1994 Legislative Session: 3rd Session, 35th Parliament

HANSARD

The following electronic version is for informational purposes only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

MONDAY, JUNE 13, 1994

Afternoon Sitting

Volume 16, Number 10

[ Page 11771 ]

The House met at 2:05 p.m.

Prayers.

Hon. B. Barlee: Visiting in the gallery today is Mr. John Adams, who is with the heritage properties branch. He's accompanied by his father-in-law, Dr. Richard Christiansen, who for many years has been actively working with the New York State Legislature. Would members please accord them a warm British Columbia welcome.

G. Wilson: I'd like the House to welcome 21 grade 3 students from Monterey Elementary School in Oak Bay. This class includes Jamie Housser, the son of the nationally renowned broadcaster, Mr. Housser. They are accompanied by their teacher, Kathleen Ernst, and a parent, Jennifer Foord. Could members please make them welcome.

Hon. A. Petter: As a former graduate of Monterey, and on behalf of the member for Oak Bay-Gordon Head, I also want to welcome the students here today. I would also have the Legislature note that earlier in the day a group from St. Joseph's School in my constituency of Saanich South also visited the precincts. I would like the House to make both groups very welcome.

N. Lortie: I rise on a very serious matter that makes some of the work we do here pale into insignificance. Tomorrow is the seventh game of the Stanley Cup finals, and at this very moment our team is winging its way to New York City. I'd ask that as a group, in rare unanimity, we congratulate this team and wish them another great and successful game -- and the Stanley Cup. Go, Canucks, go!

D. Lovick: Hon. Speaker, I assure my colleagues that I'm not here to argue for equal time on behalf of New York. Instead, on your behalf, I simply want to offer greetings to a delegation of the Association of Parliamentary Librarians in Canada. They're meeting here in British Columbia -- in Victoria, as a matter of fact -- for the first time ever in the association's history. These are people, of course, who we all know very well and on whom we rely for much of the service provided to us as members. Seated in the gallery is Joan Barton, our own chief librarian in Victoria, and a number of her colleagues from across the country. I'd ask my colleagues to please give them a warm welcome.

Hon. D. Marzari: I would similarly like to express my welcome to the parliamentary librarians and recognize the important work they do.

I would also like to introduce to the House 25 students from Our Lady of Perpetual Help School in Point Grey, Vancouver, and their teacher, Marielle Flynn, and the chaperons who have come with them. Welcome.

Oral Questions

NANAIMO COMMONWEALTH HOLDING SOCIETY

W. Hurd: I have a question for the minister responsible for gaming. The Premier has said there will be a full audit of the books of the New Democratic Party. Could the minister assure this House that that audit will also include allegations contained in the search warrant served on the Nanaimo Commonwealth Holding Society?

Hon. R. Blencoe: Hon. member, I will take that question on notice.

The Speaker: The question is taken on notice. The hon. member has a further question?

W. Hurd: In the search warrant served on the Nanaimo Commonwealth Holding Society, there's a letter from Dave Stupich. It says:

"...the Nanaimo Commonwealth Holding Society, the Harewood Social Centre and the B.C. Tomorrow committee exist to further the political interests of the New Democratic Party. All of them have provided funds over the years for the use of the party, for donations that have been made in the name of the party.

"As treasurer of the Nanaimo Commonwealth Holding Society, my responsibility has been to record financial transactions about the above groups and the Nanaimo NDP Association...."

Again I have a question for the Minister of Government Services. Can he assure us that the NDP books will prove this, and that the AG and the government will support the call for a full public inquiry into the Nanaimo Commonwealth Holding Society and the society's appearing to exist solely for the purpose of raising funds for the New Democratic Party?

Hon. R. Blencoe: This issue was well canvassed last week; the Attorney General and the Premier answered this question many times. As the hon. member knows, the law is clear. The issue is before the courts, and it is inappropriate for us to comment on the issue the member raises today.

The Speaker: Do you have a final supplemental, hon. member?

W. Hurd: The minister should be aware that the balance sheet of the Nanaimo Commonwealth Holding Society was examined by Ronald Parks, a forensic accountant with the firm Ernst and Young. Mr. Parks advised the RCMP that several balance sheet entries were "a little unusual for a non-profit society." One of those entries was a balance owing of $30,000 under the heading of "MLA accounts."

The Speaker: Question, hon. member.

W. Hurd: And another was $26,000 under "NDP project advances." Doesn't the minister agree that these "unusual" entries in the balance sheet create no doubt that there should be a full public inquiry into this fiasco in Nanaimo?

Hon. R. Blencoe: I understand what the opposition's viewpoint is. But they also know there is a legitimate legal framework and process currently underway. If the Liberal opposition wishes at its whim to avoid the legal process in British Columbia, so be it. We will abide by the legal process. The courts are dealing with the issue, hon. member.

M. de Jong: The minister knows full well that the special prosecutor has recommended that a special investigation take place and that all the pertinent documents be released. My question is also to the minister of games -- I'm sorry; minister of gaming. The affidavit sworn by Corporal Forster in May 1993 concludes that that officer of the RCMP had reasonable and probable grounds to believe that the NDP association, between the dates of January 1, 1973, and August 12, 1992, did cause the British Columbia lotteries

[ Page 11772 ]

branch and the public gaming branch to act upon forged documents.

My question to the minister is: as the individual within the NDP government responsible for administering that branch of government, will he not take the initiative and recommend to the Premier that his government has no alternative but to initiate a full public inquiry into this matter?

Hon. R. Blencoe: This issue was canvassed extensively by the opposition and by the Premier and Attorney General last week. I want it known that the B.C. Gaming Commission and the gaming branch have processes and policies in place, and that monitoring is done.

In terms of the issue before the courts, the opposition knows I cannot comment on those issues. If that member, who is a lawyer, wishes to disobey the laws of the province, that's on his head. We will obey the laws of the province of British Columbia, and the courts will proceed.

The Speaker: Supplemental, hon. member.

M. de Jong: What's clear is that this is a government that is content to hide behind the law when it's convenient to do so.

The Speaker: Question.

M. de Jong: My question to the minister is: can he tell this House how any applicant within the province can have confidence approaching his ministry and his government, knowing full well there are these shady dealings, as alleged by Corporal Forster, which this government refuses to act upon and refuses to investigate in a public way?

Hon. R. Blencoe: That member knows there is detailed process for licensing, monitoring and review, and regulations that are carried out by the B.C. Gaming Commission and the gaming branch. They do a good job. They monitor, and they are there for the people of the province.

In terms of the issue referred to, again, the courts are dealing with the issue, and we will not comment on that process.

[2:15]

R. Neufeld: In the absence of the Premier and the Deputy Premier, I'll ask my question of the Minister of Government Services. Jacques Carpentier has today alleged that a number of ministers and government MLAs know more than they have been letting on about the NCHS charity ripoff. Why won't the government muster a little moxie and immediately launch a full public inquiry into this matter?

Hon. R. Blencoe: The member is referring to lots of issues and questions that have already been raised by many members. I would again remind that member that the issues he raises are before the courts, and that we will allow the courts of British Columbia to proceed without undue effect from this House.

The Speaker: Supplemental, hon. member.

R. Neufeld: A fundraising arm of the NDP has pleaded guilty to bilking Nanaimo charities out of $200,000 -- some of which may have been laundered to members of this government. Ace Henderson has said that the only way to have this dirty laundry sorted out is through a full public inquiry. Will the government now accept Mr. Henderson's advice and launch an independent inquiry?

Hon. R. Blencoe: Once again, I refer back to Hansard and the many comments that were made. The process will take place. The courts have it, and if the accusations you make are accurate, then the courts will deal with those issues, hon. member.

The Speaker: Final supplemental, hon. member.

R. Neufeld: This government has had over a week to get up its courage to come clean. The government member for Nanaimo has conceded that he may well have benefited from the Nanaimo charity ripoff. Why is this government so afraid to do the right thing and launch a public inquiry? Is this thing so corrupt that the government is afraid to face the music through a public investigation?

Hon. R. Blencoe: Once again, the courts are hearing the case, and the issue will be resolved in the courts.

APPEAL PROCESS FOR MOTOR CARRIER COMMISSION DECISIONS

G. Farrell-Collins: My question is to the same minister. I have in my hands the entire transcript of the cabinet appeal hearing that the Minister of Energy held in granting the 18 new licences to Kimber Cabs, a longtime NDP friend. We note that on three separate occasions the minister involved cut off Paul Gill when he attempted to explain his telephone calls to the Premier. Is that minister, as a member of the appeals board, not the least bit curious? Does he not wonder why the Minister of Energy went out of her way to such a great extent -- three times -- to stifle Mr. Gill when he tried to explain his links to the Premier's office regarding Kimber Cabs?

Hon. R. Blencoe: The minister that the member refers to made a statement in this House and explained the situation. She weighed all the evidence, pro and con, and she made her decision. That's what the appeal process currently is about. The member knows that, and he knows the statement made by the hon. minister.

The Speaker: Supplemental, hon. member.

G. Farrell-Collins: Quite clearly there was some information that the minister didn't want to weigh, and that's what we're trying to get at. Is it information that the minister refused to hear? I refer the minister to page 37 of the transcript. Mr. Gill said, "But Madam Chairperson, I only want to illustrate that the Premier...." and the Chair said: "I really think that we won't hear anything more on that."

The Speaker: Question, hon. member.

G. Farrell-Collins: Can the minister explain why the Minister of Energy went out of her way, time after time after time, to stifle Mr. Gill from explaining his links to the Premier's office in the granting of 18 licences to friends of the NDP?

Hon. R. Blencoe: I think this issue has been well canvassed. Statements have been made by a number of people on this side of the House. The member knows the appeal procedure and the process.

[ Page 11773 ]

However, if I may, the member brings up some details that I'm not familiar with. Obviously I will take the question on notice and refer it to the minister.

The Speaker: The question is taken on notice. Does the hon. member have a different question?

G. Farrell-Collins: I seem to find the minister answering the question and then taking the question on notice afterward. I will proceed.

I would assume that any reasonable cabinet minister would have been curious about Mr. Gill's intervention and would have been curious with regard to the letter. Obviously, if Mr. Gill's claims regarding this are true, we have a serious problem. If they are not true, then I would assume that the minister would like to clear the air. Doesn't that minister, as a member of that cabinet appeal process board, find it extremely curious and extremely unnerving that the Minister of Energy tried to stifle Mr. Gill on three separate occasions?

Hon. R. Blencoe: The licence being utilized by the opposition is quite acceptable, I suppose, from an opposition's point of view. On this side of the House, we know the process that is in effect; we know the letter of the law in terms of the appeal procedure. The minister weighed the evidence, hon. member, and made her decision. You may wish to make it known otherwise, hon. member, but the minister made her decision and her recommendation to cabinet.

CONTRACT WITH FORMER HYDRO CEO

D. Jarvis: The official opposition has just received a copy of the new contract, or deal, struck between the government and their good NDP friend Mr. Eliesen. We note that the province is a signatory to this new deal, because the province is now on the hook for the entire amount of the contract that was originally between B.C. Hydro and Mr. Eliesen. I would like to ask the minister for gambling if he would please explain why the government is guaranteeing the obligations to Mr. Eliesen?

Interjections.

The Speaker: Order, hon. members. The hon. member should at least have the courtesy to address the minister by his portfolio. Would the Minister of Government Services please respond.

D. Jarvis: My question is to the Government House Leader.

Interjections.

The Speaker: Order, please.

Hon. A. Petter: I'll be happy to try to respond to the member's question. Sitting here listening to these questions, it strikes me that it is clear that the opposition is not only not concerned with due process, they're not concerned with issues. If they were, they would raise issues such as the environment. But since all they care about the environment is mining the Tatshenshini, I guess they don't want to raise issues. If they wanted to ask a question about schools, I suppose they could ask a question of the Minister of Education.

But since they oppose any capital spending on schools, they'd prefer to continue this insubstantial, unsubstantiated line of questioning; and we'll just sit here and listen to them continue to go around in circles while we do the people's business.

The Speaker: Supplemental, hon. member.

D. Jarvis: Most of our questions are to the ministers who aren't here today, so that's why we're having a problem.

Interjections.

The Speaker: Order!

D. Jarvis: How we got into the subject of mining responsibly in B.C., I don't know. In any event,

section 10 of this new sweetheart deal promises that the government will guarantee full performance payments and all the obligations due to Mr. Eliesen for this new pet project he is on. Could the minister explain to the people of British Columbia why the province is going to get stuck with the costs of this new venture by Mr. Eliesen and why we are paying performance bonuses before the duties are performed?

Hon. A. Petter: It's a little sad that we have an opposition.... Despite the fact that six ministers are here ready to answer substantive questions, there's not a substantive question over there to be asked of any of the ministers here. While the Premier is off with the Attorney General and the Minister of Aboriginal Affairs signing an historic agreement with the Gitksan-Wet'suwet'en -- setting aside years of litigation in favour of negotiation -- they have no substantive question to put to this government, and for that reason....

Interjections.

The Speaker: Order, please.

Hon. members, the bell terminates question period.

D. Lovick: Mr. Speaker, I rise to reserve my right to comment on a matter of privilege raised by the question from the member for Peace River North.

Interjections.

The Speaker: Order, please.

Orders of the Day

Hon. D. Marzari: I call Committee of Supply in Committee A, the estimates of the Ministry of Education.

Interjections.

The Speaker: Order, please. Hon. members, it's very difficult for the Chair to hear the minister. Would you please control yourselves.

Please proceed.

Hon. D. Marzari: In the House, I call second reading on Bill 50.

RESIDENTIAL TENANCY AMENDMENT ACT, 1994

Hon. J. Smallwood: Bill 50 is one of a number of government consumer protection measures that protect

[ Page 11774 ]

consumers from unfair market practices. Bill 50 extends greater consumer protection to B.C.'s 450,000 tenant households. It levels the playing field in the rental market by providing consumer protection to individual tenants while maintaining and enhancing safeguards for landlords.

The philosophy behind this bill is very much a Better Business Bureau philosophy. Good business practices are supported by strengthening communications. Landlords and tenants looking to take advantage of their positions are held accountable by a fair and balanced law. Currently, protection against unjustifiable rent increases in the rental market is available in four other provinces -- providing protection to almost 70 percent of all Canadians.

Bill 50 provides a balanced and affordable approach to address the needs of the B.C. rental housing market. For the first time in ten years, tenants and landlords will have a system to resolve disputes over unjustifiable rent increases. Bill 50 enhances the role of the residential tenancy branch to provide information to both parties and clear up any misunderstandings. This first step will help reduce the need for the arbitration process.

[2:30]

The unique features of this legislation make it the most balanced and administratively effective of all the systems we examined. To begin with, the system is only triggered when a tenant believes they have received an unjustifiable rent increase. This system is tenant-based -- it means that the system governs the individual tenancy, not the unit. When there is a new tenant there may also be a new rent. This means that new rental constructions are not covered. Bill 50 recognizes that each landlord's business is different, that each building is unique, and therefore it has flexibility to ensure business viability.

This rent review system is an affordable alternative, as it can easily be integrated into the residential tenancy branch's existing dispute resolution system.

Both landlords and tenants wanted a system that was targeted to abuses and to discourage frivolous complaints. Bill 50 puts in place a system that provides for this protection -- at two different points. At first contact, the system encourages and supports tenants and landlords to resolve their differences before arbitration is required. Currently, less than 4 percent of tenancies are involved in arbitration, and while arbitrators at the second point in the system have the authority to deny frivolous complaints, our expectations are that the 4 percent rule will continue to hold.

Concerns about unconscionable rent increases are longstanding. In recent years civic leaders, tenant groups and even some landlords have called for a provincewide crackdown on unscrupulous landlords. In fact, the current Leader of the Opposition, Gordon Campbell, while mayor of the city of Vancouver, issued repeated calls for the province to enact a rent review process to protect tenants from unjustifiable rent increases. After the framework for this system was announced last December, we sought the advice and knowledge of over 90 landlord and tenant groups across the province.

We asked tenants and landlords to put their experience and expertise to work by telling us what the model should look like and how it should be run. The input from these meetings helped guide the development of the rent protection system before us today.

Under Bill 50, landlords will be required to use a standard, plain-language notice of rent increase which contains information on the reason for the proposed increase. Tenants who feel that the rent increase is unjustifiable can then initiate the process by contacting the residential tenancy branch. The residential tenancy branch staff will provide both parties with information regarding their respective rights and responsibilities under the act and what actual business expenses may be passed on.

If the parties are not able to resolve the dispute during the information stage, the dispute will then be resolved through binding arbitration by a neutral third party. After the tenant has filed, the landlord must disclose and justify the increase based on the building's income and expenses and other cost factors established by this bill. The arbitrator will then use the prescribed formula to calculate the rent increase that may be passed on to the tenant.

The formula will consist of criteria defined in Bill 50. These criteria allow a landlord to capture increases in operating costs. For instance, the landlord can pass on to the tenant increases in insurance and property taxes, increases in heating oil or electricity, or increases in the cost of basic maintenance. The landlord is assured of a reasonable return on their investment and may take into account increases or decreases in interest rates. Landlords will be able to pass through to tenants costs incurred for capital expenses, such as major repairs for a new roof or for upgrading a heating or plumbing system.

The formula will ensure the amortization of these costs over the life of the capital improvement. This formula will contain the important feature of ensuring sensitivity to actual business costs incurred by the landlord. The formula will be fine-tuned over the summer months and will be discussed with landlords and tenant representatives prior to proclamation.

The Residential Tenancy Act currently requires 90 days' notice for rent changes. To ensure speedy resolution, Bill 50 contains the statutory requirement that disputes be resolved within the same 90-day period. For the first time in ten years, tenants will have the right to remain in their home during that dispute period.

During our consultation process on rent protection, the issue most often identified as a problem by tenants was the lack of maintenance and repair of their rental unit. We also heard that with respect to the current act, if landlords chose to ignore the repair order issued by an arbitrator, tenants had little practical recourse. This bill ensures that landlords meet their statutory obligations to carry out repairs and provides for more effective enforcement of the existing repair provisions in the act.

If the landlord does not comply with the repair order, arbitrators, through their ruling, can allow the tenant to do minor repairs and deduct the cost of those repairs from their next month's rent, or an arbitrator can reduce a tenant's rent by the appropriate amount until such time as the landlord complies with the outstanding repair order.

Tenants also spoke to us about the need to ensure that repairs necessary to their health and safety were carried out in a timely manner. When it's 20 below zero in Fort St. John and the furnace is out of order, the tenant must have some way of ensuring that their heat is quickly restored. If the landlord's emergency contact is not available or does not respond, the only option available to the tenant under the present legislation is to apply to an arbitrator for a repair order. In a true emergency, this is clearly not a reasonable option for a tenant.

Bill 50 will enable a tenant to deal with these emergency situations where the landlord's contact does not allow the tenant to make the emergency repair and deduct the cost of these repairs from their rent.

Those situations that constitute emergency repairs are narrowly and clearly defined in this bill and are limited to those that are urgent and necessary for the health and safety of the tenants. The landlords will have recourse under this bill to apply for arbitration if repairs were not of an emergency nature or the repair costs were excessive. I should

[ Page 11775 ]

emphasize again that all these new repair provisions are directed at landlords who do not carry out their statutory obligations to maintain rental premises in a reasonable state of repair. Reasonable landlords are unlikely to be affected by these new provisions.

Bill 50 also responds to the concerns of tenants, and in particular female tenants, who need more effective protection from landlords who unlawfully enter their suite. Currently, the Rental Tenancy Act requires 24 hours' notice before a landlord enters a tenant's premises. In instances where landlords have flagrantly continued to break the law, the arbitrator, upon application, may allow the tenant to change the locks on their door and retain the only key. This will improve tenant security and assure tenants the right to quiet enjoyment of their premises.

Again, the great majority of landlords who act responsibly and within their legal obligations will not be affected by this change. Only the few landlords who continue to ignore the laws concerning entry will be penalized. We expect that this amendment will result in a much higher rate of compliance with the act's entry provisions.

Many years ago, the Better Business Bureau recognized that bad business practices hurt everyone -- consumers and business alike. While these amendments support good business practices, we recognize the need also to hold tenants accountable for their actions. Bill 50 will respond to concerns raised by landlords. In particular, landlords will now be better protected from deliberate damage to their property by tenants. Wilful damage to residential property will now be an offence under the act. Tenants who wilfully damage their landlord's property will be subject to up to a $5,000 fine.

These changes allow residential tenancy officers to actively support the landlord in resolving these situations.

In addition to the above, Bill 50 also makes it an offence to provide false or misleading information in an arbitration hearing. It raises the maximum fine payable to $5,000, makes a tenancy agreement entered into by a young person enforceable, and strengthens the existing requirement for municipal approval in order to enter into residential leases for more than 20 years. In addition to those above, it makes it an offence for a landlord to threaten or harass a tenant to deter them from going to arbitration and makes it an offence to discriminate on the basis of source of income.

These amendments are incorporated into the Residential Tenancy Act, which already provides a wide variety of rights and obligations to both tenants and landlords. The proposed legislation provides balance. It has been carefully designed to introduce important protections for individual consumers should they need them and does not impose unnecessary regulations on the majority of landlord-tenant relationships.

G. Campbell: This is a very important bill before us today. I know the minister referred to a couple of my comments from the period when I was mayor of Vancouver and we were in significant difficulty with regard to the rental situation. Some key points, however, have been missed in this legislation. They are points which we cannot miss if we're going to pass a piece of legislation which is not going to harm the rental market and the tenant and do exactly the opposite of what this minister is claiming that this legislation will do.

There is no reference whatsoever to the marketplace in this piece of legislation. I know and understand that this kind of legislation will almost guarantee that individual tenants will have annual increases in their rents; it will increase the cost of government infrastructure substantially; and it will not provide the kind of security that tenants are looking for. One of the things that I believe is essential for us to recognize when we deal with any group, whether they are the tenant or landlord groups, is to learn from and understand their experience -- if we are going to create and craft legislation which meets some public objectives. I don't believe this legislation starts to do that.

The primary concern that we have to have in regard to housing markets in British Columbia is assuring that we continue investment in the housing markets so a supply of rental accommodation is made available. When you overload the rental market with regulations in which there is no connection back to reality, you have a great deal of difficulty in encouraging that investment. In the long term you shrink supply, and as you know -- and I know your constituents would tell you -- as you shrink supply, costs and rents go up. Then you have the kind of market escalation which we saw three and four years ago in British Columbia. It causes a great deal of concern among landlords and tenants.

There is no question that we have to have legislation that lays out a framework that encourages people to be socially responsible, both from the landlords' side and from the tenants' side. I would concur at least with one thing that the minister said, although I would raise the percentage. I think 95 percent of all landlords do an excellent job for their tenants, and 95 percent of all tenants are good tenants for landlords to deal with. When we are dealing with this legislation, however, it seems to me that we have to recognize a couple of key points.

First of all, when you look at the regulations that have been put into the bill and the opportunity to impose rent limits, the fact of the matter is that that will deter investment. We have seen time and again how these arbitrators -- as we're now calling them in this legislation -- without any direct connection to the market, come and impose what they think seems to be fair at the time. Whether there is a market return or not does not matter. Investment will therefore flee that market, and we don't want to discourage investment in rental accommodation. We don't want to discourage investment in housing in British Columbia, unless we want to create yet another housing crisis in this province.

Therefore I think that this bill requires a great deal of consideration with regard to how and what kind of limits are going to be placed on rents and rent increases that may be recognized in the marketplace. Proposals made in the past have suggested that you can indeed come up with a definition for unconscionable rent increases, but they should be revolving around the marketplace itself.

What are the cost components that go into rental accommodation? They are great and varied, and many of them are generated by government today. Certainly many of them have been generated by the costs of money and taxation throughout the province. One of the concerns that I have with this legislation is that at the drop of a hat, a tenant can say: "I don't agree with that kind of rent increase." That creates a huge bureaucratic infrastructure that is going to be costly and will add not only to the load of landlords but to the load of British Columbians generally -- and ultimately also to the tenant.

[2:45]

Another concern I have with this bill is that I believe we have to take full consideration of the situation with regard, once again, to the investor in housing. When you have the security provisions that have been suggested here, without any kind of hurdles to overcome, one of the concerns -- and it has been raised already -- is the whole issue of financing units and ensuring rental accommodation. Although I recognize the ideological thrust of an argument that says landlords are always bad, the fact of the matter is they do

[ Page 11776 ]

need to have security in terms of their investments and being able to access financing. If there are parts of this bill which undercut and erode their ability to do that, I can again assure you that that will drive legitimate landlords out of the marketplace and will not secure or eliminate the bad-acting landlord that I think the bill has to be focused on.

Certainly we want to protect tenants, but we have to be concerned with a number of areas of protection. I have already heard from fire officials and insurance officials, as well as from individual landlords, with regard to the stipulation on locks. Ironically, one of the reasons for having public access is to secure tenants who happen to be in trouble or who have concerns. It seems to me that we have much work to do in this bill with regard to this so that we can ensure that we are not jeopardizing not just the investment but the tenant as we try to do something that protects them for the future.

In general, I believe that we are creating a problem at a time when there is very little in the way of problems. Rather than proceed with the bill as it is, I would prefer that it be withdrawn and for the government to go back and work with, listen to and learn from those who are investing in housing so that we can encourage that kind of a marketplace in British Columbia.

Rent controls do not work. The minister can complain and say, "These aren't rent controls," as much as she wants. But if it looks like rent control and it acts like rent control, it is rent control. It will be destructive to the housing market and to tenants. It will ensure that they have rent increases month after month and year after year. It will ensure that we have a shrinking housing supply at a time when our population continues to grow.

We have much work to do in this bill, and I cannot support it in its current state. I would hope that the minister will take the time to learn from the community of investors in housing how we can come up with a public policy that will protect tenants as well as the housing market so that we can keep rents as affordable as possible for everyone.

V. Anderson: Having discussed with the hon. minister some of the issues in Bill 50 during estimates recently, I am very aware of her concerns. I share many of her concerns about the difficulty of many people in the community -- both landlords who are attempting to rent and tenants who are renting. As a renter I have some personal experience, but I have also been very fortunate in the landlord-tenant relationship. It has been a very cooperative one, and with that I am very pleased.

From my previous involvement in the community I am very much aware that there are many horror stories of people in the community -- and they can only be described as horror stories -- on both the landlords' side and the tenants' side.

I agree with the previous speakers that the people involved are not many in number. Yet for the individual who is involved it's not the number that's important, it's the individual reality of what it does to you as an individual and as a family member. In many of the situations where these horror stories arise, they are in areas where there are many other difficulties as well -- difficulties with income, family relationships, health, employment and jobs. A whole host of circumstances come into play when we are talking about this particular situation.

There is also the concern that many of the people forced into housing situations are on low income. They do not have enough income, or even with their government subsidy they do not get enough income to put them in decent and reliable housing.

One difficulty that must be taken into account.... This bill must be taken in the context that the housing situation in our province is not in a healthy state and that we need an overall housing plan. We need a broad plan that the community at large is aware of and are participating in. From our discussion in estimates I am very much aware that the minister has some plans. But since they are future plans she was reluctant to go into detail about them, except to say there would be upcoming announcements. That's not good enough.

The public must have some awareness of the context in which we look at a bill when it's brought forward. It's that overall plan into which each part of the action of government must fit, otherwise we have a piecemeal plan which begins to contradict other parts of the overall plan, and it creates a great deal of uncertainty within the community.

When I first read through this bill, recognizing the desire of the community to have many of their problems overcome and the desire of the ministry to respond to those problems and cooperate with both landlords and tenants who are having difficulty in the community, I was philosophically in favour of the direction in which I think this is intended to go. But upon reviewing it practically, I had to come to a different conclusion and decision. We'll be dealing in committee stage with some of the details. There are uncertainties throughout the bill that make it difficult to support in practical reality.

In this bill there are changes to other acts, such as the Infants Act and the Human Rights Act, that are out of context with those acts. The Human Rights Act is being reviewed in total by the government, so I'm not sure that we should be revising it in this bill before we have the broader picture and those particular concerns have come forward. Whether or not I am in favour of the particular direction, it is still important that we not deal with these out of context, because we get into unseen difficulties when we do that. So they must be considered within that context.

The minister referred to the Better Business Bureau. I'll wait to see Hansard as to whether that's better business bureau with a small "b," or whether she was formally trying to suggest that the Better Business Bureau, in the organizational sense, had given its endorsement to this bill. I doubt whether they have endorsed the bill. I think that it was unfair to imply that in her presentation. I would question that.

When we look at the reference to the Infants Act, I agree with the principle the hon. minister is trying to get at. But if you read it just as it is, it means that a ten-year-old, a 12-year-old, a 14-year-old, a 15-year-old and a 16-year-old are, contrary to the Infants Act, accountable for their acts, regardless of who has put them up to it or who is using them as a shield. I understand and respect the fact that many people who are not eligible under the present Infants Act should be eligible to make their own statements. I agree with that. But the way it is written in this bill leaves that completely unattended to.

When we talk about

definitions within the bill, those are yet to be decided on. What is income? In a number of cases the

definitions -- such as what is income, what are expenses and what are justifiable and reasonable expenses? -- have all been left out, to be decided by someone else later on. They are so significant with regard to the decisions that have to be made that they can't be left open-ended and unpredictable. Had they been defined in the bill itself and had the regulations, which are so crucial, been part of the bill so that we'd know what they are, then we could understand. Without those, it's like signing a blank cheque, and it's not my practice, even when I'm a part of an organization where there are two signing officers, to sign a blank cheque

[ Page 11777 ]

and then leave it for the other person. Even though I normally trust that person, that would not be fair to them, to myself or to the organization to which we're both responsible. Signing blank cheques is just not something we can do. Those

definitions and regulations are not there.

As you go through the bill, the words "registrar," "arbitrator" and "court" are used interchangeably. There's no clarification as to whether they are the same person, which one overrides the other or under which circumstance one or the other is responsible. So there is a lack of clarity in the bill.

I understand that the intention is to make it better for the 5 percent, or the perhaps 4 percent or 3 percent, of landlords and tenants who are abusing each other. There are tenants who abuse landlords, and there are landlords who abuse tenants. But a bill should be specific to those who abuse. You don't punish everybody who drives a car because some people are unable to drive a car safely. There must be more specific regulations, instead of these wide-reaching generalizations that catch everybody.

When it's that wide and that general, you're encouraging people to misuse the system. We found in so many other systems of the government that people misused the system, partly because they do it by design and partly because they are not clear about it and do it by mistake. There are real difficulties in the application of this that make it improbable and, I expect, impossible to do the task which the hon. minister has set forth in her introduction.

What are minor repairs? There is no real definition of that. What are responsible actions? What are responsible attempts to contact the landlord? One very simple statement, which I applaud, is that the landlord should have posted in the apartment or house the place where the landlord or that landlord's representative can be contacted. That's a very simple, straightforward decision which should be made, and it's one which I applaud. It's those kinds of specifics that one can support.

[3:00]

But the generalization that this will be decided later on by regulation, that this will be decided after the act is passed.... The hon. minister has said that once the act is passed it will go out to the community, and she will sit down with the landlords and tenants and work out the implications of it. Why not reverse that trend? Why not go out to the community first and look at that opportunity before we go ahead with it? I think it's very important that we take a second look at this. Now that the community has had an opportunity to read the bill, it's important that we go back and have them respond to it.

I would commend this and hope that the minister will be prepared and willing to do just that.

L. Hanson: I rise to speak against this bill in second reading. It's certainly an interesting bill. It brings in rent control while pretending not to be a rent control bill. It brings in something that the government knows won't work. So from those two statements it obviously has another motivation, and I believe that to be for political purposes. The bill does something that the government knows won't work and that the government pretends it won't do. Why would the government bring in a bill that does what the government claims it doesn't do but will actually do the opposite?

I'm sure that's a good question that the minister has been asked a number of times. I noticed that in her responses to the media at various times, she had some difficulty answering that.

But obviously the government is bringing in this bill for one reason and one reason only: they're trying to buy some short-term support. They know that the results of this bill, in the availability and number of rental units, will not turn up until about two years down the road. It is, without any question, a rent control bill.

I'm sure the minister is aware of Barrie Clark, from his former role as rentalsman. He says that this bill is rent control. The Vancouver Sun, the Prince George Citizen and dozens of other papers all around the province correctly name it as a rent control bill. Indeed, anyone giving the bill a plain reading would have to say that any bill that allows cabinet to set a formula for maximum rent increases, to control that formula and to decide whether or not increases fit in with that formula will control the rate of rental increases in the province. The only thing this bill doesn't say is that it will control the supply of rental accommodation in British Columbia, too.

While I reserve my right to continue, I believe that the member for Peace River North would like to make an introduction.

R. Neufeld: I ask leave to make an introduction.

Leave granted.

R. Neufeld: It's a pleasure for me to be able to introduce a class of students from Upper Pine Elementary School in Fort St. John. It's not too often that a member from as far away as I am gets to do this. I'd like to introduce their teacher, Mr. Chris Hambleton. There are 26 students, who are accompanied by Lorna Banack, Patty Moore, Arlene Dietz, Chris Lamoureux, Chester Jackson and Cathy Copeland. Would the House please make them welcome to Victoria.

L. Hanson: I think it's well known to members of the government, and certainly to others, that rent controls do not work. Most jurisdictions in North America brought in rent controls in the 1970s. They were eliminated in the eighties in almost all of those jurisdictions for three very basic reasons: in every case, rent controls inspired landlords to charge the maximum rent increase possible; rent controls discouraged investment in rental housing development; and the restriction in supply and the maximization of allowable rents led to bigger price increases than would have happened otherwise.

It led to classes of renters who were driven underground into second-class accommodation, hidden from any regulation whatsoever.

British Columbia was part of this North American experiment. Rent controls were introduced here in January 1974, and they existed for the next nine and a half years. They caused nothing but trouble for the province and for local governments. In the years since rent control was lifted, we have been building new rental accommodation in record numbers. There are approximately 400,000 rental units in British Columbia, housing over two million people at a time -- almost equal to the entire population of the province in 1981.

The government claims that apartment buildings are not being built, but this government takes at the old-style view of rental accommodation. Today's new rental suite is more likely to be part of a condominium project, with individual landlords owning individual units, and with tenants living side by side with owner-occupiers in a healthy mixed environment. The old-style tenement buildings -- the kind that the NDP claims aren't being built under the present climate -- are not the only form of rental housing in this province.

I believe we enjoy a healthy mix of different types of rental accommodation in British Columbia. The majority of

[ Page 11778 ]

landlords in B.C. own less than four units, and typically they are middle-class families letting out suites in their own homes, or small business people who invest in one or two condominium units in lieu of a retirement plan. British Columbia landlords are not out to gouge the public. Average rent increases in this province over the last five years have been below the rate of inflation. This government has no business citing one or two rent increases of 30 percent out of context and claiming they are justification for a provincewide rent control mechanism.

There is no economic justification and no social justification for rent control. Rent controls insult landlords, restrict supply and in fact hurt tenants rather than help them.

This government knows this as well as all of us do. The only reason they're bringing it in has to be political. This government knows that the pinch in rental housing supply caused by rent controls will take about 24 months to materialize. I suspect that it plans to go to the polls before that happens. In the meantime, it is trying to a score a short-term political hit with a policy it knows will be bad for all British Columbians in the long term. British Columbians will see through this.

They'll see that it is a political move, and it will encourage British Columbians to drive them out of office in the next election. They will replace them with a government that will stand up for the principles of honesty and real democracy, just as they did in the federal election. That old description says: "If it looks like a duck, quacks like a duck and walks like a duck, it probably is a duck." And this is rent control in its purest form.

G. Wilson: When dealing with Bill 50 in principle, we have to address what the concern is and how we're trying to address it. I've heard members say this constitutes rent control, and I've heard Mr. Barrie Clark, the former rentalsman, say that in his view this is a form of rent control. I fundamentally disagree. This is not rent control.

It may not be good legislation. But it does not constitute rent control, because there's no cap -- nothing in here caps a rent increase or binds a landlord. It provides for a tenant to protest rent increases and, through that protestation, move what the tenant may see as an unjustifiable rent increase to an arbitration process.

I find it just a bit surprising that there is such hostility toward this particular piece of legislation on the basis of it being rent control. Enough in here should cause us some concern with its drafting and with some of the consequential amendments that are confusing if not problematic in law, without worrying whether it is or isn't rent control.

Clearly, in modern-day society, where a high percentage of people are subject to rents and often come from middle- and low-income families, there should be some process or procedure by which the opportunity can occur for tenants to have access to and to avail themselves of some kind of appeal or arbitration process. I find it even more peculiar because, if we start to look at the comments made by the now Leader of the Opposition when he was mayor of Vancouver.... Perhaps we should start back in January 23, 1990, where he suggests: "Rent review doesn't interfere with the market. It doesn't interfere with investment in housing...."

What it does interfere with is housing speculation. It interferes with the person who comes in, looks at an apartment and says: "I'll go in and increase all of those rentals, create a new paper value for this apartment, and I'll sell it." That's precisely what we don't need, that fuelling of speculative issues in the market. I think the now Leader of the Opposition was probably correct on that.

On February 21, 1990, the Leader of the Opposition had a proposal of his own that suggested that tenants and landlords be expected to work together. That's a component of this particular bill. Landlords would have been required to justify rent increases to their tenants. If tenants were not satisfied, they could appeal to a newly established rent review commission. That sounds awfully like this bill. This was being advocated on February 21, 1990, by the now Leader of the Opposition. It really doesn't do us any good to try to play politics on a question as important as rental housing.

We see that whether they're in favour or opposed, whether it is or is not rent control, it's the flavour of the month for the opposition. In fact, an open letter to the citizens of Vancouver says:

"Do you believe that all tenants deserve protection under the Residential Tenancy Act? Do you believe that all Vancouver housing should meet minimum health and safety standards? Do you believe that all citizens should pay their fair share of taxes for city services? If your answers to these questions are yes, then you agree with the housing approach...taken by the NPA."

The reason I introduce this....

We can hook ourselves in this debate on the concept that rent control is bad. I would agree that it is, because I certainly don't support rent control. In fact, this bill does not introduce rent control; it introduces a particular procedure by which tenants are able to negotiate with landlords with respect to those rent increases.

The difficulty we have with the bill -- and there are some legitimate concerns -- is that it doesn't address the real and urgent need to have a housing strategy for the province. That is where this bill really falls short. It doesn't fall short so much in the sense that it introduces restrictions in the free market system in terms of rental accommodation -- although it does interfere in the free market. Much more importantly, it starts to create those restrictions in the absence of a clear strategy for expanding housing supply, particularly low-income housing.

What's interesting is the approach taken by the then mayor of Vancouver, the now Leader of the Opposition. They embarked on new housing projects for tenants, such as with Vancouver Land Corp. He heralded this new creation -- Vancouver City Savings and the VLC -- as the great panacea for solving the problem. No greater ripoff in terms of housing will you find than that VLC fiasco, which was entered into by the now Leader of the Opposition.

I don't have a great deal of faith that the people of British Columbia will be well served by the kinds of projects and schemes that are dreamed up by those who would make large tracts of public land available at below market value in order to allow a company that is funded directly from union revenues -- and from the government, as we find out -- to put a number of low-income housing units in place using contracts that are subsidized by the province. Then we find out that the amount of money paid back to that company is in excess of $6.5 million.

Even more money has to be paid by taxpayers to that company, Vancouver Land Corp., for housing projects that are yet to come on stream, because they haven't been completed and haven't created any middle- or low-income housing projects. In fact, what they have done is quite the opposite: they have ingratiated and enriched the recipients of the money. They have ripped off the taxpayers of the city of Vancouver, and because of the large subsidy, they have also ripped off the taxpayers of British Columbia.

[3:15]

That kind of approach and the doublespeak that I've just made reference to doesn't solve the problems in this bill. It is not a solution. This bill takes a couple of steps toward a

[ Page 11779 ]

solution. We will take issue in committee stage with some of the language in this bill, because we think the language is badly drafted. Indeed, we think it's even problematic in terms of some of the consequential amendments. The minister will have an opportunity to explain why that's not so when we get there.

With respect to a housing strategy, we would have liked to have seen a much bolder initiative that would have created more units on the market, in a free market system, units that would have been put toward a rent-to-own program. Those of us in the Alliance, formerly within the B.C. Liberal Party -- they seem to have abandoned this proposal; we are going to continue it because we feel that we have a mandate from the people in the last election to do so -- have been working for some time to have a rent-to-own program advanced in the province. The rent-to-own program is fairly straightforward.

This program would require that a number of units come on stream, built in a free market system with capital that can be bonded by government through a public bond issue that would allow those units to be available to people who require rental accommodation on a rent-to-own basis, so that they would not be required to have large capital for a down payment and would not be subject to huge mortgage costs with massive interest generated in the early stages of their rental of these facilities.

It would allow those people in the rent-to-own program to develop and create equity in the property they are purchasing and, through the creation of that equity, put them in a position to be more fiscally sound with respect to the potential purchase of that property in the final analysis.

On the question of rent-to-own, the private market is not going to find this a problem, because it engenders a greater amount of supply and does not unduly affect the price of units coming onto the market. Second, it allows for a variety of rental units to be constructed -- some for the low-income group, some middle-income and some at the higher end of the scale.

It would allow those British Columbians who currently find themselves locked into the cycle of tenancy who would prefer to get into the housing market -- and that's not all of them to be sure, because a lot of people like to rent and, by preference, have remained renters -- an opportunity to do so at the level at which they can afford to enter. That's an important point, because in the housing discussion and the strategy for the provision of greater rental accommodation, we often forget that there has to be a blending of those accommodations that will be available to all types of tenants.

By that, I mean all types of tenants in terms of income and regional or local preference -- and that may be and often is decided by virtue of wanting to live in an area in which there is a cultural homogeneity. If you were a new immigrant Canadian, you might wish to be in an area where the language of your neighbours is consistent with the language that is your first language. It might be also be linked into the provision of educational services for your children. Again, that has a cultural connection, and those people who live in the larger urban centres will know that what I'm talking about is correct.

So you need the mix -- not just in terms of income, but in terms of community and what we're making available to various groups of people in the community in order for them to have an opportunity to acquire property that is not only within their grasp financially but that also meets the demands they may have from a social and cultural point of view.

I don't think the solution is artificially trying to control the market system, whether you put on a new arbitration process, or provide a tenant's rights advocate or even a rentalsman -- and I'm not entirely opposed to the rentalsman concept. A rentalsman does not provide the kind of thrust that's needed in terms of a new housing strategy for the province. Rent-to-own does it, because it doesn't require the kind of government subsidies that we have seen in the past through CMHC initiatives or federal and provincial government initiatives.

I am thinking back to the 1970s, when we came up with the Raymur type of development in Vancouver where low-income housing was developed that in large measure did not only not meet the needs of the people socially but created a series of problems, as a result of the kinds of facilities that were left on the landscape and the development -- I have to be careful with my words here -- of almost an enclave of low-income people who lived in these areas.

So what we need to do, and what the rent-to-own program does -- which I offer to the government as a sensible initiative -- is facilitate an influx of capital into residential housing at all those levels, with those cultural considerations provided. It provides an opportunity for people to get in there and put their money into equity, which will at some point be returned to them either in the purchase of the unit they are in or -- depending on their fortune, if they excel and are able to get into a higher income bracket -- to use as a trade-up to new accommodation. It keeps that accommodation on the market at a reasonable price to allow people to gain entry.

The second concern we have with this legislation is with respect to the whole question of arbitration and how the arbitrator is going to function. We have read this with great care and tried to cross-reference it to all the appropriate legislation. We have tried to look at it in various other jurisdictions in which a similar situation makes a comparison worthwhile. The concern we have is that it is likely to be a very tedious, very difficult and often very expensive process that may not end up with much satisfaction short of moving to a litigation process, which is out of reach of a lot of tenants.

It creates for those landlords an undesirable prospect with respect to rent increases, if in fact they can.... And we would argue that the majority of landlords who are increasing their rents do so because there is reasonable justification.

I think that on both ends of the spectrum...you will find the unscrupulous landlord and you might find the unscrupulous tenant. But by and large, those in the middle are trying to work toward a reasonable accommodation of the landlord's concerns and needs because of their investment -- and I think we have to consider that -- and the tenant's needs for protection and recognition that this is indeed their home, notwithstanding that the building is owned by somebody else.

Once they are a tenant in that building, that is their home, and they have a right to a certain level of protection within that home, not only from unwarranted entry, which this bill does attempt to address, but also from rent increases.

We're concerned that the arbitration process doesn't necessarily solve either party's problem, so we're not certain that this bill is going to do very much more than what is available already. The minister will have an opportunity to explain that in committee stage as we get into the details of those particular sections.

In closing, it is most interesting to see the change in opinion -- the flip-flop on these issues -- depending on which particular political forum you happen to be in at any given time: whether you happen to be saying one thing at the municipal level, and then say something quite different when you get to the provincial level; or whether you are

[ Page 11780 ]

speaking to the landlords, saying one thing, and then say something else to the tenant groups.

The real key to the solution.... While the housing crisis may not be as great now as it was in 1990, it's potentially going to be there again very shortly. The real solution is to make sure that the open, free market system provides for a greater number of units to come on stream, a mix of units that are going to be affordable by those people who need to access them. We believe the rent-to-own program is a sensible and proper approach by which people will be able to not only afford rental accommodation in the long term, if that is their desire, but also have an opportunity, if they wish to get into ownership, to be able to do so without undue financial cost to them.

So we have concerns about Bill 50 in terms of its logistics, its mechanics and some of its language, which we believe to be simply unworkable and incompatible with some of the companion legislation. We will address those concerns in some detail when we get into committee stage.

In principle, we don't believe that government should start trying to bring in undue restriction in the form of rent control, although we fail to recognize -- and I defy anybody to show me -- language in this particular bill that shows this is rent control. It certainly does have an implication with respect to the ability of landlords to increase rents, but it does not provide a cap or rigid ceiling and certainly doesn't put in place the kind of rent controls that we've seen in other jurisdictions.

Our concern with this bill, in principle, is that it fails to introduce and take a more progressive and dynamic approach to the provision of rental accommodation. It does not outline a clear strategy for rental housing and accommodation for those people who are dependent on rental accommodation in British Columbia. We have introduced our idea, which we believe is a sensible one on rent-to-own that does not require the massive giveaways and the kind of ripoff we saw in the city of Vancouver under VLC and the proponents of that group.

What it does is provide an opportunity for the people who have access to that market to gain the kind of shelter that they deserve and that we would argue the state has an obligation to provide.

Where you have the state intervening in the market, we would oppose it in principle. We do not believe in that solution. We believe that the bill falls short with respect to the provision of a new rental strategy and a new rent-to-own program -- which we believe would provide a greater and broader access to accommodation. We will be addressing the technicalities of the bill in committee stage. We think that there are some very real problems in terms of the language of this bill with respect to companion legislation and some of the consequential amendments that will be there.

G. Farrell-Collins: I appreciate the opportunity to, however briefly, enter this debate. Once again, my role with regard to the previous speaker is to set the record straight, clear up some of the lack of frankness in the realm of what the member was saying, and fill in the gaps that he deliberately left out so that we can perhaps have a more truthful explanation of history, of what really took place.

I would like to talk a little bit about the bill and make reference to some comments that were made earlier. The minister calls this bill that she has brought forward rent review legislation; indeed, she's put a structure in place to allow for rent review. But she has left out one key issue in the determination of a valid rent increase, and that's the market.

We all know that sometimes the market doesn't work 100 percent. We hope that it does, and certainly it corrects itself over the long term, but it doesn't always work 100 percent. I think the minister has to realize also that in bringing in a rent review process and completely ignoring market determination and market factors, she's setting herself up for a major failure, in that over time, whether there's legislation or not, the market will react to whatever sort of controls the government chooses to put in place.

Whether it's a review process or a control or capping process, if the government -- if any government, for that matter -- refuses to recognize the influence of the market, then it's missing out on one of the key factors that is going to determine the price of rental accommodation.

[3:30]

In response to some comments made by the previous member who spoke, I'd like to fill in the gaps in the clippings that he read from. He read from them very selectively. Indeed, I think he should refer back to his

article in the Vancouver Sun on January 26, 1990, where he talked about the mayor of Vancouver unveiling to lower mainland mayors on Thursday a call for a computer registry of rents: "...an allowable range of rent increases based on market averages." Yes, it's a rent review process, but based on market averages. However, the mayor's idea is the first clear proposal that outlines a way tenants can be protected from what he calls unconscionable rent increases. The mayor told reporters after the meeting that he still doesn't favour control of rents, but believes a rent review process based on market averages would dampen the current prices.

One has to maintain an awareness of what was going on in the Vancouver housing market in January 1990. Indeed, there was widespread support from a number of mayors. One example here, which the member notably avoided making reference to, is of the mayor of North Vancouver, who was saying: "I think there are going to be disagreements" -- on this proposal put forward by the mayor of Vancouver -- "but in my opinion this is one of the most progressive steps we've taken." That's a very positive review from a mayor who deals with this process all the time.

If I can read from another clipping with regard to the process advocated by the then mayor of Vancouver:

"At the same time [the mayor] unveiled his concept of a rent review process, in which landlords would establish their own rent increases but reviews would be conducted if the increases were greater than one and a half times the market average. But [the mayor] admitted to reporters later...."

It goes on to say that that was only one of the projects being considered.

Then there's a quote from him in which he says: "I've suggested one proposal to the mayors, who would all like to deal with the question of unconscionable rent increases."

So it's not a question of whether there are problems out there from time to time; the question is how the government deals with them. The way in which the minister has gone about it has been a little naive, I think. Once again we see an example -- as we see with the community bank and a number of other pieces of legislation they've brought forward in the past -- of this government's good intentions getting bound up in incredible ideology and bureaucracy, which is the trademark of the way the New Democrats operate. They establish a huge structure designed to deal with a problem.

There's no efficiency in the way they try to deal with these problems. There's really no concern for the cost to the taxpayers or for the long-term effects of those policies and legislation. They tend to come up with projects and proposals so that they can put the red banner on their flagpole, rush in and say: "Aren't we wonderful! We're solving all your problems." But the NDP governments

[ Page 11781 ]

usually aren't around three, four or five years later to deal with the mess. Some other government has to deal with the mess created by those idealistic, well-intentioned agenda items. This is an example of exactly that type of thing.

We have a minister who -- while well-intentioned, just like the Minister of Employment and Investment, with his community bank -- sees a problem and wants to deal with the problem. Perhaps it's three years late to be addressing the problem -- although there are still a great deal of problems in certain areas of the province, which we're all aware of. The minister is dealing with a problem in a well-intentioned way. But her ideology and agenda are getting the best of her. The perspective from which she looks at this problem is one of a large and interventionist government, one of: "Who are the bad guys and who are the good guys?" -- picking the bad guys and going after the bad guys.

We see that time and time again from this government. It would be nice if for once they had to be around to clean up one of their messes, although I know the people of the province don't want them around to clean up their messes. They're going to have to bring somebody else in to do it. They should be aware when they're bringing in these types of policies and legislation that there is some downstream, long-term effect and there are some -- perhaps unintended -- consequences of their well-intentioned efforts, and realize that somewhere down the line somebody is going to have to deal with that.

With the rent review process put in place by this government, with no relevancy or determination of market conditions at all, we know there are going to be unintended consequences. The market will compensate for that in some way or another and will probably mean that people will take their capital and invest it elsewhere. They're going to invest it in condos.

They may well take small buildings -- from four or five units up to 20 units; that type and that size -- decide it's not worth keeping the capital invested in that housing as rental accommodation, and either renovate, turn them into condominiums and sell them, or tear the building down and use it for other purposes, whether commercial or condominiums again -- but in a new building.

[D. Lovick in the chair.]

I know the minister will stand up, talk about the review process she has in place here and say that when a unit becomes vacant is the time when that market adjustment can take place. That's a nice theory, but you're going to end up with a Proposition 13 type of problem like they have in the United States, where you have neighbours living in similar houses next to each other -- one with a tax rate fixed at a tenth of what the person next door is paying.

Within one building, you're also going to end up with one person in one unit paying who knows how much more than the person in the next unit who has been there for five, ten or 20 years, for that matter -- over a long period of time. Eventually, it's going to become unrealistic. It's not going to be the best market usage for that capital, that building or that land. A correction will take place, and the building will come down or be sold as strata title units.

The minister should be aware of that; perhaps underneath she is aware of it. But she is responding to a fairly strong and active lobby. It's just unfortunate that she's dealing with it in such an ideological manner. There is a way to deal with unconscionable rent increases. I would suggest that the minister go back and talk to the other side a little more. Perhaps that's not comfortable for her, but I would suggest that she go back and talk with the people she terms the "bad guys" and try to come up with some better ideas -- and try not to intervene so much in the marketplace.

Down the line, tenants and renters of the province are going to be the ones who are hurt. She needs to look a little more into the long term rather than the short term on this one. Look at what is available. Look at the opportunities to deal with these unconscionable rent increases when they do occur -- and try not to set up a huge bureaucratic, market-insensitive process that's going to have long-range repercussions not just for landlords and investors but for people looking to find rental accommodation in all areas of this province.

I hope the minister will look into some of the suggestions put forward by a variety of people and at ways to try and deal with them. It certainly isn't a brand-new issue; it has been around for a long time. Look at some of the opportunities that are out there and perhaps think a little more in the long term rather than the short term.

J. Tyabji: Point of order. I didn't want to interrupt the previous speaker's comments, but he began by saying that the member for Powell River-Sunshine Coast lacked truthfulness in his speech. I would ask that he withdraw those comments.

Deputy Speaker: I'm sorry. Given that I wasn't in the chair at the time, I will simply take that under advisement, and we will look at Hansard and see what the record says. But certainly the member's point is being raised, and we will return to it.

J. Tyabji: Thank you, hon. Speaker. I'm sure that the fact that the character of that person was impugned by....

Deputy Speaker: As I said, I can't comment on it now because I wasn't in the chair, so please simply leave it with me. I will, however, entertain a brief response from the member for Fort Langley-Aldergrove on the same point of order.

G. Farrell-Collins: Perhaps the member wasn't listening carefully. If she goes back and checks it, I think she will find that in no way did I impugn the motives of the member for Powell River-Sunshine Coast. I was merely setting the record straight and adding a complete statement to what he said.

Deputy Speaker: That ought to end the matter at this point. We don't want a procedural wrangle when we don't have the evidence.

J. Tyabji: On second reading of the bill and the substance of the bill -- instead of other members of the House.... Before I start speaking to the principle, I want to draw the the minister's attention to a couple of drafting problems that I found in the bill that she might want to be aware of before we get to committee stage. They are with regard to

section 9 of this bill, which says that

section 21 is repealed, and then under consequential amendments we see that there's an amendment to

section 21 of the amendment act. Also, in a couple of parts of the bill, there are references to

section 21 of the act, which is repealed by

section 9. There are a few other drafting problems that we might have to address in committee stage, but that one seems fairly major.

With regard to the principle of this bill, I think that the intent of the bill -- if it is to allow an avenue of appeal for people who are in rental accommodation -- is laudable. Certainly it is necessary for people in rental accommodation

[ Page 11782 ]

to have an avenue of redress in the event that they face rents that are unreasonable. However, I am speaking against the bill, as the Alliance leader has, in terms of the machinery that has been put in place by the minister. Most importantly, if we're looking at people in rental accommodation, we recognize that there is limited money. Actually, these days there is limited money on both sides of the equation. Many tenants are in a position where they don't have a lot of money to spend on expensive review procedures. I would draw the minister's attention to the fact that in

section 5 of this bill, we have many more sections being referred to the courts as an avenue of appeal, rather than to an arbitrator. That's something I hope to hear more from the minister on. It certainly doesn't help a renter or landlord when they find that the avenue of appeal is through the courts, because that can be very expensive and lengthy.

I think the crux of the bill comes under

section 18.2, where we start to talk about a prescribed form and a prescribed formula. We find out later that it will be through cabinet that there will be this prescribed formula and prescribed form, and that through this prescribed formula and form, we will then know what will be considered a reasonable or justified rent increase. Therefore the machinery for rent review comes through prescription by cabinet. That's something that we feel very nervous about, because we haven't seen it.

Obviously what we have through this bill is an infringement on the rights of the landlord in order to protect the rights of the tenant. It would seem that there's going to be a very unwieldy mechanism in place whereby there will be arbitration and possibly court action, which could be very expensive. We don't know what the bottom line will be for justifying a rent increase or decrease. I'm sure the minister will appreciate that whenever we infringe on the rights of one group in order to protect the rights of another, we want to make sure that we do that in the most expedient way, and that will obviously be the least costly way and the most efficient way in terms of the amount of time spent.

I should state on the record that some parts of this bill are very good. The minister has obviously taken some time on some parts to make sure that the needs of the tenants and landlords are being addressed. However, what we take exception to is that in the absence of a comprehensive strategy for housing, and rental housing in particular, for the province, it's very difficult to know what to expect when this bill becomes law and starts to be implemented.

For example, the Alliance leader talked about the Vancouver Land Corp., where we saw a large amount of public land and public money being given to a private corporation -- an incredible fiasco, where private profit was gained. If we had a proper housing strategy in this province, first of all, that probably wouldn't have happened without tender. There would have been tendering for the opportunity to have access to that land and public money. Secondly, it would not have happened with a lack of accountability, in the manner in which it has.

Notwithstanding the millions of dollars worth of land, the millions of dollars of cash going into a private company and the profits gleaned, there has been no accountability whatsoever.

We, the public, are once again burned by an unaccountable branch of municipal government or provincial government, where deeds are signed away and money is given, and the public ends up no better off in the end because there's no housing strategy. If there were a housing strategy and all the participants to that strategy had certain expectations that they had to meet within that, then that would automatically be an accountability process. The Vancouver Land Corp., in not meeting the expectations of the housing strategy, would then be penalized accordingly.

Certainly the people who were at the table when that company was put together, or when the land or the money was given, would be directly accountable and would not be able to benefit in a private way.

When we talk about rent-to-own housing, that is a very good way of empowering people who are earning low and middle incomes and who can't afford to own their own homes. I'm not sure if the Alliance leader talked about it, but certainly something our party believes in is that when we have an incredible public resource such as Crown lands, we could have a housing strategy that would integrate Crown lands, manufactured homes and rent-to-own housing, so that we could have a comprehensive strategy.

In addition to having a proper housing strategy through the Residential Tenancy Act, we would also incorporate some branches of Social Services, where we have cooperative housing and special needs housing, through a government strategy throughout the province.

[3:45]

In the absence of this, what do we have? This bill is supposed to be addressing the needs of tenants who would like to know that their rent cannot be increased beyond their ability to pay without some form of redress. In addition to that, we want to make sure that any bill that comes before this House is not going to lead to insecurities in the private sector and, basically, in the market that will be providing rental housing.

Unfortunately, what we have in this bill is not enough on either side. We know that rental housing owners are extremely concerned with this bill; they see it as rent control. We in the Alliance don't see it as rent control. We think it's terribly misleading to put that out there, although maybe some people haven't spent enough time with the bill. Or perhaps the minister is going to bring in regulations that will be rent control. Certainly the legislation is not rent control. In absence of the regulations, we can only look at the bill and say that this is not rent control; but because they perceive it as rent control, there's a lot of anxiety.

We find that in times when the economy is already difficult and people are not major players in rental housing -- when they're middle-sized or smaller fish in the rental housing scheme -- they very easily get scared out of creating or contributing to the housing market. That's unfortunate, because then what we do find is that some of the bigger players -- whether they be offshore or employers with the least number of employees, considering the amount of capital in them -- tend to take over the housing market.

That's not generally in the interest of the public or of the tenants, because the closer the tenants are to the landlords, the better the relationship tends to be. If we end up giving over the housing market to the biggest fish in the housing industry, the landlords end up removed from the tenants, and the service to the tenants is generally of lower quality and less face-to-face. Therefore it's much more difficult for the tenants to receive service. In the absence of service, the government has to intervene, especially with this bill.

We will find that if this bill scares the small and middle-sized rental accommodation businesses or individuals out of the housing market, they will then be taken over by the larger companies. The government will have to intervene, because often the larger companies will be removed from the process and have the resources necessary to go to court. Ironically, if it is the bigger players that end up taking over the housing market, they will have the resources to go to court,

whereas the renters often will not, so they will

[ Page 11783 ]

be the ones dragged before the courts and unable even to afford proper representation in that arena.

We have a lot of concerns, and one of the things we should look at very carefully is the needs of the renters. In my area and in many parts of the province there's a very low vacancy rate. We know that in those instances renters feel very vulnerable. There's no question that they should have some avenue of appeal.

I think other members are going to be talking about the office of the rentalsman -- I don't know what we'd call it in a politically correct age. Basically it's an office through which there can be rent review, and there would be one individual arbitrating that rent review. I'm not sure to what extent that would play with this bill, because so much of it allows for litigation, and once litigation steps in we've got a very expensive and very time-consuming process.

Before concluding speaking against this bill, I want to say that one thing I would have really liked to have seen from this government was a rewriting of the Residential Tenancy Act so that it wasn't so cumbersome. Anyone who spends a few minutes with this bill -- not only this bill, but Bill 67 from last year and the Residential Tenancy Act as it stands -- will find that you almost have to have a team of lawyers to go over it to understand how it reads. Once you've spent time with it -- some of us, as the minister knows, do spend a lot of time cross-referencing these bills.... You could go cross-eyed trying to figure out which section.... Each

section refers to a different section, and when you refer to that

section it refers to another section.

There's got to be an easier way to write this. I would hope that if nothing else we would see something in plain language, because if this minister's intent is to help renters and landlords.... They should understand the legislation that governs them. I would have a hard time believing that any renter or tenant could spend any time with this bill and feel comfortable with what it's supposed to be doing. Plain language is something that empowers everyone, particularly those with few resources, and most renters do have few resources. I can see a number of areas where the bill could be simplified very easily.

If it were simplified -- especially in principle -- it would be much easier for renters to make use of it, for landlords to make submissions on it and for everyone to get along much better.

The last point I'd like to make in second reading is about some concerns I have regarding the changing of locks. Really, there are concerns on both sides. The first concern is with the entry of a landlord into somebody's private home that they're renting. It should be very clear that once someone takes over the rental of a unit, the landlord's right to enter should be almost prohibited, then, because that is that person's personal space.

However, when we move to the point of changing locks so that someone's private property is being altered by a person under contract with that landlord, unless there's been some agreement by the landlord.... If the landlord has been found to be intrusive on that person, that person should have and does have an avenue to report the landlord. But I'm concerned that the way the bill is written right now, a renter actually could change the locks. The application made to the courts by the landlord could end up arguing something retroactively.

The landlord may have to go to court to fight against something that's already happened. The landlord does not even have the ability to control his or her own property, because someone has gone in and changed the locks without any due reason, and the landlord then has to go to court. I have instances to bring up in committee stage.

The last point on this bill is that it's a mistake if we think that there are only nuisance landlords or nuisance tenants, and a bigger mistake to think either category is in the majority either way. We all recognize that there are good and bad tenants and good and bad landlords, and that the good on either side are in the majority. We should write our legislation accordingly, recognizing that most people uphold not only the law but the spirit of a renter-and-landlord agreement.

In recognizing that, we should make it difficult for someone to harass someone. I've been a tenant and I've been a landlord. One day I hope to be a landlord again; right now I'm on the tenant end of things. I've had bad tenants who can harass a landlord at great length. And this bill does allow some wide openings for that. I've also been a tenant....

G. Farrell-Collins: Will you come back and rent in Fort Langley-Aldergrove?

J. Tyabji: No, I screen my applications for tenancy.

I also have been a tenant and have had landlords who harassed me as a tenant. It seems to me that the bill leaves things wide open for harassment on both ends. Just as we need to protect the rights of people being mistreated by the law, we also have to protect the rights of those upholding the law and being harassed unnecessarily.

With that -- although speaking against the bill -- I would like to commend the initiative of the minister. I look forward to committee stage.

Deputy Speaker: I recognize the return of the member for West Vancouver-Howe Sound. Welcome back.

D. Mitchell: Garibaldi.

Deputy Speaker: You've been away too long, member. My apologies.

D. Mitchell: Thank you, hon. Speaker. I didn't know that you or anybody else had noticed.

J. Tyabji: We all care. The debate's been sadly lacking.

D. Mitchell: I won't belabour some of the constructive comments that have been made in debate on Bill 50, but I would like to add a few comments. I'm very interested to see what the minister has to say in her closing comments on second reading of this bill. The debate has raised some interesting points.

Bill 50, which amends the central statute governing the important relationship between landlords and tenants in our province, needs to be looked at closely, because we have to understand why the law needs to be amended. What's wrong with the existing legislation, which on face value appears to have worked well for many years? Bill 50 seeks to amend that act, to bring in some changes in how the relationship between landlords and tenants is governed, and to do so in some interesting and important ways.

The central test as to whether this is a good or a bad bill -- whether or not it can be supported in principle -- has to be whether it's going to improve the lot of renters in British Columbia. What impact will Bill 50 have on the availability of affordable rental housing in British Columbia? If the effect of Bill 50 will be positive, then I think it should be supported. But if the effect of Bill 50 looks like it might be negative, might curtail or restrict rental housing in a tough and

[ Page 11784 ]

challenging market, then there is no way it can be supported. I think that's the simple test.

When we take a look at Bill 50, we note that it's amending a statute that has worked relatively well and has really allowed free market forces to govern the relationship between landlords and tenants for a number of years. How have those free market forces operated? We've had a wide array of rental accommodation available in British Columbia for a number of years. A wide array and a number of choices have been available. That's not to say that things couldn't be improved. Hon.

Speaker, you will be aware, as all members will be, that there is a need to improve the variety of options available to renters -- those people who cannot afford to, or choose not to, be homeowners in the market in British Columbia.

I know that in the constituency I represent, even in the relatively affluent area of West Vancouver, there are many renters on fixed incomes -- seniors or young families who are just starting up -- who have real difficulty finding rental accommodation. The same is true in communities such as Squamish or Whistler, where young people have real difficulty finding affordable rental housing. So the question I have to ask is: how is this bill going to improve their lot?

The concern I have to have is that this bill, which is instituting a program of.... I don't really want to get into a semantic argument about whether it's rent control or rent review, because there's been a lot said on that issue already, and I don't think I have anything to add to that debate. But it's bringing in a regime that is certainly more bureaucratic and more cumbersome. I wonder why, because the minister sponsoring this bill has said herself that landlords aren't a big problem in British Columbia. Yet the process in this bill she has brought in leads me to wonder what the problem is.

We know that under this process, landlords are now going to have to justify all rent increases. Rent hikes based on property value increases are banned by this bill. Rent hikes would also be banned for any cosmetic renovations to rental accommodation. Tenants can appeal, and the Housing ministry will try to get the two sides to agree during cases of appeal. If they can't agree, the ministry will help appoint an arbitrator. Cabinet is going to draft a formula for that subsequent to the passage of this legislation.

One wonders, why do we need all this? There once was an office of the rentalsman, as it was called, in the province. That office was controversial but it was certainly a lot simpler than the process outlined here. One wonders why the minister didn't simply re-establish the office of the rentalsman, or rentalsperson, rather than go this route, which is much more cumbersome, appears to be much more costly and really isn't going to do anything to encourage the investment that's required to promote rental housing in British Columbia.

So if landlords aren't a problem, as the minister has said, what is the problem? What is the problem that she is responding to in bringing this legislation forward? A number of people have suggested that this legislation is actually going to discourage investment to create more affordable rental housing. That's a worry; it has to be a cause of grave concern to all members of the Legislature. We know we're living in an age when expensive condominiums are being constructed, not for rental but for ownership, in all of our major urban centres in the province.

This further restricts the availability of rental accommodation. This bill could be seen as one step toward accelerating that trend toward building expensive condominium-style housing in our major urban centres. But where is the rental accommodation going to come from?

[4:00]

In Ontario a similar government, an NDP government, brought in some statutory changes to landlord-tenant relationships. The situation there has changed the market dramatically. In Ontario we've seen the government scrambling to fill the need, the vacuum, by making investments in expensive social housing that have caused the taxpayers to go further into debt -- and there is a massive public debt in Ontario.

Surely that's not the vision we want to see pursued in British Columbia, where the consequence of legislation that perhaps has not been well thought out, and of consultation that perhaps has not been broad enough, might force the government to consider constructing more social housing at taxpayers' expense, thereby adding to the great burden of debt in our province. We don't want to see that, yet that's one conclusion we can come to when taking a look at this legislation.

I'm aware that a number of groups, including the B.C. Real Estate Association, have approached the minister and asked for further consultation on this matter before this legislation is passed into law. One wonders what kind of consultation has taken place to bring forward Bill 50. Clearly, many stakeholders -- people in the marketplace who provide rental housing -- haven't been consulted. And if they have been, their comments are extremely critical -- in fact, very negative. Because of that apparent lack of consultation, although the legislation appears to be well-intentioned, I cannot support it and I will vote against this bill.

D. Jarvis: Like the member for West Vancouver-Garibaldi, I will not go into too much detail, because we will go into a lot more detail when it comes to committee stage. In principle I'm against Bill 50, because basically I can't see why government should get involved in the rental housing business in this province. I feel that any type of rent control is going to adversely affect our market.

The minister says it's not going to be any type of rent control, but

section 7,

section 18.1(1), says: "A rent increase in any amount...." The bill then says that if that is disputed, arbitration will come into effect. That is a form of rent control, no matter what you try to call it. Any time government gets involved in rental housing -- especially in new rental housing -- the market is going to change and slow down. Whether they like it or not, we are in a supply-and-demand economy. The minister will find out that the rental housing business will slow down.

Socialists try to create a renters' paradise by having these types of ministries in government, but all it will be is a bureaucratic nightmare, believe me. They had rent control in this province once before, and we had problems as the years went on. Prices started going up.

Supply and demand is the basis of any type of housing where prices go up. There are no big players in the business. There are a few odd ones that do rentals, but in the majority of situations the big players are really small, average builders or entrepreneurs who go out and create a rental property. If you now start restricting them and put pressure on them, they will back off the business. That's what happened in the later part of the seventies. People stopped building rental accommodation, and rents started going up because of supply and demand.

I'd rather see the minister go into social housing that is supplemented by the taxpayers than put everyone in this province under a type of rent control or under a landlord-tenant act, which could also follow, because there are unscrupulous landlords and tenants out there.

[ Page 11785 ]

The last thing we would want to see is our tenants looked after unfairly. I can appreciate.... I've seen it. I've been in the business for 25 years, and I have watched what has happened. In the areas where I have been involved, as soon as the tenancy acts controlling rents came in, new rental units stopped being built, stopped being created. It happens. The minister probably has no idea about what the market out there is like. When there's nothing to be created and built, the population rises and prices start going up. If you have rental controls, you'll create a situation that is the reverse of what she wants.

As I said, I will not go on in detail. We'll talk about it more in committee stage. I just want to say, as I said before, that supply and demand is the factor. The government should realize that if they upset the supply and demand factor, all they're going to do is create a problem in the rental business.

H. De Jong: I just want to make a few comments on this bill. I do not think this bill is going to make any improvements for either the renter or the landlord.

When we hear social planners talk about planning a community -- and I've heard many of them speak on it before -- they've always discouraged putting all of the people with lesser incomes in the same community. It would appear that some of the limitations that are contained in this bill in terms of a landlord's ability to respond to emergency situations or other things that renters may need from time to time are just not possible for a smaller operator. For instance, eight- or ten-unit buildings.... Most of those people have a job elsewhere and cannot respond to emergencies within the time allocated.

Certainly many small landlords have created viable opportunities for people to rent at very reasonable rates. In fact, I know that quite a few rental accommodations in our community are of a smaller nature, and when it comes to a comparison of rental costs, they are considerably lower in price than those that were built under a joint federal-provincial government program many years past. I'm sure that's still true today.

I heard the minister on CKNW last week. I thought by the time that program was finished that the minister would have said, "I think I'd better withdraw this bill," because it simply did not make sense. Many people called in. I'm not going to go over all of the issues that were called in, but many landlords called in and expressed a real concern about what this bill would do, not only in terms of an owner's ability to respond and provide accommodations but also in terms of renters.

Being the Social Services minister previously, she is well aware of the horrendous cost increases that were occurring while she was the minister. I'm very, very concerned that the intent of this bill also provides for those that are considered under the Infants Act to also get the opportunity to rent accommodation. It makes me wonder whether this means that more dropouts can leave home, go on welfare and enter into rental agreements. If that is so, that will again increase the cost to the public. It's not going to do anything to hold families together; it's going to divide the family; we know the NDP philosophy goes that way.

The main point this government made very clear during the election campaign -- when they were in opposition as well as when they became government -- was that they would provide for low-cost housing. This government hasn't done anything to provide low-cost housing. With this bill, this government is again going to increase costs for the people who can least afford to pay rent. Perhaps most of them who fall within that category are supported by the public purse to begin with.

What do we do with this bill? It's nothing more than an additional cost to the public, through taxation, to provide homes for people who can least afford them. I believe that there are better alternatives than putting further restrictions on the Residential Tenancy Act through Bill 50.

W. Hurd: I am pleased to rise to speak against Bill 50. When the government brings in a bill that's as potentially far-reaching as this one, like most people in the opposition we attempt to get the bill into the hands of people who will be affected by it.

It's rather interesting to note that in this case the people we heard from regarding the bill were almost unanimous in their opinion that they hadn't seen it before, weren't aware of its implications and, furthermore, were scrambling, as we were speaking, trying to determine exactly what implications it had for those people who own rental accommodation in the province.

We on this side of the House continue to be astonished that the government continues to bring forward these bills which have far-reaching implications without, apparently, having consulted the people whose businesses and livelihoods are going to be affected by these bills. It goes on and on.

As other speakers have indicated, this bill places some major restrictions -- or major impediments, I guess you could say -- on people who own rental accommodation. What will the impact of this bill be? That's the kind of thing that we on this side of the House try to envisage. There is absolutely no doubt that the long-term effect of the bill will be to reduce the amount of investment in rental accommodation in the province. When people invest money in rental accommodation they do so with a view to investment, but also with the idea that there are other investments out there.

A return on investment is clearly what motivates people to build new rental accommodation. Surely the most important protection a tenant has is the availability of supply.

Again, what will the impact of this bill be? In my own region of Surrey, I think the effect will be to introduce more under-the-table rental arrangements and illegal suites -- the type of rental accommodation that will not be reportable and will not fall under the rules of Bill 50. We have seen it with the GST. We see it whenever the government introduces more regulation. Designed to ensure fairness, it actually induces more unfairness in the marketplace. As I look through this bill, I see nothing that will induce a higher degree of investment in rental accommodation.

I don't see anything that will make life for tenants or landlords any simpler. I fail to see how this bill will improve or increase the amount of rental accommodation.

[4:15]

I think the member for Okanagan-Vernon said it best: the type of landlord in the province has changed. We don't see people building large-scale rental projects in this province anymore. They tend to be small investors who own one house or one condominium, and they'll simply get out of the market. Their response to Bill 50 will be to simply get out of the market, to say: "I don't need to have $100,000 or $200,000 tied up in a rental unit with these kinds of restrictions.

I'm simply going to sell it and put the investment somewhere else." Or else, what will happen is that they will strike some sort of arrangement with a tenant that involves an illegal suite, which will not be reported. That's the effect these kinds of bills have. People simply find ways around these kinds of restrictions -- they always do -- and I can almost assure the minister that that is what will happen in this particular case.

[ Page 11786 ]

These new restrictions almost amount to de facto rent control. It occurs to me that if you want to introduce constraints in the market, there's more than one way to do it. You can do it by creating such an avalanche of regulation and paperwork that the effect is the same. Looking down the road, what is likely to occur is that the small investor, the person who owns one or two suites, will simply throw up their hands and say that it simply isn't worth it. That's what I'm hearing now from landlords, in my own riding and elsewhere, who've had an opportunity to review this bill.

The members opposite seem to think that having a rental housing project or rental units is a passport to financial riches. Any small investors who own apartment buildings are themselves breaking even. They're not enjoying windfall profits. If the trend has been upward in rents, it's the result, I guess, of a shrinking of supply. It's the law of supply and demand.

If fewer people are investing in rental housing, if units that were formerly in rental housing are being sold off because it isn't economic anymore, then clearly that places the kind of upward pressure on rents the minister is seeking to avoid with this bill. You would think, given the dynamics of the marketplace and its impact on rent increases, that some effort would have been made by the government to consult with the real estate industry and the investment industry, to determine what impact the bill might have. Will it induce people to get out of rental housing? I suspect the answer is yes, it will.

We continue to see this kind of legislation -- the introduction of more regulation, more interference by government -- expecting that somehow that's going to help the situation. In this case, I fail to see how it will. People in the rental housing industry are continuing to study the effects of the bill, the implications of the bill, and the need that they will have to hire lawyers. For example, they'll need to access more legal assistance.

Again, I can't see a strategy in any part of this bill to increase the stock of rental housing in the province, which really is the basic level of protection -- the ability of someone who doesn't like the accommodation they're in to move to another unit or another building where they will have a better landlord or a better situation.

Clearly, in the long run this bill will create a shrinkage of the rental housing market and, as other speakers have said, will simply result in those remaining landlords increasing the rents per annum to the maximum allowable level. That will be the routine approach because they will be able to take advantage of a declining number of rental units, and they'll be able to charge what the market will bear. I see this bill as a recipe for more tenant-landlord under-the-table arrangements, much like we've seen with the goods and services tax. We are in an era of government where you can simply regulate to the point of driving the economy, or the activity, underground.

We've seen that repeatedly with this government. They introduce new taxes only to lose revenue because people find a way around the regulations or the rule they're attempting to introduce. This is another classic case in point where I fear that will happen; where, because of a shortage of rental supply, tenants will make a deal with a landlord not to be covered by Bill 50. In the future, we expect some rules from the government on illegal suites. We are advised that they're coming.

But again, what's going to happen is that people who choose to stay in the rental housing business will simply, on the basis of demand for their unit, cut deals with tenants to avoid the implications of Bill 50 altogether.

I can't say how far we have advanced with this type of legislation. To us on this side of the House, the government does not appear to have consulted widely on the drafting of this bill. I know that one of my colleagues will introduce an amendment to the bill, seeking to invite input from the real estate and rental housing industries. That input has apparently been absent. When that amendment comes forward, I hope the government will give serious consideration to stepping back from this legislation, to try to deduce exactly what impacts it will have if it's allowed to stand, and to invite more submissions.

Surely there must be a way of bringing the rental housing industry and the tenants groups together in some sort of constructive relationship to investigate how the problems that the bill seeks to identify can be addressed, without the need for greater regulation and the hiring of additional lawyers on both sides of the fence.

There are more regulations, more complications and fewer solutions with this bill. For that reason I will certainly be opposing this bill in second reading. I know that the government has been receiving a great deal of input on the bill since its introduction, and I hope that it will apply the rules of common sense and step back from this legislation and invite a far greater degree of consultation than we've seen so far.

C. Serwa: Actually, I jumped up too quickly; I think the member for Port Coquitlam was going to rise. I'll give him another chance to take potshots at me.

An Hon. Member: I wouldn't take potshots at you.

C. Serwa: Thank you very much. I appreciate that remark.

I take a great deal of pleasure in speaking on the philosophy and principles of Bill 50, the Residential Tenancy Amendment Act, 1994. I am going to speak in opposition to it, because it's not really a residential tenancy act; it's a rent control act. No matter how you couch the words, that's clearly what it is.

While I'm talking about it, I think we should explore the rental market. Who rents, and why do they rent? I think it's very important to note that. They may be young married couples, single mothers, single males or seniors in our community. They may be those who are working in jobs that ordinary British Columbians work in, where there isn't the great pay that the government keeps talking about; they are working in a labour market that pays them in accordance with what the labour market can get. They don't have a lot of money to spare, so they can't afford a down payment on permanent accommodation.

I think everyone has the dream of owning their own home, and that's great. I hope that the environment will create that opportunity. These folks are captured in the rental market. I understand that, and I understand why they're there. The fact is that their financial remuneration dictates that they will probably continue on in that market. They rightfully have some concerns.

When we explore the facts, we find that a substantial number of British Columbians -- perhaps one-third -- fall into the category of those who rent accommodation in one form or another. So it's a large group. We understand the aspect that, fundamentally, it has to do with monetary concerns. They are unable to raise a down payment and get into their own accommodation -- their own home, duplex, condominium or whatever. The government is coming out with this purely shallow political bill to somehow quiet the concerns of renters in the province.

Does the government really care when they speak about poor people in British Columbia, or is caring about poor people more of the shallow theatrics that the hon. minister used to demonstrate when she was in opposition? I ask you, hon. Speaker.

[ Page 11787 ]

Social Credit was the first provincial government in Canada to bring in homeowner grants. After a period of time, we recognized that renters were not treated fairly and equitably in terms of homeowner grants, so we came out with another program: the renter's tax credit. What did this government, which cares about costs to renters, do shortly after their election? Why, they cancelled the renter's tax credit. Do you know what that meant, hon. Speaker? Families needed things that they couldn't afford, but when they filled in their income tax forms, they got back a renter's tax credit.

When that vanished, it meant that a lot of people who have to drive a car to work -- and a car is not a luxury -- couldn't afford to license and renew the insurance on that car. It has been gone for two years; it's history. Young couples, seniors and others in society fall into that large rental market. Does the government care? No.

This government will do anything to look good, always striving for that altruistic effect -- for show. The reality is that a government has to be measured by its deeds, not by its words. And the commitment to renters in the province, with the removal of the renter's tax credit, has been the shoddiest demonstration -- a lack of commitment to those who really need any form of assistance. They're left to pay the full brunt of school taxes. There's no recovery and no return. We're creating renters. This current socialist government is treating renters as a lower class of individuals than another class.

They've segregated two classes of people: those who are fortunate enough to own homes and get the homeowner grant, and renters, who are excluded.

I'm not comforted by this shallow, hypocritical bill. The bill is looking at a number of things. Is there actually a problem? Is there a need for this legislation? Well, their socialist friends -- there are still some out there, but there used to be a lot more -- have obviously reached the ear of this government. Those who are in the rental market now are saying: "Hey, that's a good idea.

Freeze rents, get after those nasty landlords and keep our costs low." Government taxes aren't holding the line, all of the input costs into the system aren't holding the line, but we're going to hold those nasty landlords to low rents to satisfy those vocal socialist activists that are now in the rental market.

What we're going to miss -- and this is the important thing -- is all of the other people who are coming along: young people and those that are moving into this province looking for rental accommodation. There is no question that when you get a government bureaucracy interfering with the private system in a widespread and far-reaching manner, there are going to be horrendous cost increases. The strange thing about this is that government spin doctors believe they can really sell this to renters in the province.

If they think beyond the immediate and look at the long term, this is going to cost landlords a great deal more. That's going to have to be directly reflected in justifiably increased rents to the tenants that this government says they're supposedly trying to protect. It's going to boomerang very quickly.

Even worse than that, you're going to be drying up the rental market. The private sector has done a phenomenally good job of providing rental accommodations for everyone, all wages and incomes, from subsidized housing on up. They have done the job and will continue to do the job without government interference. The best measure for maintaining competitive rents is a very good, healthy, competitive system.

[4:30]

The government is not making a healthy, competitive system. I don't see any big initiative or endeavour on the part of those who support the government -- the unions -- to invest large amounts of union funds in subsidized housing. They invest their union funds where they will get the best return -- in many cases outside of Canada in international firms. They bad-mouth multinational firms, but at the same time they invest money there to get a healthier return for their pension funds. Why don't they invest in housing? Because it's very difficult.

With this piece of legislation this government will drive the small landlords -- who are providing rental accommodation in a sensitive, caring way -- right out of the marketplace. Will rental accommodation be provided? It probably will, by large corporations.

Has this been tried before? Yes it has. From 1972 to 1975 it was tried by the same type of socialist government. And what happened? Rental increases prior to that time were very modest, like they are now -- averaging 2 or 3 percent a year. It's tolerable; it has sort of been keeping up with inflation, and with the increasing costs it's reasonable. When the NDP came in with their program and rental controls in 1972 to 1975, they restricted rent increases to a maximum of 10 percent per year. What a signal out there! Every landlord in the province said: "Well, I'm legislated.

I can get 10 percent, rather than 2 or 3 percent." If you want to track the explosive costs and increases in rental accommodation in the province, you can track it right back to that time. It failed miserably. The people it hurt the most were the people who really needed that support: the individuals who, for a variety of reasons, did not have that ability to get the high-paying jobs. We hurt them at that time, and you're going to hurt those people again. There is absolutely no way that this shallow, shoddy, flawed piece of legislation can serve the people it is purported to serve.

This government is very foolish to proceed after second reading with this piece of legislation, because you're not going to get the support from the people you think you're supporting. It's just not going to work. It's just as bad as giving kids candy. You give them candy and you think you're being a good parent. By the time they are 21 and their teeth have rotted out of their heads, you have second thoughts. That's exactly what will happen with the tenants who are going to be impacted with this. You're going to increase the costs for the landlords; that's realistic.

You're going to increase the cost to the taxpayer for the bureaucracy you're going to create. The only job creation that any of you individuals on the government side can be proud of is expanding the bureaucracy: a 10 percent increase in the BCGEU in the past two and a half years. Hip, hip, hooray!

The taxpayers can stand only so much bureaucracy, and you're not providing any better standard of services or delivery of any product to the taxpayers. You're not protecting the individuals you are purporting to protect, and this piece of legislation is another startling example of radical left