[ Page 2669 ]

CONTENTS

Routine proceedings

An Act to Amend the Social Assistance Act (Bill No. 33). Second reading.

Mr. D.A. Anderson — 2669

An Act to Amend the Vancouver Stock Exchange Act (Bill No. 51).

Second reading.

Mr. Lauk — 2669

An Act to Amend the Vancouver Charter (Bill No. 50). Second reading.

Mr. Lauk — 2669

Regulations Act (Bill No. 1). Committee and report stages — 2670

An Act to Amend the Constitutional Questions Determination Act (Bill No. 2).

Committee, report and third reading — 2670

Companies Act (Bill No. 16). Committee stage.

Mr. Phillips — 2670

Mr. Williams — 2670

Hon. Mr. Macdonald — 2671

Mr. Gardom — 2671

Hon. Mr. Macdonald — 2671

Mr. Gardom — 2672

Hon. Mr. Macdonald — 2673

Mr. Williams — 2673

Mrs. Jordan — 2673

Mr. Phillips — 2673

Hon. Mr. Macdonald — 2674

Mr. Smith — 2674

Hon. Mr. Macdonald — 2674

Mr. Williams — 2674

Hon. Mr. Macdonald — 2675

Mr. Phillips — 2675

Hon. Mr. Macdonald — 2675

Mr. Gardom — 2676

Hon. Mr. Macdonald — 2677

Mr. Williams — 2677

Hon. Mr. Macdonald — 2678

Mr. Williams — 2678

Hon. Mr. Macdonald — 2679

Bill reported — 2679

An Act to Amend the Securities Act, 1967 (Bill No. 18). Committee, report and third reading — 2679

An Act to Amend the Infants Act (Bill No. 37). Committee stage.

Mr. Williams — 2680

Bill reported — 2680

An Act to Amend the Equal Guardianship of Infants Act (Bill No. 41).

Committee, report and third reading — 2680

An Act to Amend the Coroners Act (Bill No. 46). Committee, report and third reading — 2680

Debt Collection Act (Bill No. 48). Committee, report and third reading — 2681

An Act to Amend the Small Claims Act (Bill No. 49). Committee, report and third reading — 2681

An Act to Amend the Evidence Act (Bill No. 100). Committee, report and third reading — 2681

An Act to Amend the Landlord and Tenant Act (Bill No. 101).

Committee stage.

Hon. Mr. Macdonald — 2681

Hon. Mr. Hall — 2681

Hon. Mr. Macdonald — 2681

Hon. Mr. Hall — 2682

Bill reported — 2682

An Act to Amend the Mortgage Brokers Act (Bill No. 109). Committee stage.

Mr. Brousson — 2682

Report and third reading — 2682

An Act to Amend the Land Registry Act (Bill No. 117). Committee, report and third reading — 2682

An Act to Amend the Government Liquor Act (Bill No. 121).

Committee, report and third reading — 2682

Fair Sales Practices Act (Bill No. 123). Committee, report and third reading — 2683

An Act to Amend the Strata Titles Act (Bill No. 124). Committee stage.

Mr. D.A. Anderson — 2683

Hon. Mr. Macdonald — 2683

Report and third reading — 2683

An Act to Amend the Conditional Sales Act, 1961 (Bill No. 128).

Committee stage.

Mr. Gardom — 2683

Hon. Mr. Macdonald — 2684

Report and third reading — 2684

An Act to Amend the Bills of Sale Act, 1961. (Bill No. 129).

Committee stage.

Hon. Mr. Macdonald — 2684

Mr. Phillips — 2685

Bill reported — 2685

An Act to Amend the Supreme Court Act (Bill No. 138). Committee, report and third reading — 2685

An Act to Amend the Credit Unions Act 1961 (Bill No. 141).

Committee, report and third reading — 2685

An Act to Amend the Motor-Vehicle Act (Bill No. 163). Committee, report and third reading — 2686

Water Utilities Act (Bill No. 146). Committee stage.

Hon. Mr. Macdonald — 2686

Bill reported — 2686

Telecommunications Utilities Act (Bill No. 147). Committee stage.

Mrs. Jordan — 2686

Hon. Mr. Macdonald — 2686

Bill reported — 2687

Energy Act (Bill No. 148). Committee stage.

Mr. Smith — 2687

An Act to Amend the Civil Service Superannuation Act (Bill No. 159).

Committee stage.

Mr. McClelland — 2687

Mr. Chabot — 2688

Hon. Mr. Cocke — 2688

Mr. D.A. Anderson — 2688

Hon. Mr. Barrett — 2689

Hon. Mr. Bennett — 2689

Hon. Mr. Barrett — 2690

Hon. Mr. Bennett — 2692

Hon. Mr. Barrett — 2693

Hon. Mr. Bennett — 2693

Hon. Mr. Barrett — 2694

Hon. Mr. Bennett — 2695

Hon. Mr. Barrett — 2695

THURSDAY, APRIL 12, 1973

The House met at 8 p.m.

Introduction of bills.

Orders of the day.

HON. D. BARRETT (Premier): Mr. Speaker, I move we proceed to public bills and orders.

Motion approved.

HON. MR. BARRETT: Adjourned debate on second reading of Bill No. 33, Mr. Speaker.

AN ACT TO AMEND
THE SOCIAL ASSISTANCE ACT
(continued)

MR. SPEAKER: The Hon. Second Member for Victoria adjourned the debate.

MR. D.A. ANDERSON (Victoria): Yes, Mr. Speaker, we adjourned the debate the other day because of the fact that the amendments weren't present. After considerable searching I did find them in the orders of the day, page 17. The amendments do not affect the principle of the bill, so we are happy with them.

The principle of the bill is of course to change what I would call the Gaglardi section of the previous Act, where the Minister had full powers here to change it to the Lieutenant-Governor-in-Council, which is a step in terms of less Ministerial control. I guess we can accept it on that, although of course these things generally are approved at the request of the Minister. So I really don't know in substance whether there is a major difference.

At least in the amendments brought forward there is some provision for appeal, and we support the principle of the bill, and the bill itself.

We contrast this easy way in which we are able to approve the principle of this bill after proper amendments, with the disastrous performance of the government in withholding amendments on Bill 42. I am quite sure that if you had amended the bill just as well as you have done in this instance, perhaps debate on second reading might have been as short.

MR. SPEAKER: The Hon. Minister.

HON. N. LEVI (Minister of Rehabilitation and Social Improvement): Mr. Speaker, I move the question.

Motion approved; second reading of the bill.

Bill No. 33 referred to a committee of the whole House at the next sitting after today.

HON. MR. BARRETT: Mr. Speaker, may I draw the attention of the House to the two private bills in second reading. Second reading of Bill No. 51.

AN ACT TO AMEND THE VANCOUVER
STOCK EXCHANGE ACT

MR. SPEAKER: The Hon. Second Member for Vancouver Centre.

MR. G.V. LAUK (Vancouver Centre): Thank you, Mr. Speaker. I move second reading of Bill No. 51, An Act to Amend the Vancouver Stock Exchange Act.

MR. D.M. PHILLIPS (South Peace River): Fantastic speech! (Laughter).

Interjections by some Hon. Members.

MR. LAUK: Thank you very much.

MR. SPEAKER: Order, please.

MR. LAUK: I had prepared a 45-minute explanation of the bill, but I feel that the bill speaks for itself, Mr. Speaker.

MR. SPEAKER: The Hon. Member moves second reading. Is there any further debate?

Interjections by some Hon. Members.

Motion approved; second reading of the bill.

Bill No. 51 referred to a committee of the whole House at the next sitting after today.

HON. MR. BARRETT: Mr. Speaker, an encore. Second reading of Bill No. 50.

AN ACT TO AMEND THE
VANCOUVER CHARTER

MR. LAUK: Mr. Speaker, on behalf of the Second Member for Vancouver–Little Mountain, I move second reading of Bill No. 50, An Act to Amend the Vancouver Charter.

Motion approved; second reading of the bill.

Bill No. 50 referred to a committee of the whole House at the next sitting after today.

HON. MR. BARRETT: Mr. Speaker, I move that the House proceed to committee on bills.

[ Page 2670 ]

Motion approved.

HON. MR. BARRETT: Committee on Bill No. 1, Mr. Speaker.

REGULATIONS ACT

House in committee on Bill No. 1. Mr. Dent in the chair.

Sections 1 to 12 inclusive approved with amendments. Title approved.

HON. A.B. MACDONALD (Attorney General): Mr. Chairman, I move that the committee rise and report the bill complete with amendments.

Motion approved.

The House resumed; Mr. Speaker in the chair.

Bill No. 1, Regulations Act, reported complete with amendments, to be considered at the next sitting of the House after today.

HON. MR. BARRETT: Committee on Bill No. 2, Mr. Speaker.

AN ACT TO AMEND THE
CONSTITUTIONAL QUESTIONS
DETERMINATION ACT

House in committee on Bill No. 2; Mr. Dent in the chair.

Sections 1 and 2 approved. Title approved.

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

Motion approved.

The House resumed. Mr. Speaker in the chair.

Bill No. 2, An Act to Amend the Constitutional Questions Determination Act reported complete without amendment, read a third time and passed.

HON. MR. BARRETT: Committee on Bill No. 16, Mr. Speaker.

COMPANIES ACT

House in committee on Bill No. 16; Mr. Dent in the chair.

Sections 1 to 52 inclusive approved with amendments.

On section 53.

MR. CHAIRMAN: I recognize the Hon. Member for South Peace River.

MR. PHILLIPS: Section (3) of section 53. Does this relieve, in the case of multi-corporations, any of the shareholders in case they do wrong?

HON. MR. MACDONALD: Oh, no. It would be purely for, as it says there, "the debts, obligations or acts of the company," but nothing to do with any fraudulent dealing or things of that kind. It says there, "the debts, obligations or acts of the company," but nothing to do with any fraudulent dealing or things of that kind.

MR. PHILLIPS: If the company legitimately goes broke then…

HON. MR. MACDONALD: It's just restating the principle of a limited liability company but does not absolve directors or possibly even shareholders from extra legal acts that they might perform.

MR. PHILLIPS: Then, Mr. Attorney General, supposing that the directors of a company have personal guarantees at a bank or a finance company et cetera. This section (3) does not relieve them of that at all?

HON. MR. MACDONALD: In no way.

MR. PHILLIPS: But, if there are no personal guarantees and a company legitimately goes broke, this will relieve them with the exception of the Labour Act?

HON. MR. MACDONALD: That's right.

Section 53 approved.

Sections 54 to 64 inclusive approved with amendments.

On section 65.

MR. CHAIRMAN: I recognize the Hon. Member for West Vancouver–Howe Sound.

MR. L.A. WILLIAMS (West Vancouver–Howe Sound): Thank you, Mr. Chairman. I sent to the table

[ Page 2671 ]

today an amendment in my name to section 65. In the circumstances it does not appear in the orders which we're dealing with this evening. Does the Clerk have a copy of that proposed amendment?

Mr. Chairman, I would move an amendment to section 65 by adding to subsection 2 the following words; "The company shall keep as part of the register a copy of each document creating the representative capacity referred to in subsection l(a)." And a procedural amendment thereby renumbering subsections 2 and 3. I'd be happy to let you have this.

"Section 65 (1) (a) provides that the register of members of a company shall contain certain information, such as the full name and address of each subscriber or other person who is a member and noting, where applicable, his representative capacity."

That means clearly, Mr. Chairman, that if a person holds shares in the capacity of a trustee or some other representative capacity, all that need occur in the register is that the fact of that representative capacity should be noted.

I think it is important when one is examining the register of members to be able to ascertain truly who are the beneficial members of those shares. The one way in which this can be done is to oblige the company to keep as part of its register the document which creates that representative capacity. So that a person who then, in accordance with the provisions of the Act, has occasion to look at the list of shareholders of such a company can, in the course of that search, determine to the fullest extent who the beneficial shareholders are.

Without this, all one knows is that the person who appears on the register is himself, not the beneficial owner, and some idea of the capacity in which those shares are held.

By keeping such a document as part of the register, it means that a person searching can in fact see and examine the bona fides of that document.

I move the amendment.

MR. CHAIRMAN: I recognize the Hon. Attorney General.

HON. MR. MACDONALD: Chairman, if the Hon. Member is suggesting that if someone is, say, an executor of an estate, that that should show on the register of the company, the answer is it does. It's now required. This is the point, is it? If he's a trustee?

MR. WILLIAMS: He may be a trustee under an estate; he may be a trustee in a number of other ways.

HON . MR. MACDONALD: Yes. That should show.

MR. WILLIAMS: But he may be a trustee under a trust document, and such a document should be filed so that you can see who the beneficial owners of the shares are, on whose behalf that individual is holding the shares. It may be a voting trust. I think that the document creating that voting trust should be disclosed on the register.

HON. MR. MACDONALD: Well if the Member is raising the… I'll let the other Member make his point first.

MR. CHAIRMAN: I recognize the Hon. Second Member for Vancouver–Point Grey.

MR. G.B. GARDOM (Vancouver–Point Grey): I'd just like to add one point to the argument of my colleague and friend, and that is this, that in the very bill that was introduced by the government tonight, a great point was made of the share distribution. One of the purposes of the amendment of my friend is to provide this information to the general public. You've exemplified this with the British Columbia Cellulose bill — the number of which escapes my mind — but I think it would be an extremely retrograde step that we cease to have any information in a public office in the Province of British Columbia as to what the shareholders are.

HON. MR. MACDONALD: This is the company's register in this section.

MR. GARDOM: That's right.

HON. MR. MACDONALD: Not the Registrar of Companies.

MR. GARDOM: No, no, no, I'm talking about this being filed with the Registrar of Companies.

HON. MR. MACDONALD: It's not under this section.

MR. GARDOM: But file it indeed with the register wherever it may be. Make it mandatory that this shareholders' list is maintained completely. In my view that should also be filed with the Registrar of Companies. Now this is a point that is really I think best known by the people, Mr. Attorney General, who practice law in the Province of British Columbia. It is best known from the area that it does provide some degree of information whereby public notice can be received of what these filings are. I think that to destroy that concept in your new form is bad.

HON. MR. MACDONALD: Well, Mr. Chairman,

[ Page 2672 ]

while I don't know whether it is properly under this section, the Hon. Members are raising the question of whether or not beneficial ownership rather than the legal ownership of shares should be shown, both in the register of the company and in the filings of the Registrar of Companies. This is the main point isn't it? This is what we are getting at, because that is the purport of your later amendments.

MR. CHAIRMAN: I recognize the Hon. Member for West Vancouver–Howe Sound.

MR. WILLIAMS: We don't quarrel with the right of a company under a subsequent section to maintain its register at certain places. But what is the point of having a register that shows the person as being a member of the company and notes that the shares are held in a representative capacity if you can't see the document which creates that representative capacity?

Why should you have to go and search in a number of places? If I wish to have my shares in a company held by some person to represent me, then surely I should be obliged to deposit that document with the register and make it available for examination.

MR. CHAIRMAN: I recognize the Hon. Second Member for Vancouver–Point Grey.

MR. GARDOM: The object of the amendment is to prevent the situation which has happened so often in the Province of British Columbia with people who are marginal — marginal in ethics more than anything else. The object of my friend's suggestion and which I totally support is the fact that we should have a beneficial filing as well so that it is possible to maintain as close as we can the true and the real identity of a shareholder — the true and the real identity of a shareholder.

On the proposal that you have, you are making it much more easy, in my view, for these people to take one step underground. I think that should not be possible. I think we should make it much more presentable that they not have that opportunity to do it.

There's no way of legislating against crime, we appreciate that. Perhaps there's no way that the measure that is suggested would ever be 100 per cent effective. We're not saying that for one minute. But it's certainly a step in the more correct direction so it's possible for the public to know that if a person chooses to be a slum landlord, that person will become identified as a slum landlord as opposed to having his shares in the name of Mary Ann Smith, secretary, or Joe Blow, treasurer, as it may be — nominee situation.

HON. MR. MACDONALD: Mr. Chairman, there is a change in the later part of this Act with respect to trying to define who the beneficial owners of shares are. That's a later section. This section represents no change in the Act and none of the submissions, I am advised, that we have received have made this proposal, including the Canadian Bar Association.

Now if it's an administrator or executor or that kind of thing there's no problem. If it's a situation of a slum landlord who is trying to hide his identity behind a corporate veil, we have here a problem where we are dealing with it to the best of our ability in another section. But if this slum landlord comes in and his shares are held through, say, Montreal Trust, there's no way that the true beneficial ownership of those shares can be shown on the register of the company.

If he comes in through another corporation, there's no way the true beneficial ownership can be shown and this section is not really a change in company law. I'll be glad to consider representations in the future but we can't accept the amendment.

MR. CHAIRMAN: I recognize the Hon. Second Member for Vancouver–Point Grey.

MR. GARDOM: The Attorney General is not accepting the amendment. Could I perhaps offer as a suggestion to him that maybe the point could be cured…and pardon me for transgressing, but this is a very complicated statute and it's a statute that affects literally hundreds of thousands of people in this Province.

Maybe the problem could be cured by altering the definition of member the way that you have included it under section 2. Under section 2, Mr. Attorney General, you say on p. 3, "Member means a subscriber of the memorandum of a company and includes every other person who agrees to become a member of a company and whose name is entered in its register of members or a branch register of members."

But that doesn't go far enough. Now, I pose this to you as perhaps a curative measure which would take care of the point that we are considering at the moment. If that was altered to read this way, and I do hope that you have received a copy of this because this is not in the orders of the day:

"Member means a subscriber to the memorandum of a company" — exactly the same way that you have it, and this is the difference, Mr. Attorney General — "and includes every person who becomes the beneficial owner of any share in the company and every other person who agrees to become a member of a company" and so forth and so on. Exactly the same as your definition. Just by including that phrase.

I repeat it: "Member means a subscriber to the memorandum of a company and includes every person who becomes the beneficial owner of any share in a company and every other person who

[ Page 2673 ]

agrees to become a member of a company and/or whose name is entered in its register of members or a branch register of members." I think by that approach to it that we have developed the net that you wish to have and we wish to have.

HON. MR. MACDONALD: Well, Mr. Chairman, I'll be glad to consider that. That was an amendment to section 1 that the Hon. Member was proposing. We'll be glad to consider it in the succeeding year. I can't say I accept it now. I see real difficulties in it in the case, for example, that I mentioned where the shares are really Montreal Trust or a mutual fund. So until that's worked out that's as far as we can go.

MR. CHAIRMAN: I recognize the Hon. Member for West Vancouver–Howe Sound.

MR. WILLIAMS: Before we consider the question, Mr. Chairman, if you have the case of a mutual trust fund, that mutual trust fund is the beneficial owner of the shares. But if you have a case where an individual places his shares in the name of Montreal Trust Company, under the section as it presently stands Montreal Trust Company is obliged to note its representative capacity. If it isn't it's in breach of the Act.

Now all I'm saying is that as well as noting that capacity it should file with the company so the register will show a copy of the document which creates that representative capacity. What's happening, Mr. Chairman, is that because of the absence of this requirement the representative capacities are not today being noted in registers of the company. I would hope that when we pass this new Act an end would be put to that practice.

MR. CHAIRMAN: I recognize the Hon. Member for North Okanagan.

MRS. P.J. JORDAN (North Okanagan): I just want to ask the Attorney General something in relation to this and I am not a lawyer.

If the Attorney General does consider imposing in the Act the suggestions that have been made, recognizing the problems, I would assume this means you have to do this if we are going to have a Public Disclosures Act of any meaning, right? So people in public office couldn't hide behind the same veil that has been described here.

If this is done is there some way that people can get at the true ownership of a company as the two Members have agreed should be, that those people could also be protected against snoopers? If there is a legitimate reason for the company's true ownership or the shareholder's true ownership to be known, I think this is quite acceptable and needed. But also there should be a protection for anybody so that mischief-makers or people with perhaps political reasons or any other reason, couldn't go and get that information without disclosing who it was that got that information and why they needed it. So if someone did go and get it and tried to use it against somebody for mischievous reasons they could take proper action.

HON. MR. MACDONALD: The Hon. Member will see our procedure for determining beneficial ownership in certain cases under section 233 — the whole procedure is set out there.

MR. CHAIRMAN: Shall the amendment to section 65 pass?

Amendment negatived.

MR. CHAIRMAN: Shall section 65 pass?

Section 65 approved.

Sections 66 to 74 inclusive approved with amendments.

On section 75.

MR. CHAIRMAN: I recognize the Hon. Member for South Peace River.

MR. PHILLIPS: I do hope the Attorney General will just be patient with a fellow like me who is a neophyte in politics and not really a lawyer, but I do have…

MR. CHAIRMAN: Will the Hon. Member please state the section.

MR. PHILLIPS: In view of Bill 63 and 74, some of these are very pertinent. Would the Attorney General explain to me — it says in Section 75: "change of mortgage may be filed with the registrar." It goes on in Section 80 and 81: "register of mortgages, discharge of mortgages may be executed."

It seems to me, Mr. Chairman, that we could get into a situation similar to that which happened with Slumber Lodge, where they file a prospectus, then the mortgages are changed and the discharge of mortgages is changed, we get new commitments — pretty soon the original prospectus has gone down the drain. It doesn't really say that they have to be filed, it says they "may" be filed. Section 76. Would the Attorney General please explain that?

HON. MR. MACDONALD: It must be filed in the Land Registry Office in any case. These are mortgages.

[ Page 2674 ]

MR. PHILLIPS: Well yes, you could have them filed in the Land Registry Office, but you go up to the companies…

Interjections by some Hon. Members.

MR. CHAIRMAN: Order please, one person at a time.

MR. PHILLIPS: You haven't answered my question, Mr. Attorney General. Supposing I'm starting a company and I have a mortgage, and I change that in the period of a year. What then happens?

HON. MR. MACDONALD: Of course the mortgage must be filed. These are changes in the mortgage, so that a person would be alerted to the fact that there was a mortgage. The change itself might be a minor matter and might be filed or might not be filed. So there's no problem about somebody not knowing that there was a mortgage.

Sections 75 to 92 inclusive approved.

On section 93.

MR. PHILLIPS: Explain the amendment.

HON. MR. MACDONALD: That's just a change in punctuation to Section 93. That may not be important to you, Hon. Member, but sometimes it's important to lawyers, and sometimes it's important to judges in the construction of the section. Even though a lot of input — as the word is — has gone into it, since it was introduced into the House in its 1973 version, various groups have gone over it again with a fine tooth comb, legally speaking, and they've said the punctuation will alter the meaning of this section, or it isn't plain — and we've even acceded to their proper request for a change in punctuation, where we've agreed with them. That's all it is.

Sections 93 to 130 inclusive approved with amendments.

On section 131.

MR. CHAIRMAN: I recognize the Hon. Member for North Peace River.

MR. D.E. SMITH (North Peace River): Just a brief comment, Mr. Chairman, regarding section 131. I spoke about the ramifications, as I saw them, of this particular section when we were speaking to the bill in principle in second reading. I appreciate the fact that the Attorney General has clarified the section — also relaxed the regulation a little bit in that as long as a person is resident in Canada, they may qualify to be directors under this section, whereas before they had to be Canadian citizens.

It seemed to me that the real crux of the matter is that we know, in large corporations, the people are who are the directors of the company. Quite often that has a bearing on whether you have confidence in their particular ability to operate that company or not. I was concerned under the previous wording that we would set up a situation where companies would do indirectly what they couldn't do directly. In other words, they'd set up dummy directors in Canada to circumvent the provisions of the Act. They may still do this in certain respects, but I think that the chance of that happening is far less apparent now with them only being resident in Canada. We have many people from other countries resident in Canada who could, under this new interpretation of section 131, be directors. I thank the Attorney General for that.

HON. MR. MACDONALD: Mr. Chairman, the Member has made a good point, but I would just add this. If somebody does try to satisfy the section through a dummy director, we have in this Act generally improved the standards of care that are imposed upon directors and even a dummy director would be liable. So it will not be all that easy just to put in a nominal person. From herein, directors are supposed to exercise real responsibility for corporate affairs.

Sections 131 to 148 inclusive approved with amendments.

On section 149.

MR. CHAIRMAN: I recognize the Hon. Member for West Vancouver–Howe Sound.

MR. WILLIAMS: Mr. Chairman, section 149 — the amendment which is made by the Hon. Attorney General is a very significant change in the section from what was originally produced. The section as originally introduced provided that the directors might sell substantially the whole of the undertaking of the company with such approval of the members as required by the articles. But now the change is made that you shall not sell unless you have a special resolution and the articles might provide otherwise…

Interjection by an Hon. Member.

MR. WILLIAMS: That's right — a special resolution of the shareholders. Now this means that democracy goes out the window and that the minority is now in a position to control the majority.

[ Page 2675 ]

HON. MR. MACDONALD: No, it's the opposite. You must go to the members if the whole undertaking is being sold.

MR. WILLIAMS: And you have to have a special resolution.

HON. MR. MACDONALD: Of the members.

MR. WILLIAMS: What percentage, Hon. Mr. Attorney General?

MR. CHAIRMAN: For the benefit of Hansard, I'd ask the Hon. Minister if he wouldn't mind standing at the mike so that he can be heard. Otherwise, the procedure is satisfactory.

HON. MR. MACDONALD: Three-quarters.

MR. WILLIAMS: Mr. Chairman, the Attorney General now says three-quarters is now required. So the majority of the shareholders of the company may desire to dispose of the whole or substantially the whole of the undertaking, but if 26 per cent of them do not, then the action is frustrated. This is scarcely democratic.

HON. MR. MACDONALD: Well, you go into a company for certain purposes. Compare this situation with private associations or societies. If you go into a hockey club you can't by simple majority convert that into a tennis club if it's an ordinary society. And in the case of a company, you've got greater leeway to make various, substantial changes. Sell the whole undertaking. But we've protected it and this is with the approval of the groups that have written in about this matter. We've protected it so that it has to be a special resolution of all of the Members, and that seems to be acceptable to people generally.

As I say, if it wasn't an incorporated body but a private association, changing its objects that substantially or changing its undertaking could only be done by virtual unanimity. And this is three-quarters.

MR. CHAIRMAN: Shall the amendment pass?

Amendment approved.

Section 149 approved with amendment.

Sections 150 to 155 inclusive approved with amendments.

On sections 156 to 167.

MR. CHAIRMAN: I recognize the Hon. Member for South Peace River.

MR. PHILLIPS: Mr. Chairman, would the Attorney General explain to me what could happen in a case where a director or a president may file away with one of his lawyers the right for them to be appointed a director in such cases where the other directors of a company in the absence of the president who may be majority shareholder want to call a meeting to vote themselves a director's fee or take some surplus money out of the company, et cetera? It says here that a quorum for a general meeting of a company is two persons unless… However, does this still allow for the president to leave with his lawyer and maybe he appoints in escrow the lawyer and the secretary and maybe somebody else in the lawyer's office to have a proxy to become a director of the company in case of need.

Do you understand what I mean?

HON. MR. MACDONALD: You can't appoint a director in your place by proxy.

MR. PHILLIPS: Yes, but you can file with your lawyer an affidavit that he is a director — which he will not use unless required. And supposing that the minority shareholders of the company decide to get together some afternoon while the Member might be down in Victoria attending the Legislature or something and they decide to hold a meeting. Can you leave these proxies which will not be used by your lawyer unless there is a need?

HON. MR. MACDONALD: What you need, Mr. Member…

AN HON. MEMBER: Go home, Don.

MR. PHILLIPS: No, but it could happen. It could happen even in law firms.

MR. CHAIRMAN: Order, please. I recognize the Hon. Attorney General.

HON. MR. MACDONALD: Well, that can be done if you put in the articles of the company provision for alternate directors during which time you as an MLA might be absent from your company. If that's in the articles, the alternate can act in your place instead while you are down in Victoria making speeches.

MR. PHILLIPS: "Aye." (Laughter).

Sections 156 to 196 approved.

On section 197.

MR. CHAIRMAN: I recognize the Hon. Second

[ Page 2676 ]

Member for Vancouver–Point Grey.

MR. GARDOM: Well, two things. As a matter of fact, three, Mr. Chairman. Number one is a very, very short interlude in this stimulating debate. (Laughter). It would be most gratifying if the Hon. Members would join me in welcoming to our public galleries two very fine nine-year-old ladies by the names of Miss Jessica Crawford and Miss Rita Gardom who are up there waiting in the section. Thank you.

And the second thing, if I could have the attention of my Hon. colleague, the Member for West Vancouver–Howe Sound (Mr. Williams), I'd like his glasses for a minute. (Laughter). You think you've got troubles in your party. (Laughter).

Mr. Chairman, I would like to move an amendment which unfortunately has not got to print, but I think Mr. K.M. Macdonald has been pretty busy these days. I think everybody in the House as a matter of fact should have a vote of thanks to the Queen's Printer. We really should. It was very nice of the Speaker to bow. (Laughter). But I wish you would convey those sentiments to the Hon. Queen's Printer, Mr. Speaker, from all of us.

I would like to move an amendment to section 197 (1), the substance of which I directed earlier today to the desk of the Hon. Attorney General and I do hope that he has received it. It has been filed with the Clerk of the House.

The amendment to this section…

Interjection by an Hon. Member.

MR. GARDOM: Yes, I have a copy here, but the Clerks received one earlier and I hope they haven't lost it. The amendment, if you will pardon me groping for a moment, to section 197 (1) at the present time reads this way, Hon. Members.

"(1) Every financial statement, or interim financial statement, issued, published, or circulated by a company shall be first approved by the directors, and the approval evidenced by the signatures of two directors, or, if there is only one director, by that director."

That is the start of that section, and my amendment adds these words:

"… and further, at the time of such approval, a director of a company shall declare under oath that the information contained in each said approved financial statement, or interim financial statement, is true to the best of the knowledge, information, and belief of such director.

Now the purpose of this amendment is pretty obvious to the Members of the House and more so to the Hon. Attorney General. I'm glad that I have the ear of the Hon. Minister of Agriculture (Hon. Mr. Stupich) who is a chartered accountant in the Province of British Columbia, and a well-recognized one indeed.

Every financial statement under the present section has to be approved by the directors and it has to be under the hand of a director. What I've suggested here is just another little tooth to this section. I am saying not only should it be under the hand of a director but it should be under the oath of the director that the contents of that statement are true to the best of his knowledge, information, and belief. And I would hope that somebody would ask me, "Why?"

MS. R. BROWN (Vancouver-Burrard): Why?

MR. GARDOM: Thank you very much. The Hon. the lady Member for Vancouver-Burrard asked me why. Because if we run into the situation where there are transgressors in balance sheets; if we run into situation where we happen to have puffed values and we don't happen to have true and proper values, as for an example the Commonwealth Trust situation where we had Beach Gardens included in the balance sheet at $3.2 million if my memory is correct and the value of Beach Gardens was barely $200,000.

That statement was under the hand of a director and that statement unfortunately was also under the hand of a firm of chartered accountants in the Province of British Columbia. I would have liked to have seen that under oath to the best of the knowledge and information and belief of the directors. Because you do then have at least a better vehicle, another, shall I say "step in evidence" in the event of prosecution for people who are turning out bogus phony statements.

Now there is no way that I know that any individual who happens to turn out a balance sheet that is a proper balance sheet — and I suppose 99 per cent of them are in the Province of B.C. — those people have nothing to worry about. They are just deposing to the truth. But it might give the people who happen to be defaulters a little bit of pause and it might make them think a little more carefully before they go ahead and sign these things.

I think we've got to have, as I've said before in not only the debates this year but in debates going back four or five years in this House, that we have got to have much closer checks and better audits, and that the true value of a company's assets be shown as opposed to whatever its face value may be.

As I have said before, the reason for this amendment, if we go ahead and support these values which we do in the illustration that I'm giving and the amendment that I'm proposing — if they were supported by the statutory declaration of a company director and if they were false, those people might well have to face the appropriate penalties.

The appropriate penalty could indeed — maybe if it was serious enough — be a perjury charge; and

[ Page 2677 ]

perjury is an indictable offence and it's punishable by both imprisonment and fine. I would say that the suggestion that I have here would give rise to providing a better means of apprehending those people who should be apprehended and would not be any kind of hardship or be of any concern to the literally thousands of people who conduct legitimate business in the province.

HON. MR. MACDONALD: Mr. Chairman, we've considered the amendment. Now, mind you, in the case the Hon. Member mentioned — Commonwealth Trust — somebody did as a director make misleading statements about the company finances and that somebody, without having sworn an oath, went to jail.

MR. GARDOM: Yes. But it was pretty tough to get him there.

HON. MR. MACDONALD: Well, yes. But it wouldn't have been any easier really…

MR. GARDOM: Much easier, that's the whole point.

HON. MR. MACDONALD: No, I don't think it is easier. If the Hon. Member will look at section 364 where directors are liable for false or misleading statements — and that would include when they sign the financial statements, the two of them that may be required to do so. There are heavy penalties in section 364.

MR. GARDOM: But they're not under oath.

HON. MR. MACDONALD: No, they're not under oath. But you know, to a lot of people — for example to the Scotch…

AN HON. MEMBER: Scots.

HON. MR. MACDONALD: To the Scots …

AN HON. MEMBER: You've been here too long.

HON. MR. MACDONALD:…their word or affirmation is exactly the same and will be exactly the same whether or not it's under oath. That makes no difference to them at all.

MR. GARDOM: Don't tell the Campbells. (Laughter).

HON. MR. MACDONALD: So we feel we've adequately covered this point. You know, convicting somebody of swearing to a financial statement — they've sworn their oath but they say, "I'm just relying on the accountant;" it's a pretty tough charge to prove. I think frankly it's easier to prove a case of signing a false or misleading document under that other section than it would be in proving a false oath which is very much a state of mind.

MR. GARDOM: I think in the point that you're making you're using one barrel and I'm giving you a double-barreled shotgun with a capacity to pull both triggers at once. I think it's an added advantage.

HON. MR. MACDONALD: We'll consider it but we won't accept that at this time.

Amendment negatived.

HON. MR. MACDONALD: I move the amendment standing in my name on the order paper to section 197.

Section 197 approved.

Sections 198 to 375 inclusive approved.

First schedule approved.

On the second schedule.

MR. CHAIRMAN: I recognize the Hon. Member for West Vancouver–Howe Sound.

MR. WILLIAMS: Mr. Chairman, in the amendment paper that I sent forward to the table a few moments ago there are two additional amendments included, to form 17 and form 18. I believe the Hon. Attorney General has a copy.

To form 17 I propose the addition of a further item which would call for information regarding members of a company, their name, their address, and the kind, class and number of shares held; also an additional amendment to the notes to that section, which provide that any company which maintains a register in compliance with sections 67 and 68 of the Act need not provide that information to the Registrar of Companies.

Now the simple reason for this, Mr. Chairman, is that the practice currently is that all companies must file with the Registrar of Companies in Victoria particulars of its shareholders, including particulars of any changes there may have been in shareholders since the previous annual meeting. I fully appreciate that that results in the handling of a tremendous amount of information by the Registrar of Companies, and particularly in the case of what are now called public companies, in the filing of tremendous volumes of paper.

The Act that we presently have under consideration provides that in such cases a company

[ Page 2678 ]

may have its register maintained at a trust company. I suggest that in those cases where records are maintained in that way, the obligation to file in Victoria should not be the case.

In respect to those other companies who may maintain a so-called records office at some other place — a lawyer's office or accountant's office or indeed at the company's own headquarters — I do not believe that a person who requires information concerning membership in the company should be obliged to go to that length in order to find that information. That information should still be filed with the Registrar of Companies.

It really is not a great problem as many of the companies have two or three or four or five shareholders. It is a questionable process to file these with the Registrar of Companies so that any person may go and search in a government office, for the payment of a very moderate fee and get complete information.

The difficulty, Mr. Chairman, is this: your entitlement to see these records at a company's records office must take place during office hours, reasonable times and so on; and I can be certain that in many cases it will be increasingly difficult to make searches into the register of members of many so-called — what we today would call a private company — what will be called a non-reporting company in the future.

The amendment that I propose will not provide any significant difference so far as the Registrar of Companies is concerned. He still must receive the annual report. I just think that there is other information that should be contained, except in a case where the company maintains a register in a trust company.

MR. CHAIRMAN: The Hon. Attorney General.

HON. MR. MACDONALD: Mr. Chairman, what the Hon. Member has said will be taken into consideration, and I say that because the schedules that we are referring to here can all be amended by regulation. That sounds like a fairly major change if we decided to do that but, in fact, without coming back to the Legislature, we could accede to this suggestion and require all shareholdings to be filed with the Registrar of Companies.

But in point of fact, that has not proven to be an effectual way of determining the true ownership of companies in the past. For example, on the reporting day somebody has to file an annual report; and on that particular day there could be a transfer of shares; and then a day later they could be transferred back again. The false shareholders would, in effect, be reported to the Registrar and the Act would have been complied with.

Not only that, but we have found in the past that the voluminous material that the Registrar of Companies had to receive was in fact very often badly out of date, with the company in many cases very close to being in default to the point of being struck off the register.

So we want to give this a real try in terms of making it possible for somebody to walk in, in a proper case, to the company's office itself and say, "We want to look at your books and see the essential information that is set out in this Act that has to be held at the records office."

I think it will work. There are very heavy penalties for anybody who is going to make it difficult for a person entitled to search in that records office, or to refuse to produce the records to that person.

So we think it will work. We think the old system, as the Hon. Member said, led to voluminous paper work but did not necessarily, particularly in the case of somebody who was a shyster, really reveal the true state of the shareholders list of that company over here in the Registrar's office. So we are prepared to consider it in terms of the fact that we can amend these schedules, or amend the Act if this is not working out properly. But we cannot accept the amendment at the present time.

MR. CHAIRMAN: The Hon. Member for West Vancouver–Howe Sound.

MR. WILLIAMS: Mr. Chairman, I'd like to speak further to the amendment. The Attorney General is neglecting the fact that the failure to file a return with the Registrar of Companies is a matter which comes to the notice of the Registrar of Companies and hence to your office immediately there is no filing, or within a period of time. But if any one of the tens of thousands of companies registered in the Province of British Columbia does not maintain records you will never know, unless you hire an army of investigators to go around and knock on all of the doors in the Province of British Columbia where companies may have their records offices. You'll never know.

But now you have a system where periodically information must be filed. If it is not, the Registrar knows within a matter of days, weeks or months. And he knows. He can then call upon the company to comply.

Instead of saving money, as I expect that the original proposal was intended to do, if they are going to police companies in the Province of British Columbia you're going to have to have investigators going far and wide throughout the province in order to see that these registers are maintained.

Unless you make an actual physical search in the records office of each company you just won't know. You would know, if the company said, "We have a register of members at a trust company." Then there

[ Page 2679 ]

are relatively few places to go and check. If you intend to proceed in this direction, as I say, you are going to have to have a squad of investigators going full-time, and the Registrar of Companies does not have that staff.

MR. CHAIRMAN: The Hon. Attorney General.

HON. MR. MACDONALD: The present situation is that we have about 60,000 to 70,000 companies in the Province of B.C. and there is no way, even if we increased a hundredfold the staff of the Registrar of Companies, that we could actually prosecute the defaulters when their annual return was overdue That would be a mammoth task.

On the other hand, if a company turns somebody away from a records office, that aggrieved person is going to let somebody know pretty quickly. We think we'll be told about it. We think the Registrar of Companies will hear about it. If it is a case of somebody from the media with a legitimate right to search that company, they'll certainly make it known if they are not given the proper information in accordance with this Act.

So we think that where the infractions take place we can't be sure that the records are properly kept, but we can be sure that whenever anybody entitled to information doesn't get it we are going to hear about it.

MR. CHAIRMAN: In light of the Minister's remarks, would the Hon. Member choose to withdraw the amendment?

MR. WILLIAMS: Question. Question on the amendment. I have moved it.

Amendment negatived.

MR. WILLIAMS: Mr. Chairman, there is a similar amendment with regard to form 18, which is a form filed by foreign corporations carrying on business in British Columbia. My amendment would require that shareholders resident in British Columbia who own shares in that company also be disclosed. I move the amendment.

Amendment negatived.

HON. MR. MACDONALD: Mr. Chairman, I had an amendment in my name in the order paper to this second schedule, and I understood that was passed earlier, prior to these other amendments being called. I now move those other amendments anyway to make sure.

Amendments approved.

Second schedule approved with amendments.

Third schedule approved with amendment.

Title approved.

HON. MR. MACDONALD: Mr. Chairman, I move the committee rise and report the bill complete with amendments.

Motion approved.

The House resumed; Mr. Speaker in the chair.

Bill No. 16, Companies Act reported complete with amendments to be considered at the next sitting of the House after today.

HON. MR. BARRETT: Committee on Bill No. 18, Mr. Speaker.

AN ACT TO AMEND
THE SECURITIES ACT, 1967

House in committee on Bill No. 18; Mr. Dent in the chair.

Sections 1 to 14 inclusive approved.

Title approved.

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

Motion approved.

The House resumed; Mr. Speaker in the chair.

Bill No. 18, An Act to Amend the Securities Act, reported complete without amendment, read a third time and passed.

HON. MR. BARRETT: Committee on Bill No. 37, Mr. Speaker.

AN ACT TO AMEND
THE INFANTS ACT

House in committee on Bill No. 37; Mr. Dent in the chair.

On section 1.

MR. CHAIRMAN: There's an amendment standing on the order paper in the name of the Hon. Member for West Vancouver–Howe Sound.

[ Page 2680 ]

MR. WILLIAMS: Yes, Mr. Chairman. I move the amendments to section 1 standing in my name on the order paper.

The first amendment is to add at the commencement of that section the words "subject to the provisions of section 3" and to make a significant change in subsection (3).

HON. MR. BARRETT: How would you define the word "reasonable"?

MR. WILLIAMS: If any question arises, through you Mr. Chairman to the Premier, as to whether the practitioner has made a reasonable effort to communicate with the parents, that question would arise in the event that any action were brought against the practitioner for carrying out the particular procedures or treatment that he did without getting consent. The reasonableness of his effort would be determined by the court in the course of those proceedings.

Mr. Chairman, subsection (3) as it presently stands is really a meaningless section. It says, "Nothing herein shall be construed as making ineffective any consent which would otherwise have been effective…" That section can be left out.

The purpose of the amendment is this, Mr Chairman: before a medical practitioner or a dentist carries out treatment upon an infant over the age of 16, he should first be obliged to establish that he's made a reasonable effort to obtain the consent of the parent of that child. If he has made a reasonable effort and if the consent is refused, then the second portion of my amendment would permit the medical practitioner or dentist to give the treatment or undertake the procedures if he receives the confirmation from another medical…

HON. MR. MACDONALD: Make your motion. We'll accept it.

MR. CHAIRMAN: Shall the amendment pass?

Amendment approved.

MR. CHAIRMAN: Shall section 1 as amended pass?

Section 1 as amended approved.

Title approved.

HON. MR. MACDONALD: Mr. Chairman, I move the committee rise and report the bill complete with amendment.

Motion approved.

The House resumed; Mr. Speaker in the chair.

Bill No. 37, An Act to Amend the Infants Act, reported complete with amendment to be considered at the next sitting of the House after today.

HON. MR. BARRETT: Committee on Bill No. 41, Mr. Speaker.

AN ACT TO AMEND THE EQUAL
GUARDIANSHIP OF INFANTS ACT

House in committee on Bill No. 41; Mr. Dent in the chair.

Sections 1 to 3 inclusive approved.

Title approved.

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

Motion approved.

The House resumed; Mr. Speaker in the chair.

Bill No. 41, An Act to Amend the Equal Guardianship of Infants Act, reported complete without amendment, read a third time and passed.

HON. MR. BARRETT: Committee on Bill No. 46, Mr. Speaker.

AN ACT TO AMEND
THE CORONERS ACT

House in committee on Bill No. 46; Mr. Dent in the chair.

Sections 1 to 6 inclusive approved.

Title approved.

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

Motion approved.

The House resumed; Mr. Speaker in the chair.

Bill No. 46, An Act to Amend the Coroners Act, reported complete without amendment, read a third time and passed.

HON. MR. BARRETT: Committee on Bill No. 48, Mr. Speaker.

[ Page 2681 ]

DEBT COLLECTION ACT

House in committee on Bill No. 48; Mr. Dent in the chair.

Sections 1 to 22 inclusive approved.

Title approved.

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

Motion approved.

The House resumed; Mr. Speaker in the chair.

Bill No. 48, Debt Collection Act, reported complete without amendment, read a third time and passed.

HON. MR. BARRETT: Committee on Bill No. 49, Mr. Speaker.

AN ACT TO AMEND THE
SMALL CLAIMS ACT

House in committee on Bill No. 49; Mr. Dent in the chair.

Sections 1 to 13 inclusive approved.

Title approved.

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

Motion approved.

The House resumed; Mr. Speaker in the chair.

Bill No. 49, An Act to Amend the Small Claims Act, reported complete without amendment, read a third time and passed.

HON. MR. BARRETT: Committee on Bill No. 100, Mr. Speaker.

AN ACT TO AMEND THE
EVIDENCE ACT

House in committee on Bill No. 100; Mr. Dent in the chair.

Sections 1 to 4 inclusive approved with amendment.

Title approved.

HON. MR. MACDONALD: Mr. Chairman, I move the committee rise and report the bill complete with amendment.

Motion approved.

The House resumed; Mr. Speaker in the chair.

Bill No. 100, An Act to Amend the Evidence Act, reported complete with amendment to be considered at the next sitting of the House after today.

HON. MR. BARRETT: Committee on Bill No. 10 1, Mr. Speaker.

AN ACT TO AMEND THE
LANDLORD AND TENANT ACT

House in committee on Bill No. 101; Mr. Dent in the chair.

Sections 1 and 2 approved.

On section 3.

HON. MR. MACDONALD: Mr. Chairman, I'd like leave of the committee to withdraw the amendment standing in my name on the order paper on the basis that there is an omnibus amendment coming in from the Provincial Secretary that catches up what I was going to do and adds a little bit of its own. My amendment will be covered in that fashion so I ask leave to withdraw.

Leave granted.

MR. CHAIRMAN: I recognize the Hon. Provincial Secretary.

HON. E. HALL (Provincial Secretary): Mr. Chairman, I'd like to move the amendment to section 3 standing in my name on the order paper.

Amendment approved.

Section 3 approved with amendment.

Sections 4 and 5 approved.

On section 6.

HON. MR. MACDONALD: Mr. Chairman, I'd ask leave of the committee to withdraw the amendment standing in my name on the order paper to section 6 so that the Provincial Secretary's omnibus

[ Page 2682 ]

amendment can be brought in before the committee.

Leave granted.

HON. MR. HALL: Mr. Chairman, I move section 6, which is a much shorter omnibus amendment than that suggested by my colleague.

Amendment approved.

Section 6 approved with amendment.

Sections 7 to 15 approved with amendment.

Form 5 and 6 approved.

Title approved.

HON. MR. MACDONALD: Mr. Chairman, I move the committee rise and report the bill complete with amendments.

Motion approved.

The House resumed; Mr. Speaker in the chair.

Bill No. 101, An Act to Amend the Landlord and Tenant Act, reported complete with amendments to be considered at the next sitting of the House after today.

HON. MR. BARRETT: Committee on Bill No. 109, Mr. Speaker.

AN ACT TO AMEND THE
MORTGAGE BROKERS ACT

House in committee on Bill No. 109; Mr. Dent in the chair.

Sections 1 to 4 inclusive approved.

Title approved.

MR. CHAIRMAN: I recognize the Hon. Member for North Vancouver-Capilano.

MR. D.M. BROUSSON (North Vancouver-Capilano): Thank you, Mr. Chairman. At this point I can only comment that the additional amendments that I have suggested in this House would not be in order. The Attorney General would not bring them into the House himself. I can only express my deep disappointment in these pussycat amendments which don't make the bill truly effective.

HON. MR. MACDONALD: Mr. Chairman, I move the committee rise and report the bill complete without amendment, as very slightly flawed. (Laughter).

Motion approved.

The House resumed; Mr. Speaker in the chair.

Bill No. 109, An Act to Amend the Mortgage Brokers Act, reported complete without amendment, read a third time and passed.

HON. MR. BARRETT: Committee on Bill No. 117, Mr. Speaker.

AN ACT TO AMEND THE
LAND REGISTRY ACT

House in committee on Bill No. 117; Mr. Dent in the chair.

Sections 1 to 15 approved.

Form MN approved.

Title approved.

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

Motion approved.

The House resumed; Mr. Speaker in the chair.

Bill No. 117, An Act to Amend the Land Registry Act, reported complete without amendment, read a third time and passed.

HON. MR. BARRETT: Committee on Bill No. 121, Mr. Speaker.

AN ACT TO AMEND THE
GOVERNMENT LIQUOR ACT

House in committee on Bill No. 121; Mr. Dent in the chair.

Sections 1 to 19 approved.

Title approved.

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

Motion approved.

[ Page 2683 ]

The House resumed; Mr. Speaker in the chair.

Bill No. 121, An Act to Amend the Government Liquor Act, reported complete without amendment, read a third time and passed.

HON. MR. BARRETT: Committee on Bill No. 123, Mr. Speaker.

FAIR SALES PRACTICES ACT

House in committee on Bill No. 123; Mr. Dent in the chair.

Sections 1 to 14 approved.

Schedule approved.

Title approved.

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

Motion approved.

The House resumed; Mr. Speaker in the chair.

Bill No. 123, Fair Sales Practices Act, reported complete without amendment, read a third time and passed.

HON. MR. BARRETT: Committee on Bill No. 124, Mr. Speaker.

AN ACT TO AMEND
THE STRATA TITLES ACT

House in committee on Bill No. 124; Mr. Dent in the chair.

Sections 1 to 3 inclusive approved.

On section 4.

MR. CHAIRMAN: I recognize the Hon. Second Member for Victoria.

MR. D.A. ANDERSON: One minor matter on section 4. At the end of 16A(5)(c) do you want a comma or a full stop?

HON. MR. MACDONALD: What is it? Would you just repeat the question?

MR. D.A. ANDERSON: In here you have "strata plan for the lands affected." Should that be a comma or a full stop? A minor matter, but…

HON. MR. MACDONALD: Yes. I think that's all one sequence there, and the Hon. Member is quite right, that "shall, if satisfied" is reading down right through (g) and it should really be a comma and for some inexplicable reason we come to a full stop. And I suggest possibly with leave of the committee the law clerk might have permission to correct that.

It's just changing a period to a comma.

Leave granted.

MR. CHAIRMAN: Shall section 4 pass?

Section 4 approved.

Sections 5 and 6 approved.

Title approved.

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

Motion approved.

The House resumed. Mr. Speaker in the chair.

Bill No, 124, An Act to Amend the Strata Titles Act, reported complete without amendment, read a third time and passed.

HON. MR. BARRETT: Committee on Bill No. 128, Mr. Speaker.

AN ACT TO AMEND THE
CONDITIONAL SALES ACT, 1961

House in committee on Bill No. 128; Mr. Dent in the chair.

Sections 1 to 9 inclusive approved.

On the title.

MR. CHAIRMAN: I recognize the Second Member for Vancouver–Point Grey.

MR. GARDOM: Just one short word, Mr. Chairman, concerning the title: this perhaps does transgress into the next statute, and it also transgresses slightly into a more general field, but I would ask the Attorney General if he would direct to the law reform commission that they give some thought and some study into the use of the word "guarantee."

Now, I've been in the House through three Attorneys General. We've heard criticism after

[ Page 2684 ]

criticism about the very loose use of that particular word. It's not in the statute — you don't have to search to find it. But it's applicable to this bill because we find conditional sales of goods that are subject to almost infinite guarantees and absolute sales of goods that are subject to almost totally unconditional guarantees.

The word "guarantee" has become an exceptionally loose word and it is a word that has always troubled a legislator. But it is one where there has been no effort put into it by a government side, in any government that I know of, to try to go ahead and inform or educate the general public as to perhaps the defensive measure that they should take and the things that they should look out for and be perhaps even suspicious of when they see the word "guarantee."

Maybe it's only an educative programme; maybe the word "guarantee" should be used only on certain situations whereby there is an effective mechanism to the satisfaction of a government, shall we say, that the guarantor can back up the guarantee. But I remember most vividly the use of the word "guarantee" being severely criticized by Mr. Bonner when he was Attorney General. The time it was brought specifically to his attention was about three years before the Commonwealth Trust bubble broke, and they were using that word — that company was using that word in the loosest sense. He said, "There's a wrong here; it's something we should look into." Your immediate predecessor, Mr. Peterson, said, "Aha, there is a wrong here; it is something we should look into," and I'm sure you're going to say the same thing. But I'd like for once somebody to do something about the ruddy thing instead of just look into it.

I would be most personally pleased, and that's immaterial — it would be most useful to the general public if you would perhaps refer to the law reform commission that they investigate the use of the word and determine how perhaps it could be better curtailed — that's not the correct statement — but how at least, if it is used, it can be used with an indication of the backing behind it, instead of just saying, "It is guaranteed."

Any fool can guarantee and it doesn't mean that it is an effective guarantee.

HON. MR. MACDONALD: Well, Mr. Chairman, speaking on the title, I think it may be considered in its legal context, but even more particularly in its consumer protection context.

Now, we'll be discussing that subject and I'll try and raise that matter as to how often this word comes up in the consumer field and how often people are really deceived after relying on what seems to be a guarantee.

MR. CHAIRMAN: Shall the title pass?

Title approved.

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

Motion approved.

The House resumed; Mr. Speaker in the chair.

Bill No. 128, An Act to Amend the Conditional Sales Act, 1961, reported complete without amendment, read a third time and passed.

HON. MR. BARRETT: Committee on Bill No. 129, Mr. Speaker.

AN ACT TO AMEND THE
BILLS OF SALE ACT, 1961

House in committee on Bill No. 129; Mr. Dent in the chair.

Sections 1 to 3 inclusive approved.

On section 4.

MR. CHAIRMAN: I recognize the Hon. Attorney General.

HON. MR. MACDONALD: On section 4 in this seize-or-sue legislation there is a minor problem with respect to collateral mortgages that are already outstanding. It's been drawn to our attention by the Industrial Development Bank that there is a rule of law, and we could get very technical on this subject, that if there is a prime security and collateral security you have to try your collateral security first or you will lose your collateral security. You will lose it. You can't go against it. You have to go in the proper order against it.

So I have an amendment here which I would like to recommend to the committee, which is to amend section 4, after the last line, by adding the following as subsection (3):

"For the purposes of subsection (2) of section 22A, 'instrument' does not include a mortgage on land granted before this section comes into force."

In other words, in arguing the amendment, Mr. Chairman, after the Act comes into force people can protect themselves in this way. They can have prime security, not one prime and one collateral, and protect themselves. But already where there are cases where there are the two kinds of securities existing already, it's rather unfair to bring in this legislation and nullify their security to some extent.

[ Page 2685 ]

I move the amendment.

MR. CHAIRMAN: Shall the amendment to section 4 pass?

Amendment approved.

MR. CHAIRMAN: Shall section 4 as amended pass?

MR. PHILLIPS: I would just like to ask one small question to the Attorney General. In the case where a mechanics' lien is executed on a vehicle prior to its being repossessed under the terms of this new Act, shall the mechanics' lien still have priority over the repossessory lien?

HON. MR. MACDONALD: Yes. The mechanic's lien still has priority under the Mechanics' Lien Act.

MR. PHILLIPS: But you really don't give that much protection. Prior to this Act coming into force, Mr. Attorney General, if you repossessed a vehicle, or any automobile dealer repossessed a vehicle, and there was a mechanics' lien on it, and he suffered a deficiency because of that, then he was able to go back to the original owner. Now, under this Act he will not be able to do so. So is there any protection for the dealer?

HON. MR. MACDONALD: Well, if the person elects to seize rather than sue — and they can only do one or the other now — if they elect to seize they are going to be responsible to pay off that mechanics' lien because that's a prior charge.

Sections 4 to 6 inclusive approved with amendment.

Title approved.

HON. MR. MACDONALD: Mr. Chairman, I move the committee rise and report the bill complete with amendment.

Motion approved.

The House resumed; Mr. Speaker in the chair.

Bill No. 129, An Act to Amend the Bill of Sales Act, reported complete with amendment to be considered at the next sitting of the House after today.

HON. MR. BARRETT: Committee on Bill No. 138, Mr. Speaker.

AN ACT TO AMEND THE
SUPREME COURT ACT

House in committee on Bill No. 138; Mr. Dent in the chair.

Sections 1 to 3 inclusive approved.

Title approved.

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

Motion approved.

The House resumed; Mr. Speaker in the chair.

Bill No. 138, An Act to Amend the Supreme Court Act, reported complete without amendment, read a third time and passed.

HON. MR. BARRETT: Committee on Bill No. 141, Mr. Speaker.

AN ACT TO AMEND
THE CREDIT UNIONS ACT, 1961

House in committee on Bill No. 141; Mr. Dent in the chair.

Sections 1 to 12 inclusive approved. Title approved.

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

Motion approved.

The House resumed; Mr. Speaker in the chair.

Bill No. 141, An Act to Amend the Credit Unions Act, 1961, reported complete without amendment, read a third time and passed.

HON. MR. BARRETT: Committee on Bill No. 163, Mr. Speaker.

AN ACT TO AMEND THE MOTOR-VEHICLE ACT

House in committee on Bill No. 163; Mr. Dent in the chair.

Sections 1 to 27 inclusive approved.

Title approved.

HON. MR. MACDONALD: Mr. Chairman, I move the committee rise and report the bill complete

[ Page 2686 ]

without amendment.

Motion approved.

The House resumed; Mr. Speaker in the chair.

Bill No. 163, An Act to Amend the Motor-Vehicle Act, reported complete without amendment, read a third time and passed.

HON. MR. BARRETT: Committee on Bill No. 146, Mr. Speaker.

WATER UTILITIES ACT

House in committee on Bill No. 146; Mr. Dent in the chair.

Sections 1 to 4 inclusive approved.

On section 5.

HON. MR. MACDONALD: Mr. Chairman, I move the amendment standing in my name on the order paper to section 5.

MR. CHAIRMAN: Shall the amendment to section 5 pass? I recognize the Hon. Member for North Okanagan.

MRS. JORDAN: Can the Attorney General just explain what the amendment means, please?

HON. MR. MACDONALD: Well, in the telecommunications field the Okanagan Telephone, which the Hon. Member is interested in, is being transferred so that it will now be…

MR. CHAIRMAN: We're on Bill 146. (Laughter).

HON. MR. MACDONALD: Well, you'll find exactly the same amendment to the next one under telecommunications. I know the Member is interested in Okanagan telephones, so I thought that was it. But all it is saying is that we have a transition section where water utility regulations of the old PUC are said to continue in force. All this amendment is saying is that they continue in force until they expire or are lawfully changed or amended. So that's all it's doing. It's a technical thing, in a sense.

MRS. JORDAN: This has nothing to do with the posting of bonds for water?

HON. MR. MACDONALD: Oh, no.

Sections 5 and 6 approved with amendments.

Title approved.

HON. MR. MACDONALD: Mr. Chairman, I move that the committee rise and report the bill complete with amendment.

Motion approved.

The House resumed; Mr. Speaker in the chair.

Bill No. 146, Water Utilities Act, reported complete with amendments to be considered at the next sitting of the House after today.

HON. MR. BARRETT: Committee on Bill No. 147, Mr. Speaker.

TELECOMMUNICATIONS UTILITIES ACT

House in committee on Bill No. 147; Mr. Dent in the chair.

Sections 1 to 4 inclusive approved.

On section 5.

HON. MR. MACDONALD: I move the amendment standing in my name on p. 27 of the orders of the day of April 12, 1973.

MR. CHAIRMAN: I recognize the Hon. Member for North Okanagan.

MRS. JORDAN: Could you just explain again how this amendment relates to the underwater telephone company? (Laughter).

HON. MR. MACDONALD: Same explanation.

MRS. JORDAN: Why does this relate to the telephone company? Would the Minister please explain this amendment?

HON. MR. MACDONALD: Well, it's exactly the same as in the case of the Water Utilities where an order is outstanding. If we pass a statute that says that the old orders of the PUC remain in force, notwithstanding the change from the PUC to the new B.C. Energy Commission, then they would carry on forever. You know, as long as our statute was there saying they were in force. So we say they are in force until they are lawfully changed, or until they expire. That's all we're doing. It stays in force at the pleasure of the Crown for three years.

Sections 5 and 6 approved with amendment.

Title approved.

[ Page 2687 ]

HON. MR. MACDONALD: Mr. Chairman, I move that the committee rise and report the bill complete with amendment.

Motion approved.

The House resumed; Mr. Speaker in the chair.

Bill No. 147, Telecommunications Utilities Act, reported complete with amendment to be considered at the next sitting of the House after today.

HON. MR. BARRETT: Committee on Bill No. 148, Mr. Speaker.

ENERGY ACT

House in committee on Bill No. 148; Mr. Dent in the chair.

On section 1.

MR. CHAIRMAN: I recognize the Hon. Member for North Peace River.

MR. SMITH: In speaking to section 1 of the bill, Mr. Chairman, we've been going since 9 o'clock this morning and it's after 10 o'clock this evening. It's been better than 13 hours since we started.

In all due respect to the Premier and the fact that he would like to get some of this legislation moving along, surely to goodness at this time of night he could call some of the bills which he knows will not create a lot of contentious argument or debate and you could move those along…

HON. MR. BARRETT: Would you move an adjournment of this bill?

MR. SMITH: Yes. Mr. Chairman, I move that the committee rise and report progress.

Motion approved.

The House resumed; Mr. Speaker in the chair.

MR. CHAIRMAN: Mr. Speaker, the committee reports progress and asks leave to sit again.

Leave granted.

HON. MR. BARRETT: Committee on Bill No. 159, Mr. Speaker.

MR. D. A. ANDERSON: A point of order, Mr. Speaker. It is helpful if we get a list of the order in which the Ministers are coming up. I was actually expecting agriculture this evening.

HON. MR. BARRETT: Yes, but, it's my understanding that the House wishes to go to non-contentious bills at this point.

Interjection by an Hon. Member.

HON. MR. BARRETT: I'm just telling you now — No. 159.

MR. D.A. ANDERSON: Who is after the Provincial Secretary? The thing is that it's not alphabetical. I'm just wondering which way you're going.

HON. MR. BARRETT: It can't be alphabetical because of what the House now wishes. I'll try to find the bills that are non-contentious. I'll let you know as soon as we're through the Provincial Secretary's. I'm checking the thing now because I'll have to change the schedule at your request. I'll let you know as soon as I can.

AN ACT TO AMEND THE CIVIL SERVICE
SUPERANNUATION ACT

House in committee on Bill No. 159; Mr. Dent in the chair.

Sections 1 to 14 inclusive approved.

On section 15.

MR. CHAIRMAN: I recognize the Hon. Member for Langley.

MR. R.H. McCLELLAND (Langley): Mr. Chairman, I move the amendment standing on the order paper in my name.

Once again, I move this amendment for the same reasons that we've made representation to the government on many other occasions — because of the possibility of the expansion of financing to include so many other areas, rather than those areas which are guaranteed in guaranteed securities, Mr. Chairman.

We feel that this is a wrong area in which to move. We feel that even though the government offers guarantees up to a certain investment limit, if those investments are bad, the taxpayers' money is lost and it can never ever be regained. We understand that the civil servants won't lose their investment because it will be guaranteed by the government, but only to a certain degree. It's not nearly as much as they would have got out of it on the basis of guaranteed investments, Mr. Chairman.

[ Page 2688 ]

For those reasons, and once again because of the danger of expanding this kind of investment outside of guaranteed investment funds, I move this amendment.

MR. CHAIRMAN: I recognize the Hon. Provincial Secretary.

HON. MR. HALL: Mr. Chairman, the government does not accept the amendment. We're voting against it.

MR. CHAIRMAN: I recognize the Hon. Member for Columbia River.

MR. J.R. CHABOT (Columbia River): Looking at this section and the amendment, the amendment is a realistic one. It protects the present financial position of pension funds in British Columbia.

We have fully-funded pension funds. It's one of the few jurisdictions in all of Canada that has the type of financial resources and stability in pension funds. I would like to see this maintained, rather than the government having the ability to invest pension funds in any capital stock of any corporation, be it in the Province of British Columbia or elsewhere.

I think it's a very dangerous precedent and one which could be very costly, not to the people who are receiving pensions in British Columbia, but to the taxpayers of British Columbia. We cannot accept section 15 as it presently reads in this Act.

MR. CHAIRMAN: I recognize the Hon. Minister of Health Services and Hospital Insurance.

HON. D.G. COCKE (Minister of Health Services and Hospital Insurance): Mr. Chairman, the pension business is now in the 1970's. I'm glad to see our government recognizing at long last the route that pension trust funds have gone for some number of years.

As you know, I've been connected with pensions and life insurance for a great length of time. I was pleased to see that at least the Social Credit Party now understands that there is no threat to the recipients of the pension plan.

Interjection by an Hon. Member.

HON. MR. COCKE: No, the argument the other day was the threat to the recipients.

AN HON. MEMBER: The taxpayers.

HON. MR. COCKE: The taxpayers are the only people who could possibly lose anything in any way. This aspect of this plan indicates that now we have the freedom to invest that money where it can do better for the taxpayers of the Province of British Columbia. We don't want to go along that dark street that we've been in for so long.

Mr. Chairman, this plan is a guaranteed plan for the recipients. This is a very wise move for the government to make at this time.

MR. CHAIRMAN: I recognize the Hon. Second Member for Victoria.

MR. D.A. ANDERSON: We support the suggestion that subsection (d) be struck. The reasons are pretty simple. We've mentioned them before, and I'll go over them very briefly now.

First of all, the statements have been made that it's just as question of guarantee, and that only taxpayers' money could be lost. This is perhaps precisely whom we should be protecting in this instance. Why is it that in this section we give the Minister of Finance, in his sole discretion, the ability to use as much money as he can take out of the pensions funds, provided the immediate needs are met, and play the market with it and invest it in any corporation that he likes.

The fact of the matter is that we have other corporations, one of which is under Bill 102 — and I guess I can't discuss it now. We have other provisions which allow the Minister to make investments on behalf of the public in a way which is much more controllable and observable than this one is. We fail to see why this should be justified simply on the grounds that if he makes any mistakes, the taxpayers have to make up any losses.

This is just a straight open invitation for entering the market with substantial amounts of money — there will be many, many millions of dollars — and playing it for whatever it's worth because, in actual fact, there can be no losses, according to the Minister, because the taxpayers have to cough up.

It is the sort of situation which I think would encourage irresponsible or reckless speculation. The pensioners can't lose, according to the Minister, so they're not going to be able to squeal, and in turn eventually…

MR. CHAIRMAN: Order, please. A little more quiet.

MR. D.A. ANDERSON:…according to the Minister of Health the taxpayers have to pick up the burden. Well, we think that's not the way the government should get into investments of this type in this area at all. We think it should be an entirely controllable situation where it is completely obvious to the public what's happening. Otherwise we're going to be in a situation where maybe years later the government is forced to make good a guarantee on

[ Page 2689 ]

the basis of bad investment decisions by a Minister of Finance who might be long gone. And it just doesn't seem to be a sensible provision to put into an Act of this nature because there are absolutely no controls whatsoever under this particular section or any other section of this Act.

MR. CHAIRMAN: I recognize the Hon. Premier.

HON. MR. BARRETT: Mr. Chairman, I appreciate the comments made by members of the opposition, but I assure you that the idea that there will be reckless investments or investments made with gay abandon is a little bit much.

There will be an annual report.

Interjection by an Hon. Member.

HON. MR. BARRETT: Oh, I'm not suggesting "trust us." Now, don't go off on that line. I'm just suggesting that you understand what the situation is in terms of the existing controls. All right. Look, it is a decision that the government has to make. If you're uncomfortable with that, I appreciate that, but I'm trying to give you our explanation of why we are taking this choice. You may not agree, but certainly we are on a route that we'd like to explain.

There's an annual report. There's an auditor. There are trustees. And then there is the Treasury Board itself.

Now we're not sitting down in the corner playing some kind of roulette with these funds. The former administration set a pattern for the investment of funds that was fairly rigid. That was a cause of concern from the pensioners who claimed that they weren't getting enough return. All right. So now we're embarking on this course. We are going to be cautious. We are going to be very, very careful, and we're guaranteeing it. We will come back with our annual report, and we'll see what our experience is in a year's time.

I realize that this is a departure from the rigidity of the past.

AN HON. MEMBER: The public are guaranteeing it.

HON. MR. BARRETT: O.K. The public are guaranteeing the BCR bonds, the school bonds and everything else. So we're all in this as the public.

Interjection by an Hon. Member.

HON. MR. BARRETT: O.K. Look, Mr. Member, I can appreciate your anxiety, but you don't come with the framework of what we've gone through to get to this point.

We've had a lot of trouble — and if you were here with the demonstration of those teachers in terms of the pensions they wanted…and the previous administration's rigidity. Now, we're trying to move cautiously out of that.

You vote against it, or do whatever you want. But, I am trying to give you a rational explanation. If you are not prepared to accept it, vote against it. But it's my obligation to give you an explanation from our point of view.

The explanation is simply this: we will be cautious; we will not be making reckless investments in unknown gold mines — Wing Dam et cetera, or Dry Gulch or anything else. The procedure will be through the Minister of Finance, through the Treasury Board, and the investments will be made. We have a year to review it. And we'll have a chance to look at it.

Interjection by an Hon. Member.

HON. MR. BARRETT: I'm not one of them. We're not investing there.

So that's our position. And I've listened very carefully to your concerns, and your concerns are valid, and we'll be cautious.

MR. CHAIRMAN: I recognize the Hon. Leader of the Opposition.

HON. W.A.C. BENNETT (Leader of the Opposition): Mr. Chairman, this is a decided departure. I understand the government's point of view — and that's the beauty of our democratic parliamentary system, the right to differ, to have different points of view.

What I mentioned the other day in second reading I would like to re-emphasize now, that we are dangerously near the top of the boom that has been in existence since 1945.

Metropolitan Life, one of the largest insurance companies, has just announced that it's withdrawing mainly from investments in common shares and going more and more into bonds because of this "near the top of the boom." And it isn't true. Therefore I would urge that the government move very slowly on this — extremely slowly during the next two or three years during this period of adjustment, because you could have a bad slump overnight.

You might have success for six months or a year and the stocks can look good, and, as you know, that could give you the wrong impression of what can happen. I've mentioned not only the Penn Railway, but other railways, the CPR and everybody else — all the good stocks that went bing, bing, bing, you know. And that could happen. There is no way that a government can pick the blue-chip stocks that are going to stay blue-chip, because we're not only in that place in the boom but in a great period of rising

[ Page 2690 ]

costs.

It is going to be harder and harder for companies to make a profit, to pay dividends that would then go…you get the revenue from these investments into the pension funds. Because as your costs go up, and labour costs go up, and with the resistance against prices going up — then the profit squeeze comes on these companies and the common shares where dividends are being declared, and that's where the squeeze will come.

It will not come on the bonds because the bond is an explicit contract and there isn't the danger there. But there is the danger at this particular time, especially now in our history in common shares; it's a very dangerous period.

It's also true that there is some chance that the taxpayers would lose in this respect, that when the surpluses build up in the pension funds, then we enlarge the pensions. But, if there's a drop in the value of the pension fund then there isn't room for the expansion of benefits to the pensioners. So it isn't true that the pensioners are not taking a chance with this new policy. They are taking a great chance indeed.

While the Premier says there was rigidity in the last government, there was great progress in the pension funds. The enormous mess that we took over in the pension funds — the teachers' pension fund was bankrupt; the municipal pension fund was bankrupt; the pension fund for the civil service — they were short in their pension fund by millions and millions. And our pension funds today are in the best shape in the whole nation.

I would hate to see that destroyed. You know I'm not a pessimist; I'm an optimist among the optimists. There used to be times when the Liberal leader in the House called me "Bennett the Boomer." I was the Boomer.

AN HON. MEMBER: You should sit down there.

HON. MR. BENNETT: Yes, that's right. (Laughter). So you know that I am not a pessimist, but along with being an optimist one must also at all times be a realist. I emphasize again, because of reasons of increasing costs putting the squeeze on dividends and companies, there won't be the revenue from these dividends that there could be from bonds. It might be much lower than from bonds, and there's the double risk of the common shares going down and losing your collateral as well.

If this should pass, Mr. Minister of Finance, I would, with all sincerity that I hope that I possess — as a person who is not going to stay a long time in public life — press on you very strongly not to take the advice of your Treasury Board — don't refuse their advice either, mind you — and don't take advice of just your pension people either. They have no magic way of knowing what's happened in this marketplace in this world period — when the world financial structure of the world is shaking like that tonight.

In August 1971, nearly all countries were off the gold standard. Of all the main countries there was only one, the United States, that was on the gold standard — Fort Knox. In August 1971, President Nixon faced the situation where he could no longer pay; he could not longer keep his contracts and pay n gold. And overnight he took a member of another party — who had opposed them strongly — into his cabinet. He sent him all around the world to explain that. And no longer was the American dollar redeemable in gold or currency; it was only a piece of paper.

Interjection by an Hon. Member.

HON. MR. BENNETT: All right, different from newspapers — they're valuable too, but valuable in a different way. But, nevertheless it was printing-press money. And when the main financial country in the world, the one great nation in the world, went off the gold standard and only had the printing press, then it put the whole world in a spin.

There were meetings overnight. Our governors of the Bank of Canada, in the middle of the night telephoned internationally to Europe to get people to back our currency — other countries phoned them because they have a kind of a club to try to protect each other a little bit, because if not the whole thing just collapses. Now, they did patch it up a little, but they only patched it up on a temporary basis. And in his last few months, our own federal Minister of Finance, Mr. Turner, had to go off to Europe and go everywhere to these meetings as well. So we haven't got a stability in the international monetary system at all in the world tonight. We haven't got it; it was destroyed in August 1971.

It came to an end in that period, and we are now in the most dangerous period in the world's history inasfar as a real shakedown could come and a real stock market crash could come — I don't say it will come. I pray to God that it won't come. I pray that these countries do cooperate, but this is indeed an experience. I respect him for his sound judgment. I recognize too the risk not the period to invest trust moneys in common shares at this time. I hope I've made the point clear, Mr. Chairman.

MR. CHAIRMAN: I recognize the Hon. Premier.

HON. MR. BARRETT: I want to thank the Leader of the Opposition, for what I think is perhaps a long overdue exchange of opinions and ideas. I respect him for his wide experience. I respect him for his sound

[ Page 2691 ]

judgment. I recognize too the risk that the former Premier has outlined in terms of the world monetary situation. However, perhaps there's really no more obvious difference between the philosophy than what may be related to a generation gap, more than a philosophy gap. When you describe the 1971 crisis and the bringing in of Connolly, as you mention, into Nixon's Cabinet…

Interjection by an Hon. Member.

HON. MR. BARRETT: I appreciate that, but you must relate it to what could be described as a Connolly syndrome.

If we're to take the absolutely conservative approach and look at the results of what the Connolly effort was under Nixon, we will all notice that the downward spiral in terms of the value of the dollar was affected too. And at the end of that value deflation is the human equation.

On the one hand is the desire by a good, sound economist and a good, sound, hard-headed businessman to protect that pool of funds. On the other hand is the price you pay when you protect that pool of funds. And the price you pay is that the people who are caught in the squeeze are relying on this fixed income. You try to protect their pool of money; you have sums of money coming into that pool of money and you try to protect that. These people are held at a fixed income at a time when inflation is crippling their purchasing power. Now, you can give them a slight increase, but then you draw on the pool of funds that are coming in, once you give them the slight increase. Now what are you going to do? Are you going to stay with the fixed rates on the safe investments at a time of inflation, when inflation is eating into that pool of funds? Or do you open up a bit and go into bonds?

Interjection by an Hon. Member.

HON. MR. BARRETT: No, not carte blanche…

Interjection by an Hon. Member.

HON. MR. BARRETT: All right, common shares. But, I mean even bonds that pay a higher interest rate. Don't think that the pendulum goes automatically when there is a change — and this is a caution that I am trying to raise. The pendulum doesn't automatically go from one extreme to the other. The former Minister wasn't in that extreme. He wasn't in that extreme. He listened, he had good advisers; but in the final analysis, he has to make the judgment himself. And I agree exactly with what you're saying in terms of the Treasury Board advisers inside and outside.

MR. GARDOM: He went to the extreme in 1966.

HON. MR. BARRETT: Well…and he weathered it. He weathered it. But there were political motives in the extreme he had. And those political forces that exist in Canada which forced the former Premier to that extreme, in terms of a tax on British Columbia, aren't completely dissipated in this country.

That would be a matter of great interest reading, in terms of political analysis of the development of this province under Social Credit and now latterly, under the NDP. Both essentially are western populous movements. They're removed from the eastern power bases that have the bias against this province. It's true. It's true, and it doesn't matter whether it's Social Credit or NDP; the simple fact that it isn't a label of the old-line parties is enough to raise the emotional hackles around that bias, and the former Premier agrees with that, I'm sure.

HON. MR. BENNETT: I don't agree with that.

HON. MR. BARRETT: Oh, you don't agree with it? Well that's my opinion.

Interjection by an Hon. Member.

HON. MR. BARRETT: It's more than that?

But I'll tell you, my seven months in office have given me appreciation of that simple fact. I don't expect, or ask the former Premier to acknowledge that. But he will with a smile, appreciate what I'm talking about in terms of an eastern rigidity.

Now, going back to the point.

MR. GARDOM: Industrial central Canada.

HON. MR. BARRETT: Industrial central Canada? O.K. But the industrial centre of Canada has caused the alienation of the west to lead to that kind of political rejection of the labels from that industrial centre. Even the Conservative Premier in Alberta is Conservative in name only. That is a danger which is another factor in dealing with this country that rests…

MR. PHILLIPS: Are you calling him a socialist?

HON. MR. BARRETT: No, I'm not calling him a socialist. I'm calling him a reflection of that western feel in Canada which Social Credit was a part of, which NDP is a part of, and that Lougheed and the present Conservative is a part of. Just as the realm of the Creditiste has a separate and distinct identity in Quebec which reflects a populous rejection of centralist Ontario, so was the Social Credit foundation in this province when it spilled over in the early 1950s into this province and was captured by a

[ Page 2692 ]

group of conservatives who rejected that rigidity from the east and catapulted it into power in this province.

Interjection by an Hon. Member.

HON. MR. BARRETT: Well, a great number of Liberals and some CCFers too. You bet, you bet some CCFers too, because they felt the momentum of the movement in 1952 that gave it a political identity that came at that time as a rejection of that centralist feeling. The same feeling is still here.

I'm sorry that we've digressed to this point, but it does relate also to the fiscal policies of the central bank. When that feeling is expressed in political power blocks, as it has been in the west, then those political power blocks have to adjust in a way that somehow, understanding the central government's rigidity and the central power base rigidity, has to adjust within its own framework to allow people not to suffer because of that, and let them grow in our framework and still feel part of Canada.

The former Premier, and his approach, was to protect that pool of funds. We disagreed with that because the absolute protection of those funds kept the people who were relying on those funds for income at a less than acceptable standard of living. And display of that, you'll recall, was the demonstration by the teachers walking up and down and asking for an increase in their pension plan. The teacher pension plan did go broke, but we pulled it out of the hole by good grace of that kind of fortune we all welcome, but whatever we label it, I don't know — the boom, the great progress, the wonderful things that happened in British Columbia.

We're faced too, with the parity bonds. Now they're a good buy right now — an excellent buy — you couldn't buy them without paying a premium for them right now, but you over-extended pretty heavily on those parity bonds.

MR. PHILLIPS: Lots of funds there.

HON. MR. BARRETT: Lots of funds there. You bet there's lots of funds now, but if we're faced with a drain…

Interjection by an Hon. Member.

HON. MR. BARRETT: We'll take that risk. But, I think that it's a good thing that we are having this kind of an exchange — and I'm pleased that it's happened, because this is due.

Mark you, the previous administration played it very close to the vest. The only area that they left was in those parity bonds. If the run comes — zap, zap. But, we're the government, we face that.

O.K., having accepted all of your premise, you've got to look at the rising age groups that are coming on like a wave into that pension benefit area. They're coming on fast. You can see that curve rising every single year. When there's more and more drain on those pension funds and you have to make the humanitarian consideration to raise those standards up, instead of splitting the narrow pot, you've got to take a broader look on the investments to see that those people don't suffer. Nobody disagrees with that.

Now we're cautiously looking at that curve coming up. We're looking at the inflationary cost-price squeeze. We know what inflation does to the pool of funds, but when you balance that off with what inflation does to the poor recipients, you've got to find some middle ground.

I appreciate the help that the former Premier has given to the House tonight and to the people of this province tonight with his very valid comments. I humbly accept your caution, but the decisions we have to make are ones that allow us somehow to take the chance — not a crazy chance, a wild chance or a roulette chance — but take the chance to expand the earnings of that pool of funds so that the people that are relying on the pensions aren't the victims of inflation.

Now I said we're going to be cautious. You want to give us any advice? We're open to all advice. I'd welcome your advice. If you're out of politics and want to come down to my office some time, we'll have a nice talk. The kind of cautious advice I get from you is the same as my father's, if I may say…

Interjection by an Hon. Member. (Laughter).

HON. MR. BARRETT: Well, you may be more radical, but you both start from the same frame of reference — "Dave, remember the Depression. God help us, I don't want it to happen again, but remember it did happen once."

I don't want to go through that. You're absolutely right in terms of the whims of the market. We have no control over it in this little corner of North America — none whatsoever. But we do have a responsibility to the people. That's where we're moving the pendulum a bit. Give us a year.

Our commitment is to those people. I will not, as the Premier of this province, go to those people and say, "You're the ones who have to hold the line. You're the ones who have to suffer because it may happen." I'll take the responsibility on that basis.

MR. CHAIRMAN: I recognize the Hon. Leader of the Opposition.

HON. MR. BENNETT: Of course, the Premier and Minister of Finance must accept the responsibility. It's with him every hour and every day and will

[ Page 2693 ]

remain with him as long as he has that office.

The point I want to make again tonight is that it isn't a question of opening it to get more revenue from the pension funds. It's the danger that you'll narrow the money that will come in. In this period there's no assurance at all that the dividend rates of the good companies will be as good as these high interest rates in bonds. There's no guarantee.

As we mentioned a few minutes ago, what is causing this great difficulty — and it hasn't been corrected internationally — is that there are billions of wild American dollars all over the world. There are billions of dollars that won't be redeemed with anything else but another piece of paper. That's what is shaking the whole financial structure the world over. We must realize that. Mr. Chairman, if the Minister of Finance moves into a policy like this and is not as conservative — with a small "c" — as the former Minister of Finance, then he's got to be very careful. We made sure that if in the different revolving funds there was a run on parities, we could take the whole $250 million in. If it all came in in one week, we could take the whole thing. We made sure that we had the finances in this province.

There will be a tax on the finances everywhere — on companies and governments everywhere — when certain situations develop. Even the great United States wasn't free from it. Britain hasn't been free from it. Japan is not free from it. As these people move and attack a currency or a credit, you must be in that position.

Our policy was this: since we had a quarter of a billion dollars worth of parity bonds out to our people — mostly to small people, we allowed a secondary market. On the primary market, there was a limit to which any person could buy. We made sure that we were able to take care of them. And we made sure that we had enough of these funds to take care of our Crown corporations so that we didn't have to go into the unsettled conditions of the world marketplace.

When you finance within yourself, Mr. Minister of Finance, you pay no commission. You pay no other costs. You make tremendous savings for Hydro in that respect. Millions and millions of dollars are saved when you do your internal financing.

You have a little fountain out in front of the lawn here. You see the water circulating around, Mr. Premier. It's almost like perpetual motion. The same water is used over and over again. All you have to do is inject a little new water in there, Mr. Minister of Public Works (Hon. Mr. Hartley). That's under your jurisdiction. You know that — how little extra you have to put in there to keep it going.

We had the finances of our province in such shape that we didn't have to go to any market in the world — not only in the last four or five years but, if the policies could have continued, forever. We would never be under the danger of the financial struggle — never.

Now with interest rates rising, Mr. Minister of Finance, through you Mr. Chairman, there's a danger in the parity bonds. As interest rates advance, there is a danger. The interest rates in the banks went up 1/2 of 1 per cent the other day. When you go from 6 per cent to 6 1/2 per cent, that is more than 1/2 of 1 per cent. We're in that kind of market. If, to stop certain inflation, the Government of Canada is going to use monetary forces again to raise interest rates — and the Bank of Canada has made the statement — then there is a danger.

If you plan a change in financial policy from that which we operated under, you should immediately plan for the long-term refunding of the parity bonds. Unless the money in your funds is going to be kept extremely liquid, the parity bonds would be in danger. And the credit of the province would be in danger because there could be a raid. If the money wasn't there in a few years, you would be in trouble.

Mr. Chairman, if the government's policy is not to be as rigid as ours, then my advice would be to make the parity bonds long-term issues. Parity bonds are demand money; I've always said that. It's a contract that the purchaser has. He can keep it for the five years. As far as the different organizations like Hydro and the railroad are concerned, it's demand money for them. They can demand that money in five minutes. Never at any time have they had to wait five seconds to get their money. But if there is a change in government's finance policy and if that money is not available immediately, then there would be a real run and, bang, away it goes.

So I stress again: if there is a change in financial policy, get away from the short-term parity bond, which is demand money, and get in long-term bonds if you want to be safe. But I again warn you, Mr. Chairman, about these billions of wild American dollars in the world today and the unsettled financial conditions in the world, which aren't settled at all tonight. There is no agreement tonight. It's not based on any sound international agreement at all.

This is the greatest period in the world's history, but it is also the most dangerous period in all the world's history.

MR. CHAIRMAN: I recognize the Hon. Premier.

HON. MR. BARRETT: I think it's important that we continue this exchange. I know that the Leader of the Opposition would not want the impression to get abroad that there is any danger to the security of those parity bonds. I know that you would not want that impression made.

HON. MR. BENNETT: Oh, no. There's lots of money in the Treasury to pay them all off.

[ Page 2694 ]

HON. MR. BARRETT: Let's tell all Canadians…

HON. MR. BENNETT: Tell them that. But if you have a change in policy…

HON. MR. BARRETT: O.K. Let's deal with some of the other statements you've made. I would point out that the parity bonds are at a premium right now.

At one time, when you issued parity bonds, you were forced to compete with the market and increase the interest rate on those parity bonds.

Interjection by an Hon. Member.

HON. MR. BARRETT: Yes, I appreciate what you're saying. But let's face the fact that you too had to meet competition, when you went for funds for those parity bonds.

I don't agree that the wild American dollars are the primary problem. For British Columbia, what may be even more of a problem are the $22 billion of foreign currency reserves that Japan has. As we're on the eastern circuit of the Pacific trading bloc, that $22 billion…

AN HON. MEMBER: A lot of it is American.

HON. MR. BARRETT: A lot of it is American money but it's in Japanese hands. The pressure of the expenditure of those funds to reach out and secure control of resources throughout the Pacific Rim is a pressure that governments have to be very, very cautious of.

HON. MR. BENNETT: Europe as well.

HON. MR. BARRETT: Europe as well. Therefore, in terms of long-term planning of the economy of the Province of British Columbia, we are in a position at this time to be very, very cautious of how we handle our resources. We have two choices.

We can go for the fast buck, which was an attractive thing to do in the late Fifties and early Sixties. It is not attractive now because a new form of conservatism has risen. That is a caution that is looking not only to this generation but to two, three and four generations ahead. So in terms of the wild American dollars and what I see as a greater danger, that huge Japanese surplus…

HON. MR. BENNETT: That's American dollars.

HON. MR. BARRETT: That's American dollars but the Japanese have control of it. Their need is for the resources.

The European market is exactly why we're going into the Sukunka coal deal — exactly. In that particular resource, the former administration left us with the one customer in Japan through Kaiser. That's why Kaiser has the financing. As socialists we say that we believe in a nice, healthy dose of competition. The way of getting a healthy dose of competition is to get that money market out there competing for these resources.

With all due respect to the previous administration, it was on a kick of whoever came by for the resources first got the first kick at it.

HON. MR. BENNETT: No, it wasn't.

HON. MR. BARRETT: Yes it was. Your coal leasing plans, Mr. Leader of the Opposition, were a shambles. You created values overnight just by giving leases on the coal in this province.

And you did it in the forest industry, too. You remember the famous Abitibi case when Catermoll was able to get those licences up north, and overnight went down to New York and traded them for some $13 million. You created money values overnight out of resources, and you created a value of exchange…

MR. GARDOM: You're arguing amendment 20 now.

HON. MR. BARRETT: No, no. I'm arguing that we must now go into two directions in the policy. One, one of caution that the people who are involved have some share in the resources of the province, that the value created by those resources is when we release the potential for the development of those resources. That potential development of those resources was given away by the former administration and that's why huge profits were taken out of this province, except when they fumbled on something like Kaiser. Super profits!

Now, we are saying that in an era of caution under this government that must end, and we must turn some of the money into producing better returns for the people who rely on pensions. It's the people out there who are relying on us husbanding that money.

Up to this point, after seven months, all you can say is that it is a change of theory, and that is a valid statement because seven months isn't very much to prove anything. Except that while we believe in your theory of keeping that water circulating, the ingredient you forgot to add was a little new water.

HON. MR. BENNETT: We added it all the time.

HON. MR. BARRETT: That's why we had to

[ Page 2695 ]

increase the welfare rates. That's why we had to give guaranteed minimum incomes to seniors which put $40 million of water into the water wheel, and that's why it's reflected in sales tax revenues being up 15 per cent.

Now, those phenomenal climbs can't continue. We intend to protect the parity bond situation that we inherited, and I know the former Premier is well aware, as he stated tonight, that those parity bonds are very secure.

This is a minor, cautious departure from a policy that led to a conservation of the pool of funds and quite honestly, in my opinion, a bad judgment, because you were in a boom time in the last two years. After June of 1969 when the market did go sour, you were in a boom time. If you had used some of those funds in the last two-and-a-half years when the market fell down in New York to just below 800 points when it was predicted to go up to 1,000 — if you had moved into the market a bit, we would have had a few more dollars right now.

Interjections by some Hon. Members.

HON. MR. BARRETT: We're having a rational exchange of opinion. I'm coming back on your own analysis. You and anybody could say "would've, could've, should've." But I'm only saying "would've, could've, should've" on the basis of your statement, not on the basis of what we're planning.

Now, there is no way that this government intends to go into a massive investment in the open market. None whatsoever. We want to be free enough to make decisions based on caution and prudence, to protect those funds and still have a better return on that money.

That's a decision we intend to take, and only time will tell if it's effective. Perhaps the best thing to do at this point is …

HON. MR. BENNETT: I just want to say one word. I wouldn't want the impression to go abroad on Sukunka coal that we were going to sell that to Japan. We had meetings with the groups that were interested in it — the Australians, and so forth — and it was all based on over half of it going to Europe, my friend, right from the very start. I know you wouldn't want to give the wrong price of that.

HON. MR. BARRETT: Well, I still have the floor and I'll say that when we came into office we found, on the Sukunka deal, that half of it was going to Europe. Look, there's no question about that. But what we said was, "No matter what market it is going to, we want a far better share than 25 cents a ton." We'll leave that because we are in negotiation. But that's a matter of business acumen. You were prepared to do it for two bits, and I'm only a social worker but I want a lot more than two bits a ton.

HON. MR. BENNETT: We wanted a lot more but we wanted to get it in a different way.

HON. MR. BARRETT: Well, you and I …

HON. MR. BENNETT: Quantity royalties, and so on.

HON. MR. BARRETT: Quantity royalties, and that's why we used to say to the old-age pensioners, "You've got a quantity increase — it's still coming but it hasn't arrived yet."

HON. MR. BENNETT: It's only fair to say that the money for the old-age pensioners that's been given to date by this government came from the surplus left by the Social Credit.

HON. MR. BARRETT: Please don't go back into a political vacuum. The fact is that we are in power now. You lost. One of the reasons you lost was that you didn't transfer some of this money.

Interjections by some Hon. Members.

HON. MR. BARRETT: O.K. Now back to the amendment. I think we had a very good exchange and I value your opinions. We will move with caution with your words in our mind, but our purpose is slightly different. The goals are the same but the method's different.

Mr. Chairman, I move the committee rise and report great progress and ask leave to sit again.

Motion approved.

The House resumed. Mr. Speaker in the chair.

MR. CHAIRMAN: Mr. Speaker, the committee reports progress and asks leave to sit again.

Leave granted.

HON. MR. BARRETT: Mr. Speaker, the order of business tomorrow is to continue with the Provincial Secretary, then the Finance Minister, then the Health Minister. We may do Bill 102 tomorrow as well, afterwards.

Interjection by an Hon. Member.

HON. MR. BARRETT: Yes, I want the House to have a good rest.

Just a personal note, nothing to do with politics, Mr. Speaker: I would like to announce that the Port Coquitlam men have won the B.C. Bowling

[ Page 2696 ]

Championship, 3232, the Burnaby 2969, and they are now on their way to Calgary for the national championship. The ladies from Nanaimo won the Women's Championship.

Hon. Mr. Barrett moves adjournment of the House.

Motion approved.

The House adjourned at 11 p.m.