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CONTENTS

Routine proceedings

Residential Premises Interim Rent Stabilization Act (Bill 75). Second reading.

Mr. Barnes — 2325

Mr. Curtis — 2326

Mr. D.A. Anderson — 2328

Mr. Smith — 2332

Mr. Gibson — 2334

Mr. Steves — 2337

Mr. Schroeder — 2342

Hon. Mr. Barrett — 2344

The House met at 8:30 p.m.

HON. D. BARRETT (Premier): With leave of the House I'd like to read a telegram that I sent this evening to Mr. Hank Aaron of the Atlanta Braves, Atlanta, Georgia:

ON BEHALF OF THE GOVERNMENT AND THE PEOPLE OF BRITISH COLUMBIA WE WISH TO CONGRATULATE YOU ON YOUR HISTORIC ACHIEVEMENT OF BECOMING THE HOME-RUN KING OF BASEBALL.

Introduction of bills.

Orders of the day.

HON. D. BARRETT (Premier): Public bills and orders, Mr. Speaker. Adjourned debate on Bill 75.

RESIDENTIAL PREMISES INTERIM
RENT STABILIZATION ACT
(continued)

MR. E.O. BARNES (Vancouver Centre): Mr. Speaker, I just have a few more remarks to state in completion of my list — quotes from letters I have received in regard to cost of rental accommodation. I'd just like to continue these.

One in The Vancouver Sun regarding a resident in the West End: a 67-year old pensioner stated that the city should put in a rent freeze. He said that it's getting out of hand — his rent would be increased from $120 to $175.

A telegram received just about a month ago:

I WISH TO BACK YOUR APPLICATION FOR SOME FORM OF RENT CONTROL. MY WIFE, CHILD AND I MOVED TO A TWO-BEDROOM FOURTH FLOOR WALK-UP APARTMENT ON DECEMBER 3, 1973 WHICH COST $175 PLUS PARKING. FEBRUARY 2, 1974, THE OWNER INFORMED ME THAT HE IS GOING TO RAISE THE RENT TO $225 TO COVER OPERATING EXPENSES AND WOULD LIKE IT TO TAKE EFFECT ON THE MARCH 1 PAYMENT. I REFUSED TO PAY ON MARCH 1 AND HE HAS GIVEN NOTICE ALTHOUGH NOT IN WRITING INFORMING HIS CARETAKER TO ASK ME TO LEAVE. THIS IS HAPPENING ALL TOO OFTEN, ESPECIALLY TO FAMILY TENANTS.

Another one during that same period:

OUR LANDLORD JUST DECIDED LAST MONTH THAT HE WOULD EVICT EVERYONE IN THE HOUSE WE SHARED. WE ALL HAD LIVED TOGETHER PEACEFULLY FOR ONE YEAR. MY FAMILY HAS LIVED IN THE HOUSE FOR TWO YEARS. THE LANDLORD SURPRISED US BY DEMANDING $20 MORE A MONTH. HE GAVE US ONLY ONE MONTH TO GIVE HIM THE INCREASE. IT WAS AN ILLEGAL RENT INCREASE NOT GIVING US A THREE MONTHS NOTICE. HE NOT HEEDING THE LAW GAVE US AN EVICTION NOTICE AFTER WE REFUSED TO PAY THE INCREASE. WE ARE GOING TO COURT OVER THE ILLEGAL EVICTION. UNFORTUNATELY THE OTHER TENANTS JUST GAVE UP AND MOVED OUT. THE TWO WOMEN WILL HAVE TO PAY THE EXPENSE OF MOVING THEIR BELONGINGS, THEN THE ONEROUS TASK OF FINDING NEW SUITABLE HOUSING.

Another letter. This one is interesting; this is a landlord who is finding it difficult to practise because of the pressure of his partners:

"I have been a landlord for most of the past 20 years and so help me, I have never put the squeeze on the tenants. One of the things my partners have against me is that I haven't raised the rent. An old widow in the basement pays $30 a month and I refuse to raise her rent."

This is another one:

"In 1970 the rental was $75 with furnishings. December 1, new owners came in. At that time I was informed they would be taking over the first floor, consisting of three suites, for renovation for their private use. Those tenants received one month's notice. I'm over 60 and on a fixed income. This complicates the search for rentals. I realize I will not be able to find anything suitable for under $145 a month. I am writing because my problem is shared by people over 60 on fixed incomes."

Another one:

"The foremost point I wish to stress is cost of renting to the disabled and senior citizens on a fixed income. Their income does not begin to meet the demand for rent."

Another one:

"I have stressed for years a need for a province-wide law on landlord and tenant rules and regulations. Up till now landlords have been a law unto themselves and have ripped off the public in deposits and gougings to the tune of millions in the last several years. I trust you to make sure if and when the legislation is brought down that it has teeth in it and that it… forceable, as most legislation was wishy-washy and feeble in the past."

Another:

"Are you aware of the stress being created among tenants which is giving one a feeling of insecurity? Surely something can be done to alleviate this distress among people who depend on apartment living.

"In my case we have had the usual $15 a year increase…. It is only four floors high, an

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old building and my one bedroom $180 per month... If sold a possible increase of $20. The present landlord may, however, still apply this 20 per cent increase."

There was just one final example: a fellow who was a resident manager in an apartment block that had been sold. This is the second time since he'd been there. The new owner approached him and asked if he though the tenants would go for a $60 per month increase. The manager said that he thought this was a bit too much for the people in the building to pay all at one time. He suggested that it be cut in half to $30 this year and $30 next year. The new owner said he didn't think he could wait that long and would have to make the increase immediately.

Obviously there's a problem. Obviously there's no one simple answer. The opposition, I'm sure, will be anxious to get up and show that we've made all kinds of errors — especially on the figure that was set at 8 per cent; the allowable rent increase in any one year period.

Perhaps you could argue that point because there is no magic figure. It could be suggested that it was arbitrary, but then at the same time what is another arbitrary figure that you could recommend? I think the challenge to the rental industry is perhaps one that they will have a great deal of difficulty meeting because it's going to suggest that capital become more citizenship oriented, more concerned about the field in which it operates rather than the yield it can extract at the present time. We do have a crisis and we require a lot of co-operation.

The Hon. Leader of the Opposition (Mr. Bennett) asked the Attorney-General if he had taken the time to talk to the communities, especially the manager side, and find out their problems and their feelings, et cetera. Well, I think that some of this has been done, but I don't think it's too late to do that. Perhaps that's the next step. Perhaps the opposition can assist in helping those who are on the managerial side understand the real seriousness of trying to cope with the housing problem and the rental problem as well.

We won't be able to deal with the problem purely on a legislative basis. It is going to require co-operation and people are going to have to be willing to not find all those loopholes that they have been able to use in the past. They are going to have to try.

I would like to feel that instead of capital fleeing, as the Member for Columbia River (Mr. Chabot) likes to talk about — fleeing capital — that capital will say, "If we flee and keep finding greener grass, then we'll eat up all the grass and then we are going to have to come back anyway — so maybe we'd better save the field."

I don't think that's too unrealistic. I think perhaps we could stop and take a look at what can we cut down on. How much do we really have to have in order to keep developing? Why can't we co-operate a little bit and cut down on some of the costs? Now this situation is something that in a competitive society no one wants to take the lead and take the loss. But perhaps we can share some of the losses. Perhaps we can settle for a little bit less. Perhaps we can be a little more honest about what the books are really like.

You know, you can read books all kinds of different ways. You can pay yourself a big salary and call it operating costs. You can say that any equity that you achieve or develop is your due right and that has nothing to do with any gains above that. I think that the capitalist has a responsibility as well as the people who are trying to hold the line, trying to hold the capitalist down to some sense of responsibility.

If we destroy the field, I don't know what we are going to do. I don't know what we will do. The rent freeze is a temporary measure — I would just like to close in saying this — it is a temporary measure. It is an attempt to respond to a situation that…. I think if you evaluate the nature of those letters that I just quoted — these are most of the people, not just a few of the people, living in the places which are being rented. I think they have a right to at least be given a trial. And we have given them this trial.

Although we are going to be subjected to accusations of being unfair to management, to capital, of causing problems as far as construction is concerned in new accommodations, I think that when all that is said and done we still have a real problem and it didn't start when this government came into office. It has been a long problem, a serious problem and it will continue unless we can make some serious efforts to try and resolve the problem and find some stability in this economy. Thank you.

MR. H.A. CURTIS (Saanich and the Islands): Mr. Speaker, I will be very brief. I am sure that my colleague, the Member for Oak Bay (Mr. Wallace) has other comments to make with respect to Bill 75. But you know, Mr. Speaker, this isn't an easy bill with which to deal; it is a very complex and complicated subject. We have yet another attempt on the part of this government to rush something into law which is quite properly, as I believe the Leader of the Opposition indicated this afternoon, described as "Band-aid legislation."

I have to agree with the adjective. It is once again, regrettably, in British Columbia the appropriate phrase. Particularly appropriate criticism, Mr. Speaker, when we review the fact that with all the careful scrutiny by high-priced help, the careful review, presumably by the Attorney-General, the careful review by members of the government caucus, all this failed to identify the most embarrassing flaw which is now being corrected by means of an amendment which is on the order paper over the

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name of the Attorney-General.

I think we will come to know that as the "8 per cent flaw."

It is this kind of snafu that continues to erode public confidence in this government. The bill represents one single action by the NDP to correct one single problem — landlord-tenant relationships. It is retroactive legislation, and except in cases of direst emergency, I cannot subscribe to retroactivity in law.

It is most regrettable that the government did not have its own affairs in order so we could have been presented with something to solve the total problem last year, or at the latest, within the first few days of this spring session — a carefully thought out, well documented, well prepared Landlord and Tenant Act, such as the one which at first glance appears to be reasonably good, which arrived on our desks only this afternoon.

Instead, we have again an instance of hurry, of haste, of poor draftsmanship and poor craftsmanship. The First Member for Vancouver Centre (Mr. Barnes) has spent some time reading excerpts from letters that he received from tenants. I don't deny some of the comments which he made; a number of them are very valid. It is probably significant — he could correct me with interjection if I am not right — that many of them seem to come from the crowded West End of Vancouver where, and I think we have to face up to the fact, more people want to live than can be reasonably or comfortably accommodated. I believe there is significance in that fact. At least as he referred to a number of the letters, they appeared to be West End addresses.

Mr. Speaker, we could stay here for three days or four days reading letters to each other. I have just one which I think will perhaps state the landlord's side of the picture. This one is from Burnaby, on Royal Oak. It is a copy of a letter addressed just a few days ago, March 27, to the Hon. Attorney-General. I'll quote from it:

"We bought an apartment on April 1, 1973. In order to purchase this apartment we gave up our home which took 25 years of hard work to acquire. We took over the management and caretaking. My husband and I worked long, hard hours, including weekends, cleaning and repairing it. So far we have not collected any wages or profit on our original investment. In fact, it has cost us $33 per suite more than actual rent to maintain — see attached sheet for actual costs."

— I won't read those — the Attorney-General has them, Mr. Speaker —

"We put the suites up in November, 1973, by an average of 12 per cent, the first increase in four years.

"In calculating our expenses for 1974 we need an average of $13 per suite increase as of January, 1974, to cover our present costs.

"Due to the Landlord and Tenant Act we cannot put these rents up until November, 1974. But at November, 1974, we should also be adding another 10-12 per cent increase for our 1975 costs.

"Would you please tell us, by return mail, how we might meet our costs because we cannot subsidize these tenants any longer. We should be able to get our rents up to cover costs and a fair rate of return.

"Mr. Yorke's answer on radio to such an explanation was: 'Tough beans, you shouldn't have bought it.'

"I called on Mr. Lorimer to help, and he said, 'don't worry,' but he wouldn't look at any of my figures.

"With such remarks, what chance have two people against 50 to 100 tenants? None.

"The tenants are like the present government — they will not look, see, or listen. Rent increases on a percentage basis are not fair. Some suites might be renting at top rate of $185, others at $145 for the same accommodations."

Mr. Speaker, the next line:

"The people with low rents are being penalized. We are not rent-gouging, we are trying to keep our heads above water, and working seven days a week to do it."

The letter to the Attorney-General: copies to the Premier and to all Members of the Legislature, and to the mayors and councils of Vancouver, Burnaby and New Westminster.

The statement by the Law Reform Commission I think is also very significant and other speakers from the opposition side may well refer to it.

In part

"Governments should always seek other and more direct routes to their ends before resorting to rent control. Since the supply of housing in the inner city is inelastic in the short run, that is, unresponsive for a while to changes in price, and since tenants have more votes than landlords, it is always tempting to impose rent controls as a temporary solution to an urgent problem.

"Their most destructive effects appear much later, and the longer the controls continue, the harder it becomes to eliminate them for the good reason that the immediate effects of freezing the rent will generally be even worse.

"An industry which has grown unprofitable, whether through price controls or other reasons, does not shed its least efficient producer; it is the most effective who go, leaving in their place, the ineffective and the unscrupulous.

"Thus governments should first consider

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what they can do through subsidies — that is, rental allowances for private as well as public tenants, public provision by building or acquiring houses, giving security of tenure, selective extension of opportunities for access to one-owner occupied or public housing, mortgages and loans for those who really need them, and higher priority for unmarried mothers or other groups excluded by housing managers in the public sector, and by policies that may get higher incomes to the target groups through better job opportunities, subsidized public transport or larger family allowances and pensions."

The start of the statement from pages 144-45 of the LRC report on landlord-tenant relationships: "Governments should always seek other and more direct routes to their ends before resorting to rent control."

Mr. Speaker, how unfortunate that in its haste, the government could not have produced Bill 105 two months ago, and there would, I submit, perhaps have been no necessity for the bill which we are debating tonight.

MR. D.A. ANDERSON (Victoria): Mr. Speaker, we have here a bill we're discussing in principle and a bill which I feel is wrong in principle. The bill is, I think, a pretty clear indication to all of us of the failure of the government's 18 months in office with respect to housing and of course, in this instance, rental housing. We've gone into this in some length during the estimates of the Minister of Housing (Hon. Mr. Nicolson) but this bill I think only reinforces the arguments made then about the failure of the government in this field.

The problem that we have in rents was described by the Attorney-General (Hon. Mr. Macdonald) quite well. He pointed out the problem of supply. He pointed out the number of vacancies — two per 1,000 in Vancouver as opposed to some 20 per 1,000 when the government took office. The difficulty that is faced in the increases in rent that are occurring are essentially because of a government which has almost.... Indeed, the conclusion is inevitable that the government has deliberately created a climate in which investments in apartments would not be attractive and therefore apartment dwellings would not be going up with the speed that they did previously and the numbers that they did previously, and there would therefore be a shortage of supply.

This bill, of course, compounds the problem. We have a shortage of supply, we have a problem of increasing rents, we have of course an inflationary situation as well. But this bill will make it even more difficult in future to dissuade the private apartment builder and the private apartment owner from putting up the money and of course the talents that they have in this field. To putting up buildings in this field. So you have a situation where you have a bad problem and you have a government policy which is inevitably designed to make it worse.

It's a policy which I am reluctantly driven to conclude is deliberate. You have a government which does not believe in the private sector. You have a government which believes — or many of its Ministers do — in the Waffle Manifesto and public ownership. You have a situation where there is a conscious effort to discourage private investment in a most important area of social investment. And you have this social investment reduced to the absolute minimum possible by government action.

Now, of course, we have a restriction, a government bill designed to make things even worse than they previously were in terms of supply, and no doubt in the near future we will hear the cries go up about the failures of private enterprise in this field, the failures of responsible private enterprise and therefore the need for even greater amounts of public investment, public control and, of course, public takeover.

We have, as I mentioned, the figures — a tenfold decline in the amount of vacant housing available in the rental field, from 2 per cent to below 1 per cent right down, indeed, to 0.2 per cent. The inevitable problem has been created. The government is responding in a way which is well described by the Member for Vancouver Centre (Mr. Barnes), a way where they respond to the pleas and the concern without thinking of the consequences of what they are in actual fact doing.

The Member for Vancouver Centre talked about the mobility of capital, and he talked about the need for capitalists to be responsible. Well, capital is mobile. The most easy thing in the world is simply to hold off the market or put your money in another area. Much of our investment in British Columbia, in particular in multiple-family dwellings and condominiums, has been from overseas. Perhaps it's desirable; perhaps it's not. But that's where a large chunk of the investment money, in particular for rental accommodation, has come from. This has been deliberately stifled, with no effort being made by the Minister of Housing (Hon. Mr. Nicolson) and none being made in this bill to find a substitute.

It's a short-term response to a long-term problem. It's a short-sighted response. It's a response which we feel — in fact we are sure — will only make the problem worse in the long run, which is going to lead to further controls, further difficulty, further shortages and, of course, further trouble and unhappiness for many British Columbia families.

So we feel that this bill is wrong in principle. As was mentioned by the Member for West Vancouver–Howe Sound (Mr. L.A. Williams), we will be voting against it. We feel it's going to lead to long

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waiting lists for housing. I mention the fact that there is now a 0.2 per cent vacancy rate. This is virtually no vacancy rate at all. There are always, of course, one or two people moving out for reasons of their companies transferring them or the government transferring them. There are always some vacancies for that reason. And 0.2 per cent only takes care of that group of people.

So we will shortly be finding the long vacancy lists which I can remember one time, a period that I spent studying in Sweden, were eight years for the young family in Sweden. Eight years they had to live with their in-laws or with their parents or with friends before they could be considered high enough up on the Stockholm housing list to receive accommodation.

You're going to find, of course, limitation on choice. Those who have apartments now will be most unwilling to give them up — first, because as soon as they do they get away from the protection offered by the bill in terms of restriction on rent; secondly because of the difficulty of finding new accommodation.

So you'll find a social problem resulting directly from the fact that people who have accommodation will not be willing to trade it for something more appropriate to their circumstances. The retired people, for example, will not be willing to move into smaller or less expensive accommodation when their children move out. Why should they, when the net result of moving means simply the rent will remain the same or even be higher and there will be less in the way of facilities?

The people who live in Vancouver are being encouraged by the Minister of Industrial Development, Trade and Commerce's (Hon. Mr. Lauk) programme for northern British Columbia. He's trying to encourage them to move into the north. But will they move? You bet your boots they won't move. They're stuck there. Why? Because of the social immobility created by legislation such as this.

I've mentioned before, Mr. Speaker, black markets. Black markets are impossible to control in the housing field. Sure, you'll have a few prosecutions, Mr. Attorney-General, through you, Mr. Speaker. Sure, you'll have a few prosecutions which will be regarded as success of the government's plan to implement this legislation. You know full well for every successful prosecution you'll have at least 50 to 100 cases where the key money is paid and the unscrupulous landlord collects, even though the person knows full well that this may be a dishonest and, indeed, illegal payment.

There's going to be disincentives to builders, so you're going to have even more trouble in the future. The problem that has been mentioned by people in this House is that at the moment there are more tenants than there are landlords, but I think that we should think about it from the tenant side. If you look at it from the tenant side, you'll realize that this type of legislation, this type of ad hockery, is just as bad from his point of view or her point of view as it is from the point of view of the landlords themselves. When the reasonable needs of people go unsatisfied, you do not have satisfied tenants.

I'm sure the government must have given some thought to this, and the Attorney-General, who brought in this bill with a certain amount of hesitation, I felt, in his introductory speech, who talked of this being temporary, who kept on trying to assure people that there really wasn't that much to it, I'm sure he realizes the difficulty that we are facing.

Mr. Speaker, how can you have the policies of the Minister of Municipal Affairs (Hon. Mr. Lorimer), who is here in the House tonight, with respect to changing transportation, with respect to servicing and zoning which he has in mind? Indeed, the Minister of Housing has changes here. How about building code changes? How can you have all these things take place when you have so frozen the housing field and the existing stock? Here I might mention once more the fact that the vast bulk of housing is existing, already built housing and new stock, new supply brought on by construction is but a small margin in comparison with the overall total.

So you're going to create the strains that are going to result from the lack of mobility which I think will have serious effects upon other social programmes of the government.

We've heard eloquent remarks about the need for rent control to assist the low income or the pensioner or the person who is having difficulty meeting rapidly increasing rents. That's an excellent reason for concern. But surely, as I mentioned in the estimates of the Minister of Housing, the way to achieve this is not to go after the supply side and force landlords, in essence, and in particular responsible landlords, to subsidize their tenants. Surely the best way of going about this, Mr. Speaker, is to go and attack the root of the problem, which is the lack of spending power of the low-income families or the pensioners themselves.

The difficulty we face is this: the government has got a problem. There is no question about the problem — it's a problem of their own creation. But instead of adopting a responsible approach they have adopted an approach which tends to shift the burden on to the landlord, a burden which I don't think the landlord is willing to bear in the short run or in the long run, and a burden which undoubtedly will come back to roost on the tenants themselves.

So if we want to assist, surely the way to do it is to assist in the income level of the low-income family, the single parent with children, the pensioner and those who are, in fact, in obvious need.

There are many other problems we see in principle

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in this legislation but I would like to mention just a few, Mr. Speaker. You are going to have a reduction in supply in the face of what the Premier and Minister of Finance (Hon. Mr. Barrett) told us during the budget debate was ever increasing population, and with that you simply cannot solve your long-term problems. All you can do is to have a short-run reduction in rent increases until the market discovers ways of creating avenues around the legislation and then your problem is going to escalate enormously.

You are going to have a large number of families who, no matter what their income level, are going to find it more and more difficult to find accommodation. People with higher incomes, of course, will have far less difficulty than those with lower incomes. So your problem of accommodation and income distribution is going to be substantially magnified and the problem for the low income person, the problem of the person who is on pension, welfare, or anything of that nature, is going to become substantially greater, while the person who is on a good salary will have no trouble at all.

The fact is, Mr. Speaker, if you are going to set up a subsidy scheme such as we have — a subsidy scheme which the government believes should be a subsidy scheme by landlords to tenants, in particular the responsible landlords who have been good in the past years and have not increased their rents out of line with other costs they have had to meet — if you are going to set up a scheme which has them pay a subsidy to tenants, you are creating a social distortion which I feel is bad and it is the type of payment, in my view, which should be met by the state from public accounts. Why should the landlord, in particular the responsible landlord, be forced to pay that type of subsidy?

I trust some of the Members on the government side will address themselves to this problem, because it is pretty easy to do, as has been done by the government Member (Mr. Barnes) who spoke before the adjournment hour and immediately after, Mr. Speaker. It is pretty easy to create a word picture of the rapacious landlord trying for every buck, and it is pretty easy to read the letters of the individuals who are worst hit in society, and then to say, "Ah, that's the landlord," and to generalize from the very worst cases — the cases, for example, of the people such as the Minister of Lands, Forests and Water Resources (Hon. R.A. Williams). It is easy to take letters on that and assume that all landlords are just as bad, but it is not necessarily fair to the vast bulk, many of whom have tried very hard to keep rents within reason and who are penalized far, far more by this legislation than, of course, the person who has acted irresponsibly.

So you have a situation where the irresponsible landlord escapes, the responsible does not, the subsidy is paid by the responsible and not by the state. It just doesn't make a great deal of sense and that is why it is indeed wrong in principle.

The other aspect that I would like to mention is this: it leads to a very inefficient use of our present housing starts. Again I mention, Mr. Speaker, my own experience not so long ago when I decided to rent rather than buy, simply because I didn't think I needed as much space as some other people who have more family responsibilities than I do. I did tend to keep my use of housing down, thus meaning, of course, that others might use more. Now this, of course, wasn't my only reason for doing what I did. But a situation should not be created where you encourage people, because of an artificial rent ceiling on their present property, not to move into smaller accommodation when they have no longer as much use as they previously might have had for a more spacious accommodation. That is an important point because the mobility is reduced substantially.

Another point, Mr. Speaker, is that we are going to create — and here I'm afraid I have to agree with some of the advertisements of the landlords' associations — in certain parts of the province, in particular in areas where buildings are not of the best at the present time and where, in addition, the landlord has tried to keep rents down, and I'm thinking of some areas, for example Chinatown in Vancouver — we are going to create slums with legislation such as this.

There is really no two ways about it. You have a situation where the landlord himself has attempted to keep down costs. He has not made exorbitant profits from his property. He has attempted to accommodate senior citizens and others reasonably and he does not have a large margin to work against. He is not necessarily a wealthy man. What you find, Mr. Speaker, is that he simply will not have the money, he will not have the return on his investment to permit him to make expenditures which could be major expenditures in the renovation and repair which otherwise he would have done.

So you are creating a situation, at least in certain parts of Vancouver, and probably Victoria and other cities as well, where you are going to encourage slum housing by legislation such as this.

Now, that's not everywhere. That's not throughout the City of Vancouver. It's not necessarily throughout the City of Victoria. But in certain instances, Mr. Speaker, you are going to create slums with this type of legislation and there is really no way the landlord who has been responsible in the past, who is not taking an excessive profit, who may well feel at the present time that he has allowed his profit margin to diminish dangerously low, will be able to maintain the property as it should be.

The landlord will tend, in fact, if he is not getting an adequate return, to live on his capital and this means depreciating the value of the stock of housing.

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So indeed, Mr. Speaker, you have got problems in just about every area. This type of rent control may well be a well-meaning effort and a foolish effort to reduce the cost of housing, but it is going to reduce the number of new homes available for rent, the number of new apartments, and the number of condominiums. It is going to increase the pressure for people to buy instead of rent, because in actual fact there will be no possibility of renting because there will be no accommodation available for rent.

So you are going to be faced with a situation where the only possibility of getting new accommodation will be to purchase, and many young families cannot afford the cost of purchase. Many don't think they want to embark upon the responsibilities of purchase because they may want to move elsewhere in the province within a year or two and for them to be forced to buy, if they are to get accommodation at all, is obviously pretty foolish.

I'm glad the Minister of Consumer Services (Hon. Ms. Young) is in the House because this type of legislation is extremely damaging to the consumer's interest. The consumer should, and I think she agrees, have freedom of choice and ability to choose — the opportunity of going out and disposing of his income in the best manner that he or she sees fit. Yet if you create a situation such as this legislation will inevitably create, with dislocations in the economy and special situations as well as shortages, the consumer cannot make a choice because there is no alternative if they move out of their present accommodation. So you have the situation where the individual consumer doesn't have the freedom of choice and is unable to make his own decision because of institutional arrangements brought in by this government.

Mr. Speaker, I spoke earlier of the need for subsidization. If we are to have low-income people assisted, and I think they should be assisted, by all means let's do it by the public. After all, it is the public that wants them assisted. It's the public that bears this responsibility and it should be done in a way that can be clearly outlined, clearly defined, and it should be in there in the public accounts of the Minister of Finance (Hon. Mr. Barrett) or the Minister of Housing (Hon. Mr. Nicolson) in a manner which cannot be concealed.

Subsidies, when they are paid within society by one group to another, are bad when you cannot tell what they are and how much they are, or where they are going to, because this type of legislation will probably assist the wealthy infinitely more than it will assist the poor. If we want to have assistance to the poor or the less fortunate, we should indeed make direct grants to them. A direct subsidy paid in cash or kind to the consumers gives them the choice of deciding where they wish to maximize their expenditure, where they can get the best return. They may not think it is always in housing. They may wish something else, and I feel that to get responsible consumers we have to give them maximum choice.

So I think, Mr. Speaker, that if you have a subsidy scheme, if a subsidy scheme is necessary — and it appears that it is, thanks to the government's mismanagement in the last 18 months — let's make it a subsidy scheme for people, not a subsidy scheme for things.

I would like to suggest that the Denny report on housing has a quotation which is well worth considering. They go on

"We recommend the payment of a shelter allowance to low-income households. That allowance could take two forms. It could be an annual payment made in advance to all low income households, regardless of their actual expenditure burdens, amounting to the difference between the average shelter-to-income ratio of households in that income range and 20 per cent of income; or it could be a rebate paid after the event of the difference between the income actually spent and the 20 per cent of income."

That's on page 7 of that report.

I feel that's the route we should be going if we wish to assist the low-income renters. The present legislation simply does nothing to deal with the problem. The relief provided by this bill goes generally to the wrong people, mainly those who are wealthy enough not to need it. It's ineffective in terms of both society and the economy, and it will do nothing for future shortages.

I have no intention whatsoever of voting for this legislation, to reply to the question across the floor from the Minister of Highways (Hon. Mr. Lea). It's another example of the government's ad hockery.

I thought a socialist government would come in here full of long-range plans. Planning was something which I thought socialists were interested in and prided themselves at being good at. But what we find instead is ad hockery on top of ad hockery, short-term programmes on top of short-term programmes with absolutely no thought to ultimate results and conclusions and the effects upon the people of British Columbia.

The one worst feature of this government is this: instead of allowing market forces to carry out — admittedly, not perfect but at least with some semblance of rational decision-making….

HON. A.B. MACDONALD (Attorney-General): Carry out the exploitation of the poor tenants of this province. Let's face the facts: nobody is sticking up for those tenants but this government.

MR. SPEAKER: Order, please!

[ Page 2332 ]

MR. D.A. ANDERSON: For a man who was so reluctant in bringing forward this bill today, Mr. Speaker, and spoke so diffidently, I think the Attorney-General should check a little closer.

Bringing in legislation which, while it may be popular in the short run, is in the long run damaging to the interests of the very people he talks about protecting, is not in my mind good planning nor is it good for those tenants.

The landlords have their associations; they can deal with their own problems. It's the tenants and, in particular, the low income tenants who cannot be protected and are not protected by this type of legislation. It's to those people I think the government should devote a great deal more attention and thought.

MR. D.E. SMITH (North Peace River): It's been an interesting discussion so far. I think perhaps the speakers who have taken their place in this debate, both from the opposition and the government benches (although we've only heard from the Minister who introduced the bill and one other government speaker so far in this debate) have clearly defined the basic differences between what we feel will provide results in the field of rental accommodation and accommodation generally for people in the Province of British Columbia and what the government feels is a solution.

It's unfortunate the Hon. Attorney-General (Mr. Macdonald), before introducing this bill, didn't give a little more thought to it. I think if he had even taken the advice of the Law Reform Commission and read what they had to say about rent controls, he would have realized they had some very important statements to make.

They felt the whole problem of rent control was so demanding and required so much study from people who were first in economics and policy decisions that it was beyond their competence to deal with it. This is what they had to say:

"We find ourselves in agreement with the position taken by the Law Reform Commission of Ontario in 1968, stated as follows:

" 'Rent is an important element in the cost of living, but it is only one element. A consideration of any system of rent control cannot be disassociated from consideration of controls over all those elements which go into the costs of construction and maintenance of housing accommodation. This includes the cost of land, the building supplies, wages, the food and clothing for the wage earners and their families, together with municipal and other taxes. The wisdom of such controls is something that requires a wide economic study and policy decisions that go far beyond the power of this commission as a law reform body.' "

Yet, we have the Attorney-General, obviously because of pressure from Members of his own backbench, moving very rapidly to introduce a bill which he now tries to say is just a temporary measure; it will certainly not be in use for very long. I've got to admit that the First Member for Vancouver Centre (Mr. Barnes) can be a little bit persuasive when he wants to be. He certainly has the size that can make his point of view very acceptable, particularly if you are backed into a corner, Mr. Attorney-General.

HON. MR. MACDONALD: He's in the palm of my hand.

MR. SMITH: Oh! Where you at, Mr. Member for Vancouver Centre? I don't think he'll take that sitting down.

Interjection.

MR. SMITH: In any event…

AN HON. MEMBER: It's the other way around.

MR. SMITH: … it's interesting to analyse the remarks and the statements of some of the Members of the government concerning this whole problem of providing accommodation for people in the Province of British Columbia. What have they done and what are they trying to do?

First of all, with the legislation you've brought into this House including Bill 75, although not it specifically, you have followed a philosophy in policy that people should be tenants of the state. You suggested you want to own the property; you will encourage people to build co-operative housing units; you will do something to relieve the accommodation shortage provided those people never retain or become owners of their own property.

MR. SPEAKER: Excuse me, would the Hon. Member not deal with that other bill.

MR. SMITH: Oh, I'm not.

MR. SPEAKER: Try to contain this within the provisions here of the principles of …

MR. SMITH: We've had other Members speak…

MR. SPEAKER: …Bill 75.

MR. SMITH: …in the debate concerning housing. You have suggested that people should become tenants of the large corporations of the province which have the funds available to build

[ Page 2333 ]

houses. But I want to make it abundantly clear, Mr. Speaker, that the position of those of us in the official opposition is that people should be encouraged to own their own homes outright on their own property in the Province of British Columbia.

Then and then only will you start to come to grips with the problems of housing and accommodation for people in the Province of British Columbia. You can't do it by introducing a patchwork, pitifully weak type of legislation that we have before us in Bill 75. It won't work; it will not begin to accommodate the problem that has been with us for some time and is growing every day by leaps and bounds.

The thing you must do is provide an incentive for people to own their own homes in the Province of British Columbia, thereby releasing the rental accommodation they might have been in before for other people so they can rent that. That relieves some of that shortage when those new homes are built to accommodate new families.

You haven't come to grips with problems the people are actually facing. Regardless of what you have said or what your party has said, the number of available suites in the Province of British Columbia is the lowest in all of Canada: 0.2 per cent vacancy in the City of Vancouver where the need is most acute. Compare that to the cities of Edmonton and Calgary where the vacancy rate runs from 5.2 to 7.9 per cent. It's not much wonder that the B.C. Rental Housing Suppliers Association have run an ad in the British Columbia papers saying, let's move to Alberta because there is accommodation available.

I would think that what you would want to do if you really are concerned about the housing problem in British Columbia is encourage people to (1) build their own homes; (2) encourage those people who have money to invest to build more apartment blocks.

But I suggest this to you, Mr. Attorney-General: you will never encourage people to build apartment blocks if you don't do something about the high costs that are involved in building today.

Interjection.

MR. SMITH: Well, let's just take a look at some of the things this bill disregards.

It's not the responsibility of a tenant or a renter, but it is certainly the responsibility of the government to analyse some of the problems that are involved in rental accommodation and some of the reasons we do not have new building starts going on in the Province of British Columbia, new apartment blocks. Why don't we have these things? Let's take a look at some of the reasons.

First of all, we have a rate of inflation in British Columbia as high as any place in Canada — 10-plus points a year. You've got to admit that the government has contributed greatly to that inflation rate.

You have an increase in the costs of owning property in the Province of British Columbia — 15 per cent on an average on residential property, according to the Greater Vancouver Regional District. And it's certainly far more than that to people who presently own commercial property, who have owned it with the idea of building an apartment block on it, or at least entering into an agreement with someone who has the capital to build an apartment block for them on that property.

Certainly the rate of inflation and the rate of increase of assessment is greater than 15 per cent a year.

We have wage increases in British Columbia in the building trades which averaged 14 per cent in 1973; and it certainly doesn't look like it will be any less than that in 1974.

Thanks to the proposed increase in the cost of petroleum products there's an escalation in the cost of heating apartment blocks. Individual homes — in fact, anyone who uses energy in the Province of British Columbia — will face an increase of from 15 to 30 per cent this year.

Then you wonder why people who are in the business of building apartment blocks and leasing them out suggest to their tenants that they must receive a nominal increase in rent. On the whole, most people who have owned apartment blocks are not rip-off artists. I think that they have been trying conscientiously to supply the needs of their tenants.

You must admit, Mr. Attorney-General, through you, Mr. Speaker, that many tenants are very demanding these days. They are very demanding on the people who own the property — and sometimes abusive of the property they occupy. Irrespective of that, if we could encourage several thousand new units per year.... We need more than several thousand. We could probably use 100,000 in the lower mainland alone. But that's probably looking beyond what we could reasonably expect. But if we could hit that level of new apartment construction and new home units each year, we would accommodate those people who could afford to pay the rents that are involved in new suites. But by the same token, we would take the pressure off some of the older apartment blocks scattered throughout the lower mainland area that rent at more reasonable rates because they're not quite as modern. They don't have all the facilities of the new apartment blocks.

At least this would provide accommodation for people who are desperately in need of it now.

I agree with some of the other speakers that where we have to deal with the disenfranchised people and the elderly citizens and those on a poverty level, we should consider providing them with some sort of financial assistance which would offset the rents that

[ Page 2334 ]

they have to pay. Certainly we subsidize people in other areas; this is one area where I think we could be of direct benefit to the people who, through no fault of their own, must pay higher than they can reasonably expect to pay.

You know, we've heard a great deal from the Minister of Housing. But one of the things I think we should just take a brief look at is the fact that the ICBC, a creature of this government, spent $7.5 million acquiring property to build claims centres throughout the Province of British Columbia. For what purposes? — to duplicate a service that was already available to everyone in the Province of British Columbia long before ICBC was ever thought of. The services were here; they were provided. They were provided by the insurance companies and the agencies that operated in this province for 100 years. There was no real requirement to acquire that property, except the position of the NDP that they must become owners of everything in the province — including, it looks like, the 5 per cent of property, or less than 5 per cent, that is presently in the hands of private owners throughout the province. Ninety-five per cent of the property in the province is in the hands of the Crown and you're still not satisfied.

If you took that $7.5 million which was not really required, and added to that a like amount — which will certainly be spent to build buildings on this property — you would have a fund of $15 million available to subsidize, at least in the initial year, the rents for those people on fixed income, for those people who may be disabled and for those people who, through no fault of their own, cannot keep up with the pace of inflation today and rent accommodation that's in keeping with the size of family that they have to raise.

We've seen in the last 18 months more waste and more squandering of funds by the NDP than by the previous government in 20 years. There's no question about it. There's been a great tendency to speculate with the dollars you were fortunate enough to collect through no fault of your own, because of taxation in the province.

If you're really concerned about housing in the Province of British Columbia, then you should take the advice, I would hope, of those people who speak to us and say they wish to own their own homes in the Province of British Columbia, but somehow can't understand how property which a year ago could be purchased for $10,000 suddenly costs $20,000 or $25,000 — for the same basic lot. It is no greater accommodation or greater facility, but it's doubled in price. I think it's time you asked yourself why that happened in the Province of British Columbia and what part the government of this province played in the escalation of land prices throughout the province.

Certainly the greatest effect by far has been the effect of the land freeze and the position taken by the NDP with respect to ownership of property in the Province of British Columbia.

We should be encouraging people to make use of the strata-title legislation that they have available to them. We should encourage people to build their own homes. We should encourage people to use all the facilities that are available to allow them to get out of rental accommodation and into a home that they own themselves.

That won't relieve us of the problem of shortage of accommodation for people who must for some period of time rent in the Province of British Columbia. But the one thing that we must look at is the position of new housing starts and new apartment blocks in the province. In that respect, Mr. Speaker, the record of the NDP is an abysmal failure.

You're not keeping up with the requirements of the province. The reason you're not keeping up is that the legislation you have introduced is not going to solve any problem; it's going to contribute more to it than anything else. And a year from now we'll be standing in our places in this House talking about the tremendous problem we have in British Columbia because people can still not get accommodation. Those that want to build will still be disenfranchised; they will not be able to build. Those people that need apartments will still be waiting for apartments if we follow the outline and the suggestions and the policy of the NDP.

MR. G.F. GIBSON (North Vancouver-Capilano): Mr. Speaker, I'd like to start out by saying that I think the government's intentions are good in this legislation. The execution is incompetent, Mr. Speaker, but I think the intentions are good.

We heard some very moving and eloquent remarks by the Hon. First Member for Vancouver Centre (Mr. Barnes) that certainly demonstrated to me that the government would genuinely like to do something. So, Mr. Speaker, why won't they take some of the good advice they've been getting — the good advice from this side of the House?

This is a government that's bankrupt in everything but money. It's certainly bankrupt in an understanding of how you get housing onto the market be it housing of the single-family, owner-occupied variety or be it housing of the multiple-family, apartment variety that we're talking about tonight. The problem is that….

HON. MR. BARRETT: The federal Liberals know all the answers, don't they?

MR. GIBSON: Mr. Speaker, the Premier suggests that the federal Liberals know all the answers. Mr. Premier, I think the provincial Liberals have a lot of the answers if you'd just listen to them.

[ Page 2335 ]

Interjection.

MR. GIBSON: The problem here is that this great socialist government that has always been thought of as a bunch of thinkers and planners have come into office and it turns out they don't know how to plan. What a surprising thing we have here. Growth is going on in British Columbia at its regular rate of 3.5 per cent a year, and what do you know? — more apartments are required.

HON. MR. BARRETT: The 57-vote wonder.

MR. GIBSON: It was on the right side of the line, Mr. Premier.

HON. MR. BARRETT: How lucky you were! If your leader had been there for another day, you would have lost.

MR. GIBSON: But if you'd been in there for another day, I would have won by more.

Interjections.

MR. GIBSON: The Premier was only in the riding one day, Mr. Speaker, but he was a great help.

MR. SPEAKER: I should send you both a notice to quit.

MR. GIBSON: So they haven't planned, Mr. Speaker, and now that the crisis has been forced upon them, the realization of it, they don't understand the problem and they haven't attacked it properly. The problem is very real for the tenants and for the owners too. I hope the government appreciates that it's on both sides.

I'd just like to read a short letter:

"My wife and I are old-age pensioners in an apartment near Lonsdale Avenue. We have just received a three month notice that our rent will be increased by 27 per cent as of July l, 1974. By that date we will be tenants for one year, but the increase is just too much for us."

Mr. Speaker, that's a short note of a personal tragedy. On the other hand, I have a description from another man in my constituency, a man of middle age who is a labourer. He has worked long and hard to buy himself one triplex and one duplex, has maintained them well, has good tenants in them and is charging rents for two-bedroom suites well below the market: $185 a month in the triplex, $210 a month in the duplex.

Even at an increase of 8 per cent he would still have problems with the kind of money he had to pay for these buildings, money he earned himself as a labourer. So there are problems on both sides here and I think the government would be wrong not to recognize that. The rising costs of construction have gone up much faster than the average returns on rent.

The Greater Vancouver Apartment Owners' Association circulated some data on rent which perhaps the Attorney-General would talk about when he closes the debate because the figures are far too low. The rental index has gone up only 25 per cent or a little more since 1961.

Mr. Speaker, I think everybody would say that the rental index has gone up a great deal more than that, because this Statistics Canada figure, I think it is, measures only very selective kinds of rent measurements. There are other figures that say that the average rents in the Vancouver area at least have gone up something more like 60 or 70 per cent over that period.

But at the same time — and this is more easily measurable — the costs of construction have gone up a great deal more than that, to the point where it has been estimated that for a 450-square-foot studio apartment built in a modern concrete highrise built today, a return of $236 a month rental would be required to break even on that — and $289 for a small one-bedroom and $341 for a large one-bedroom. The costs have gone completely out of control, the costs not only of construction but of financing and operation too.

So what does the government have to say about all that? They don't come up with the obvious answer which is to build more apartments, to find a way to do that. Instead they come up with a temporary rent-control measure which will lead us into a longer-term rent-control measure, that the rules don't permit us to go into at any length tonight; but it will be a continuation of the rent-control idea.

So I would just like to put on record some of the effects of rent control. I'm reading here brief excerpts from a paper prepared by Dean Phillip H. White, September 25 and 26, 1972, then the dean of the faculty of commerce and business administration at UBC. He has this to say about rent control.

"It's manifest in those countries where rent control has persisted that as with other forms of price control, rent control leads to the creation of shortages, long waiting lists for housing, limitations of choice in housing, black markets, disincentives to builders and acute difficulties in finding equitable ways of distributing houses among consumers."

Unfortunately, Mr. Speaker, with all those disadvantages he goes on to say:

"In spite of these effects, rent control has the durability of other forms of economic protection, and has been found difficult to remove once it has become established."

In other words, the government, in bringing in rent control, is not bringing in something temporary,

[ Page 2336 ]

especially with the ongoing legislation; they're bringing in a problem that British Columbians, if this Act passes, are going to be living with for many years.

Interjection.

MR. GIBSON: The Attorney-General said he would lift it, Mr. Member, but controls breed controls; they always do.

Now what's so bad about these controls then? What are the specifics on the general charges that Dean White made at the beginning. He says:

"First of all, it discriminates in favour of tenants of controlled premises and against the tenants of uncontrolled accommodation."

Now the tenants of controlled premises, of course, are a very large group at the beginning. Then, as more and more uncontrolled premises are built, it becomes a smaller and smaller and more privileged class. You're building in a privileged class, living in rent-controlled apartments as time goes by.

Secondly he notes that rent control discriminates in favour of tenants of controlled premises and against the landlords of controlled property.

"The latter are forced, in effect, to subsidize their tenants. Many would hold that it is wholly inequitable to require one group of citizens to subsidize directly another group, especially when the original selection is made more or less by chance on the basis of who happened to be renting or owning certain kinds of accommodations on the particular day when rent control was introduced."

Mr. Speaker, that seems to me a very obvious statement of equity and one that is better curable by the suggestion of the Hon. Second Member for Victoria (Mr. D.A. Anderson) that we might be better to subsidize persons having difficulty making rental payments than to take the step of rent control.

Dean White notes:

"Thirdly, rent control discriminates in favour of the owners of uncontrolled property, including owner-occupiers, and against the owners of controlled property. The former benefit because prices in rents in the uncontrolled sector of the market will rise higher than would otherwise have been the case, while the capital value of the controlled property will be kept below the level it would otherwise have reached."

Once again the bill will have discriminatory effects. The people who build apartments in the future, those that might be so brave, will not be subject to the same low level of control as those owners of the existing housing stock. At the same time, tenants will be locked into the older buildings even if those buildings become unsuitable for their needs. Even if families become smaller and people should move out of relatively spacious accommodation into more compact accommodation they won't, because they're in a low-cost, frozen-priced apartment.

Here is a very effective concluding quote: "Although rent control is intended to alleviate the housing problem, in the long run it makes it more acute by increasing the housing shortage and distorting the supply of new houses. Rent control seriously damages confidence in housing as a private investment and if it continues for long enough, it may destroy it entirely."

I can't think of a clearer statement as to the potential effects of this legislation and the legislation that will follow.

It's another problem of supply and demand, I would suggest to you, Mr. Speaker. The government has suggested no ways of increasing the supply. The great expenditures of the Minister of Housing, which the Attorney-General in his opening remarks or sometime during the debate spoke of, are entirely inadequate for this purpose. So, what does the government want to do? Is the government perhaps thinking that if they make it unprofitable or undesirable for the private sector of the economy to continue building apartments, that the government can step in and build the apartments required and become British Columbia's largest landlord in short order?

I can't think that would be the government's idea because landlords just aren't popular, Mr. Speaker. If the government's looking for votes, they don't want to become landlords. Nevertheless, in the back of the government's mind, this idea could be lurking there.

On the question of supply, in the Greater Vancouver Regional District there's something like 16,000 housing units built every year. The Minister of Housing said he would like to see it up to 18,000 or 19,000. Of those, somewhere between 7,000 and 8,000 have traditionally been rental accommodations. Mr. Speaker, we've had figures put on record that a CMHC inventory of multiple-family dwellings in the month of February showed there were no more than 4,000 under construction at that stage. No more than 4,000, of which many will undoubtedly be strata-titled rather than multiple-family dwellings for rental purposes.

In other words, Mr. Speaker, with a vacancy rate of 0.2 per cent in Vancouver and 0.4 per cent in the Greater Vancouver Regional District at the present time, due to the policies of this government, I would submit, the building rate of apartment accommodation is less than half what's required just to keep up to demand. So if we think the situation is bad now, by the end of the year it's going to be worse. If there is anything any systems of controls has proved over the past generation — with the

[ Page 2337 ]

exclusion of controls during wartime, and even then to some extent — it is that controls where there is a very strong demand situation and a poor supply breed problems in black market operations and difficulties of all sorts uncontemplated by the controllers in the first instance.

The best protection is a high vacancy rate, a vacancy rate of 3 or 4 per cent. I want to quote the Minister of Housing. I don't have an exact date on this clipping, I think it was in January. I hope he might have something to say about it later. "'Vancouver's housing shortage should be solved by building more housing, not imposing rent controls,' provincial Housing Minister Lorne Nicolson said Monday." It's not an exact quote; I'm quoting the newspaper.

That's what the Minister of Housing said and I think he's right there. But has he changed his mind? Or has the government ridden roughshod over his advice? — knowing full well that this isn't the best way to deal with things, at least in the view of the government's Housing Minister, nevertheless ignoring his advice and going ahead with controls because they seem politically expedient in the short run. That's what I fear, Mr. Speaker.

To me the answer is: not to pass this bill. The answer is for the government, over the next couple of weeks after they've given a little more thought to it, to announce incentives that will arrange for the building of more apartments.

That's the only solution. Anything else is tinkering with the financial conditions and with the legal conditions. Mr. Speaker, surely the solution to the housing crisis and to the rental crisis is the building of more apartments. I don't know how anything could be more simple or clearer cut. Yet this legislation we have before us will discourage the building of apartments — will and has discouraged the building of apartments.

We can see that today from the figures I cited. At the very maximum, half as many apartments are building now as should be building for the needs of the Greater Vancouver Regional District.

Mr. Speaker, I'll conclude by saying once again I think, I hope, I believe the government's intentions are good in wanting to make things better in this rental housing situation, but they've gone about it completely backwards.

What they are doing in this bill is going to make the situation so much worse that a year from now in this Legislature we'll look back to April 8, 1974, and say a mistake was made on that day, a mistake whose consequences we can trace directly in the situation in the 1975 housing market in the area I know best, in the Greater Vancouver Regional District.

When we see a situation where prices are far, far higher on new apartments that are being built, prices are skyrocketing even more highly in the field of owner-occupied housing because people simply won't be able to find apartments anymore, the growth into Vancouver will continue. The inflationary push and structure in British Columbia will continue to mount. Higher and higher wage increases will be required to pay for it, higher and higher social assistance payments will be required. The Minister of Finance will find even his incredible surplus being used up. At the same time, in the midst of all of this, the basic tragedy continuing — an inadequate amount of housing being built because of legislation of this kind.

MR. H. STEVES (Richmond): I was very interested in the comments of the previous speaker. I'm looking forward to being in this House a year from now and looking back at April 8, 1974. I think we'll look back next year on this year the same way we look back at last year on the Bill 42 debate and wonder what on earth the fuss was all about.

Mr. Speaker, I'm very sorry to hear the opposition Members crying the blues for the poor landlords. The Hon. Second Member for Victoria (Mr. D.A. Anderson) said, "Help the low income earners and the pensioners. Help them to help themselves. Take the responsible approach." He said, "and don't put the responsibility for helping the tenants on the landlords."

The Hon. Member for North Vancouver-Capilano (Mr. Gibson) said, "Take the good advice you've been getting." In other words, what they're suggesting, Mr. Speaker, is that we should subsidize the tenant and then see the entire subsidy gobbled up by rent increases on the part of the landlords.

How many times have we seen pensions increased by $10 to see it gobbled up the next day by rent increases in the same amount. How many times have we gone this route before? I suggest to you, Mr. Speaker, that we've tried these things many times before and they have not worked; that's why we are embarking upon the programme we are starting on now.

The Hon. Member for North Vancouver-Capilano also said — and he wanted us to take this advice — that we should offer incentives to the builders to build apartments. Did I hear him right? Is he suggesting that Block Brothers, Wall & Redekop and these big apartment-block owners need incentive? In other words, he's suggesting that we should give money to the tenants so that they can spend it on higher rent increases, which would then put the money in the hands of the landlords. Then we should give money to the landlords as well to build more apartments.

I suggest to you, Mr. Speaker, that this is a wrong course and the citizens of British Columbia recognize this is a wrong course and this is why they elected this government to take a separate course of action. We've seen this happen before and it hasn't

[ Page 2338 ]

worked. In fact, this is what has caused the situation that we see before us today.

Mr. Speaker, we have said that this particular bill is a temporary measure. We are bringing in an amendment to the Landlord and Tenant Act. One of the previous speakers, the Hon. Second Member for Victoria, suggested that this Act was going to create slums. I wonder just what kinds of slums he expects to be created in six months. We've said that this bill is only going to be of about six months duration. Are rental accommodations and the apartments that have been built in the Province of British Columbia so bad that they're going to be slums in six months? I suggest this is utter nonsense.

As soon as the Landlord and Tenant Act is in effect, and as soon as we have a programme for justifying rent increases, then the operation costs of the apartments will show in the rent. We have said that we will be bringing this Act in; this is why the Landlord and Tenant Act has been tabled today so that the opposition can see that we intend to bring in the legislation that will make this Bill 75, which we're talking about tonight, unnecessary as soon as we're able to put the Landlord and Tenant Act into effect. Of course, it's necessary for the short term so that we don't see speculation in rents until we can bring the Act in.

I'd like us to take a look at what the costs of operating an apartment really are. I suggest to you that the landlords really haven't got it that bad.

Take an apartment of approximately 58 or 60 units, which cost in the neighbourhood of $1 million. If someone was to build such an apartment, perhaps he might have $250,000 of his own money to put down and then borrow $750,000 for the $1 million cost. Of this, amortized over about 20 years, you could put the cost of that apartment at about $30,000 per year towards his loan equity and you would find that his gain on that $1 million over the 20 years would probably be in the neighbourhood of $250,000, just strictly on inflation.

It turns out that apartment owners — and I've got some evidence of this in one of the items that I'll read to you later — have had in the past a feeling that the equity that they've put into their apartment should be paid for by the tenants and that they should still be able to take in 9 per cent profit over and above the cost of paying off the loan.

In other words, on a $750,000 loan they expect the tenants to pay out of their rents about $30,000 a year in an accommodation such as I've mentioned and they expect to make a profit of another $20,000 per year on top of that. At the same time, they would be making profits in the neighbourhood of $50,000 a year just on the inflated value of the apartment development.

You might ask then — if the landlords have got it so good, why aren't they building more apartments?

And that's a good question to ask. However, I suggest to you that in many cases things are much better in other forms of housing. You can get your profits out a lot faster, of course, if you build accommodation and then sell it on the market for speculative gain.

Of course, we find this with the apartments as well, that landlords are changing hands very, very rapidly. Someone will sell the apartment to another landlord. He has to get his profit on it, he has to pay extra money for it and so he jacks the rent up, he sells it to somebody else and the next guy jacks the rent up. So you see the rents escalating and really all that's happening is one landlord is selling to another landlord and profits are being made on the speculative increases as it changes hands. Now, this is one way of making a speculative profit on apartments.

The major way, of course, in the housing business is to get directly into housing for sale. Rather than building rental accommodation to sell, they get into the sale of condominiums and single-family housing and so on. And there's even greater profits in that. I think that this is probably the reason why you see that not so much rental accommodation is being built, because it is much easier to get short-term gains if you're dealing in other types of housing.

Let's take a look at what the 8 per cent increase is going to mean on an apartment of around 50 or 60 units. In the case of a typical apartment, suppose the rents are around $180 a month and suppose the operating costs are around $60 a month — that's the taxes and the cost of operating the apartment. These costs might go up and they go up 9 or 10 per cent a year. Nine or 10 per cent of $60 comes to about $6 per month. Nine or 10 per cent of $180 comes to $18 a month so we see that if a 10 per cent increase in cost is really reflected in the rent increase, it should not increase by $18 a month but only by $6 a month.

You could take another example. Suppose your costs are $100 — these are just round figures. Ten per cent of $100 is $10. Why should the rent go up from $200 to $220?

On an apartment such as the one I'm suggesting, if you had, say, 58 suites and your costs went up 10 per cent per year, it would be $6 on those suites; on $60 per month that would amount to $5.40, if it was 9 per cent. An 8 per cent increase in rent is equal to $14.40 per month. So on a profit on a suite of per rent, you have a profit over and above the normal 9 per cent which would add up to about 11.5 per cent because they're actually adding on…. Maybe I haven't explained this too clearly. If you assume that there's already a 9 per cent profit level on apartment rents at the present time — and this is generally the case in many apartments — then if you take an increase of 10 or 20 per cent on the overall rent, you find that you have maybe $5 or $6 a month over and above the actual increase in cost, so this adds to the

[ Page 2339 ]

total profit on the apartment. Instead of having a 9 per cent profit, you get up in the neighbourhood of 10 or 11 per cent total profits on the rent.

So in effect an 8 per cent increase in rent really allows for a 16 per cent increase in costs from the apartments. That's another way of looking at it. So in effect, on the 8 per cent we're suggesting, if your rent has gone up from $200 to $216 and your costs have only been $100 a month then it reflects a $16 per month increase in cost that the landlord can absorb, or a total of 16 per cent increase in costs that he can absorb by that 8 per cent increase.

So I think that's a pretty liberal increase on rents — 8 per cent — to coin a phrase.

Now one Hon. Member suggested that heating costs have gone up 15 or 20 per cent. To use as an example, supposing your heating cost in an apartment is $20 a month. Actually you can heat a home for about $30 a month so I think that's probably a high cost — $20 a month. Suppose your heating costs are $20 a month and they've gone up 15 or 20 per cent. Well, 15 or 20 per cent of $20 is $3 or $4 and that certainly doesn't justify rent increases of $30 or $40 or even $50 or $60, as the case may be in many apartments in the greater Vancouver area and also in the Fraser Valley area. Somebody said that the previous Member on my right here had been talking about Vancouver only.

One other Hon. Member mentioned that the vacancy rates in other parts of Canada were 5 to 8 per cent. Here is another aspect that we should look at. If the vacancy rates are 0.2 per cent in B.C. then how can the landlords justify increase in the rents? They've never had it so good. They've got new tenants before the tenancies are vacated. In many parts of the country, and even here in the past, landlords had to have a cushion in the rents to expect vacancy rates of 10 or even 15 or 20 per cent. They've got it down to 0.2 per cent. They don't have to worry about finding tenants; their tenancies are always filled up; it's very easy to get tenants and here they are raising the rents.

Another statistic that somebody mentioned was that housing construction for rental accommodation had decreased since the government formed. Well, if you look at the vacancy rates of the past four or five years, you will find that in 1971 the vacancy rates were 4.1 per cent and in 1972, before the new government was formed and got into really high gear, they'd already gone down to 2.4 per cent vacancy rate. In 1973, it was a 1.0 vacancy rate. So you can see the trend had already started long before the NDP took office because it takes a number of years to build the apartments four or five years ahead of time.

MR. FRASER: Scared off?

MR. STEVES: The Hon. Member says they got scared off. He must have meant that they were scared off about five years in advance.

HON. MR. BARRETT: They were afraid Phil Gaglardi would be premier.

MR. STEVES: I guess that was it. Anyway, they stopped constructing rental accommodation before we formed the government. Actually we are having to pay the tune for the faults of the previous government because they're the ones that are responsible. The figures show it. Just look at the figures put out by Central Mortgage and Housing. These figures show exactly who was responsible for the housing shortage. The trend was started long before we were in office.

Interjection.

MR. STEVES: Mr. Chairman, the Hon. Member for Saanich (Mr. Curtis) said that unless we had the direst emergency we cannot accept retroactive legislation. Well perhaps I can give that Hon. Member a few examples of rent gouging which will indicate that a dire emergency does exist and that we do need retroactive legislation.

Mr. Speaker, I have received around 300 letters from tenants. I'm not going to read them all here tonight. It might keep me going for awhile but I will read two or three that I picked out at random. You might suspect that I didn't pick them at random but I just couldn't be bothered going through the whole pile of 300 to pick choice letters so I grabbed three or four off the top and I'd like to read some of these to you. It will give you some indication of what people are putting up with out there in the real world.

This is dated October 24 and it's from Vancouver:

"I am a mother alone with one son, seven years old. I am doing my best to raise him in good surroundings and with as little disruption of his life as possible.

"In August I found a nice, two-bedroom, upstairs apartment in a house for a reasonable rent — nothing fancy, but adequate for our needs. I arranged to rent this from 'a Mr. X' for $155 per month, plus all utilities, starting September 1.

"About a week and a half after renting the apartment, a 'For Sale' sign appeared on the front lawn. During September the house was sold to another party.

"On September 27, the new owner came to my door, introduced himself — we had not met or talked at all on the phone up to this time — and asked me if he could collect October's rent and I gave him a cheque for it. He then handed me an eviction notice saying his family was moving in and he would need the whole house.

[ Page 2340 ]

This proved to be a lie as immediately he put an ad in the paper advertising the suite downstairs for rent.

"A few days later I phoned him and offered to take an increase in rent if he would let me stay. He said he would let me know in a few days. Accordingly, a few days later, he agreed to let me stay for $225 per month plus utilities on the condition that I would sign a letter to be prepared by his lawyer to let him off the hook as far as rent increase legislation goes."

This person's father put her in contact with the tenants' council in Vancouver and they informed her not to sign the letter, because it would be illegal in the first place to sign such a letter, and to continue to pay the $155 a month until she could find another suite. She says:

"This is what I plan to do when he contacts me again. I have done some looking and my name is on the waiting list for two suitable places that I can afford. I realize that he could take me to court and that you can take me to court and get me out. I'm prepared for this. A rent of $225 a month plus utilities, is more than I can afford on my secretary's wages. And besides the place is not worth it even if it is in a good area."

Take the rent increase in this one suite alone: last year $155 a month, this year $225 a month; a $70 increase, or a 32 per cent increase if you want to look at it that way. With the 8 per cent stabilization Act, this increase permitted would only be $12. In fact, this person, if she has not already moved and found other accommodation, is entitled to a $58 per month rebate, for a total of about $175 for 3 months.

I wonder, Mr. Speaker, if the opposition in opposing this bill is opposed to that poor person getting her $58 a month rebate? Certainly that's what they're suggesting if they vote against this bill.

Another letter, Mr. Speaker — I'm not going to read it; it's a rather lengthy one — a person moved into a house a year or so ago, renting it at $80 a month. She had a lot of trouble with the plumbing. It was what you might call slum housing and it went through about four or five different landlords over the course of a year. Each one promised to repair the house and to repair the plumbing. The roof leaked and the toilets leaked, and everything else. Finally, the last landlord who got the accommodation came in and said, "We're not going to repair your plumbing but we are increasing your rent from $80 a month to $200 a month. In other words, an increase of about $113 a month over and above what they will be entitled to charge under Bill 75. So this person is entitled to $133 a month rebate when this Act comes into force.

I also have a list from another apartment in the greater Vancouver area of how all the suites went up.

They were paying in the range of $155 to $165 a month, and the rates went up effective January 1 this year to around $185 a month, or roughly $38 to $40 per suite, about $26 over and above the 8 per cent the rent stabilization Act allows.

I've read a few letters from tenants. The Hon. Member for Vancouver Centre (Mr. Barnes) also read a number of letters from tenants, so I think I will read a few letters from landlords.

This first one is a letter from a tenant along with a letter from a landlord. This tenant says: "I moved into this apartment April 1, 1973, and my rent was $198. It later went up...." They found out the previous tenant at April 1 had been paying $184 and the rent January 1 went up to $220. In other words, two rent increases in nine months: a total of $36 per month increase. This person is entitled to a rebate of $21 a month. I'm sure the opposition members would like to see that person get their rebate.

The point I would like to make is the type of notice that was sent out by the landlords. This one is a form that says:

"To be prepared in triplicate. Notice to increase rental.

"As you are aware, living and operating costs are steadily increasing and we find it necessary to adjust our rentals to keep abreast of these costs. Please be advised that the rental for your suite"

— and it gives the number of the suite —

"will be increased to $220 per month, effective January 1, 1974.

"This notice is not given due to any dissatisfaction with your tenancy. If you wish to continue as a tenant in your present premises from and after the first day of January, 1974, at the new rental rate, it will be necessary for you to sign and return the extra copies of this notice on or before October 31, 1973."

So in other words, the tenant is more or less being given an eviction notice: you are to agree to the rent increase or you are being evicted. It says this in the next sentence.

"Failing advice from you by that date, we must assume that you will vacate the premises on or before the day before the new rental rate comes into effect and we will arrange to obtain a new tenant for the said premises. Should you wish to remain as a tenant at the new rental rate, the other terms and conditions of your new tenancy will be the same as those set out on the enclosed form."

I ask you, Mr. Speaker, does an emergency exist or does it not? The rents are going up 30, 40, 50 per cent and people are being sent notices like this, saying if you don't pay these fantastic rents you are evicted. I think that is an emergency situation and requires an Act such as the one we are bringing in.

Another letter directly from a landlord to a

[ Page 2341 ]

tenant, from the Canadian Owners and Managers Reference Service Ltd., 10th Street, New Westminster, I'll just read part of it. The rent on this accommodation went up from $250 to $345, effective October 1. Here is what the landlord says:

"The increase in rent from $250 to $345 on the suite in question was necessitated by the fact that this suite will not, by law, be allowed another increase in rent until October, 1974."

In other words, they raised it in October, 1973, by $95 strictly for the reason that they couldn't raise the rent for a year. What kind of rent increases go on in this province if you have rent increases around $95 every year? That $95 increase is a 40 per cent increase in that rent. I'm really hesitant to see what kind of rent increase that person would have got this fall in October if we hadn't brought Bill 75 into this Legislature.

Another note from a landlord, a handwritten one from a landlord to a tenant:

"Sorry to say, but with everything going up, taxes, et cetera, we are forced to give you this notice that your suite's rent will go up from $115 a month to $128 per month, a raise of $12.50 per month effective January 1."

This is one of the very few low rent increases that have come across my desk. Actually, with the 8 per cent increase, the landlord here would be entitled to $9.20 per month instead of $12.50. The tenant, who happens to be an old-age pensioner, will get a rebate of $3.50 per month with the new Act.

Another landlord — Grandview Gardens in Surrey — Notice of increase of rental rate. To the tenant:

"Due to a tremendous increase in taxes, sewage and operating costs, the rent of the apartment or premises above will start a new rent programme. You are therefore hereby notified that, beginning May 1, 1974, the monthly rental of the above suite will be $230 per month. You are also notified that effective May 1, 1974, new parking rates will be $4 for open parking spots and $6 for carport. This is the three-month notice required by law. Dated January 31, 1974."

On this one the rent previously had been $175 per month on this suite, and so we see here an increase of $55 per month or 31 per cent. With the 8 per cent applying, the rent can only increase by $14 per month from $175 to $189 instead of going up to $230 per month.

There are 194 units in this particular apartment block. If we look at the rent increase the landlord was suggesting of $55 per unit — and I'm taking this in averages, it may not be entirely accurate but it's fairly close: 194 units at $55 a month rent increase comes to $10,670 per month increase, or a total of $128,040 per year increase on that one apartment block. The landlord in this notice has suggested that it is to pay for increased taxes, sewage and operating costs. I suggest to you that roughly $130,000 per year will pay for an awful lot of taxes, sewage and operating costs.

On the same notepaper from the same landlord, they also give another explanation of what their operating costs are. I would like to share it with the House because I think it is rather an interesting comment. They have an addendum:

"We are sorry we had to increase the rent so much. The increased costs of operating are one reason; the other is taxes (commercial rates are higher.) But the biggest reason is those smart-assed people who think they can get away with not paying their rent. This doesn't help you, but perhaps you will have less sympathy for these types when you know you are paying for their con games."

This is from a landlord in Surrey and is the type of attitude the landlord has for the tenants. Perhaps he has had some tenants who have not paid their rent, but I don't think the landlord is justified in socking such fantastic rents to tenants as this one is on the basis of a few people who have not paid their rent. In fact, I really wonder; with that kind of attitude the tenants probably felt quite justified in not paying their rents from the tone of this type of rent increase.

I got one letter from a landlord in my own community who is objecting to the rent increase, and actually sent me a letter justifying that their rents should go above the 8 per cent level. However, in calculating it out, I found that actually, where the landlord had increased the rents by 20 per cent for 1974, they were justified in only a 7 or 8 per cent increase.

There are six apartments to this particular development; it is an apartment of six units. They had a $3,000 capital cost. It was a one-shot effort that had to go into those apartments. They chalked up the entire $3,000 capital cost in one year's rent increase. No mention of the fact that the rent would not go down by $3,000 in 1975 or 1976. They used a $3,000 capital cost, a one-shot deal, to justify increasing the rents by 20 per cent.

This is the type of thing we are looking at when we bring in our legislation that will take the place of this particular bill. This is why the bill is necessary.

This is why we had to bring in legislation on the Landlord-Tenant Act: to make sure that the tenants are not paying off the capital costs — are not paying the direct cost of building the apartments, and so on, out of their pockets. We must make sure that these come out of the 9 per cent profit, or whatever profit level it is the developers take when they construct this type of development.

Giving them a reasonable profit they should be able to pay for the capital costs of construction over a reasonable period of time. We shouldn't expect it to

[ Page 2342 ]

be paid off in one year by the tenants.

Finally, Mr. Speaker, I would like to read as my final entry into this debate a note from that Red Waffle council, the Corporation of the City of North Vancouver, the Red council of North Vancouver… very radical:

Re rental increases: — and this is dated December 19, 1973.

"The city council on December 7, 1973, adopted the following resolution: ... that the council petition the provincial government requesting legislation which would limit increases in residential rental rates to not more than 10 per cent of the current rental rate for any single increase."

MR. D.E. LEWIS (Shuswap): That's a rent freezer.

MR. STEVES: That's a rent freeze, the Hon. Member suggests. I would suggest to you that this is very close to what we brought in; and it was suggested on December 19 by that left-wing, radical council of the City of North Vancouver.

I just wonder, Mr. Speaker, if the Member for North Vancouver-Capilano (Mr. Gibson) is listening on the speaker in some other room to what some of the people in his own area really think of our legislation, because obviously those people in North Vancouver support our legislation and would expect that Member to vote for it along with the rest of us.

MR. H.W. SCHROEDER (Chilliwack): I have to oppose this bill because I think the government itself is opposed to this bill. The reason why I say that is because we have had just today — although we can't possibly know the contents of the bill — another bill introduced today which nullifies Bill 75, which is under discussion right now. The government itself doesn't believe in Bill 75. How could the opposition subscribe to it?

I think the reason why the government is opposed to Bill 75 is because they wish to admit to the opposition and to the whole world that they really didn't do their homework before they came down with the bill.

How did they know they needed a rent freeze? Because they listened to a few backbenchers. How did they know that the freeze was to be established at 8 per cent? They didn't know. They pulled a figure out of a hat, assumed that it was somewhere near 8 per cent, didn't think that it would be necessary to determine by asking a few people who are in the rental business what the actual cost of providing housing accommodation is. The cost of housing is real; it's not imaginary.

The Minister of Labour (Hon. Mr. King) has a broad grin on his face. I have a question for him, through you. If he had $30,000 to invest in building some accommodation, would he invest that $30,000 without a guarantee of a return or would he sooner leave the $30,000 in the bank? I am pretty sure that the Minister of Labour has never seen $30,000 — not in his own savings account. Therefore I am wondering very much whether or not he would be willing to provide housing for other than himself at less than a 10 per cent guaranteed return. There is a real cost to providing housing.

The other day when I spoke, not concerning rents, Mr. Speaker, but concerning the provision of housing itself, I developed a model which was developed around the central figure of $30,000 per unit. I would like to use that same figure again tonight because it allows for easy figuring.

I would like to suggest that the real cost of housing can be easily determined by taking the number of dollars invested in the creation of that housing, adding to that the cost of operation and adding to that the cost of repair or depreciation so that that housing can be maintained in similar condition so that it can be used in perpetuity.

When you take the cost of a $30,000 unit, a family unit, at interest rates that prevail today — 10 per cent — $3,000 annually is the return on the investment. Approximately $600 will cover the cost of utilities to operate that unit; $300 approximately will cover the cost of the odd paint job and a few plumbing leaks. Add to that a management fee of 10 per cent; that is the salary for the fellow who does the vacuuming in the hallways and repairs the broken windows when they occur. A management fee of 10 per cent equals $400. Then you divide the total, which is $4,300 annually, by 12 because there are 12 months in the year, and the actual cost of housing for a $30,000 family unit is $360 a month.

Now we have had all kinds of kite-flying, Mr. Attorney-General, here this evening. I would like to suggest to you that perhaps that particular unit may have been rented to some individual for some $240 a month, which was not reflective of the real cost of that housing at all. But the Member for Richmond (Mr. Steves), if he were to adjust the cost of the rent as it were at $240 a month to what it should be to reflect the real cost of $360, would call it a rip-off. He would say it's an unreal gain. He would say it ought not to be done. He'd say we ought to put an 8 per cent freeze on it.

I say, Mr. Attorney-General, through you, Mr. Speaker, that if you are going to place an 8 per cent rent freeze on any kind of accommodation, you must first establish the basic rental value. And there will have to be massive adjustments all across the province, because I want you to know that for every — I hate to use the word — shyster that you may wish to find in the rental business, I can lead you to 100 who are conscientious, down-to-earth landowners who provide rental accommodation for someone else

[ Page 2343 ]

in hopes that they can gain a 10 per cent return for their money.

I want you to know that just as interested as you are in speaking for those people who are renting that accommodation, I am just as interested in all the people in British Columbia. I think that someone needs to raise a voice in protection of those who have been providing, at less than the real cost of rental accommodation, that accommodation for people who have been willing to live on their premises.

I say there is a real cost to providing housing. I also further suggest that the government, regardless of how financially flush they may appear to be…. There is no way that the government can assume the full cost of providing even the new housing that is required. Approximately 8,000 family units are required in one year; that's one year's growth.

Now it just so happens that you can't create a family dwelling unit for $30,000 such as I used in my previous model, because after this government has made certain edicts, the cost of building a family unit is now more like $50,000. If you are going to build 8,000 just to catch up to the requirement you need for this year, if you are going to build 8,000 family units at $50,000 a crack, you are going to have to invest, by quick figuring, $400 million dollars.

Mr. Attorney-General, I saw you stick out your chest the size of a sparrow's kneecap here just a little while back and heard you say, as though you wanted us to pin a medal on you, "We are investing $100 million in housing this year." Well, God bless you, it's a start, but it's only one-quarter of what you are going to need if you think you are going to assume the cost of providing housing at the present day rates, even for the vacuum that exists.

I would suggest that the 8 per cent freeze you have just created in this bill is not going to help you create those 8,000 family units. You are going to have to call, through you, Mr. Speaker, on the private segment to help you to build those 8,000 units. Even if you spend your entire $100 million, you are only going to build 2,000 units.

Somebody is going to have to help you and the minute you put on an 8 per cent freeze, you have just eliminated the people who have been helping you all through these years — those that helped us when we were in power and, by the way, those that are not helping you today.

May I just casually remind you of some of the reasons why they are not helping you? It was this little government over there who, two days before they arrived in government and ever since, have been saying: "Stop building. Stop building. We don't want blacktop over the entire valley floor from here to Hope. Stop the building." People took you at your word. They stopped building.

Then you went along and said: "Well, we're going to make less land available. Just in case there are some rip-off artists in this land that won't heed the call to stop building, we're going to make less land available." And the cost of housing escalated. Not only did they stop building, but the price of the land upon which you wished to build was escalating.

The next thing you did was tax the builder out of business. Yes, you did, by upping corporation taxes, by upping any kind of a tax at all that you could lay down.

Then on top of that you created a runaway market in prices of materials so that a contractor will not give a firm contract any more. It takes him eight months to 14 months to build a home, and he will not give you a firm price at the beginning of that contract because by the time he has finished the building the cost may have increased by as much as 25 per cent, as was the experience in one year.

Then this government asks: "How come we're short of housing?" I don't believe it. If anyone had come to me and said that socialists were this ignorant of economics and that they would add insult to injury by trying to correct a problem by stacking more problems on top of it, I would not have believed it. Yet here it is, in front of God and everybody.

Somebody over there at the end of the floor said that there's a lot of gouging going on in rent. I would say that there are a few instances of rent gouging. However, you would also have to agree, Mr. Attorney-General (Hon. Mr. Macdonald) that if there were a lot of rent gouging going on and if the climate for creating housing were favourable out there, then people would be creating the housing.

The fact is that they're not. And the reason why they're not is because they can't get the return for their investment dollars. I guarantee you that you cannot get the return for your investment dollars.

What you're going to have to do is ask for some kind of a subsidy. You're either going to have to subsidize housing yourself, which is like putting your head in the sand and pretending that the real cost of housing does not exist, or you're going to have to ask the landowner to subsidize the tenant in his own place. It's like paying to keep yourself employed.

Mr. Speaker, I see the brows over there puckered in perplexity. I am hoping that a ray of sunshine is piercing those minds and that somehow or other they'll see the folly of their ways in Bill 75. Why not scrap the whole concept? Bring in Bill 105.

Why not give every individual in British Columbia a chance to own his own home? That's what I believe in.

Why not create the kind of a climate whereby you can distribute enough buying power to every resident in British Columbia so that he can have his own home, select his address, select the kind of a home he wants and also the stature of the home that he would like to create?

[ Page 2344 ]

Not only that, but I decry this concept of making people in British Columbia tenants of the state. The only answer that that socialist crew over there has, Mr. Speaker, is to create some kind of a subsidy whereby those people who right now do not own their own homes and who are dependent upon the government — that is, the rest of us — to provide that housing for them will be lured into constant, consistent and eternal slavery to the state, which is just another form of a large corporation. I decry that kind of economics. Shame on you.

HON. MR. BARRETT: Mr. Speaker, it's nights like this that I could almost coin a new slogan: "Bring back Ken Kiernan." (Laughter.) Never would Ken Kiernan have made a speech like that because he was a true Social Crediter, and true Social Credit talked about monetary reform and protection of the little people against usurious capitalists.

Oh, how that party has fallen! Maybe it's a good thing that Ken isn't here tonight to hear his successor plead on behalf of rapacious capitalists so that they can get a fair return, as he describes it, on their investment dollars.

What is the history of this interim rent fund? The Member for Saanich and the Islands (Mr. Curtis) says it's "in haste." The Liberals say it's "ad hoc."

We can forgive the Liberals, because as far as the Liberal Party is concerned the election of the NDP is just straight inconvenience to their divine right to rule.

MR. D.A. ANDERSON: It's temporary.

HON. MR. BARRETT: It's temporary, and the Liberals have been temporarily out of office for 25 years!

Oh, Mr. Speaker, what an inconvenience it is to this House and to this province for the old-school-tie gang to have graduated in everything, including style, appearance, looks, diction and accent and still not have power. Oh, what an inconvenience that the ordinary people would somehow want ordinary people to represent them instead of plastic bodies encased from the urban rich centres of this province.

The Member from Penticton (Mr. Richter) doesn't speak on this bill and he knows when to keep his mouth shut. But he did say about the Liberal Party that there's not a dirty fingernail among the bunch, and nothing could be more apt in describing that group.

What do they offer as alternatives to this rent bill? Just a few weeks ago the Member for West Vancouver–Howe Sound (Mr. L.A. Williams) was up in this House and what did he say? I regret to refer to Hansard. What did he say on March 11 this very year? That honourable gentleman said: "We need to have some positive programmes," adjusting the vest that comes with the vested suits. "We need to have some positive programmes." And the little Liberal doubt popped out. And he went on to say:

It may be, Mr. Chairman, that we'll need to have the Minister of Finance stand in his place and say that his government is prepared to freeze rents in the Province of British Columbia until he can rationalize this difficulty between rising costs on the part of the landlord and the inability of the tenant to pay.

AN HON. MEMBER: He said that?

MR. D.A. ANDERSON: Read on!

HON. MR. BARRETT: "Read on", says the Member, and to be fair I shall. I pick up the quote and it says here:

…until he can rationalize this difficulty between rising costs on the part of the landlord and the inability of the tenant to pay.

Reading on, the next is (.) period, and another speaker stood up to take his place. (Laughter.)

That leader doesn't even know what his own Members are saying. When he says "read on" he wants to find something that isn't there.

The Member for West Vancouver–Howe Sound was calling for an interim rent freeze. And you know what they're mad about? I'll tell you what they're mad about — they're mad the government did something about it. That's what they're mad about!

Interjections.

HON. MR. BARRETT: Oh, they're annoyed. Grrrrrrr!

Interjection.

HON. MR. BARRETT: Oh! We have to change ties for the evening meeting of the House, you know. (Laughter.)

Now shall we go back to Lesson 2, my friends, and review the other statements of that Liberal group? I'm so happy to see the new leader in his seat tonight. (Laughter.) Oh, ambition does strange things.

Take note, new leader — you have nothing to take heart of, but take note of what was said by the same Member for West Vancouver–Howe Sound one year ago. Oh, this is not somebody who signed the Waffle Manifesto. Tch, tch, tch! Oh, this is not one of the radical NDPers. Oh, this is not one of the funny-money Social Credit Réal Caouette-and-the-gang who are attacking the banking group. No, this is the voice of the establishment speaking and I now quote. Hoo, hoo, hoo!

MR. SPEAKER: Order, please!

[ Page 2345 ]

HON. MR. BARRETT: Page 710, Mr. Speaker: "I suggest to you, Mr. Speaker" — he was speaking to you — "that in many, many cases an increase of 5 or 6 per cent" — in rent — "is unfair."

HON. MR. MACDONALD: Oho! What about 8 per cent?

HON. MR. BARRETT: Eight per cent? Why, that would be usurious, Mr. Attorney-General.

But what did the Member say? Where is he? He's hiding his head in shame. He's writing out a motion to do away with Hansard — caught twice on the same banana peel! (Laughter.) Here it is:

Yet we have no indication that the Minister or any of the government are prepared to make similar inquiries in respect of those people who do not receive the additional allowance under Mincome.

The plea was made by that Member, attacking the Minister of Human Resources (Hon. Mr. Levi) as to why there was so little protection for the people against rent increases. The Minister of Human Resources said: "We're going to give them a fair chance. We're not going to rush in with rental controls."

We believe in people, we have faith in people. We believe that most of the landlords out there would show their hearts and not gouge on rent. We asked the people of this province to write in to the Minister of Human Resources and tell us whether or not it was happening. We said time and time again in Hansard that we want to give the landlords a chance. And you have the nerve, Mr. Member for Saanich and the Islands (Mr. Curtis) to say we made up our minds just tonight when the record goes back a clear year and that the Minister said time and time again, appealing to the landlords: "Don't raise the rent. Don't force us to bring in legislation. Let us have some heart. Let us have some understanding."

All we got piled up was evidence there was gouging after gouging going on in the province. We have to make a move and that's why this bill is here.

There was a time that the Social Credit Party tried to say that…. I'm through with the Liberals now, you can leave. The float planes have gone but you might make the last CPA flight. Oh no, no they're here. Oh, I'm sorry friends, they're all here because the airports are closed. (Laughter.)

Interjection.

HON. MR. BARRETT: Oh. Well, would you let me know, Mr. Minister, if you hear from the federal Minister that the strike is settled? Then we can check on their attendance at that time.

Interjection.

HON. MR. BARRETT: Well, you know… go to Japan and kick a football. Mr. Member, at least one of the things about standing behind the scrum is that I always get a view of Liberal policy. (Laughter.)

Mr. Speaker, I wanted to go on to another series of very brief non-political comments, which is my wont; I am rarely political in this House. I like to be what the Liberal Party thinks it is, non-partisan. You know them — they're the only non-partisan group in the House, so I have this offer to make to the only non-partisan party in all of Canada. I say this: let us examine what the federal Liberal government has done with taxation on building materials. In 1963, in June of that year....

AN HON. MEMBER: Order!

HON. MR. BARRETT: Well, you were all over the ballpark about building homes.

MR. SPEAKER: Order! Is any Member of the Liberal group in his own seat? (Laughter.) Then you shouldn't be speaking from another Member's seat because it makes him responsible for your statements.

HON. MR. BARRETT: Mr. Speaker, I will willingly grant a five-minute recess to help them find their way back to where they belong. (Laughter.)

Nonetheless, Mr. Speaker, there was a 4 per cent tax on building materials introduced by the federal government in June, 1963. It was increased to 8 per cent on April 1, 1964, then 3 per cent OAS was added bringing the rate up to a full 11 per cent. Now, the federal government has not made a single move to remove that tax. I'll tell you this tonight, that if the federal government announces tomorrow that it will take off the 11 per cent building tax, we will take off our 5 per cent forthwith.

Mr. Speaker, I put this challenge to the federal Liberal government.

Interjection.

HON. MR. BARRETT: The federal Liberal government. Mr. Member, don't talk out of your seat about no guts; I'd worry about your back, not your guts. You're the one who's in trouble.

Mr. Speaker, I challenge the federal Liberal government to remove the 11 per cent building material tax on building supplies for homes or for rental units, and we'll remove the 5 per cent forthwith. If the federal Liberals don't do it, I challenge those five to resign. I challenge them to resign.

You can't come into this House and make speeches on behalf of the little people of British Columbia and still belong to the Liberal Party. You get on the phone, or wire them and tell them to pull

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off the 11 per cent; we'll pull off the 5 per cent and away we go to house building.

The Socreds agree to that. As a matter of fact maybe I should speak to Mr. Lewis and ask Mr. Lewis to bring down the federal government if they don't pull off the 11 per cent. Bring it down!

Interjections.

HON. MR. BARRETT: Yes, what an issue to go to the people on! Mr. Speaker, I don't like to do this very often, but I'd like a little quiet.

MR. G.S. WALLACE (Oak Bay): You remind me of W.A.C.

HON. MR. BARRETT: Wait a minute! I haven't said "my friend" once, and I haven't tucked in my thumbs once.

I want to tell you something, W.A.C. is down in Ottawa right now spreading the story that four Socreds aren't going to get the nomination in the next provincial election. Yes, he just came back from Ottawa, now he's spreading it in B.C. Anyway that's their problem. Which four of you are going to disappear like fog in the morning? I remember Stan Carnell.... Oh, but that's a separate story and I don't want you to lose a night's sleep. (Laughter.)

MR. SPEAKER: Order, please. Would the Hon. Member get back to the bill?

HON. MR. BARRETT: Yes, Mr. Speaker. Some Members don't lose any sleep. (Laughter.)

Mr. Speaker, this is the challenge. I'm going to phone David Lewis tomorrow. I'm going to ask David Lewis to put a motion on the order paper and say to those feds: Pull off the 11 per cent sales tax on building supplies.

MR. D.A. ANDERSON: Wait till they get their pensions.

HON. MR. BARRETT: Mr. Member, wait till they get their pensions. Why did he leave Ottawa? Why was there such a sense of relief?

Interjection.

HON. MR. BARRETT: No, no. We're happy to see you here. It's nice to see a Liberal from the City of Victoria whose only reason for entering is because Waldo punched a woman. (Laughter.)

I'm sorry, Mr. Speaker. I'm sorry.

MR. SPEAKER: Please get back to the principle of the bill.

HON. MR. BARRETT: I'm sorry, Mr. Speaker. I didn't mean to hurt him or the old school tie. You know, Mr. Speaker, coming from barb-wire….

MR. SPEAKER: Order, please. On a point of order.

MR. N.R. MORRISON (Victoria): Mr. Speaker, I ask that Member to withdraw that. I happened to be in the room at the time and that fact is not true. He did not hit that lady.

HON. MR. BARRETT: Mr. Speaker, I withdraw. He missed her. (Laughter.)

MR. SPEAKER: Order! May I point out to the Hon. Member that it really is not a point of order. You cannot ask another Member to withdraw a statement that does not relate to yourself in a matter of that kind, or to a Member of this House.

Interjections.

MR. SPEAKER: Well, under our rules if you think that the Hon. Member is mistaken you can correct him, but it has only to do with something touching on your own speech.

Interjections.

MR. D.A. ANDERSON: He may not have slugged the lady candidate, but he did punch out one of my photographers who was there. (Laughter.)

MR. SPEAKER: That's not a point of order either. It may be a point of disorder. (Laughter.)

HON. MR. BARRETT: Mr. Speaker, if we're ever heard a self-condemning speech, that's it. He hit the photographer, no picture of the candidate appeared, therefore he was elected.

But aside from that, Mr. Speaker, it's not true. He did not hit the woman; he missed her and that was consistent with every attempt he made at a policy decision. He missed everything else. All right, I withdraw.

Interjection.

HON. MR. BARRETT: All right, he's the only guy I know.... Okay I withdraw. I won't talk about going up the down escalator.

Mr. Speaker, let's talk about escalating rents.

I miss Waldo, and considering what we got instead of Waldo, I'm sorry.

Nonetheless, Mr. Speaker, in conclusion I want to say that we haven't seen any real serious evidence of the opposition to propose some alternatives to a very

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serious problem. We've had a great deal of discussion about the plight of people who are on fixed incomes. We had the Member for Saanich and the Islands (Mr. Curtis) and others get up and attack us in terms of the ferry settlement, but not one of you have given any serious thought to the increase in the cost of living to the average industrial worker in this province. When he's faced with a wage demand, when he's got to go in and negotiate with his union and struggle in terms of meeting the high cost of living, and he wants to bargain and have an increase in wages to meet the high cost of living, how can he possibly plan in a sensible union negotiation if the kind of trend that exists in rental prices continues during this particular year?

Interjection.

HON. MR. BARRETT: Of course he couldn't do it, Mr. Member, and you acknowledge it. The government has the responsibility to stabilize at least one cost in his life. That's why this interim bill comes in. We have had a government over there, when they were in office, who did absolutely nothing in terms of housing, Mr. Speaker.

I move adjournment of this debate until the next sitting of the House, but before I do that, I invite all the Members to the opening of the causeway tomorrow with the Governor-General's attendance.

As to the order of business, I hope to introduce interim supply immediately after question period.

Hon. Mr. Barrett moves adjournment of the House.

Motion approved.

The House adjourned at 11 p.m.