[ Page 2093 ]

CONTENTS

Routine proceedings

Committee of Supply: Department of Housing estimates On vote 111.

Mr. Phillips — 2093

Hon. Mr. Nicolson — 2094

Mr. Bennett — 2094

Division on Mr. Chairman's ruling — 2096

Mr. D.A. Anderson — 2096

Mr. Chabot — 2102

Division on Mr. Chairman's ruling — 2102

Mr. D.A. Anderson — 2103

Hon. Mr. Nicolson — 2106

MONDAY, APRIL 1, 1974

The House met at 11:15 p.m.

Introduction of bills.

Orders of the day.

House in Committee of Supply; Mr. Dent in the chair.

ESTIMATES: DEPARTMENT OF HOUSING
(continued)

On vote 111: housing and development, $50 million.

MR. D.M. PHILLIPS (South Peace River): Thank you, Mr. Chairman. I was quite interested a few moments ago listening to the Member for Kamloops (Mr. G.H. Anderson) who stated that we hadn't made any suggestions in the House with regard to proposals for housing. That suggestion was reiterated in the hallway by the Premier and Minister of Finance (Hon. Mr. Barrett); so I would suggest that what we have been saying all along, that the government has a closed mind, is really true. I don't know whether the government is tired or whether they are in a hurry to get to Japan or what the problem is.

MR. CHAIRMAN: Order! Order, please. I must request that the Hon. Member make his remarks relevant to vote 111 which is the $50 million item under housing and development.

MR. PHILLIPS: Yes, Mr. Chairman, and here we're talking about a $50 million expenditure of taxpayers' money to provide housing. I was very pleased to hear the First Member for Vancouver–Point Grey (Mr. McGeer) support the proposals that were made by the Leader of the Opposition (Mr. Bennett) and by myself both in the fall and again in the spring.

This government, if they were really interested in providing housing in this province, would move swiftly to remove the 5 per cent tax from building materials. Now there is a positive, clear-cut suggestion, Mr. Chairman, that would reduce the price of a house by approximately 2.5 per cent.

Building materials run about 40 per cent of the cost of the house and labour about 60 per cent. Now, if you took the 5 per cent off the cost of building materials, it would, in relation, reduce the interest on the loan by 2.5 per cent. Then, of course, the Member suggested and supported us again in removal of the 11 per cent federal sales tax. This would go a long way towards assisting in utilizing this $50 million.

How far is this $50 million actually going to go in reducing and making available to the average wage-earner a new home in British Columbia? We suggested that one of the highest costs of housing today is the principal, interest and taxes. The previous administration went a long way towards providing incentives just to reduce these three items by a home acquisition grant which comes under the Minister of Housing; by assisting by the homeowners' grant to reduce the taxes which is part of the annual payment, which is part of the principal, interest and taxes which have increased substantially over the years.

We've also made suggestions in the House which would reduce the price of land to the ordinary individual who wants to build himself a house. We've also suggested the lease-to-purchase, but this government seems to be hung up on wanting to lease land, and I don't think in the long run that that's going to assist housing in British Columbia one iota.

There must be new methods found. As I suggested in this House at the beginning of this debate, the price of land is very closely connected to the supply and demand. But, Mr. Chairman, it's very easy to understand why the Member for Kamloops (Mr. G.H. Anderson) would not realize what was going on in this House, because the Members of the government backbenchers are seldom in the House. They are seldom in the House.

MR. CHAIRMAN: Order, please! Would the Hon. Member confine his remarks to the vote before us?

MR. PHILLIPS: They're seldom in the House. That's right. They have 38 Members and they run in relays….

MR. CHAIRMAN: Order! Order, please. Just for the guidance of the Hon. Member I'll just read again the section from the budget which delineates the manner in which this money is intended to be spent.

"Additionally, the new Department of Housing will have $50 million for programmes of land assembly and servicing, neighbourhood improvements, cooperative housing and family rental housing. Under this programme, the province has the flexibility to build houses on government land and either sell them, using the first mortgage programme, or rent the properties."

This would seem to be the method by which this money would be spent. I would ask him to confine his remarks to the consideration of these matters.

MR. PHILLIPS: The Member for Kamloops went on to say that Ontario was in much worse shape as far as housing was concerned in regard to that in British Columbia. Well, I'll have to agree with him, and this goes back to the great heritage that was provided to this socialist government when they came to power.

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There was a great heritage. The price of land wasn't that high. The incentives that had been provided were keeping the price of housing down. But as I pointed out, Mr. Chairman, what has happened? What has happened in the last 18 months?

The price of land has more than doubled because of the land freeze, because of Bill 42 and because of assessments. Certainly, even today we may not be in as bad a shape as the Province of Ontario, but that's due to the great policies of the previous administration.

Now, Mr. Chairman, in the financial statement, or the statement which the Minister provided us and is now public knowledge and knowledge of the House because they were circulated, statements that were provided to us with regard to Woodbridge Developments…. In that statement on page 11 it refers to "certain contingent liabilities." I would like the Minister of Housing to delineate to the House exactly how much those contingent liabilities are. Because any financial statement I have seen always outlines the exact dollars of the contingent liabilities. We have no idea, no way of knowing how much. Could it be millions of dollars? What are the contingent liabilities of Woodbridge Development Corporation?

Maybe the Minister at this time would like to outline that for the House.

MR. CHAIRMAN: Shall vote 111 pass?

MR. PHILLIPS: Well, no, Mr. Chairman. The Minister maybe has been drinking some milk of amnesia again tonight. Because I think it's only fair that he table the documents. I've looked at the financial statement and I think in reality, Mr. Chairman, this contingent liability could be a debt to the Province of British Columbia. I will just read you what it says about these contingent liabilities.

It says on page 11, item 11, it says:

"The company is contingently liable: a) On mortgages assumed by purchasers of properties developed and sold by the company."

Now the company had been in operation quite some length of time.

MR. CHAIRMAN: Order! I would request that the Hon. Member relate his remarks to the vote before us. I attempted to delineate those subjects covered by this vote.

MR. PHILLIPS: Well, yes, I certainly will, Mr. Chairman, because here we are providing $50 million and, for all I know, the contingent liabilities of Woodbridge Development Corporation could be $25 million.

They've been in operation for a long time and I presume they've sold a large number of condominiums. According to the Minister they were a very successful operator, otherwise he wouldn't have bought them. They were one of the best in the industry, so he told me.

So how many mortgages; what is the contingent liability of this company? I think, Mr. Chairman, the House has a right to know and I would like to invite the Minister to respond.

MR. CHAIRMAN: Shall vote 111 pass?

MR. PHILLIPS: Well, Mr. Chairman, this has no bearing whatsoever on the case in front of us. It has to do with the assets of companies.

HON. L. NICOLSON (Minister of Housing): In the first place, he has been referring to some statement of Woodbridge Development.

There's no such statement of Woodbridge Development — as he said you would find in Hansard — that has been tabled in the House. In fact, I think he's quoting from something else. I think it's been established that it's not for us to decide what is sub judice in this matter. It also places the Chairman, the questioner and the responder in a most difficult position. It's not for us to decide which is and which is not sub judice in this matter.

We can talk about what they are doing now, projects which the company has underway at the present time. Certainly his Ajax question was obviously in order. But getting back into these things is leading us, I think, into a very dangerous area.

MR. CHAIRMAN: Order, please. On the point of order, the Chair would rule that any consideration of a matter which pertains to the evaluation of the Dunhill corporation would be impinging upon the case which is now before the courts. I would quote again from the 1956 Journals:

"It is not for the Speaker to microscopically sift the relevant from the irrelevant evidence, but to liberally apply the sub judice rule in such a way as to prevent the mischief which that rule was intended to obviate."

We can drift into the consideration of something which would clearly impinge on the whole matter. Therefore, I would rule that any further discussion is out of order.

MR. W.R. BENNETT (Leader of the Opposition): Mr. Chairman, the contingent liability factor is not like the appraisal matters you ruled out of order previously. On what basis can they be considered in the same context? I just can't understand your ruling in this matter. Contingent liabilities are something of the past business of this company that had nothing to do with the present deal, but carry with them an

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obligation. We're just trying to find out that obligation because it's carried forward to the new operators of the company. It certainly has nothing to do, necessarily, with those appraisals.

MR. CHAIRMAN: Order, please. The contingent liabilities clearly could relate to the value of the shares. Inasmuch as this is the matter which is under consideration by the courts, I would rule that any discussion of either appraisals or contingent liabilities, or anything else to do with evaluation of this company, would be out of order.

MR. BENNETT: A further point of order, Mr. Chairman. Earlier you let some discussion continue to do with the deferred income of $779,000 which is shown as a liability on the original Dunhill statement, but which was claimed as an asset by the Minister. That has more relevance with the assets of this company than the contingent liabilities.

Now you have already shown latitude on that being discussed. Does it mean that it is only when you think that the government might be facing some embarrassment that you wish to invoke the rule?

MR. CHAIRMAN: The Speaker has clearly indicated that the subject matter is out of order, and should be considered to be out of order in his opinion.

MR. BENNETT: No!

MR. CHAIRMAN: Correction: the Chairman should consider whether the subject matter is out of order. I am making the ruling that this matter is part of the subject matter which is part of the main issue before the courts.

Now if the Hon. Member wishes to appeal the ruling, he may do so. But I will make the same point again: "It is not for the Speaker" — or the Chairman — "to microscopically sift the relevant from the irrelevant evidence, but to liberally apply the sub judice rule." That is what I am attempting to do, so that there can be no doubt or mistake in this matter.

MR. BENNETT: Point of order, Mr. Chairman. What you're really doing is restricting as you see fit, from time to time, the discussion of the instrument by which this money might be spent.

MR. CHAIRMAN: Order, please. If the Hon. Member wishes to challenge the Chair, there is a procedure.

MR. BENNETT: Just one further point of order. Do I take it, then, that it is all right to discuss, as you've indicated earlier, the $779,000 of deferred income taxes which you allowed discussion on previously?

HON. R.M. STRACHAN (Minister of Transport and Communications): I would just like to point out that that may have been discussed in this House prior to the attention of the Chair being drawn to the order of the whole matter.

MR. BENNETT: No, the $779,000 was discussed this evening, just a few minutes before the regular 11 o'clock adjournment. It was. The First Member for Victoria (Mr. Morrison) discussed it. And you allowed it.

MR. CHAIRMAN: I'm making a ruling on the basis of the Speaker's observations, and I'm ruling that the consideration of contingent liabilities, inasmuch as they relate to the value of the company — and therefore to the value of the shares — are part of the general subject matter. They are, therefore, out of order.

MR. BENNETT: Well, I will show you the statement. Where does it relate to the value of the company?

MR. CHAIRMAN: Order, please. I would just make the point of order that you may not debate a ruling of the Chair. You must use the procedure provided in the standing orders, and that is to appeal….

MR. BENNETT: Well, if your ruling, Mr. Chairman, is based on the contingent liabilities having a bearing on the value of the shares, if that is the case, then I challenge your ruling.

The House resumed; Mr. Speaker in the chair.

MR. CHAIRMAN: Mr. Speaker, in Committee of Supply, while considering vote 111, the Chair made the ruling that Members may not discuss the matter of contingent liabilities in regard to the company acquired by the government, namely the Dunhill corporation, presently known as Woodbridge.

I ruled that any discussion of this would be out of order because of the case before the courts. I ruled that it was sub judice. My ruling was appealed.

AN HON. MEMBER: Point of order, Mr. Speaker.

MR. SPEAKER: I can't deal with a point of order at this stage. I can't argue the matter of the point of order. The question is really before the House now. I merely put the question to the House: shall the ruling of the Chair be sustained?

Mr. Chairman's ruling sustained on the following

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division:

YEAS — 31

NAYS — 15

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

On vote 111: housing and development, $50 million.

MR. D.A. ANDERSON (Victoria): Mr. Chairman, I said that when the Minister's estimates were up I'd be speaking very briefly then, and I believe I did — about eight lines in Hansard. I haven't had much opportunity since to discuss the Minister's estimates. But I would like to have a look at some of the difficulties that I think we face as a result of having the lowest increase in housing starts over 1970 of any region of Canada.

Certainly, as the Minister pointed out, we had a large number of starts — 37,000 plus. But in terms of increase we had a smaller increase over 1970, in the first nine months of 1973, than was the case in the Maritimes, which had an 88 per cent increase, Ontario, the Prairies and Quebec. We had the lowest.

This, I think, is important when we're discussing housing, for the following reason: it's fairly well demonstrated that the uncertainty we've had in the last 18 months with respect to the housing field has reduced the number of housing starts.

The average in terms of apartment vacancy across the country is approximately 2 per cent, but in British Columbia it's 0.2 per cent. That means, of course, that we're in a situation where the private sector is simply not doing as well in producing housing starts and new apartments as is the case elsewhere in the country and as was the case in the past.

This, of course, is reflected in two things: one is a rapidly increasing price of houses, and the second a rapid increase in rents — which the government has put legislation in on.

The government has gone into the purchase of large amounts of property in communities. They've created what they consider as some sort of land bank, and the government has been fairly proud of it. For example, in the budget debate on February 14, the Hon. Minister talked of 746 acres purchased in the last year. He's lost four acres, and perhaps he'll give an explanation of where they went. Nevertheless, it's a substantial amount of land purchased.

Interjection.

MR. D.A. ANDERSON: I'm told that he's lost four acres in that six-week period through erosion. Somehow or another some of his land that he's stored up so carefully has washed away. His landbank has suffered some attrition.

I wonder whether he could give us an indication of how these precise figures of 746 acres shrunk to 742. Apparently none were sold. How much did you buy last year? The two figures being different raises questions of credibility.

In any event, he's talked about the number of housing starts there were last year. Roughly, I think they represent something up to $1 billion worth of new housing; $800 million may be a better figure. I'm not sure of the exact figure, but it's a substantial amount of money.

When we compare it to the amount of money that's going into public housing through the various votes — and in particular vote 111, which is $50 million — we see, as the Minister has correctly pointed out, Mr. Chairman, that the private sector is extremely important and cannot be ignored. I don't think it can be harmed either, because, after all, it provides the bulk of our housing in British Columbia. It has done this in the past, and it will continue to do so in the future.

Mr. Chairman, I'd like to say just a few words at this time about the price of land and housing costs. First, I think I could remind the Minister that housing costs are the result not of the increase in houses constructed. You have a stock of housing in the province. You add to it about 6 per cent every year. It's not the cost of the new houses that determines the level of prices of housing; it's the overall stock of housing that you have. It's not just the purchase of new housing which creates the new market; it's the sale of old houses as well as that 6 per cent which are new.

So if you're to do anything about housing costs, you have to remember that you're not dealing with a commodity which is like ice cream — which the Member for Vancouver–Little Mountain (Mr.

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Cummings) knows so well — something consumed at the time. You are dealing with something where there is a very, very large backlog or stock, and that is part of the price determinant.

In other words, if you are to have any effect upon price levels of housing — which have gone up so substantially as our increase in housing has slowed down — relative to other provinces, what you're going to have to do, Mr. Chairman, is to make sure that you have a steady and continuous and a high level of new starts, because you have to add to the stock to make any real difference.

It's not just the increase; it's the substantial addition to what's below it which also counts. If you could visualize that in bar-graph terms, you've got this much that has been constructed already and just a little bit on the top, which happens to be the new that is constructed in any one year.

So you've got a tremendous amount already constructed, which helps in the determination of price. To suggest that the only factor determining price is the new houses coming on the market is totally fallacious. In this city you will see this very well where the price of housing has held up very high; it's not the fact that the houses are old that determines their price. It's how good they are. And, of course, new housing simply adds a little bit to existing stocks.

Now construction costs then obviously will have an effect upon the price of house construction. But changes in construction costs will have virtually no effect whatsoever on the price of housing — the final end price to the purchaser of housing. Why? Because it doesn't matter what you do with that little 6 per cent, Mr. Minister. If you lower the cost there, you're still faced with the fact that the market level will be determined, not by the new 6 per cent or 7 per cent or whatever it may be, but by the sales of the existing 94 per cent as well as the new 6 per cent.

So all this talk about lowering the cost of construction materials is well and good, but it will not have any substantial effect on the average price of housing in British Columbia. It's not the new houses; it's the overall stock that counts.

Now we then get to the question of land prices. Similarly, reducing the price of land, or indeed increasing it, is of no real effect, except as it has an influence upon existing housing stocks. Do you see what I'm, saying, Mr. Chairman, through you to the Minister? I'm making this point because I think it's particularly important. Unless we have a very steady and constant and large volume flow of new service lots onto the market, we won't have any real effect on housing costs in terms of prices to the ultimate consumer — the home purchaser.

Incidentally, Mr. Chairman, I'm unlike these cabinet Ministers who own $85,000 waterfront homes. I rent an apartment which is the bottom half of an old house; it's the type of thing the Minister was talking about when he said this is what more people should do. I'm a tenant, and I speak as a tenant when I speak in this debate. I do it by preference, even though I know full well that I have substantial tax disadvantages for being in this position. And because I act as a responsible citizen and rent, I'm constantly behind the eight ball, thanks to the efforts of people like the Minister. In any event, that's an aside.

I just wanted to point out that I'm not in any way attempting to justify any purchases on my part because I haven't done it. And the result has been that I haven't had those massive increases, inflated windfall profits, that the Member for North Vancouver–Seymour (Mr. Gabelmann) talked about in a debate earlier in this Legislature, about the price of his house going up, the value of it going up. I haven't had that. I think rental accommodation is part of the overall stock, and I happen to be a renter.

However, back to cost of land. If you don't have an adequate supply of serviced land coming onto the market, artificial attempts to keep the price down, such as the Minister talked about earlier today shortly after the question period, will not succeed.

Why? The reason is simple. That's only a very, very small fraction of the overall number of houses that are in the general housing stock, and fluctuations in that tiny little percentage of the new houses will not have much effect upon the overall price levels. It may lead to windfall profits here and there. It may lead to speculation here and there; it may even lead to subsidies here and there.

But the important thing is to break over the barrier which is, if you like, the adequate supply level for new lots coming on the market. If you do not have, Mr. Chairman, through you to the Minister, an adequate number coming onto the market, you will not have your construction companies working effectively and efficiently, as they do at the present time, in constructing housing for other people, or for speculation on their own account.

It was just a week ago that I attended a meeting, a small meeting, of a group out in the highland district not far from Victoria — people who, I might add, were concerned about the Minister's policies for that area. Perhaps he might say a word about future plans later in the debate.

The man who picked me up from the corner of Millstream and Finlayson and took me up to where this little group was gathering, was a man in the construction business. He said he is now building at Duncan because of the difficulty of finding serviced lots in the greater Victoria area. He pointed out that he felt he might have to go into another line of work.

There is one interesting thing, Mr. Chairman — as a small contractor he is in and out; he goes and does other things. And if you force them out, of course,

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you force down your ability to expand stock because you've forced out some of the small people who are actually constructing the new stock of housing that I was talking about earlier.

If you have a shortage of lots, you have developers working at less than full capacity because lots are simply not available at reasonable prices.

To have any effect upon long-term prices, I think the key element is the price of lots coming onto the market not in an indiscriminate fashion, not in the case of surges of large numbers suddenly and then very few, as has happened in the last 18 months, but a continuous, large flow of serviced lots. I don't think the government has done what it should have done and could have done to secure such an adequate flow.

First, the question of the purchases by the government itself: For every one of those 742 or 746 acres you bought, whatever turns out to be the right figure, you took land away from the private sector which otherwise could have been able to buy these lots and perhaps could have serviced it, perhaps could have used it for construction purposes.

The infilling that my colleague the Member for North Vancouver–Capilano (Mr. Gibson) mentioned was not taking place. The filling in of the corners between developments here and there, this was not taking place because your own department was lifting land off the market, forcing the price up, creating scarcity conditions which in turn created the expectation of future scarcity, which is even more important and has shot up the price of housing right across the board, old housing as well as new. Thus, of course, the many statistics that have been given to you, which I will not repeat, dealing with the substantial increase in house prices in British Columbia in the past year.

When you add in the effects of Bill 42 which the government entered into, I'm sure, with good intentions, but when you add in the effect of Bill 42 on housing which took away possible subdivision areas, took them right out, prevented even those which were marginal from being built on until they had passed the Environment and Land Use Committee, you realize that you did create a real bottleneck, a real supply problem with respect to serviced lots.

The result was that as people kept on coming into the province at the rate of more than 3 per cent, and as people's expectations for housing increased, it had a classic situation of your inelastic supply and your demand in excess. The result was that the price started going up and going up to the sky.

There is not a great deal that could have been done about it, or can be done at this stage except, as I said, for the government to reverse its attitude, position and policies with respect to assisting the municipalities to provide serviced lots.

We have, Mr. Chairman, a very serious situation developing which, I think, is not improving at the present time.

I should add that in addition to growing populations, you have a problem of rising expectations. People no longer live at home — these are younger people — to the extent they used to. The old folk, the retired in-laws or parents, tend not to live with the young couple and young family as they did in the past.

I'll give you a very interesting example of this, Mr. Chairman, because I can see you are very interested in this, and that is the municipality of Oak Bay. In the 1971 census the municipality of Oak Bay found to its horror that the population had varied only 10 people, I believe it was, from the previous census. They said that this is obviously wrong, look at all those big apartment blocks we put up, obviously we have more people.

Mr. Chairman, I can see you shaking your head in disbelief of what I've said. What they forgot was this: they forgot that each house in Oak Bay, the single-family dwelling or duplex, had, on the average, fewer people in it than previously. If previously a house had five people in it, perhaps it had slipped to a 4.5 average — things of that nature. The elderly in-laws or parents had moved out, the kids moved out at an earlier age to apartments of their own, perhaps sharing with other young people, but they'd moved out of home at an earlier age and the old people didn't move in at the same rates. So, despite enormous construction of apartments you had a situation where the actual number of people did not increase substantially. The municipality of Oak Bay found to its considerable surprise that they were at much the same level that they had been 10 years before, despite large increases in the number of apartments constructed.

That's what I call increase in expectations. There is an increase in expectations matched with an increase in incomes, and you have a really very tricky situation where an increase in housing well in excess of the population increase did not satisfy demand.

The way to get around it is to go back to where we started and deal with serviced lots, which the Minister and his department, and in particular his colleague, the Minister of Municipal Affairs (Hon. Mr. Lorimer) and the Minister of Finance (Hon. Mr. Barrett), through his influence, simply have not been doing.

I'd like to make one or two other points, Mr. Chairman. First of all, I think it should be recognized that despite the gloom and doom that has been spread around by all Members, the shelter costs in B.C. are not outpacing income and disposable income in particular as compared to over the last 10 years. We are not in a situation where housing costs more of disposable income now than it did 10 years ago.

The Attorney-General (Hon. Mr. Macdonald) shakes his head, but it is an interesting point and I think if he checked it out he would find I am correct.

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The problem, Mr. Attorney-General, is, of course, rising expectations, people demanding more. Shelter itself is going to take up more disposable income because they want more square footage, they want the wall-to-wall, they want the big windows, they want the drapes, they want the expensive things, while previously they were more content with smaller things. So it is increased expectations, Mr. Attorney-General, which may have increased the cost of housing. In actual fact in comparison with 10 years ago the situation is that we are actually better off. It should be, I think, realized….

HON. A.B. MACDONALD (Attorney-General): What's the percentage of B.C.?

MR. D.A. ANDERSON: I'm sorry I don't have the exact figure. I believe....

Interjection.

MR. D.A. ANDERSON: Well, Mr. Attorney-General mentioned, off the mike, that in Toronto there was a study and half the income of poorer people went for rent, and he's right. I'm glad he made that point because that's the second point I was going to make, and he's just a little ahead of me.

Generally, I'm right in my general statement of overall disposable income, but with respect to poorer people, the Attorney-General is dead right. It is an extremely high expense for such people. But, Mr. Attorney-General, the area we're in now is a question of income support, in my view. We're into an area where direct income support might well be a more clear, effective and more valuable tool than some of the hidden schemes of price support in the housing field, such as the Minister of Housing talked about earlier.

I don't dispute the figures you gave at all, Mr. Attorney-General. I think they are probably….

MR. CHAIRMAN: Order, please. I would point out to the Hon. Second Member for Victoria that when we're considering this vote, he should be mainly commenting on the programmes which are being put forward by the Minister of Housing under this vote. Your own suggestions should be minimal in terms of the….

MR. D.A. ANDERSON: I was sidetracked into a delightful exchange with the Attorney-General. He's a man who provokes thought, Mr. Chairman. He provokes thought and discussion in a rational and intelligent sense. I'm glad I had that little opportunity to point out to him that problems of income distribution and support are not the same as problems of housing, and we shouldn't take it out in the housing field when really and truly what we should be doing is working at the other end of the scale, at income support and income distribution. I quite agree with the Chairman's ruling as I apparently got off the point, but these things do happen.

I would like to speak for a moment or two at this stage, Mr. Chairman, through you to the Minister, on land banking. I feel that it is one of the great myths of our time that somehow landbanks are going to cut down on the cost of housing. I don't believe it. I think you're wrong in this area and I think the federal Minister, Mr. Basford, is also wrong in this area. I just don't think it works as simply as you people would have the rest of us believe.

Interjections.

MR. CHAIRMAN: Order, please. The Hon. Second Member for Victoria, please disregard the asides and continue your remarks.

MR. D.A. ANDERSON: I didn't even hear him this time. He's mumbling. I wonder whether he could speak up.

MR. CHAIRMAN: I would request that the Hon. Members not interrupt the Hon. Second Member for Victoria.

MR. D.A. ANDERSON: Well, I don't object, because I find his interjections up to now have been helpful and thought-provoking.

But we're on the question of landbanks and why they don't really work. Well, what, first of all, are the objectives? Perhaps if we start there we can have a look at this.

The planning objective: there is a suggestion here that if you have landbanks — and the Minister had made it clear that he believes this — you can somehow plan better. Well, I just don't see how, and I don't think it's proved elsewhere. The difficulty you face, of course, is that under normal planning you have your rezoning, you have your regulations, you have your local people involved, and you can, I think, zone, plan and organize very effectively.

I don't think that in the planning objective you've talked of, Mr. Minister, the need for landbanks is at all proven. There really is nothing that the landbank can do in the planning field which cannot be done by existing mechanisms through private enterprise, and probably done better.

The big advantage, of course, of the private system is its dispersion of decision-making. If you have a centralized bureaucratic organization which…. I might add at this point that I have great faith in your advisers, the present ones in the room. I think this is the one little ray of hope that we have, that you have such fine people with you. But that doesn't alter the fact that your policies are wrong.

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The planning objective, I think, can be met quite well by intelligent use of good municipal officials, and given guidance by the Department of Municipal Affairs when necessary. If you have this decentralized decision-making, the chances of making a really tremendous error that you see so often in government-sponsored programmes — and I've seen government-sponsored programmes that house 60,000 in one estate — will not occur.

I just don't think, Mr. Chairman, that this suggestion that public decision-making is better has been proven.

The second objective of your landbank, as I think I can reconstruct it, Mr. Minister, is the price objective — cost. Somehow this is going to reduce costs. I just don't believe it at all. I told you, in the few minutes I've had up to now, that it is supply of serviced lots which is the key bottleneck which is going to determine price levels. It's the overall bulk of the entire housing stock and the changes in ownership within that bulk of stock which will determine price levels. Land banking is not going to have any major effect upon that.

The only thing you've been able to tell us, with the dilemma that you face in North Vancouver — where you have a $30,000 lot and you are trying to figure out a way of selling it for $15,000 without giving somebody a $15,000 windfall gain…. The thing you're up against is a dilemma which I don't think you are going to be able to solve, and certainly you have not given us any indication that you are going to solve it.

You are talking about an opportunity cost, or holding cost, and you're talking about the government taking losses, a straight subsidy — a hidden subsidy if you like — which is, of course, like saying that there's a saving. But of course you're losing $15,000 in one pocket as you pay it out in the other. You pay out a subsidy; you lose $15,000. There's no way you can get around that, and you haven't indicated that there's any real price advantage to land banking.

Instead, and we go back to the proposal of the Attorney-General — and I once again thank him for his generous contribution to my speech — we go back to the question of price support and maintenance. Why not put a direct subsidy to the individual? Why not go ahead and do something similar to the homeowner grant on a massive scale or similar to some of these mortgage schemes where the first few thousand are forgiven?

Well, anyway, we're back to the problem I was taking about where it's much better to give a direct subsidy which is calculable — which comes up neatly in votes — instead of some loss of money through your land-banking scheme, or funds being thrown into the land-banking scheme, and the public and the public's representatives having no real opportunity to analyse or evaluate the subsidy programme.

Take, for example, Ontario's Home Ownership Made Easy — the HOME plan. Now a lot of people did rather well under that scheme, and it did have an effect at a very, very high cost. It had an effect on housing starts in Ontario. But the people who really profited were those who were lucky enough to get in on the scheme. They made a killing. They made a very, very nice windfall profit, thanks to the fact that they were dealing with the government. And the government, in turn, made a windfall loss every time they sold a house under that type of subsidy programme.

It is not the best way of going about it because it's not clear and it's not obvious; it's not desirable from the point of view of public policy, Mr. Chairman, which is that subsidies such as this should be clear and calculable and able to be scrutinized by the people's representatives. If we want to subsidize housing, fine; but let's make it clear. Let's not get lost in this hassle which the Minister described quite well, I thought earlier because he simply did not provide any suggestion as to how he is going to handle this particular problem.

It may well, for example — bearing in mind my initial premise that housing costs are based on the overall stock — simply result in a builder's profit, a builder's windfall profit, by selling these lots at a lower than market rate because, of course, it's the market rate of overall housing which will raise the cost of the new houses upwards.

Now land banking is said to be better because the holding costs will be lower. Well, I have yet to discover it. If public land speculation is to replace private land speculation, there will be holding costs; and I simply do not think that you can ignore them, Mr. Minister, as you have up to now in the statements you have made.

There is a social cost in holding land; there's a holding cost involved, and to simply pretend that it doesn't exist is to cheat and defraud the public. There is such a cost. It is borne at the present time by private speculators, and some of them, it is true, make a killing. Others, of course, have to sell out to Daon because they start to go broke.

But the fact of the matter is, if you ignore holding costs, as you have done, you destroy the effectiveness of any proper evaluation, and I don't think you should continue to do it. I think that's not fair, that the true cost of government land banking is ignored. So the holding costs are not lower when you have public speculation by way of landbanks instead of private speculation.

In addition you have the problem of alternative costs — what else might have been there had the government not held the land. I don't know what you're going to do about that. You may wish to comment on that as well. Certainly there is no

[ Page 2101 ]

indication that alternative costs will be any less for society as a whole when government holds land as opposed to when private people hold land.

You know, the whole concept of landbanks is based upon the idea, Mr. Chairman, that somehow the public sector has superior knowledge than the private sector and can get in there firstest with the mostest. But this does not tend to be borne out by facts. As the president of Dunhill said a short time ago, dealing with another case which has been referred to already: "We have to be very careful when we spend public money, and the flexibility that a private outfit has is superior." He made that very clear in his statement.

So you have a situation where with land speculation exactly the same thing holds true. You have the public sector generally moving slower because of the need to make sure it's a first-class deal. They generally are unable to anticipate speculators and the speculators make the money anyway. The public landbank is generally a less effective speculator than the private sector.

So the private developers are there already. The other thing, Mr. Chairman, is that when you have the public agency buying in a certain area you at once begin private speculation on the boundaries of that government purchase. So on the one hand you're generally not as effective overall as a private speculator; on the other you generally provide an extra area of speculation adjacent to government purchases which otherwise would not have taken place. So I don't think there's much there.

Now let me give you an example. Say you buy land at $100,000 and you hold it. The government does this — the Minister does this — not you, not me, not private citizens; the Minister does this. He holds it and the holding cost is $40,000 — cost of interest lost, et cetera, et cetera. But the value of the land, say, five years later is $200,000; so there is a $60,000 windfall profit.

If I use figures, perhaps I can illustrate this a little better, Mr. Chairman, because you and I are a little weak in intellectual concepts, and we're perhaps a little stronger on concrete examples. Anyway, I speak for myself.

So you have $60,000 of so-called windfall profit, Mr. Chairman: $100,000 original cost; $40,000 holding cost; $200,000 sale price; $60,000 of windfall profits.

If you sell that land at $140,000 you're giving somebody else, the developer, the new owner, a $60,000 windfall profit. If you sell it at $200,000, you're first subject to abuse because your landbank isn't achieving the purposes which you claim it will, which is reducing costs.

Secondly, Mr. Chairman, you are not achieving any other social objectives. You simply are not achieving very much by creating a situation where the government goes in there and starts handing out land based only on original cost and holding cost, because a $60,000 windfall profit that they give to somebody else is $60,000 taken out of the taxpayer's pocket. It has to be made up from the taxpayers' pocket and it is not a speculative profit in that sense. It's actual money lost to the taxpayers of British Columbia.

Again, I go back to the homeowner grant principle. In the homeowner grant you had the example of the fixed, certain amount of money. You could tell who it went to. You could even calculate later on the effects of such a thing; but in the type of thing that you proposed for us, Mr. Minister, we simply don't have that type of fixed and clear cost — or that fixed and clear subsidy.

Now, there's an extra problem which I haven't mentioned which I will now and that's to do with the cost of zoning, the cost of delays in putting land into the situation where it can be built upon.

It's not generally recognized what a tremendous extra social cost delays are — and I congratulate the Minister, through you, Mr. Chairman, and I congratulate the officials with him for having dreamed up this idea of the expediter whose job it is to cut through red tape when it comes to zoning changes so that more land can be brought on the market more quickly.

As soon as you delay a decision on zoning, which may go for months or even years, you add substantially to the cost of the ultimate project. There's no way those delays are free. There's no way that those delays can be ignored in your calculations. They are part of the actual cost of land and let nobody think otherwise.

It's been in this province a substantial handicap in many areas when a person arranges financially, when he arranges architects and the rest of it, when they proceed before civic councils and the municipal authorities, that they find all too often that they are not met with decisions; they are not met with a competent analysis they would like. They are met simply with delay which goes on and on and on until finally a compromise is worked out involving substantial alterations. The result is, of course, that the original cost of design and the new costs of design have to be added on to the single, final building that might be built.

Now, Mr. Chairman, it's early in the morning and….

Interjection.

MR. D.A. ANDERSON: Oh, I'm sorry. The Member for Peace River (Mr. Phillips) has very poor eyesight.

MR. CHAIRMAN: Order, please! Would the Hon. Member confine his remarks to the vote?

[ Page 2102 ]

MR. D.A. ANDERSON: The big hand is just past 12 and the little hand — I'm sorry, the other way around. (Laughter.) It's 12:20, Mr. Chairman.

MR. CHAIRMAN: Would the Hon. Member relate his remarks to the vote before us?

MR. D.A. ANDERSON: Yes, certainly. Private developers have in British Columbia proved that they have, by working through sometimes until three in the morning, got the ability to put together deals and to produce the serviced land which has been necessary to keep our housing stock at a relatively decent level. The public sector, if we can judge from the last 18 months, has been full of delay, indecision and uncertainty.

MR. J.R. CHABOT (Columbia River): I've just gone to the library seeking out some information to assist me in this debate. I was looking for the National Housing Act and Bill C-213 and there is no one there to assist me.

MR. CHAIRMAN: The point of order is well taken. I'll send a note to the Speaker of the House asking him to inquire….

MR. CHABOT: Well, I want this information now. This Member might take his seat and I might have to debate the issue almost forthwith and I think you should take some action.

MR. CHAIRMAN: Order, please. On the point of order, obviously the Chairman is unable to leave the chair so I will send a note to the Speaker of the House.

MR. CHABOT: Well, I suggest something be done.

MR. CHAIRMAN: The matter will be attended to as soon as possible.

MR. CHABOT: Well, let's attend to it now, Mr. Chairman. I didn't raise the point....

MR. CHAIRMAN: Order! Would the Hon. Second Member for Victoria continue?

MR. CHABOT: Mr. Chairman, on a point of order.

AN HON. MEMBER: How about the appraisals as well? Why doesn't he turn them over?

MR. CHAIRMAN: Order, please. It is not a point of order. Would the Hon. Member for Victoria continue?

MR. CHABOT: Mr. Chairman, on a point of order.

MR. CHAIRMAN: Order, please! Would the Hon. Member state his point of order?

MR. CHABOT: My point of order is that the library facilities are not available to the Members of the House at 12:20 a.m. I suggest that they be available before we proceed any further.

MR. CHAIRMAN: Order, please! It is not a point of order in this debate.

MR. CHABOT: In other words, no longer do the library facilities have to be open to the Members of this House while the session is in sitting. If it's not a point of order, Mr. Chairman, I have no alternative but to challenge your ruling.

The House resumed; Mr. Speaker in the chair.

MR. CHAIRMAN: A point of order was raised by the Hon. Member for Columbia River (Mr. Chabot) in which he stated that the library facilities were closed. I made the ruling that this was not a point of order in talking about the debate taking place. Rather it was an administrative matter and he challenged my ruling.

Mr. Chairman's ruling sustained on the following division:

YEAS — 31

NAYS — 15

MR. N.R. MORRISON (Victoria): Point of order. I particularly have something I'd like to look up. Could you get someone in the library for me, please.

MR. SPEAKER: I'll certainly try; but I assume what has happened, from my own investigation just a minute ago, is that the staff quite naturally presumed

[ Page 2103 ]

at 11 o'clock, when the Speaker's procession went by, that they were adjourned for the night and they went home. Now the question is whether the Legislature wants me to summon one of the library staff, wherever he may be, in his bed, to come back. Is it that important, or…?

MR. MORRISON: Well, Mr. Speaker, just a few minutes before the vote, I was in the library and the lights were all out. I rang the bell, I shouted, I asked for anyone present, and there was no one there.

MR. SPEAKER: So did I. May I suggest to the Hon. Member that I have nothing to do and I used to work in the library once a long time ago. I'd be glad to help in any way. I put myself at your disposal.

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

On vote 111: housing and development, $50 million

MR. D.A. ANDERSON: Mr. Chairman, in the short time before we had our interruption for that vote, I was talking about the problems of land banking, and the Minister was showing his usual and courteous attention to this.

I was outlining some of the difficulties that are faced and how in actual fact, Mr. Chairman, the use of a short-term landbank such as we apparently now have, in all likelihood will not prove to be effective. At this stage, I'd like to make a few comments about the time spans, because time spans and land banking are particularly important.

For example, the Minister has purchased either 746 or 742 acres in all municipalities in B.C., or at least in many of them, last year. Now the City of Saskatoon, with a population of 135,000 more or less, has over the last 10 years purchased 7,000 acres of land. You can see that really and truly in terms of land banking we aren't anywhere, and the City of Saskatoon is about the only city which has a decent landbank scheme in our country; I don't know about others in North America. So it has, as my colleague worked out for me, 10 times as much.

I'm so glad he carries a pocket computer with him. These things at this stage of the morning are beyond me.

But they have 10 times as much as we have for the whole of British Columbia. The reason, of course, is that they're doing land banking in a lengthy time frame, while we have heard from the Minister not one word about the time frame of our land-banking systems and schemes for British Columbia.

There is no point in having anything that approaches a landbank if you're simply out there one month bidding against the private developers or private individuals who wish to purchase a house, taking the land off the market at a higher price than it otherwise would be, turning around and handing it out to someone else at a subsidy programme. It does nothing at all.

To be effective, of course, you have to have a lengthy period of time. Now this has grave disadvantages. First of all, you tie up a tremendous amount of capital, and tying up a tremendous amount of capital reduces your ability, for example, to build homes. Fairly simple, even in your own department.

The opportunity cost of increasing the housing stock is reduced by a landbank scheme which ties up large amounts of land over the long term, because it costs money.

Now the argument is of course that because it's the government, somehow this land will be cheap. It isn't. You can expropriate it if you wish to, I guess, but even then the price of expropriated land will be virtually equivalent to market value, or you'll have the lawyers and judges around your neck trying to make sure that it is and it should be.

There's no reason in the world that you should be able to take away land from private citizens and simply transfer the value from one citizen to another by expropriation and direct confiscation in fact. No reason that you should be able to do it, and I doubt indeed whether you would want to, yourself being a man devoted to fairness in these things. So I'm quite sure that the price the government pays is going to be identical to the price that the private developer or speculator would pay.

You're going to have to sock in large amounts of money — money for years hence. To this they're going to have to reduce the number of houses to, say, 99 per cent of demand, you've got 1 per cent of the population running around trying very hard to find a house or an apartment. And if you have that with an inelastic supply, you're going to have rapidly increasing prices.

Yet, you, Mr. Minister, promised to try and do something about reducing prices. Now you're not going to be able to reduce unless you increase the supply in the short run and increase it substantially, and continue to increase it in the short run, year after year, until eventually you have a long-run situation.

What happens is that you create a situation where expectations on the amount of land coming onto the market are changed, and this in turn will lower the overall cost of future expectations for land sales, and stop this nonsense, as the Member for North Vancouver–Seymour (Mr. Gabelmann) has pointed out, of people simply buying property, holding on to it because they know that a year from now it will be $10,000 more valuable than it is at the present time.

If you don't break that philosophy, Mr. Minister, we are in for an inflationary spiral in the house prices which will continue and continue and continue, and

[ Page 2104 ]

you will never break this inflationary psychology unless you do something very much different from what you're now doing to increase the number of lots which should indeed come forward to the public.

The second advantage of increasing the number of lots in a short run, through you, Mr. Chairman, to the Minister, is that you will of course increase the number of housing starts. By doing that, you'll take up the slack in the building trades, the building industry, and you will perhaps increase the productivity of that industry and the number of people involved in it. And you will start making an appreciable dent. But as long as you're substantially behind the demand, as we are at the present time, you're going to have this rapid escalation in prices. So it's the continuous supply, and we haven't seen any indication of this at the present time.

I should mention to you that too often debates of this nature take place between the present situation and system as it is and some Utopian or future system which someone would like to bring in. And that's fair enough. But the real decision should not be that between that type of Utopian situation and the present one with all its failings. It should be what can be obtained through the landbank system and what can be obtained through the improvement of the present system.

In other words, not something new in the future, assuming nothing else changes, but the two courses that I suggested. One is improving the supply, the other is the landbank concept; one is the reliance upon the private sector, the other the reliance upon the public sector. And you have to think of how improvements could be made in the private sector to create a situation which would undoubtedly be superior to what we have at the present time. So I hope the Minister will comment upon that as well.

But now I come to the problem, Mr. Chairman, that I face, and that is that despite my words, which I'm quite sure the Minister's listened to attentively, he doesn't appear to have agreed with me. He shook his head. Huh, his head is stationary. Goodness!

The fact is that he's embarked upon this course, and I'd like to know whether or not he's going to encourage some municipalities. He's talked a great deal about the municipality of Penticton where he's had good cooperation from the mayor, as he's talked about, and we certainly all applaud the mayor for cooperating with the Minister. But how much is going to be done by the municipalities and how much by the provincial government?

I suspect from the budget and the estimates in other areas that the municipalities are going to get the short end of the stick once more. They are not getting adequate funds for them to really get involved in ambitious new programmes. And if they don't, of course, we then take the land away from the one authority which is closest to the people, best able to cater to their needs, best able to understand the local situation.

This is a great problem with the Minister's estimates, and indeed the overall budget of the government. It's the level of government that should be doing the work that I talked about and the work that you've talked about, Mr. Minister, which is not now equipped to do it because of financial constraints.

Neither you nor any other Minister, in particular the Minister of Municipal Affairs (Hon. Mr. Lorimer), have given us any encouragement that the municipalities would be able to take on any of the land banking suggestions you have talked about.

Another point I'd like to make is the need for continuity. You cannot have a system of this nature which is an on-again, off-again tap. This is where the City of Saskatoon has had great success. They've had a system which was set up and which extended beyond the normal term of office of the municipal officials or, indeed, the provincial government. It survived changes in the administration because of this. We've had no indication from you about the type of long-range thinking that you have for any proposals such as you have made.

I'd like to say a word or two about the planning objective. If you were going to sue — and you talked about this in glowing terms — the government ownership of land for planning purposes you are going to have to own a great deal more than you presently have. There is no way, with the relatively little amount that you have now, that you are able to achieve planning objectives. I wonder whether the Minister would indicate how strong these planning objectives are. He's not going to achieve any real success if he does not either get into this thing in a much greater way or, indeed, opt out and allow the private sector to handle it properly.

The Minister stated early on in his speech which he gave in the budget debate: "Our task is not to understand the world but to change it." I'm a little alarmed by that statement. He didn't say where the quote came from. I'm sure it's by some excellent philosopher but it worries me. The only way to make change intelligently is to understand the problems that you have at the present time.

The Minister I think has embarked upon a number of interesting ideas without trying to really relate them to the present world. I think he's failed to analyse some of the problem areas of the present time, what has led to them, and what is still continuing to cause them to be a problem. He has instead leapfrogged into the future with Utopian concepts, which may be splendid in a Utopian sense but which are not relevant particularly to the traditions of British Columbia and to the way that we have gone along in the past, which may well be in need of some change that the Minister will like but

[ Page 2105 ]

cannot be reversed overnight. I think he's going to have to make some attempt to understand the present world. I think he's going to have to make some attempt to put his finger on some of the difficulties and not to say: "It's not up to me to understand why we don't have enough apartments; it's not up to me to understand why we don't have enough houses."

MR. CHAIRMAN: Address the Chair. If you haven't anything more to say, take your seat.

MR. D.A. ANDERSON: I will continue. The Minister and I, however, are now having an interesting discussion.

MR. CHAIRMAN: That has no bearing on it.

MR. D.A. ANDERSON: What has bearing and what doesn't is, I think....

MR. CHAIRMAN: I will remind the Member that you are on vote 111! Address the Chair!

MR. D.A. ANDERSON: Right on, Mr. Chairman! Now, the question, Mr. Minister, is that you're going to have to start understanding the problems that we presently have instead of ignoring those and vaulting into the future and changing the world, as he described it. What we're going to have to do at the present time is try and figure out why we don't have enough apartments, in particular in the major cities of British Columbia. We're going to have to figure out why the price of ordinary single-family dwellings has escalated so high, and why the price of condominiums has gone up so much despite the efforts of the Minister of Lands, Forests and Water Resources (Hon. R.A. Williams). We're going to have to start understanding before we can get any improvement in the situation. Your quote that our task is not to understand the world but to change it fills me with a great amount of concern.

The question on apartments I think is fairly clear. With the Canadian average vacancy rate of 2 per cent, we in British Columbia, because of a reduction in construction and matched by rising expectations, rising disposable income and rising population are simply not getting the new supply that we need. The amount of construction in apartments relative to single-family dwellings has declined substantially since 1969, when it reached I think a high point. The Minister, I'm sure, is aware of this. He's going to have to understand that and try and do something about that instead of sending us off into sort of visions of the future, which apparently he is more interested in.

We're going to have to get that vacancy rate up to over 1 per cent, if at all possible. If we don't do it you can bet your bottom dollar you're going to see the same thing in British Columbia as I have seen elsewhere in the world. You're going to see the phenomenon of key money where people have to pay to get the initial lease. It may be illegal payment, it may be a payment related to some other product or service, but it is essentially a tax to get the key to get into the apartment. If you think, Mr. Minister, that you're going to be able to succeed in avoiding that situation through legislation you're dead wrong.

Let me give you an example. You turn up at the door of an apartment, you discuss with the landlord or the caretaker the lease and he says the rent is fixed at $205 this year....

MR. CHAIRMAN: Order! I think you're dealing with legislation and you should be dealing with the estimates under vote 111.

MR. D.A. ANDERSON: I'm dealing with the number of houses of British Columbia. The legislation has nothing to do whatsoever with key money. If you can find the words "key money" in that legislation I would be just delighted to agree with you.

MR. CHAIRMAN: It's not that. It's not the words exactly, but you are speaking about Bill 75 instead of the….

MR. D.A. ANDERSON: I am not speaking about Bill 75.

MR. CHAIRMAN: Will you confine yourself to vote 111?

MR. D.A. ANDERSON: Yes, Mr. Chairman, just hold on. Mr. Minister, the situation develops whereby the rent will be a certain amount but to get the key to the apartment you're going to have to make a separate payment. It can easily be disguised. You can be told that the bedroom needs repainting and it will cost $5,000 to repaint the bedroom. You are told that the cat goes with the apartment and the cat's going to cost you $5,000. No matter how you try to get around that illegal payment it's going to take place. I can assure you of this because I have been in jurisdictions where this happens. If you have a supply situation which is short and you have demand which is excessive you will get a situation such as I have described. On the apartment side you're not going to get away with it until you do something about supply. I have gone into how you can improve supply all you like.

Now, you see, Mr. Chairman, how that had nothing to do with the bill that you had in mind. With respect to regular housing, you're going to have to do something there. Again, the key to the whole thing is the supply of serviced lots. If you can increase your overall number of houses by a steady and continuous flow going onto the market, you will

[ Page 2106 ]

increase the number of housing starts you have and you will decrease expectations of future profits, which will in turn bring more land onto the market. But if you create a situation where there's the expectation of future profit, you've created a situation where people are not likely to put land on the market at the present time because they feel that if they hold off they will get a return which will be greater than a return that you get by selling the land or property and investing it, for example, and getting a return on their money elsewhere.

So it's tremendously important for you to realize that only if you go into the supply question are you going to have any hope of dealing with the overall problem.

I've got a few more notes here, Mr. Chairman, through you to the Minister. I trust the Minister will tell us how between February 19 and March 29 he lost four acres of land which he purchased last year. You've found that out, have you? Was it erosion? It got washed in the river, or what?

HON. MR. NICOLSON: The provincial land acquisitions are 742.65 acres. There are also 71 lots, I believe, most of which are in the Strathcona area in Vancouver.

I think what the Member has described as expectations…. Certainly the change of the utility of the number of persons per unit is changing. People leaving home at a younger age and seeking their own accommodation and independence and many other things are leading to this phenomenon which he described in Oak Bay. Certainly studies and information which we have indicate this to be part of the problem.

The Member has outlined some arguments on land banking not dissimilar from those of Dr. Stan Hamilton of UBC. However, I do feel that perhaps sometimes the extent of what we are doing or the intent is misunderstood. We appreciate the holding costs of land and we try to treat it as if we were paying 11 per cent interest rates. It's that philosophy, at least. We don't kid ourselves that it isn't costing money to hold land. That's the reason we want to turn it over as quickly as possible.

The Member has mentioned the success of land banking in Saskatoon, and that does go on side by side with private land banking at the same time. There has been a fairly moderating influence on the cost of lots. Certainly I've always said that the major key solution is supply, as the Member stressed time and time again throughout his speech. I look at that as a more permanent solution.

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 moves adjournment of the House.

Motion approved.

The House adjourned at 12:50 a.m.