any incorporation,

to pick up some of the cost.

I believe the government has

purchased the property commonly known as the E&N right-of-way. It

was interesting this morning, Mr. Chairman, when we were discussing

transit, to hear the problems of acquiring the right-of-way for a

transit system in the greater Vancouver-lower mainland area. We must

look ahead in the Western Community, because that same problem will

develop as people are going to move to that part of the community.

Transit problems and planning must be looked at today. There must be

some firm commitment that that particular should be maintained. It

should not be chopped up, destroyed or ever be allowed to slip off so

that the cost of purchasing it back would be unavailable to the future

communities.

I would like the minister, if he could, to give

some idea of what proposals the government may have. We both know that

there presently is another committee. This time I believe it is being

sponsored indirectly through the Western Community Chamber of Commerce.

They, like the majority of the citizens out there, would like to know

if there are going to be changes, what programs the government has on

tap right now. What assistance are they prepared to give, and in what

time-frame would they like this particular development or this possible

incorporation to take place?

HON. MR. VANDER ZALM:

Mr. Chairman, very briefly.... I thought perhaps I could save it, but

certainly I can answer the questions which have been posed by the

member for Esquimalt.

The Western Community group has

established a committee. I'm not sure just how formalized it has

become. When they left my office after the last meeting, they certainly

promised that they would get as broad a base as possible by drawing in

people from all sectors of the community, and electing from amongst

their group an executive with which we in the ministry could deal and

which could make decisions with respect to the bringing in of a

consultant, to see what would be the pros and cons of seeking

incorporation for the Western Community. I believe it's progressing,

but just exactly where it is at I can't say now. I think it's probably

changing by the day, but it is proceeding.

Secondly, the

inspector met last week with the four electoral area directors for the

western sector. They are looking to develop a drainage plan for the

area, because it does involve more than just the one electoral area, as

you are aware. It's for the whole area, and they are looking for a

means of bringing about a resolution which we could begin working

towards.

Finally, the government is working towards

acquiring rights-of-way. I understand that recently we did acquire some

of the rights-of-way, but perhaps the Minister of Lands, Parks and

Housing (Hon. Mr. Chabot) can best answer that under his estimates.

MR. MITCHELL:

I'm aware that there is a committee being formed. This is the third, if

not the fourth, committee. It's not so much that we form another

committee, but it's.... Some of these major costs that the Western

Community is facing are because of the development that is being

allowed to take place under the auspices of 30 years of Social Credit.

What is the government prepared to put into this program for flooding?

I believe there is a possibility of a referendum, but before a

referendum goes to the people, it is important that we know that the

provincial government is prepared to put some bucks into that

particular proposal. This is what people want. They want answers, and

they want some leadership or positive solutions from the government. I

can predict right now that if it goes to a referendum without a firm

commitment from the government, the referendum for incorporation — or

maybe a referendum for flood controls — will be defeated. I say this is

wrong. I think the answers should be given now: what kind of money the

government is prepared to put into it and why they feel that they have

a responsibility to clear up some of the messes that they have allowed

to develop.

Maybe there should have been a policy 20 or 30

years ago that when an area becomes so concentrated or has a certain

density, then it's automatically incorporated. We just can't allow this

to develop, to go from one committee to another. There has to be some

positive progress, and up until now we haven't had it. Whenever we have

problems with planning or when subdivisions are turned down, there is a

certain amount of static. We all blame the Minister of Municipal

Affairs; if we can't blame him we blame the Highways department.

There's always somebody that we blame.

Still, there has to

be some other method of getting people to take their responsibilities —

how they are going to develop the area. The area has been allowed to

drift. The government has created problems, and I think the government,

before they expect someone else to pick the chestnuts out of the fire,

must be prepared to say, look, maybe we were partially to blame; we are

going to assist, to the extent of X number of dollars. This is the kind

of leadership, the kind of answers people are demanding. They are

demanding them now, before any referendum. People don't understand;

they don't know what the costs are. It will be defeated because of fear.

MR. MACDONALD:

I have just a short question to the minister, who keeps filibustering

his estimates. I don't know whether he's listening, but Lovat

Corporation in Toronto has developed the super mole....

AN HON. MEMBER: Mole?

MR. MACDONALD:

Yes — not one that spies out the secrets of government, not a member of

the CIA or the OGPU. There's no political complexion to the mole.

There's no expense account involved. But it tunnels underground with a

wide tunnel, as I think the minister may know, 670 metres in four days.

With the problem in Vancouver with ALRT, particularly on Commercial

Drive, and further south in terms of residents and commercial

enterprise, has the minister investigated the possibility of using this

mole? I understand there may be some federal financing to help with the

cost.

HON. MR. VANDER ZALM: For our type of operation

in Vancouver it would need to be a cut-and-cover. Therefore the use of

the mole, however exciting it may be for other

[ Page 8123 ]

projects

and prospects elsewhere in the province or country, doesn't appear to

apply in Vancouver. If they want to make a presentation to us, we would

certainly be most willing and happy to receive the information.

MR. BARBER:

When my colleague the former Attorney-General was recounting the

strange coincidences involving the purchase of magically sited

properties along the ALRT right-of-way, the minister indicated a couple

of times that he thought it was perfectly reasonable for someone like

Docksteader to make a profit of well in excess of a million bucks in

just nine days work for doing nothing.

[Mr. Richmond in the chair.]

That

marks a major philosophic difference between this side and that. New

Democrats believe in profit. They believe profit should be earned, not

ripped off. They believe profit should be earned by labour, by

imagination and by actual work. What work did Mr. Docksteader do to

earn this profit of more than a million dollars in just nine days? Did

he improve the property? No. Did he put buildings on it of any sort at

all? No. Did he tear down unsightly old buildings? No. Did he begin

construction on anything? No. Did he improve public access for any

public purpose? No. Did he do anything at all? Nothing. However,

apparently under the capitalist creed of the Minister of Municipal

Affairs, it is acceptable for this man to earn a million dollars for

doing nothing. He did absolutely nothing, except buy a piece of

property at the right time and sell it to the right guys for what has

obviously turned out to be the right purpose, at least from the point

of view of making unearned profit.

If I were Minister of

Municipal Affairs, I would hope to be able to develop a way to tax

back, to the benefit of all the people,100 percent of that unearned

profit. As far as I'm concerned, that kind of profiteering, because it

is unearned, is undeserved. Profit is okay as long as you work for it.

Profit is okay as long as it's honestly earned. Profit is okay as long

as you don't mislead, exploit or deceive the people you are taking it

from.

When the people of British Columbia are concerned

about the rising cost of land for housing, commercial or other

purposes, they have to be concerned about who profits. I have no

objection to someone profiting when they redevelop land for a good

purpose, when they do it within the law and when they do not deceive

their customers. If they work for the profit, they're entitled to the

profit. They have earned it when they have worked for it. What kind of

work did Docksteader do? What sort of work did he do; what improvements

did he make; what value did he add to that land? The answer, perfectly

and provably, is zero. If I had my way, I would tax back that utterly

unearned profit and would use it to build a park. We might even call it

Docksteader park in honour of the man who paid for it.

ever a government is going to take initiatives to control the cost of

land so it remains affordable for homes, and for commercial and

industrial purposes, then it's clear that that government is not going

to be a Social Credit government. In other enlightened jurisdictions —

I think of two of the Australian states — they have a 100 percent tax

on the unearned and windfall profits that are gained in speculation in

land. Land speculators are a curse in British Columbia. They are a

curse in any jurisdiction that must suffer their diseased view of

private enterprise. They are a curse in this and every other province

that has to put up with their activities.

They are, in fact,

fundamentally lazy because they do work that is no real work at all.

The so-called work consists of buying something one day, selling it a

few days later, having done nothing to improve its value and thinking

that they are entitled to some vast profit. The consequence of that is

that people have to pay more for other commercial, industrial or

residential properties. The consequence of that speculation is that all

the values of land — if value is the word — are artificially increased.

Is this government ever going to make a move to kill speculation in

land and return the value of land to those areas of real improvement,

real benefit and real work done to earn a real profit?

The

minister may think, gosh, I wish it was me — for all we know maybe it

was, through some front, but I doubt it — who knew about this; I wish

it was me who could pick up a million bucks for doing nothing, for

owning a piece of land for nine days. There are probably certain greedy

people around who think they are entitled, having done no work, to make

a big profit. But I don't think they are, because on this side of the

House we have a different view about how you control speculation in

land. You don't do it simply by making speeches, which occasionally

Socreds do, about how terrible it is that people speculate in land,

that they flip property and that they boost up real estate prices in an

unearned and artificial way. Occasionally the old Socreds will stand up

and give speeches about the money-lenders, the speculators and the

land-flippers. The old Socreds apparently still believe in that, but

the new Socreds, who used to be Liberals mostly, have a very different

and a fundamentally selfish view about the uses of land. They appear to

care not at all that speculators continue to drive it up so that other

people can afford it less and less and so that those who end up having

to rent, lease or purchase those properties will pay far more than they

should have and may well have no choice for reasons of local economy

and local location.

Mr. Chairman, if someone owns a piece of

land, as Ocean Cement owned it, then they turn around and sell it to a

guy like Docksteader, and then Docksteader turns it around and sells it

to Socreds like the Olma brothers, and in the meantime the land has not

been improved — no value has been added, no work has been done, nothing

has been done but to exploit, speculate and flip the property — it's

clear that there is something wrong with that system of speculation in

land. Greedy people may think it's okay to make a profit that they

haven't earned by their own labours; greedy people may think it's okay

to take a profit that they have not earned by their own sweat, by their

own imagination and by their own building. Greedy people may think it's

okay to take a profit that they are not entitled to. But most of the

people in British Columbia find speculation in real estate, the

flipping of land, to be a sickening spectacle of which they are the

victims.

Every time a real-estate flipper in the housing

market takes a piece of land at a lucky location at a lucky moment in

the real estate market, turns around and sells it again for 100 percent

above the value he paid for it and has not improved the value of that

land, all he is doing is adding to the cost of everyone else's land.

Specifically, he is adding to the cost of the land for the people who

have to buy his house because maybe they didn't have a lot of choice in

today's market. He's certainly doing nothing whatever to break the back

of the cycle of the artificial evaluation and the artificial inflation

of the value of land. Now if you believe in speculating in land,

[ Page 8124 ]

then

I suppose you can accept what this government has done to stop it,

which, of course, is nothing. They've done nothing whatever to stop

speculation in land; they've done nothing whatever to stop flipping in

land.

I do recall the Minister of Consumer and Corporate

Affairs (Hon. Mr. Hyndman) making a speech about it once. It was a good

speech. He sounded like an old Socred who really believed that you can

earn a profit if you work for it. I believe that too. I believe profit

is just fine if you earn it.

AN HON. MEMBER: How would you know?

MR. BARBER: Do you have proposals to stop speculation in land?

AN HON. MEMBER: Do you?

MR. BARBER:

Yes, I've made the first one. You do what two Australian states have

done and you tax the daylights out of it. You describe it as a capital

gain and you set that tax rate at 100 percent.

AN HON. MEMBER: Sure, that's what they did in Poland.

MR. BARBER: Are you out of your mind? Poland?

MR. SEGARTY: You've no idea what you're talking about. You want everyone to be socialists.

MR. BARBER: No, not at all. I want everyone to have an opportunity to own their own home and their own land.

Interjections.

MR. CHAIRMAN: Order, please. The House will please come to order and will the speaker please address the Chair.

MR. BARBER:

Yes. Claude, I want everyone to have an opportunity to own their own

land and their own home, and to do it I want to help establish the kind

of market in the Canadian mixed economy which at best stops the profit

taking that speculators, flippers and people who engage in the sale of

land, having added nothing to its value, would otherwise denigrate,

diminish and kill altogether.

The Socreds don't like to be

confronted with the prospect of really having to work for their keep.

Socred speculators especially don't like it. They don't like it because

it is in fact an admission that the Protestant work ethic is something

they wish to impose on other people but are not prepared to follow

themselves. What work went into Mr. Docksteader's property, by way of

illustration? Can any of the guys opposite answer that?

AN HON. MEMBER: What work are you doing on the Nanaimo Hilton?

MR. BARBER: They are building a hotel; they're improving the value of the land.

When

people take land, raw or previously developed, and invest in it and

convert it to some higher purpose within the laws and bylaws of the

province and offer a service that people want and they make a profit,

that is fine by me — be it CCF in Nanaimo, the Empress in Victoria or

the Hotel Vancouver in that city. They have improved the value of the

land and they are entitled to benefit from it. However, when you see a

guy like Docksteader — and all the other Socreds — pick up a piece of

land, do nothing whatever to improve its value and turn around and sell

it nine days later, making a profit of more than a million bucks, these

guys are clearly no better than speculators. They are speculators in

land.

MR. KEMPF: What about Andy Schuck?

MR. BARBER: He will pay his income taxes. I hope the same can be said for you.

MR. CHAIRMAN: Order, please. Would the member please address the Chair?

MR. BARBER:

Sure. When a guy like Docksteader, speculating in land, turns around

and in nine days — having done no work, having contributed no value,

having added no worth to that land — thinks he is entitled to a profit

of in excess of a million bucks, we describe that as a ripoff. That is

a kind of theft which, although legal, is not moral. Although it may be

lawful, it is not right. Although it is permitted under the current tax

system, it is not permitted in some other jurisdictions.

would advise the government that for some time in two of the states in

Australia they have had a 100 percent tax on unearned profits in the

speculation of land. They exclude residential land; they include

commercial and industrial property and they have, with apparent

success, begun to dampen the inflationary fires that have forced the

cost of commercial and industrial land in those states upward, with no

end otherwise in sight.

Do you stand idly by and allow land

speculation to continue with no controls, no restrictions and no

abatement? If you do you are probably a Socred, because it's in your

interest and the interest of your friends to allow that kind of

unearned and unworked-for profit to be made. It is unearned and

therefore undeserved, in my view. But in other democratic jurisdictions

they have decided to try to wrestle with the problem of speculation in

land. The first way they have found to do that is to establish a 100

percent tax on that unearned value.

How can value be earned

on land? Clearly it can be earned by providing access to it for some

designated public purpose, by improving services on it — be they

sewers, transmission lines or some other function — or by building on

it according to the bylaws and the zoning requirements in that

particular area. In that system these improvements justify the profit

because real work has been done and therefore a real profit can be

earned on that particular land. When someone simply purchases land,

adds nothing to its value and that land is not residential, then in

these other jurisdictions they have to pay a 100 percent tax.

Speaking

for people who care about the devastating impact of speculation on the

real estate markets, speaking on behalf of people who care about the

tragic consequences of land-flipping in the real estate economy of

British Columbia, and speaking for people who are concerned about the

human and market impact of unearned and vast profits in real estate, I

ask the minister to tell us whether he has commissioned studies of any

order along those or any other lines to try to bring the vicious

results of speculating and flipping under control in the real estate

market. I am sure that even the

[ Page 8125 ]

minister

will acknowledge that it is a real problem, especially in the built-up

urban areas of this province. Even the minister will acknowledge what,

for instance, the B.C. Real Estate Association has acknowledged in a

paper they published in the middle of last year, as I recall. They said

very plainly and forthrightly that flipping and speculation in land was

doing injury to the real estate market. It was adding value that was

not earned and inflating values that could not be met. It was adding to

the costs in a way that did damage to the whole economy.

I'm

very pleased that real estate boards in British Columbia, as

represented by that organization, took that position. That was a

responsible position, because they too felt some responsibility to

identify and deal with the problem of the dislocation of the real

estate market that inevitably occurs with flipping and speculation,

especially in a time of low vacancy rates in certain sectors of that

real estate economy and high costs associated with a general cycle of

inflation, which must inevitably be borne by people who frequently

cannot afford it at all.

I ask the minister to tell us

whether or not his department has commissioned a study along the lines

of the Australian model or along the lines of some other model which we

on this side might not be familiar with.

Interjection.

MR. BARBER:

We're not interested in the Russian model any more than you are. We

don't live in Russia and neither do you. We don't live in Chile and

neither do you. I presume that you are as interested in living under

fascists as we are interested in living under communists, which is to

say that neither of us are. Will you not concede for once that as

legislators we actually care about this province? We live here by

choice and we want to build it our way. I'm not interested in Russia,

I'm sure, any more than you're interested in Argentina. We don't say

that you are all supporters of the fascists in Argentina. Why on earth

do you try to mislead people into thinking that we believe in some

communist system? It's equally nonsensical.

MR. CHAIRMAN: Order, please. Could we address vote 63, please.

MR. BARBER: Yes. And I know you will call to order the member for North Peace River, because you are supposed to be fair, Mr. Chairman.

MR. CHAIRMAN: I'm calling everyone to order, and I would ask the member to address the Chair and address his remarks to vote 63.

MR. BARBER: Which is the office of the minister and that area of policy-making that I am now concerned with.

Once

again, that area of policy-making is trying to address the question of

whether or not this government has taken any steps at all to follow

along the remarks of the real estate association and the remarks of the

Minister of Consumer and Corporate Affairs (Hon. Mr. Hyndman) in a

speech last year, in which he identified as a problem that issue of

speculation and flipping. If this government's position is that a 100

percent tax is not an appropriate remedy, that's fine, if they can come

up with another remedy that works.

In our system, apparently

the only remedies that work in regard to such unearned profits can be

found in the tax system of British Columbia as it is administered here

and, of course, to some extent in Ottawa. If there are no tax remedies

that you are prepared to consider, are there some others? For instance,

is there a system of zoning sufficiently detailed to suit the purpose

that would make it impossible for people to benefit in a speculative

and land-flipping way, should they propose to? If you're not prepared

to consider a tax mechanism for ending speculation or at least bringing

it under real control, are you prepared to consider some other means?

Those are the only two that appear to be practical at all.

The

member for North Vancouver–Seymour will get up in a moment and talk

about the horrors of confiscation and 100 percent taxes. I hope he

reminds us that he was a member of the federal government that brought

in the capital gains tax. The capital gains tax is, of course, one

means of distinguishing profit and one means of retrieving some of it

for public benefit. The capital gains tax was introduced by the Liberal

government when Mr. Davis was a member of it, and I hope he won't omit

to mention that in his remarks in a moment, because to do so would be

to omit a very consequential argument in favour of those means whereby

in Canada we can establish some sort of control over speculation and

flipping.

If the government has not examined the capital

gains tax, the income tax or such a system of bylaw and regulation that

could control flipping and speculating in land, then I wonder if he

could tell us whether or not he's got any other approach to consider.

We on this side are not prepared to allow individual homeowners and

individual businessmen to continue to fall victim to the artificial

increase in real estate values that we've seen in this province in the

last several years.

MR. BRUMMET: Are you going to regulate the buyers?

MR. BARBER: No. There may be ways to regulate the sellers.

MR. BRUMMET: There are no sellers without buyers.

MR. BARBER:

The member for North Peace River says that there are no sellers without

buyers. The irony of it is that in the restricted conditions of today's

market in real estate that's not always the way it works. Let me

illustrate. For instance, if persons are forced, by way of job

relocation, to move to a community that has a zero vacancy rate in

apartments and are forced to seek accommodation on some other basis,

they may end up purchasing a strata title unit, a duplex, a

single-family dwelling or a mobile home. In that sense they have no

choice, because their job has forced them to relocate. That being the

case, is it not a reasonable question of public policy to ask whether

or not those persons who have to move, through no choice of their own,

should have to fall victim to the local real estate pressures in that

area?

Interjection.

MR. BARBER: No one is

saying you're not allowed to buy. What we're trying to do is make it

easier, more affordable and practical to buy. We're trying to make home

ownership more accessible to more people, and we're trying to keep the

costs of land down for business and industry. One of the

[ Page 8126 ]

ways

you do that is by stopping speculation, by ending flipping in real

estate and by trying to control speculation as best you can. We believe

in home ownership. We believe businessmen should be able to pay the

least possible price in order to assemble land for industrial and

commercial purposes. We want commercial and industrial enterprise to

succeed. One of the problems they have to bear is the problem of the

cost of land. The cost of land is increased artificially when guys like

Docksteader make a profit of a million bucks in nine days for doing

nothing.

How do you break the cycle? What proposals do you

have? What studies have you examined? What studies have you

commissioned? What, if anything, does Social Credit propose to do to

act on the advice of the Minister of Consumer and Corporate Affairs

(Hon. Mr. Hyndman), who said that flipping in real estate was a real

problem and something had to be done to stop it? I wonder if the

government has done anything at all to end speculation in real estate.

If so, we'd like to hear what it is.

MR. DAVIS: The

hon. member for Victoria has raised an important subject. It's

important, I know, because many people are concerned about exceptional

increases in real estate values from time to time. What they tend to

forget is that there are also recessions and declines in real estate

values. So one can't automatically assume that when someone pays a

large amount for a particular property he is in fact going to get his

money back. I realize that Mr. Docksteader did very well out of the

transaction which several members have referred to, including the

second member for Vancouver East (Mr. Macdonald), but there's no

assurance that O&K Tract, who bought from Docksteader, will get the

money back that they paid for that property. There's no mechanism which

will pass any part of that increase in value along to UTA or the rapid

transit system.

When the hon. member for Victoria — who I

assume was not only speaking seriously about a subject which he may or

may not fully understand, but was also speaking for his party —

advocated a 100 percent capital gains tax on properties within any

distance of a public investment like light rapid transit or,

conceivably, a highway or public work of any kind, he was really saying

that this Legislature and provincial government should unilaterally,

without regard, for example, to the sensibilities, powers and zoning

jurisdictions of the municipalities, move in on real estate

developments fringing on any provincial public work. If a 100 percent

capital gains tax is the policy of his party, he's suggesting that it

use a sledgehammer to kill the equivalent of a fly. There is a problem

with flipping, but it's nothing like as horrendous as the problems we

would face if there was a 100 percent provincial capital gains tax.

Would he allow for inflation? Can you get anything back for inflation,

or is it 100 percent? Does he qualify his 100 percent?

A few

years ago in the United Kingdom, the Labour Party brought in a 100

percent capital gains tax in relation to public transportation. It

killed any development whatsoever along those corridors, and as a

result there was no improvement in ridership on those systems. They

abandoned it. It had to be abandoned. It was obviously a scourge to any

kind of development fringing on those new arteries.

They've

had no substantial increase in real estate development around the

principal BART stations in San Francisco. Why? Because they didn't

allow rezoning. It's within the power of the municipality. The

municipality can control the value of the lands around the stations. If

you talk to the academics who've written on this subject, there are

just as many saying there's no enhancement of land value around an

urban transit station as those who say there is an enhancement. They've

looked at the scene right across this continent and western Europe. It

depends on the zoning, as the hon. member suggested. If the

municipality is not prepared to rezone that land, that land has no

enhanced value.

O&K Tract obviously thought there would

be a rezoning. They're counting on a rezoning. They're counting on

Vancouver to rezone the land around that particular station site.

Unless they get a rezoning, they've been taken by Don Docksteader. They

only have industrial land in an inappropriate place for industry with a

two-storey maximum, and it will just sit idle. The city of Vancouver,

in its wisdom, may decide to allow much higher structures to be built

there. In that act they do construe a value on that land. It is not a

value construed on that land by rapid transit by itself or by the

location of a station there. It is construed by the upzoning.

someone who would like to see the ridership improved in rapid transit,

I would like to see an upzoning at every station and around every

station so that we eventually have developments like those in Toronto

where there has been a development in the last quarter of a century of

highrises, condominiums, rentals and so on around the stations where

people can conveniently get into rapid transportation because they live

right above or right beside the station or within a few minutes' walk

of the station. We will see this kind of thing develop in Vancouver

around the station sites.

[Mr. Strachan in the chair.]

The

question the hon. member is begging is whether the province, through an

agency of the province, should get into the land development business

around stations. It must also, in some way, be able to control,

encourage or affect the upzoning or it isn't going to be a very

profitable land business. You will acquire the land to no effect unless

the zoning is changed.

Surely the hon. member is not

suggesting at the same time that the province, through an agency of the

province, should not only build these transportation arteries but also

get into the zoning business within the municipalities.

MR. BARBER: That is what you have done at B.C. Place.

MR. DAVIS:

That is an exceptional development in an area where the city was

incapable, from a financial point of view, of reaching a conclusion

with the CPR. The province moved in to solve an otherwise insoluble

problem. We are not talking about one property site. At this point in

time we are talking about at least 12 stations and, in the longer term,

maybe two dozen stations and so on. The province, through an agency of

the province, will be buying some land around station sites. Not really

being in the land business but having to buy the land to facilitate the

development, the province will sell it back. Hopefully we will sell it

back at some profit. That profit would flow into the financing of the

urban transportation system. I assume the hon. member would think that

would be desirable in itself. I think the hon. member would have us

reach much further afield around these stations — rather than taking

only those several lots that the station physically impinges on — and

take more than just those

[ Page 8127 ]

several

lots. That would be more in line with the kind of thinking that he is

proposing. He would see the Crown, the government and this agency in

the land business to a considerable extent and use that land operation

to help finance the project. We will be doing a bit of that. We will

not be doing it to the extent that he would like, I know. Certainly we

are not advocating a 100 percent capital gains tax on private

properties abutting on the properties taken by the Crown agencies.

MR. BARBER: I wasn't just referring to the UTA development, Jack. I was talking about the real estate market generally.

MR. DAVIS:

I think a very important aspect of this is the relationship between the

provincial agency and the municipalities. Should the provincial agency

mop up this enhancement of values — assuming it is allowed by rezoning

— or should this accrue to the municipality?

In the case of

the Olma property, if we can call it that — or the O&K Tract

property, because they own it now — the city looked at the property

with a view to buying it. It was offered to the city two and a bit

years ago. The city decided not to buy that property, even though it

knew there would be a transit station within 50 feet either way of it.

They decided not to buy it using their heritage fund. Someone else

bought it. Genstar sold it at what now looks to be a low price to

Docksteader. Docksteader sold it to O&K Tract at a high price.

O&K Tract has allowed UTA to cross for one dollar and are prepared

to pay — depending on the rezoning they get — additional dollars. The

public agency has not put out more than one dollar but, depending on

the zoning, will get $1.3 or $1.5 million, depending on the square

footage. The public agency has not used public money to line the

pockets of Don Docksteader, O&K Tract or whatever. It has, in

effect, extracted some kind of tax from that property, depending on its

rezoning. We have done something. Maybe the dollars aren't enough for

the bon. member. In a very general way we have done in a specific case

exactly what he would do wholesale. One dollar has been paid by the

Urban Transit Authority for the right to go through.

The

station will substantially be built by the operator. A minimum station

will be built by the UTA. If they get a rezoning and the right to build

a hotel enveloping the station, they pay money into UTA depending upon

their square footage — let's say $1.3 million or $1.5 million. What

would the hon. member have had the government do — buy the property and

then sell it again at some time in the distant future, meeting the

carrying charges and ending up with a profit of $1.5 million? That's a

characterization of what we've done. The hon. member for Victoria and

the hon. member for Vancouver East may say that we didn't drive a hard

enough bargain. We could maybe have got $2 million, $3 million or $4

million, but we would have had to wait some years to recover our

investment. In that case we did something which is a bit unusual, but

we may be doing a similar thing by buying properties and selling them

back again. I really don't see any difference in principle.

The

one question that the hon. members opposite should really address, if

they were government and running the UTA, is to what extent they would

steamroller over Vancouver, Burnaby and New Westminster. They would do

the zoning, the upzoning and recover values. Those municipalities have

their own ways of recovering the values. They regard any intrusion

along these lines of zoning, or along the lines that the bon. members

are suggesting, as a usurpation of their powers.

There was

mention of one alderman, George Puil, and his annoyance with the

actions of the UTA. George Puil was essentially upset because he saw

big bad Victoria in yet another instance steamrolling over the city,

assuming that upzoning would be forthcoming, being presumptive and

stripping off $1.3 million. It was jurisdiction more than anything else

that concerned him. I believe that we did the right thing cutting a

corner there. The line was shorter, less expensive and there will be

less slowing down of the trains. I believe that we did the right thing

in principle in getting $1.3 million because we went across a private

property. We could have accomplished that in other ways, such as buying

and then eventually reselling the property. I don't believe that the

government, the UTA specifically, lost anything in this process.

has established one point: that we can get something out of the

presumed enhanced value of property around stations. I don't think

anyone can make a case in terms of dollars for the people of the

province or the people of Vancouver being ripped off in any way. They

collectively spent one dollar; they will collectively get back $1.3

million in the next few years, and they've got a somewhat shorter and

easier line to operate through a property. I certainly don't think

anyone in this Legislature will claim that any member of the staff that

negotiated that deal gained in any way from the transaction. I didn't

negotiate it; it was new staff hired several months after Docksteader

had sold O&K Tract. All they can complain about really is whether

we got enough by investing one dollar and getting back $1.3 million or

$1.5 million in a few years. That's gain to the people of the province,

and all the hon. members opposite can say is that they would have done

better. I doubt very much if they could possibly have done better with

a 100 percent capital gains tax, which doesn't work anywhere and which

would frighten investment off and certainly wouldn't build up ridership

around our stations.

HON. MR. NIELSEN: Mr. Chairman,

the member for Victoria has stimulated a certain amount of discussion

with respect to speculation and again with respect to the estimates of

the Minister of Municipal Affairs. The member offered a lot of ideas

and concepts that are worth consideration by everyone in the province

who may be interested in this particular subject. I think perhaps the

member has indeed stimulated some very legitimate discussion in this

House, which unfortunately doesn't occur frequently. I'm not speaking

with respect to that specific property that the member for North

Vancouver–Seymour (Mr. Davis) offered some specific information on. I

don't know who Don Docksteader is, but I presume he's part of the

Docksteader family that is well-known in the Vancouver area.

The

concept that the first member for Victoria put forward was the 100

percent tax on profits earned, I think, on commercial or industrial

property where improvements had not actually occurred — I think that's

the category — and the effect it may have on home costs. Mr. Chairman.

I would agree with the member for Victoria that those who engage in

flipping properties and speculations add to the overall cost of the

acquisition of those properties at some later time by someone for a

specific use. I don't know how the flipping or speculation on

commercial or industrial properties would bear on the residential value

other than by, I guess, general increases in property values. But I'm

not quite sure how a 100

[ Page 8128 ]

percent

tax — government's favourite way of bringing someone to his knees by

imposing increasingly heavier taxes on people because they don't have

the capacity to do it in some other way, so you just take it all.... I

would think that if a person is investing in property, he does that

with the idea that at some time the property will be sold, and he may

gain a profit.

The member for Victoria didn't argue — in

fact, emphasized — that a profit earned is a profit that should be

properly gained. I wonder how attractive it would be to anyone to know

that should he make a profit, depending on the criteria of the

government of the day as to whether it was legitimately earned, it

could be completely taxed away. I wonder how many people would take

that chance, wondering what the policy was going to be next week

depending on who might be in government. With the NDP in government, as

the member said, it would be 100 percent tax unless it was earned.

That's a pretty tough definition — "earned" — presumably earned to meet

the criteria established by whatever government.

I suppose

those who are engaged in flipping and in speculating have a very

limited circle of people who would publicly support them, because I

think most people agree that they do engage in an activity which has an

effect on property values. It's interesting that the member for

Victoria in his discussion and debate on the minister's estimates had

to engage in name-calling. Apparently any person who engages in

purchase or sale of property is a Social Crediter. According to that

member, everyone who buys property is a Social Crediter. It seems so

strange to hear that every person who may make a profit on a property

sale is automatically a Social Crediter. I can just remember so

distinctly the dreadful spectacle we saw in Vancouver some years back

when a politician was engaged in evicting people from their apartments

down in Vancouver because he was converting them to townhouses. That

gentleman later became a cabinet minister — Mr. Bob Williams is no

longer a cabinet minister. I remember the concern that was raised that

someone was evicting people to convert apartments into townhouses so he

could make a profit. What really concerns me, Mr. Chairman, is that the

definition of the member for Victoria makes Bob Williams a Social

Crediter. But in defence of Mr. Williams, he did hire his mother-in-law

as a bricklayer — and that was generous, I think.

Interjections.

HON. MR. NIELSEN:

I think it was his mother-in-law — she was on the payroll — or a

relative of some kind. Possibly it was his mother, I'm not sure.

MR. CHAIRMAN: Perhaps we could now return to the estimates and vote 63.

HON. MR. NIELSEN: Well, Mr. Chairman, I think the question of those

who speculate in real estate — those who flip land and property — is vitally

important. I think that if the people of this province are to be concerned about

how Municipal Affairs, municipalities and regional districts, or whoever, affect

the value of property and eventually the cost to a citizen, they should pay particular

attention to the concerns which have been raised in this House. And interestingly

enough, those municipalities and regional districts, or whoever else may have

zoning power, themselves engage in this practice of seriously affecting the value

of the property and eventually the purchase price that an individual may have

to pay to get that property. It's certainly not a secret nor is it a new

concept that it is zoning that creates the wealth. Looking back in history,

the capability of a municipal council — whichever government has that authority

— to cause huge evaluation increases simply by rezoning.... Now in rezoning

without, as the member for Victoria said, improving the property in any way,

all that is done is that it is rezoned, and suddenly it is worth many times

more than it was previously.

The same thing happened in this province when the agricultural land boundaries were imposed upon the people. The former Premier, the Leader of the Opposition, said: "I guess we have

to agree that we created a lot of millionaires."

Because

other property was not available for industrial, commercial or

residential use, that which was not in the ALR was available, and the

price zoomed up. That is because of zoning imposed upon land, by the

provincial government in this case. More frequently it is imposed by

municipal or regional districts. I think the Minister of Municipal

Affairs has an enormous area of concern with respect to land values and

costs, particularly when it is associated with providing properties for

residential purposes. The problems associated with the acquisition of

residential property go far beyond flippers or speculators in

commercial and industrial property. They go far beyond the rezoning

capabilities that municipalities or regional districts have, and beyond

the capacity of a province, eventually reaching the federal

government's concepts and ideas with respect to residential property

and home ownership.

I welcome the news from the member for Victoria that he is in favour of home

ownership and private property. Many people have been concerned about the statement

from the member for North Island in which he said he didn't believe in the

private ownership of property. I commend the member for Victoria, who recognizes

and agrees that home ownership is worthwhile and he supports it. I hope the

member for Victoria will not frighten anyone into thinking that, should the

NDP ever become government again in British Columbia, and should a person who

owns property, be it zoned commercial, industrial, residential or whatever,

sell it for more than he paid, there will be a 100 percent capital gains tax

to recover any such property. I hope no one believes this will occur.

Interjections.

HON. MR. NIELSEN:

There are people who own a home that they may have purchased many years

ago, and the home today may be worth a quarter of a million dollars.

Thirty years ago they may have paid $15,000 for it, or even less, the way

the prices of homes have gone. Many of these people can barely afford their

taxes. They may think: "This is my pension or my estate and I'm going

to sell it." But if government is going to confiscate that profit at 100

percent simply because they didn't earn it according to the criteria that

could be established by a socialist government, I would think those people would

be pretty frightened. If the minister could develop processes for what I consider

to be the extraordinary powers of local governments in zoning and the effect

it has on the escalation of prices of land, I think he would be doing us a great

service. I share the concern of the member for Victoria about the fact that

a government at any level can simply, by signing a paper,

[ Page 8129 ]

rezone

major areas of a city which now are so valuable that the average person

can't even approach purchasing them. That has been happening for a long

time. It is an area that perhaps can't be resolved quickly or even in

this chamber at this time. I think the member for Victoria brought

forward some thoughts that probably will stimulate discussion. It does

typify an attitude that some people hold, and it will be very much

worthy of consideration.

MR. CHAIRMAN: The member for

Victoria. The Chair also regrets that the debate was not allowed to

reciprocate during the last exchange. I was misinformed about something.

MR. BARBER: I appreciate the Chair's apology.

have more common ground than I had expected and I am glad for it.

Dealing with the comments of the member for North Vancouver–Seymour

(Mr. Davis), in our view, the preservation of air rights along major

rights-of-way, be they public highways for the automobile or public

highways for transit — either way, they are public thoroughfares —

should be the permanent preserve of the public itself. The temporary

ownership and finally the sale to private interests of those air rights

and related benefits is not in the public interest.

That

does not necessarily mean, though, that the Crown is competent or

adequately empowered to administer those. I don't happen to think it

is. I think the Bay Area Rapid Transit district in the Oakland-San

Francisco-Marin-Richmond area made a serious mistake when they decided

to abandon the opportunity to retrieve benefit in order to subsidize

the costs of BART. They did so out of terrible political fear. There

was an enormous controversy in San Francisco. I happen to be fairly

familiar with that. I've met with officials from BART on three

occasions now, and I happen to read the San Francisco Chronicle .

Although it's not a great newspaper, it usually carries these details

fairly well. I've read some studies and once attended a hearing of

BART. They made their decision to abandon the possibility of public

benefit from the rights-of-way along BART lines because they were

terrified of the criticism that would result that members of the board

of BART — which is an elected board in that system — would somehow have

been benefiting their friends.

As far as I can tell, there's

no other rationale. In many other systems, as the member for North

Vancouver–Seymour (Mr. Davis) knows full well, they retain those

benefits and values for the private or public interest. It certainly

can be done. Those values are measurable. They can be planned for, they

can be anticipated, and they can be built. There may be certain areas

of the United Kingdom where, for esthetic reasons, it's not appropriate

to have development along major rail or highway lines. That may have

been one of the rationales. I don't know. But it seems to me that you

can make the argument as well that you don't want strip development

along a major transit line. There may be esthetic, environmental or

historical reasons, especially in Europe, for choosing not to proceed.

In Vancouver, of course, that would be ludicrous. The primary benefit

should be commercial and should be commercially available in such a way

as to benefit transit.

The member said that there's

fundamentally, if I understood him correctly, simply a difference in

degree. He thought our response to him would be that they're not going

far enough. Public ownership isn't great enough, public return of value

isn't considerable enough, and the public process isn't well enough

served. I think he correctly calculated our view. In our view, the air

rights and related land benefits along ALRT lines should be preserved

in their entirety for the public. However, the way they are earned need

not by any means be the conventional way that they've been earned in

other places.

Why, for instance, could the government not

consider a policy as follows? The Crown would retain ownership. Public

equity would be preserved in those benefits and rights. Local

municipalities would be permitted by legislation to share in the

proceeds, in return for which, as partners, they would guarantee

certain rezoning for certain purposes. Thus the element of doubt and

accident would be removed altogether. Let me illustrate. Vancouver, for

instance, having agreed that it is consistent with its plan and their

purposes, would agree to rezone for, say, a hotel, the property at Main

and Terminal — if we can use that as an example. In return for that

agreement, by virtue of the public planning process which Vancouver is

already engaged in, they are then entitled to a share of the proceeds.

They benefit; we benefit their planning proceeds; ours proceeds; ALRT

is built; and not just the $1.3 or $1.5 million, but the tens and

twenties of millions that will eventually be earned on that profit over

the life expectancy of the buildings — shall we say, 30 years — would,

in its entirety, return to the people of Vancouver and British Columbia.

Furthermore,

there is no need to set up a British Columbia hotels corporation. That

would be ludicrous. However, what you might do by public bid and tender

or some other open process would be to invite private enterprise to

participate: to build the hotel on the leased land along the

specifications that the city of Vancouver, which is a partner in the

venture, would set out. That private enterprise would be entitled to

run it, just as private enterprise runs facilities on airport land.

Cara, for instance, has made enormous profits by leasing land in

airports across Canada, by operating restaurants, dining rooms and bar

facilities. It doesn't matter to them that they don't own the airport.

They don't have to own the airport. They own the rights of business.

They provide a service — admittedly in this case a very expensive one —

the Crown is reimbursed, the cost of the terminal is somewhat reduced,

and private enterprise makes a profit which they have earned.

What

is wrong with that policy? What is wrong with sharing the revenues with

the city of Vancouver? What is wrong with using the provincial revenues

to subsidize the real cost? Transit is a loser. Transit will never make

money in North America. The distances are far too great and the

densities are far too small. What is the matter with using those

profits to benefit the people of Vancouver and British Columbia and

simultaneously reduce the losses on the ALRT system? What is wrong with

challenging private enterprise to participate in this co-venture? What

is wrong with asking private enterprise to build a hotel above the ALRT

station? They did that in Montreal. Place Ville de Marie is a classic

example of how they did that, connecting conventional rail service, the

new Montreal underground service — Metro and private enterprise.

this case, one of those enterprises happens to be a Crown corporation,

as you know — the CNR. The CPR is also involved in its end of things in

Montreal. In Montreal they found that joint venture formula which

allows profit to be made to reduce the costs of operating Metro, and

allows private enterprise to make and earn a real profit and keep

[ Page 8130 ]

people employed and the economy moving. It seems to me that's a more desirable combination.

British Columbia, as in Canada, we enjoy the benefits of a mixed

economy. Private ownership and public ownership both have a role, a

duty, an obligation, a responsibility, and a way of keeping our people

working and our economy moving.

The member for North

Vancouver–Seymour (Mr. Davis) says we disagree basically in degree and

not in consequence. He may be correct. But for us the final consequence

is that we may see — over the period of time that ALRT exists —

millions of dollars earned by private entrepreneurs along the

rights-of-way that could have been shared with the public and could

have been shared.with the public originally so as to reduce — at the

outset — the capital outlay that will be necessary in order to finance

this project. The sooner we pay off the ALRT debt the better. We will

thereby pay less interest and do so over a shorter period of time. It's

clearly in our interest to pay off the ALRT debt as soon as we can.

Therefore

timing is really very important — $1.3 million a year at Main and

Terminal is a nice pile of money, and I'm glad we may be able to obtain

that. However, if $4 million or $5 million a year were available

because we were in a partnership with private enterprise and with the

city of Vancouver, that's even more desirable. That's the harder

bargain, and in the long run that is more greatly in the public

interest. The consequence of receiving those greater revenues is that

we can pay down the debt of ALRT and the UTA more rapidly and thus pay

less interest and finally evacuate that debt in a quicker period of

time. I think that's in our interest too.

To reiterate, BART

made a mistake. It's understandable because of the political complexion

of the Bay Area Rapid Transit district; the fact that the members of

the board are elected persons; the fact of the imposition of a

district-wide sales tax, which they twice increased in order to pay for

BART. Also one has to point out that the technology, courtesy of

Westinghouse, turned out to be not very practical. That is no

reflection on the issue of rights-of-way, but it was certainly a

problem of finance that they had to deal with. The directors of BART

clearly wish they had not abandoned the public benefits that could have

resulted from development at the stations and along the right-of-way.

They desperately wish today that they could finance the writing-down of

BART's debt by taking advantage of that. I am advised that they are now

looking at ways to reconsider. For instance, they are looking at ways

to build above the Berkeley transit station, which is in the east bay

of San Francisco. That particular locale near Telegraph Avenue, near

the gates of Berkeley — one of the great universities in the western

world — may provide such a physical opportunity. However, they have

problems with engineering associated with earthquakes and other

problems there, and they may not be able to build to the density they

would like in order to recapture the gain they need.

Nonetheless,

I hope we don't make BART's mistake. BART's mistake was to say no to

everything. Our mistake may be to say no to some of the things, and

this is fundamentally a mistake that over the period of time ALRT will

be in existence will prove to be very costly. I'm glad the member for

North Vancouver–Seymour shares our view that the public is entitled to

retain value and obtain benefit from air rights and rights-of-way. I

just don't think they are going at it in as serious or as disciplined

or as profound a way as they could.

I would call on this

government to establish that partnership with both local government and

private enterprise in order to allow private enterprise to do what it

does extremely well — which is to efficiently operate business, make a

profit and employ people — and at the same time to allow local

government to do what it does well — which is to examine local planning

priorities and zone accordingly — and to allow the province to do what

it does well — which is to build these projects with a level of finance

that is denied completely to private enterprise and local government. I

think the government should be a little more serious about discerning

and obtaining public benefits along ALRT rights-of-way. We agree with

the basic principle; we wish you would go a lot further in its

execution.

With regard to the comments made by the member

for Richmond (Hon. Mr. Nielsen), I would only argue that it's a welcome

thing to hear that he shares our concern about the devastating impact

of flipping and speculation in real estate, be it in the residential,

the commercial or the industrial market. It is devastating, crippling

and damaging; it is unearned profit that they are not, in my strongly

held view, entitled to make. I want to say, for the twentieth time,

that I believe that people are entitled to take profit that they earn.

That is our system in this mixed economy of Canada. But if they don't

earn it, they are not entitled. They haven't worked for it, and they

don't deserve it.

Now if the government rejects the notion

of a 100 percent tax on speculative gain, on real estate flipping, then

I ask them to tell us what other notion they would advance as an

alternative. It's useful and worthwhile to give speeches condemning

flipping in real estate. I'm glad the member for Richmond did so. I

share his view. But I would commend to him, and to his colleagues, the

three principal alternatives that exist.

First is through

some system involving the income tax to retrieve 100 percent of that

unearned profit in the speculation and the flipping of land.

The second alternative is of course through the capital gains tax, which would have to be done, obviously, with Ottawa.

The

third alternative involves some system of zoning of sufficient

complexity to be precise enough to deny unearned value. The member for

Richmond raises a useful question. He says: "What about someone whose

family built the home in the year 1900, shall we say, and they did so

for $5,000? This year it is worth a quarter of a million dollars. Are

you going to make them sell it for $5,000, or are you going to tax away

$245,000?" He raises a useful point, and I agree that that would be

unfair and an absurdity. It would be unfair and unreasonable, as it

would not take into account the cumulative impact of inflation or

whether those people improved the value of their land by adding wings

or bringing the wiring or the plumbing up to date or putting in a fancy

garden. All of these things have to be taken into account.

Again,

I commend to the minister the illustration in Australia. As we're

advised, two of the Australian states have found a formula to take

those things into account. In one of them, what they appear to do — if

I understand their system correctly, and I think I do — is to allow, in

effect, a total exemption for a family home under any circumstances.

They make a 100 percent exemption and anything goes. However, when that

family — be it the parents or adult children — own other properties for

revenue purposes, as can be easily demonstrated through the income tax

mechanisms that exist, and

[ Page 8131 ]

they

use those for revenue purposes and attempt to sell, usually in a matter

of days in a high-value, high-turnover real estate market, then they

are taxed 100 percent. They are taxed at that level because they have

not earned any profit and therefore they are not entitled to any profit.

the other Australian state I'm advised that the way they do it is

basically by observing the calendar. That is obviously open to abuse

and is obviously artificial in a sense. What they say is: "If the land

is sold within three or six months" — I forget precisely which — "you

are then subject to the tax." If it is sold after that period, it is

held to have been for a legitimate purpose and legitimate uses on it

occurred, and it is therefore subject to a partial tax. Beyond the

further period of time, a partial and a lesser tax is imposed. That is

a complicated formula but it may well be better than what we've got,

which is no formula and no mechanism at all.

If the

government does not accept those means of dealing with the problem of

real estate and flipping, which I'm glad the member for Richmond and

the member for North Vancouver–Seymour acknowledge and also see as

being real problems, then could they tell us what other system they're

prepared to consider? Could they tell us what other system they're

prepared to establish? In the absence of any system at all, the people

of British Columbia who wish to assemble land for legitimate commercial

and industrial purposes or who wish to enjoy the benefits of home

ownership will continue to pay more than they should. For all practical

purposes, they will be denied the benefits to which they're entitled by

right of citizenship and by right of their own ability to participate

in this system. I think they are entitled; they should benefit. It is a

right of citizenship to own your own home, but when flippers and

speculators are driving up the cost of that home, for all practical

purposes that right is denied you. That's unfair and it's unreasonable.

The continued unwillingness of this government to deal with the problem

of flipping and speculation is a problem that should not be left

unaddressed much longer.

MR. LEGGATT: Mr. Chairman, I

just want to add a few remarks to those of the member for Victoria, and

particularly to those of the Minister of Health in defending the

present tax structure on capital gains. At the present time a person

who works for wages is taxed on 100 percent of his earnings. If,

however, you're fortunate enough to flip a house or sell a business,

you get taxed on 50 percent — 50 cents on every dollar. It's time we

should really ask ourselves about the fairness of a tax system which

tells someone who works very hard for a living and earns every dollar

of his money that he's going to pay tax at twice the rate as those who

are fortunate to buy, sell and flip houses. That is what the minister

has been defending this afternoon. He has defended a tax system which,

in fact, punishes the hard working and rewards those who wish to

speculate. That's exactly what it does.

AN HON. MEMBER: A buck is a buck.

MR. LEGGATT:

Yes. A non-socialist, called Mr. Carter, produced a commission report

on the tax structure in this country which still makes an eminent

amount of sense. In order to pay for the costs of services you tax

dollar-for-dollar, which means that if you had a tax on succession

duties, tax on capital gains and tax on revenues, you would reduce the

tax to working people in this country by at least 50 percent to 60

percent. We've never had the courage to look at the income structure of

the country to bring forward a fair tax structure, one that would have

a built-in incentive for people to work. There's lot of talk about

people who don't have incentive to work. You tax wages at 100 percent;

you tax speculative profits at 50 percent. What kind of fairness is

that? What kind of system is that?

MR. CHAIRMAN: I

call the committee to order. The member is straying a bit. The Chair

recognizes how we have arrived at this situation, but perhaps you could

be brief with the subject of federal income tax.

MR. LEGGATT:

If you wish to bring tax relief to ordinary people in British Columbia,

find a way to bring revenues to government that are other than a tax on

earned or wage income. You must find alternative sources. One of the

ways to do it is the way that the member for Victoria has suggested,

and also the member for Vancouver East, which is to participate in a

lease-back structure around those properties which can yield permanent

and perpetual revenue to government. Permanent and perpetual revenue to

government is the future, but the high-taxers over here want to savage

working people with tax rates that are some of the highest in the

western world. They provide a disincentive for average income earners.

Those high-taxers on the other side will deny the public the

opportunity for any other source of revenue to balance the necessary

costs of government.

That's what the debate was about this

afternoon, Mr. Chairman. That's what the Minister of Health (Hon. Mr.

Nielsen) had to tell you. He said: "I still want to stick it to the

working guys. That's where we're going to get our money. Those who

speculated will be taxed at half the rate. Those who have unearned

income will not be taxed at all. There will be no succession duties to

be paid in this country. No, we won't look for any other source of

revenue except the working guys. They're supposed to carry the can."

Mr. Chairman, that's the debate. That's their position, and they are

stuck with it.

MR. CHAIRMAN: Order, please. There

appears to be an awful lot of conversation going on in the committee.

Perhaps we could remind ourselves that only one member at a time is

recognized. Before recognizing the first member for Victoria, the Chair

appreciates how the topic has strayed, but perhaps we could return to

Vote 63, the administrative actions and responsibilities of the

Minister of Municipal Affairs.

MR. BARBER: Mr.

Chairman, I would now like to proceed to a series of specific questions

to the minister, and I will try to ask them exclusively along the lines

of particular subject areas. I’ll do so in a group and then wonder if

he could reply. That might be the most efficient way to handle it. I

have quite a number of different subjects here.

The first

has to do again with the Islands Trust, but in this case with

proclamation of that

section of the Islands Trust Act which allows the

establishment of an Islands Trust Fund. I'm in receipt of a copy of a

letter from the Minister of Municipal Affairs which indicates to the

chairman of the Islands Trust that he was unable to persuade his

cabinet colleagues to have that

section proclaimed. I wonder if he

could now advise us — this is my only question on the subject — whether

or not he has been able to go back to cabinet; whether or not he has

better news to report to the Trust.

[ Page 8132 ]

That

section of the act allows the establishment of a fund in order that the

Trust itself may hold property. The purpose of that, in the view of the

Trust, and as illustrated in the plan which they are now attempting to

advance among the Gulf Islands, is that they may pick up property for

public and recreational purposes. These are obviously worthwhile

purposes, but they cannot do so without authority. The only authority

available to them is under the Islands Trust Act. The only specific

authority available is under a

section that has not yet been

proclaimed. Could the minister tell us whether he's been able to go

back to his cabinet colleagues, and whether or not he could advise the

likely date of the proclamation of the

section which would allow the

establishment of the Islands Trust Fund?

[Mr. Davidson in the chair.]

HON. MR. VANDER ZALM: Mr. Chairman, the matter is still up for consideration, but I would not took forward to proclamation this year.

MR. BARBER:

The next question is about ALRT. Is it the government's position yet

that the equipment will continue to be automated and that the trains

themselves will have no drivers? If that remains the position of the

government, can they advise whether or not they have taken a look at

the problems encountered when the BART system first went in without

drivers, and when, as a result, they suffered tremendous opposition

from and rejection by the riders on that system, who were especially

concerned about the public safety in the tunnel sections under the bay?

We will have tunnels in one part, the Dunsmuir Tunnel. Is it still the

government's position that ALRT trains will be driverless from day one?

If so, I would appreciate hearing that from the minister at this point.

HON. MR. VANDER ZALM:

Yes, that is still my position. We have the experience of San

Francisco, as was mentioned, as well as Washington and Hamburg. They

are working well, and we intend to go with an automated system.

MR. BARBER:

The point was that BART didn't work very well and they had to put

drivers on. They started without drivers, but later, because of

passenger objections, they had to put drivers on, which of course

enormously increased the cost of the system. I have been on BART many

times. They have a trainman at the beginning. Originally there was to

be none. It should be pointed out, additionally, that there was also a

problem in BART with trains colliding. The braking system failed on at

least three occasions and the trains collided. This was another obvious

reason why the passengers were concerned about driverless trains.

On March 2, 1982 the minister was quoted in the Vancouver Province

as saying that ALRT will likely carry 25,000 people per hour in each

direction. However, UTDC, in the material which they made available to

us, indicated that its system capacity would only be 10,000 people per

hour in each direction. I wonder if the minister could explain the

anomaly. I have reviewed the UTDC material and it is simply not at all

consistent with what the minister advised. I am quoting statements that

he made in the Vancouver Province as recently as March 2 of this year.

HON. MR. VANDER ZALM:

The answer is that it will initially carry 10,000 people per hour each

way, but it is capable of carrying 25,000 people per hour each way if

we get the additional cars. Certainly there wouldn't be the need to

begin with, so we are aiming at 10,000 initially and hoping that 25,000

will arrive soon.

MR. BARBER: Part of the explanation

and, if you will, the defence that the government has offered in regard

to the UTDC technology is that it is guaranteed in such a fashion that

if it does not work we will not have to pay for it. The contractual

obligations are such that if certain requirements are met, UTDC is

protected. If they are not, we are protected. The UTDC contract

specifies that the hourly rate will initially be only 7,500; it will

thereafter proceed to 10,000. I cannot find anywhere in the contracts

with the UTDC a provision that it will be required to obtain or handle

the capacity of 25,000 people per hour. I cannot find any reference in

any UTDC–British Columbia contract that specifies a capacity — be it

from the standpoint of the planning purpose, rail-carrying purpose,

computer-guidance purpose or the number of trains to be made available

— that will hit 25,000 per hour. That does not appear in the contract.

What does appear are the references to the figures of 7,500 and 10,000.

The 25,000 appears nowhere in there. If we are given financial

protection for a system that can only handle 10,000 and the minister

tells us he thinks it can go to 25,000, I want to know who protects us

if it handles 10,000 but cannot handle 25,000 and if 25,000 is the

optimum carrying capacity and anything less makes the system more

costly and less efficient. Nowhere in the contract do I read a

provision that will provide the same guarantees at 25,000 an hour that

the minister says he has established for the figure of 7,500 to 10,000

an hour. This is a problem in terms of protecting the public interest

along the contractual basis by which protection has been established

here.

HON. MR. VANDER ZALM: The contract could not

meet 25,000 per hour. The contract, as we now have it with UTDC, would

only be good for up to 10,000 per hour. If we wanted to go to 25,000 —

certainly we would later on — we would have to purchase additional

cars. We only have 114 cars in the contract.

MR. BARBER:

If I understand it correctly, though, it is more than simply a problem

of purchasing the additional cars. It is also a problem of rewriting

the computer programs and guidance systems necessary in order to

continue to guarantee the level of safety and the rapidity of travel

that an extra load — in this case, more than twice the ordinary load —

on the system would require. I see the member for North

Vancouver–Seymour (Mr. Davis) is here. Perhaps he could handle it as

well. What concerns me is to know whether or not UTDC has the

engineering and computer capacity to guarantee the rapid and safe

transmission of those extra 15,000 passengers an hour. The contract

only holds them accountable for 10,000. The minister indicates that the

contract may be rewritten to take it to 25,000. If that is the case, I

want to know whether the current engineering and computer-guidance

considerations are such that they can handle that. If so, could the

minister advise what assurances he has along those lines? The current

contract itself, as he acknowledges, does not answer that.

[ Page 8133 ]

HON. MR. VANDER ZALM:

If you double the number of cars, obviously you would have to make some

changes to the computer programming. That is understood, but there are

no difficulties.

MR. BARBER: Do I understand that the

UTDC has given assurances that the safety and the transit designs of

the current system will allow it to go to 25,000 per hour without a

major rewrite of the mutual obligations between UTDC and the province?

HON. MR. VANDER ZALM:

We would have to buy more equipment. Unless there's something in the

question I didn't get, he member's just repeating what he asked before.

MR. BARBER: My concern was whether the equipment, apart from the issue

of cars, has the capacity. Let me illustrate again. When BART decided to expand

down on the East Bay, Westinghouse assured them originally — and Mr. Davis will

know this — that the guidance systems would have the capacity to allow for extra

track, extra passengers and extra cars. It turned out that Westinghouse was

wrong. They had to do a second rewrite of their computer-guidance program. Westinghouse

had assured BART that it would have the extra capacity that BART said it

wanted. When it got to the point of opening the new lines on the East Bay, it

turned out that Westinghouse was wrong. In that instance, fortunately BART was

protected. If I recall correctly, Westinghouse was sued. I believe the appeal

of that suit is still in the courts, but Westinghouse rather than BART was found

liable.

just want to know if the minister is assured, on the basis of

engineering and computer-guidance specifications that have to be taken

into account, that they can in fact do this. I would just remind the

minister that a company as reputable as Westinghouse did provide a

similar assurance to BART, which turned out to be perfectly worthless.

HON. MR. VANDER ZALM: We're satisfied. Obviously there would need to be a new contract to acquire more cars if we increase the capacity.

MR. BARBER: In a letter to the Vancouver Province on April 13, 1981,

the minister estimated that ALRT would cost approximately $40 million more

than its conventional light rapid transit counterpart. However, when we inquired

along the same lines, UTA indicated that the actual comparison would see

the ALRT system cost in excess of $100 million more than conventional light

rapid transit. I again refer the minister to his letter of April 13, 1981 —

at that time it was $40 million more. The UTA has now provided figures which

indicate it will cost in excess of $100 million more than conventional light

rapid transit. In the letter of 1981, the minister was using 1979 dollars.

If he wishes to continue to operate on that basis, that's okay. On either

basis we need to know what the cost may prove to be. I wonder if the minister

could bring us more up-to-date figures than did his letter of April 13, 1981.

HON. MR. VANDER ZALM: It's apples and oranges. If you were to

compare the two systems and attempt to determine what the difference in

price might be, you would have to design one like the other and ensure

that there were no level crossings. In fact, if level crossings were

accepted as satisfactory, then a conventional system would be cheaper.

On the other hand, if you didn't accept 28 or 30 level crossings, with

their gates coming down every few minutes — and the tremendous chaos

that would create, particularly through the Burnaby-Vancouver corridor

— and if you elevated the conventional system, you would spend a whole

lot more than what you're spending on ALRT.

MR. BARBER: It wasn't our side that compared apples with oranges; it was the minister in his own letter of April 13, 1981 to the Vancouver Province .

The minister, not the opposition, first attempted to compare the costs

of CLRT — conventional light rapid transit — and ALRT. Again, it's now

simply a matter of public record. The UTA itself has provided figures

which indicate that ALRT will cost more than $100 million more than

what would be the cost of its CLRT counterpart. Those aren't our

figures; that comes from the UTA.

I have other questions

about the costs of this system. We have already seen a very

considerable overrun in the cost of building ALRT. Let's go back in

time to December 6, 1980. At that time the minister announced, for the

first time publicly, that ALRT was going to be built in greater

Vancouver. At that time — December 6, 1980, a year and a half ago — he

established that the system would cost $290 million. Again I am quoting

from his statements released to the public at that time. However, in

May 1981 the price had begun climbing; it was $324 million. This is the

figure that appears in the UTDC contract. However, that inflated figure

of $324 million — by the way, Mr. Chairman, this is all in 1979

dollars; that's the basis of comparison that the minister has offered;

I know you're interested; I can see that you're following each of these

figures — excludes certain items which subsequently are found to be the

responsibility of the UTA itself. The UTA advises that these additional

items total another $70 million. Additional costs include, for

instance, the cost of providing access for the handicapped, which is

estimated by the UTA to be $6 million, and the alignment change on the

north side of the Georgia viaduct to accommodate B.C. Place, which the

UTA tells us will be some $10 million.

When you include

those additional charges, you find as we did three months ago when we

did these calculations, which were based entirely on UTA information

provided to us by the minister, that total cost of the ALRT, in 1979

dollars, now stands at $410 million. On December 6, 1980, the minister

said it would be $290 million. Now, in the spring of 1982, it's $410

million.

There are, of course, additional charges which may

also be added. That includes the esthetic considerations of an elevated

track, the cost of additional changes that the municipality of Burnaby

is requesting and additional costs at the end of the line in New

Westminster. This is provided in a report that the GVRD produced on

March 26 of this year. This also includes, of course, the possibility

of a tunnel under Commercial Drive, the estimate of which is $13

million to $14 million, but which, clearly, the government has ruled

out. We accept the fact that they've ruled it out, but we observe that

the additional costs here may well amount to some $750,000 to $1.1

million. That brings it clearly in excess of $410 million.

wonder if the minister could help us reconcile the apparent

inconsistencies: December 1980, $290 million; contract signed in May of

1981, $324 million; and current conservative calculation, $410 million.

That's a very considerable increase in less than a year and a half. I

wonder if the minister could tell us — in 1979 dollars or contemporary

[ Page 8134 ]

dollars — what the costs are in fact going to be when the line is finally built.

HON. MR. VANDER ZALM:

Mr. Chairman, it hasn't changed. I can't really speak for the GVRD, and

I'm not really here to debate figures that are sometimes put forth by

GVRD or one of their bureaucrats. The initial estimate was $290 million

in 1979 dollars, and that is still the estimate, with the exception

that the figure of $324 million which was quoted included an item

negotiated with respect to the tunnel. The entrance will be changed and

there will be an arm coming off the tunnel which will head towards

Richmond, but the time to do it is when they do the work for the tunnel

initially. It's going to cost money and a figure has been negotiated,

but it's cheaper to do it then than to try to do it later on.

Similarly,

they negotiated a change in the service facility, and the negotiated

change will allow for expansion of this service facility. But the

figure of $290 million that was initially used still stands.

MR. BARBER: Can the minister confirm that the additional costs include, for handicapped access, $6 million over the figure he just cited?

HON. MR. VANDER ZALM:

That decision was made by UTA after the contract. If you'll recall,

there was a lot of discussion at various councils, and certainly they

brought it to our attention. Similarily, I asked UTA to immediately

look at this, and that's an addition of $6 million following these

decisions.

MR. BARBER: That takes it to $330 million.

Can the minister confirm that the alignment change required on the

north side of the Georgia viaduct to accommodate B.C. Place will cost

an additional $10 million over and above the previous figure? This

figure has also been provided to us by the same people who told us it

would cost $6 million for handicapped access.

HON. MR. VANDER ZALM:

I'm not sure just exactly what the figure is, but it could perhaps be

correct. However, B.C. Place pays for that. If a municipality or a

Crown corporation or anyone else wants to negotiate something outside

of that provided for in the contract, it's at their cost.

MR. BARBER:

Mr. Chairman, the point is that when B.C. Place pays for it, that means

the taxpayers pay for it. B.C. Place is us. We own it. To try to

pretend that somehow it's a separate source of money when, in fact,

it's public money, is, I think, not stating the case accurately. B.C.

Place pays for it; that means we pay for it. That's an additional cost

and an overrun. What is the precise value of the performance bond that

the UTDC has signed?

HON. MR. VANDER ZALM: It's $300 million.

MR. BARBER:

This concerns me, Mr. Chairman, because the minister has now agreed

that the contract is in excess of $300 million. In fact, it's initially

$324 million, on top of which are certain additional charges. Let's

ignore those additional charges — UTDC may well say that they're not

responsible for them — and deal with the dilemma of seeing that a

performance bond is worth $300 million and the contract is worth $324

million. If, for instance, the entire system should collapse in a hail

of electric sparks and it doesn't work and you have to start again,

obviously we are not fully protected. If inflationary costs are such,

how will we be protected at all? It seems to me, on the simplest basis

of calculation, that the amount specified in the performance bond is

patently inadequate to the job of recovering public expenditure if it

turns out this system does not work — as a performance bond must always

anticipate the possibility of.

The performance bond is $300

million. Does that include an inflatio