CONTENTS

Introduction

Presentation of Dr. Walter Gage to the House — 3211

Speaker's ruling

Control of government expenditures. Mr. Speaker — 3213

British Columbia Payment to Canada of Federal Income Tax on Behalf of Natural Gas Producers Act (Bill 129). Hon. Mr. Barrett.

Introduction and first reading — 3214

Oral Questions

Letter on BCR reorganization. Mr. Bennett — 3214

Resource grant to senior citizens. Mr. D.A. Anderson — 3214

Contract talks with BCGEU. Mr. Wallace — 3214

Equipment for poultry plant. Mrs. Jordan — 3214

Legality of actions of B.C. Steamships, 1975, Ltd. directors. Mr. Gibson — 3215

Railcar production at Squamish. Mr. L.A. Williams — 3215

Liquor administration branch and CNIB Cater Plan employees. Mr. Curtis — 3215

Abortion practices at Vancouver General Hospital. Mr. Wallace — 3216

BCR industrial site at Prince George. Mr. Phillips — 3216

ICBC refunds. Mr. D.A. Anderson — 3216

Review of grants in lieu of taxes. Mr. Morrison — 3216

ICBC strike contingency plan re automobile accidents. Mr. McGeer — 3217

Seaweed-eating sheep. Mr. Wallace — 3217

Food prices. Mr. Gibson — 3217

Agricultural Statutes Amendment Act, 1975 (Bill 126). Committee stage.

On section 1. Mrs. Jordan — 3218

On section 2. Hon. Mr. Stupich — 3218

On section 5. Mrs. Jordan — 3222

On section 6. Mr. Phillips — 3224

On section 7. Mr. Phillips — 3224

On the title. Mrs. Jordan — 3225

Report and third reading — 3225

Savings and Trust Corporation of British Columbia Act (Bill 86). Committee stage.

On section 3 as amended. Mr. Phillips — 3225

On section 4. Mr. Gibson — 3227

On section 5. Mr. Gibson — 3227

On section 6. Mr. Morrison — 3227

On section 7 Mr. Gibson — 3228

Amendment to section 9. Hon. Mr. Barrett — 3229

On section 9 as amended. Mr. Morrison — 3230

On section 12. Mr. Gibson — 3230

On section 13. Mr. Morrison — 3230

On section 15. Mr. Gibson — 3230

On section 16. Mr. L.A. Williams — 3231

On section 20. Mr. Phillips — 3231

On section 21. Mr. Morrison — 3231

On section 40. Mr. Morrison — 3232

Division on section 40 — 3233

Amendments to section 41. Hon. Mr. Barrett — 3233

On section 41 as amended. Mr. Morrison — 3233

Report stage — 3235

School Tax Removal and Resource Grant Act (Bill 73). Third reading.

Motion to recommit the bill. Hon. Mr. Barrett — 3236

Municipalities Aid Amendment Act, 1975 (Bill 106). Second reading.

Hon. Mr. Barrett — 3236

Mining Tax Amendment Act, 1975 (Bill 122). Second reading.

Hon. Mr. Barrett — 3238

Committee of Ways and Means

Hon. Mr. Barrett — 3244

Supply Act, No. 2, 1975 (Bill 80). Second reading.

Mr. Bennett — 3244

Appendix — 3248

MONDAY, JUNE 9, 1975

The House met at 2 p.m.

Prayers.

HON. D. BARRETT (Premier): Mr. Speaker, I'd ask the House to just take a moment to welcome a very special guest and a unique British Columbian: Dr. Walter Gage. Walter Gage is retiring as the president of UBC. He has served in that capacity...and has been associated with the university for 54 years. He has been a figure in the university education department of this province in all those years. He's a man of humour, compassion and is modern. Dr. Gage is known throughout the whole community of British Columbia, having taught, in this very House, many Members of the present Legislature or members of their families. Even the Speaker has been a student of Dr. Gage as well — not related to May, of course, but in other subjects.

MR. SPEAKER: More "shall" than May.

HON. MR. BARRETT: More shall than May. (Laughter.)

Dr. Gage had lunch with the Minister of Education (Hon. Mrs. Dailly) today and was asked to come over on a very informal basis just so that we here in this House could express our very deep and sincere appreciation for his many years of service to the students and to the people of British Columbia. He's perhaps even fondly known as our own "Mr. Chips" of British Columbia — Dean Walter Gage.

MR. W.R. BENNETT (Leader of the Opposition): It's not often we get a chance to agree with the Premier, but I would like to extend our congratulations and welcome to Dr. Gage today. We all recognize the contribution he's made to education and, through education, to the province. We're also proud to be in the chamber when he's visiting today, and we're proud to be in a province where he has set an example for the rest.

MR. D.A. ANDERSON (Victoria): I similarly would like to add our words of welcome to Dean Gage. The Premier failed to mention that he had some association with Victoria College prior to the University of British Columbia and, as someone who had two years at Victoria College, I'd like that mentioned. I would also like to point out that to many of us he was responsible for the student loan funds, as well as bursaries and scholarships. As one of those who touched his generosity on a number of occasions, I would like to add my personal note of welcome to him.

MR. G.S. WALLACE (Oak Bay): As a landed immigrant, I haven't had the advantage of studying under Dean Gage, but I have a daughter at UBC who tells me, sir, that your name is highly esteemed, and I know very well that the university fraternity have named residences after you because of your contribution.

HON. L.T. NIMSICK (Minister of Mines and Petroleum Resources): Mr. Speaker, I don't think anybody has got better knowledge of Dr. Gage than myself. I remember him when I attended university, back as far as 1924, and I followed him in later years. When they were looking around for a president for the university, they went all over the world and they had one right here; I think, the finest president the university has had, Dr. Walter Gage. I give him my credit.

HON. E.E. DAILLY (Minister of Education): Mr. Speaker, seated in the Members' gallery are three gentlemen who had lunch with us today, and we are very pleased to have them join with us in honouring Dean Gage — Mr. Donovan Miller, the new chancellor of the University of British Columbia; Dean Douglas Kennedy, the president-designate of UBC; and Mr. William Armstrong, the chairman of the Universities' Council of B.C.

MR. BENNETT: Mr. Speaker, while the House is in an honouring mood while we are recognizing service to the province and to education, I would like to bring to the attention of this assembly the service for which we are celebrating the 22nd anniversary of his election to the Legislature, and that is of the Hon. Frank Richter, who has served this Legislature since June 9, 1953.

By way of just a short biographical note, he served not only as an MLA in government, but as Minister of Agriculture from 1960 to 1968, Minister of Commercial Transport and Minister of Mines and Petroleum Resources from 1968 to 1972, was chairman of the B.C. Harbour Board, and instrumental in the formation and development of Roberts Bank. This list of credits and his service to the province are not ceasing because he continues to serve and represent the proud constituency of Boundary-Similkameen. I am proud to be an associate of Frank Richter, and I ask this House to congratulate him on 22 years of service, for which I hope there will be many more years in the future.

HON. MR. BARRETT: Mr. Speaker, when it comes to congratulating one of our own, I suppose a catalogue of events and the successes and heartbreaks of each one of us really doesn't sum up the feeling that we develop as human beings over a period of years.

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When I served in the opposition, Frank Richter was and still is now one of the more popular Members of the House, a very generous and gracious Minister, but more than anything else, a good colleague despite party differences. I think Frank Richter, along with few other people, has demonstrated the warmth and understanding that cuts across party lines and becomes popular as an MLA in his own right. For that I want to thank the Member and extend to him my very deep appreciation for my having the opportunity of knowing him for part of those years. I wish him every great success, even electorally, in the future.

HON. MR. NIMSICK: A few words on behalf of Frank Richter. I think that I was in the House when he first came here. I have always found him very popular, a person who didn't say too much and didn't get himself into too much trouble. (Laughter.)

I followed him as Minister of Mines and I have difficulty finding anything to criticize in what he did during the time he was Minister of Mines.

HON. R.M. STRACHAN (Minister of Transport and Communications): I was here to welcome the Member when he arrived. In the catalogue of his achievements, the Leader of the Opposition left out one which I think is probably his greatest achievement — he was the chairman on the Select Standing Committee on Agriculture that met with the Farmers' Institute and brought a unanimous report into this House recommending public ownership of the B.C. Electric. Thank you, Frank.

HON. MR. BARRETT: Awesome powers, heavy hands. (Laughter.)

HON. G.R. LEA (Minister of Highways): Mr. Speaker, getting on to some more important things...

AN HON. MEMBER: Oh, oh!

MR. SPEAKER: Order.

HON. MR. LEA: ...because it is my constituency....

Oh, does Frank want to speak?

MR. SPEAKER: I think the Hon. Member would care to reply.

MR. F.X. RICHTER (Boundary-Similkameen): Thank you, Mr. Minister of Highways, for giving way at this time. I do want to thank each and every Member on both sides of the House for his acknowledgment of my years of service. I am sitting now as the longest-sitting Social Credit Member in British Columbia. I appreciate the support that my constituents have given me over the number of elections I have gone through.

Certainly there has been frustration — there's no question about that — but at the same time there have been great rewards. I wouldn't have missed this for anything. At one time I thought probably the most unbecoming thing for a farm boy to ever do was to get within the hallowed halls of the Legislature, but I've changed my mind. I think that a person who allows their name to go forward and extends their service deserves a great deal of credit, and I appreciate what has been said today.

I do want to say that the most important thing I think that's happened to me in the 22 years I've been here was to have made as many friends on both sides of the House — sincere friends, people I can stop and talk to at any time — and I hold no animosities in any way because of political differences. I think this is possibly the most important thing that could happen to anyone. The Minister of Mines (Hon. Mr. Nimsick) has served a long time. One of the former leaders of the NDP at that time was a Member for Cowichan-Newcastle (Hon. Mr. Strachan) which is no more a constituency by that name. He used to get up in his place in the House, you know, and he would drop his h's and he would roll his r's, and he used to scare the living daylights out of me as a farm boy, you know. I just wasn't accustomed to this. However, time heals these little things and I appreciate hearing him get up today and still roll those same old r's. It's refreshing.

I want to say that probably one of the things I look forward to in the next 22 years as a Member of this House is that I hope that we can have the same feeling of friendship at that time as we have today between all Members of the House, and that we can do the people's business in a fashion in which they can be proud of us.

The Hon. Minister of Mines has said that I didn't get in too much trouble. You know, the theory there is that whenever the shooting gets rough, you keep your head below the trenches. Thank you.

HON. MR. LEA: Mr. Speaker, today in the gallery are 28 grade 7 students from Prince Rupert, along with their teacher, Stan Anderson. I can't think of a better day for them to journey to the Legislature and hear what's been said so far. I think that only too often especially students feel that politicians are always at one another's throats, and I think it was a good day for them to be here today and see this humanness in the House and see that first of all we're people and secondly we're politicians. I think that's a good thing for the students and teacher. I would ask you to welcome them here today.

MR. L.A. WILLIAMS (West Vancouver–Howe

[ Page 3213 ]

Sound): Tell them to stick around for a few minutes.

MR. WALLACE: Mr. Speaker, in the absence of the Member for Yale-Lillooet (Hon. Mr. Hartley) I would like to welcome Mr. Bill Hamilton and some of his friends who are visiting here to do business with the Minister of Municipal Affairs (Hon. Mr. Lorimer). Mr. Hamilton serves on the local school board and regional district. I would ask the House to welcome him.

MR. SPEAKER: I also would like the House to welcome a parliamentary observer from Australia, Mr. A.W. Saxon, the Clerk of the Legislative Council of New South Wales who is on the floor of the House. Mr. Saxon is studying facilities for Members, which seems to be a common habit these days.

The other matter that should be raised at this time is that I promised some time ago the Hon. Member for North Vancouver–Capilano (Mr. Gibson) that I would deal with the complaint of breach of privilege that he alleged with respect to the recently acquired Princess Marguerite vessel which was, he stated, being operated without legislative appropriate or sanction. He suggested that the same constituted a contempt of the Legislature, as did the operation of the Rent Review Commission.

I've dealt with this in great detail and I don't propose to read all the information out at this time, as it would be quite a burden on the House, but I think the nub of it really is this. In examining the precedents, in order to constitute a contempt, one has to look to all the authorities. I cannot find anything apropos upon which to conclude that it constitutes a prima facie breach leading to priority ahead of the orders of the day, and that is the task of the Speaker to determine. It would be a case to take up, if the Hon. Member proposes to do so, by one of several other means at hand — by setting down a motion of privilege with notice, instructing a committee, or by normal debate as the occasion presents itself within the rules during estimates, or when a specific bill is called relating to this subject.

In examining the Canadian decisions, there are only two cases which came to mind, and I can't find anywhere else which even comes close to this complaint. One case was a complaint by Mr. Stanley Knowles, found in December 10, 1969 in the Votes and Proceedings of the Canadian House of Commons. It dealt with a letter from the Minister of Finance which, he complained, constituted a breach of privilege in that it was a production of propaganda material, he alleged, without the authorized use of public funds. Mr. Speaker Lamoureux stated — and I'll get to the nub of what he said:

"The Chair has been unable to conclude that the conduct of the Minister of Finance, as related by the Hon. Member for Winnipeg North Centre, was an effort to obstruct or impede any Member of this House in the discharge of his duty, or that such action had the tendency, directly or indirectly, to produce such results."

These words are important because I can extract from them the decision that I must make, in my humble view, in this case. Mr. Speaker Lamoureux then went on to say:

"Whether or not it was proper to prepare and circulate what the Hon. Member described as propaganda material is, in the opinion of the Chair, a matter of administration which can be debated by Hon. Members in a variety of ways. In fact, a number of questions have already been asked by Hon. Members in relation to this matter. I have to conclude that although there may be a grievance against the government, a prima facie breach of parliamentary privilege has not been established."

I say this in regard to this decision, as you'll find in my report on it:

"In finding that no urgency requires the displacement of the orders of the day, this is not to suggest that the Member cannot employ the usual notice of motion, should he feel bound to have the House examine his objections."

Then I outline the occasions under which it is possible to get supplementary estimates passed in the House, the occasions on which novel expenditures are authorized in the House, and the fact that our estimates cannot be altered once they are submitted to the House without withdrawal of them and starting the whole process over again.

The consequence of that is that usually a statutory authority is then required to legitimize any expenditures that may be required for novel purpose. I cite two examples that are to be found in the authorities: the case of Air Raid Precautions Expenditures in Britain, 1935, and the question of unemployment insurance, in Britain as well.

These examples will show you that there is a route that requires, when it is followed, that all these matters of expenditure must come before this House or, indeed, it would be a breach of privilege if in time, in the proper course of events, any expenditures that require authorization or statutory authorization are not at some time produced to the satisfaction of this House. I will file the material and make copies of it for the Hon. Member.

MR. G.F. GIBSON (North Vancouver–Capilano): Very briefly, I thank you for examining this and the careful attention you've obviously given it. I'll have a look at the full text of your judgment and see if any further arguments can be found which might bring this case within the four corners of privilege; or, as

[ Page 3214 ]

you suggest, there may be some alternate route in the near future.

MR. SPEAKER: Thank you.

Introduction of bills.

BRITISH COLUMBIA PAYMENT TO CANADA
OF FEDERAL INCOME TAX ON BEHALF OF
NATURAL GAS PRODUCERS ACT

Hon. Mr. Barrett presents a message from His Honour the Lieutenant-Governor: a bill intituled British Columbia Payment to Canada of Federal Income Tax on Behalf of Natural Gas Producers Act.

Bill 129 introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

Oral questions.

LETTER ON BCR REORGANIZATION

MR. BENNETT: Mr. Speaker, to the Premier as president of the railway: can the Premier confirm to the House that he has in his possession as president of BCR a report from R.E. Swanson and Associates, on their letterhead, signed by R.E. Swanson, dated February 26, dealing with reorganization in the B.C. Railway?

HON. MR. BARRETT: I'll take that as notice, Mr. Speaker.

RESOURCE GRANT TO SENIOR CITIZENS

MR. D.A. ANDERSON: Again to the Premier and Minister of Finance, Mr. Speaker. Mr. Speaker, in view of the concern being expressed by many senior citizens about the method of calculating the benefit of the resource grant, could the Premier please indicate what steps will be taken to ensure that B.C. senior citizens will receive the full benefit of both the resource grant and the extra $50 of the home owners' grant?

HON. MR. BARRETT: Mr. Speaker, a statement will be forthcoming on the adjourned debate on that bill.

CONTRACT TALKS WITH BCGEU

MR. WALLACE: Mr. Speaker, to the Provincial Secretary. In light of a statement by Mr. John Fryer, general secretary of the B.C. Government Employees Union that the only way employees will get a new master agreement as good as last year is through massive confrontation, and a statement that the power of his union is almost beyond comprehension, could I ask the Minister if preliminary discussions with the union have already taken place, and if the catch-up increases of last year, percentage wise, are being asked again this year?

HON. E. HALL (Provincial Secretary): Mr. Speaker, in partial answer to the Member's question, yes, the master agreement is being looked at now by both sides. I think I would prefer to answer the Member in this way: I am looking at the total text of Mr. Fryer's speech, and I think I should do that before I respond to any further questions there may be on this.

MR. WALLACE: One supplementary, Mr. Speaker. In light of the secretary's statements, which have been given great publicity, and because of some of the implications, I accept the Minister's suggestion that the whole field should be looked at. But it clearly implies the possibility of a shutdown of public service. I wonder if the Minister is developing contingency plans should that situation arise.

HON. MR. HALL: It is precisely because I anticipated that question that I want to look at the whole of the text of Mr. Fryer's remarks.

EQUIPMENT FOR POULTRY PLANT

MRS. P.J. JORDAN (North Okanagan): My question is to the Hon. Minister of Agriculture. Would he advise the House if the equipment for the interior poultry processing plant to be has been purchased and, if so, did the bids go out to tender?

HON. D.D. STUPICH (Minister of Agriculture): I'll take it as notice, Mr. Speaker.

MRS. JORDAN: Well, while the Minister is taking it as notice, would he please consult with the Member for Shuswap (Mr. Lewis), who is aware that it has been purchased and seems to have all the details? Would he also advise us when he brings in his answer what was the price, who purchased the equipment, from whom, on what date, where it is stored, for how long it has been stored and at what price per month, whether a site has been selected and, if so, whether that land is zoned for industrial development or whether it requires rezoning? It would help a great deal if the Minister would bring these answers in all at once. I'm sure the Member for Shuswap would help him.

HON. MR. STUPICH: Mr. Speaker, in answer to the first two questions, I suppose that rather than take them as notice I should have said in answer to

[ Page 3215 ]

the first question, yes, the equipment has been purchased. The second question the Member asked is the one that I wish to take as notice.

With respect to all the other questions, I wasn't able to take them down as quickly as she asked them, but I will say this: a site has not yet been chosen.

MRS. JORDAN: Well, they'll be in Hansard and they'll help you.

MR. GIBSON: Mr. Speaker, might I be permitted to address a question to the Hon. Member for Esquimalt (Mr. Gorst) in his capacity as chairman of the Marguerite committee and as a director of a private Canadian company doing business with the Crown?

MR. SPEAKER: Well, the problem there is that matters that are on bills before the House, if that is what it is about, would be out of order in question period.

MR. GIBSON: It is not related to the bill, Mr. Speaker.

MR. SPEAKER: It also must relate to his duties in the House. Therefore a private Member can be asked questions. But if you look at the standing orders, you would be in difficulty in trying to widen it to some ex cathedra effort going on outside the House.

MR. GIBSON: I wonder if the best thing, Mr. Speaker.... Perhaps I might ask the question, which I feel is in order, and you might comment on it before the Hon. Member seeks to reply.

MR. SPEAKER: Well, you can always ask and we can always receive. Let's see how it goes.

LEGALITY OF ACTIONS OF B.C.
STEAMSHIPS, 1975, LTD. DIRECTORS

MR. GIBSON: Well, Mr. Speaker, addressing the question pro forma to that Hon. Member: in view of the fact that the Hon. Minister of Lands, Forests and Water Resources (Hon. R.A. Williams) is not in the House today, and the other day noted that each of the shareholders of this private company, B.C. Steamships, 1975, Ltd., had made a declaration of trust in favour of the Government of British Columbia on the shares they hold, I would ask the Member if he was aware of section 88 of the Canada Corporations Act, which says that to exercise the powers of a director one must own the shares absolutely in their own right. There are only certain exclusions for those holding shares in trust, which I wouldn't believe would apply to the Hon. Member; therefore how can a board of directors function with zero legal members? That is my question.

MR. SPEAKER: There again, I think you are asking for the solution of a legal problem or proposition that you pose. It would be out of order, as you know, to ask a question that deals with legal service to be given to any person.

The strict rule, according to Beauchesne, page 150, is that no question can be put by one private Member to another, except on the orders of the day and on measures with which the Member to whom the question is put may be connected. That means, in the definition of "measures," matters that have to do with his duties in the House — for example, if he were on a committee of the House, that sort of thing.

RAILCAR PRODUCTION AT SQUAMISH

MR. L.A. WILLIAMS: Mr. Speaker, a question to the Hon. Minister of Economic Development in his capacity as executive vice-president of B.C. Rail. Have any cars been produced from the car plant in Squamish?

HON. G.V. LAUK (Minister of Economic Development): I'll take the question as notice, Mr. Speaker.

MR. L.A. WILLIAMS: A supplemental, Mr. Speaker, while the Minister, who is the executive vice-president of the railway, doesn't know the answer to the question and has taken it as notice, would he also advise the House whether the president's statement in the annual report that this car plant opened in the first quarter of 1975 is going to be corrected?

HON. MR. LAUK: Mr. Speaker, my instructions were that it did open. It was operating at that time, wasn't it?

MR. L.A. WILLIAMS: I thank the Minister for that answer. In view of his answer, could he tell us: is he really the executive vice-president of B.C. Rail?

HON. MR. LAUK: I'll take that as notice: (Laughter.)

LIQUOR ADMINISTRATION BRANCH AND
CNIB CATER PLAN EMPLOYEES

MR. H.A. CURTIS (Saanich and the Islands): To the Hon. Provincial Secretary with respect to government liquor store smoke shops and operated by the Canadian National Institute for the Blind, a plan which I believe is referred to as Cater Plan. I wonder if the Minister is aware of a request from CNIB to discuss the status of those employees of Cater Plan

[ Page 3216 ]

who are, apparently, going to come under the jurisdiction of the liquor administration branch. If there has been a request for a meeting, has the meeting taken place?

HON. MR. HALL: Yes, I am aware of it. Yes, there have already been meetings, and I think there are more scheduled.

MR. CURTIS: Supplementary. I wonder if the Hon. Minister would respond to the concern which has been expressed, in writing, I believe, to him as to other Members of the government, by the CNIB to the effect that while these liquor administration branch–CNIB employees will receive higher earnings as a result of this change, there will be a considerable degree of disparity with those CNIB employees who are not brought in under that plan.

HON. MR. HALL: That's one of the areas upon which the meetings are taking place.

ABORTION PRACTICES AT
VANCOUVER GENERAL HOSPITAL

MR. WALLACE: I'd like to ask the Minister of Health regarding the specific study which he carried out on the practice of abortions at the Vancouver General Hospital. I'd like to ask a very specific question: did that report show that abortions had been carried out beyond 20 weeks of pregnancy?

HON. D.G. COCKE (Minister of Health): The only study we had was a recent study. You're talking about a long time ago, and I can't give you that, but the recent study is that there has been a real reduction in the time frame. That's the only study I have available.

MR. WALLACE: Supplementary. In light of the petition with one million signatures presented in Ottawa, and the obvious concern of the federal Justice Minister, does the Minister in this province have any plans to meet with Mr. Otto Lang, or are they corresponding, because of the expressed concern, as was reported in the press last week, which Mr. Lang has about the practice of abortion at the Vancouver General Hospital?

HON. MR. COCKE: I can't see why anybody would take one hospital and use that as the hospital that one should look at. There are many hospitals across the province.

As far as Otto Lang is concerned, I have no contact with him. I have contact with the Minister of Health and Welfare in Ottawa. The question has been discussed on the agenda of our Health Ministers' conferences. It's a situation that's unpleasant, largely by virtue of the inability of people really to grapple with the problem.

BCR INDUSTRIAL
SITE AT PRINCE GEORGE

MR. D.M. PHILLIPS (South Peace River): I'd like to address my questions to the Minister of Economic Development, as vice-president of the British Columbia Railway.

Some several weeks ago I gave the Minister a file, and he took the question as notice. It was with regard to the price of leases on the BCR industrial site at Prince George. I'm just wondering if the Minister has anything further to report with regard to the information I requested.

HON. MR. LAUK: I took the question as notice. Since that time I've received one brief report. I've sent it back for more detail. I'll review it and report back.

ICBC REFUNDS

MR. D.A. ANDERSON: To the Minister of Consumer Affairs: may I ask the Minister whether she has received complaints from people claiming that ICBC is not granting refunds of any sum of $10 and under?

HON. P.F. YOUNG (Minister of Consumer Affairs): I'll take that as notice, Hon. Member, and have the department look into the file.

REVIEW OF GRANTS
IN LIEU OF TAXES

MR. N.R. MORRISON (Victoria): My question is addressed to the Premier. Is there any review under way at the present time by the government concerning the grants in lieu tax system whereby the City of Victoria, for example, received a grant equal to approximately one-third of the actual tax value of provincial government property?

HON. MR. BARRETT: Policy is always under review.

MR. MORRISON: In view of the fact that the province is continually buying land within the city limits of the City of Victoria, are you concerned, and are you discussing with the city officials what is happening to the tax base in the City of Victoria as those properties are removed from our tax load?

MR. SPEAKER: I think if the matter is one that still requires advice to the Crown, I don't think that can be asked unless it's already policy.

[ Page 3217 ]

ICBC STRIKE CONTINGENCY PLAN
RE AUTOMOBILE ACCIDENTS

MR. P.L. McGEER (Vancouver–Point Grey): To the Minister of Transport and Communications: now that the B.C. Federation of Labour has called for everything handled by ICBC to be hot, does that alter in any way the contingency plan of ICBC to deal with the motorists who have accidents in British Columbia?

HON. MR. STRACHAN: I haven't seen the statement which you indicated, and I'll have to take it as notice until I've seen that statement.

SEAWEED-EATING SHEEP

MR. WALLACE: I'd like to ask the Minister of Agriculture a question with regard to a statement by a British expert about a rare breed of Scottish sheep. Mr. Alderson told the animal science department of UBC, and I am sure Dean Gage will be interested in hearing this, about the sheep in the Orkney Island of North Ronald say who eat nothing but seaweed and enjoy the kind of climate we have in British Columbia and would breed very well in British Columbia. As the Minister is eager to expand the agricultural economy of this province, will he be taking any initiatives to encourage the importing of North Ronaldsay sheep?

MR. D.A. ANDERSON: They taste like fish.

HON. MR. STUPICH: Mr. Speaker, I have asked for a report on that particular breed of sheep.

MR. L.A. WILLIAMS: Is Oak Bay going to be the shepherd?

MR. SPEAKER: Order, please.

FOOD PRICES

MR. GIBSON: A question to the Minister of Consumer Services. In view of the forecast that settlements of demands in the B.C. food industry could raise food prices to consumers by up to 7 per cent, could the Minister say whether she has taken steps to become involved in the situation on behalf of the consumer, who is not otherwise represented at the bargaining table?

HON. MS. YOUNG: Mr. Speaker, I think that would be very inappropriate for me to do because that is a matter between management and labour. It is quite obviously in its very early stages.

Orders of the day.

HON. E.E. DAILLY (Minister of Education): Mr. Speaker, I ask leave of the House to proceed with public bills and orders.

Leave granted.

MR. SPEAKER: Before we do, may I point out an error in the order paper for June 9, page 24. Where it reads "adjourned debate on second reading," it should include "second reading, adjourned debate of Bill 93, adjourned by the Hon. Member for Oak Bay." By error, that is apparently shown just under the simple heading "second reading." So it should be moved up to next-in-line after Bill 27 on adjourned debate on second reading, adjourned by the Hon. Member for Oak Bay. I apologize for the error.

MR. D.A. ANDERSON (Victoria): Mr. Speaker, in light of the fact that a few days ago the Premier indicated that today was the day the province runs out of money, I wonder whether the government House Leader would like to indicate whether or not a supply bill is coming in today.

HON. D. BARRETT (Premier): It did already.

MR. D.A. ANDERSON: Oh, I'm sorry.

HON. MR. BARRETT: I informed the House through the Whips. I stood in the House and said that Monday — I think it is in Hansard — there would be a supply bill. Today is Monday, I gave the date.

MR. D.A. ANDERSON: Perhaps the House leader could indicate when this will be coming forward.

HON. MR. BARRETT: About 5:30 p.m.

SOME HON. MEMBERS: Oh, oh!

MR. D.M. PHILLIPS (South Peace River): Afraid to debate it, eh?

MR. SPEAKER: Order, please.

MR. PHILLIPS: You have an utterly ruthless attitude toward the opposition.

MR. SPEAKER: Order!

HON. MRS. DAILLY: Mr. Speaker, committee on Bill 126, Agricultural Statutes Amendment Act, 1975.

AGRICULTURAL STATUTES
AMENDMENT ACT, 1975

The House in committee; Mr. Liden in the chair.

[ Page 3218 ]

On section 1.

MRS. P.J. JORDAN (North Okanagan): In view of the fact that this bill was difficult to discuss in principle, I wonder if the Minister would outline briefly section-by-section his intentions.

HON. D.D. STUPICH (Minister of Agriculture): Mr. Chairman, in section 1, parts (a) and (b), the explanatory notes give a pretty good indication of what is in the legislation. I don't know what I can do any more than read the explanation here. However, since the Members have had only four days to do this, I will read the explanatory notes.

"Section 1(a): The addition of this subsection makes it clear that the Minister may order that the Act apply where requested by a municipality."

"Section 1(b): This amendment empowers the Minister to use the Domestic Animals Protection Fund to administer the Act."

MRS. JORDAN: Would the Minister outline if he has had requests from any municipalities for funds under this Act and if he is complying with this request and how much he anticipates contributing to those municipalities that have requested assistance?

HON. MR. STUPICH: I have had requests from municipalities for funding under this. The Act itself doesn't provide any such funding. However, it is possible out of the licence fees collected in the municipality, when a municipality asks that this Act be applicable within the boundaries of that municipality. We can enter into a funding arrangement of that amount.

Section 1 approved.

On section 2.

HON. MR. STUPICH: In complying with the request of the Hon. Member, Mr. Chairman:

"Section 2: The opening words of section 2 are 'The Lieutenant-Governor-in-Council may, for the purposes of establishing, carrying out, and administering any farm income plan....'"

And then the amendment before us adds the words that are in the bill before us.

This, I might say, is completely in line with the request that the Canadian Federation of Agriculture made in its 1975 presentation to the Prime Minister and Members of Parliament, when they used actually the same words, if I can quote from their presentation in relation to Bill C50, which we very positively support: "Our most important submissions are as follows: (1) for formal consultative procedures with producers." So we are including that, which is formalizing the actions which we have been taking in the past.

MRS. JORDAN: Is the Minister advising the House that up until now requests by commodity groups to enter into income assurance have not in fact exactly been legal, and this legalizes those requests? Has he had this matter brought to his attention?

HON. MR. STUPICH: Mr. Chairman, that is not the case. When the legislation was introduced in the fall of 1973, I made it very clear that it would be our policy. I did this with legal advice to the effect that that was possible under the legislation — it would be our policy to consult with agricultural organizations. There was some feeling that the agricultural organizations would be happier if it were spelled out in the legislation. So simply to accommodate that feeling, and also a point of view put forward by the National Farmers' Union that the legislation, as it currently was, didn't leave the door open for any kind of consultation with them.... From the point of view of making it abundantly clear to everyone concerned that we were prepared to consult with organizations that represented a commodity, or with organizations that represented an area of the province — that we were prepared to consult in either way, as long as we established which was the way those farmers wanted to be consulted with.

MRS. JORDAN: Perhaps he clarified it, but this in essence, then, would allow a breakaway group from a commodity organization to form into a second organization or association and deal on a separate basis with the Minister on income assurance.

HON. MR. STUPICH: Mr. Chairman, as we do with members of labour organizations, we believe that people should have the right to be represented by the organization of their choice. There's nothing now to prevent what the Hon. Member calls a breakaway group from forming. All we're doing here is saying that we are prepared to consult with organizations, either on a commodity basis or on an area basis. We're not encouraging or discouraging what the Hon. Member calls a breakaway situation.

MRS. JORDAN: Well, I hope the Minister's not misinterpreting my term "breakaway." I didn't mean it in an uncomplimentary sense at all. I am interested to know if this legislation will accommodate a group of fruit producers, for example, on Vancouver Island or in the Okanagan, who may not wish to participate in one association and may wish to form their own association. Would they then be able to enter into an agreement or negotiation for income assurance with the Minister under that association's auspices?

[ Page 3219 ]

HON. MR. STUPICH: Mr. Chairman, I would say, not in that particular situation from reading the wording of section 2 where it says that we may consult with an association of farmers when the association establishes to my satisfaction that it represents a majority of farmers or classes of farmers. So I would think in that situation it would not be possible, in the wording of this legislation.

MRS. JORDAN: It seems to be a little vague, because the Minister said "to his satisfaction." I realize this is in the legislation. What criteria is the Minister going to use in terms of defining an area as opposed to a breakaway group, using that term in a complimentary sense? For example, the egg producers in the northern areas of the province might well wish to form their own association and deal directly with the Minister. I'm using that as, perhaps, a different situation than the fruit producers. Is this what the Minister is saying would be available under this amendment to the income assurance legislation?

HON. MR. STUPICH: Mr. Chairman, it is conceivable that the northern part of the province would be considered an area — then we get into deciding what is the northern part of the province. But in the case of the specific situation you mentioned, it's conceivable that it could apply.

MR. R.H. McCLELLAND (Langley): Mr. Chairman, I'd like to ask the Minister whether or not he really said that this section has come about as a direct request from the National Farmers' Union. If so, does the Minister consider that the National Farmers' Union represents a majority of farmers or classes of farmers in any part of this province? Is this section an attempt in any way to drive a wedge between the existing organization which represents the majority of farmers in the province and the National Farmers' Union?

HON. MR. STUPICH: Mr. Chairman, the answer to all of those questions is no. I think perhaps the Minister was in his seat when I used as my first example....

MR. McCLELLAND: You're the Minister. I'm a Member — for now.

HON. MR. STUPICH: I think the Hon. Member — hopefully for a long time — was in his seat when I used, as my first explanation of this section, a direct quotation from the Canadian Federation of Agriculture, so it's not here as a direct response to requests from the NFU. So the answer to all of your questions is no.

MR. PHILLIPS: Mr. Chairman, I hope I didn't miss any of the debate; I was out of the House. But when you're recognizing that a majority of farmers in one area is banded together in an organization, do they have to represent all of a particular commodity?

Do farmers have to negotiate on a commodity basis? Or do they have to negotiate...? For instance, getting down to specifics, supposing that the Minister finds that the farmers' union in any particular area represented the majority of farmers in that area. Would the farmers' union then be able to negotiate, for instance, for the hog producers in the area even though the majority of hog producers in that particular area were not members of the farmers' union — or the majority of grain farmers, for instance, even though the total majority of farmers in the area were not represented on the farmers' union?

HON. MR. STUPICH: Mr. Chairman, I want to make it clear that the word is "consult" rather than "negotiate."

Secondly, I think the Hon. Member is aware that even the National Farmers' Union in their presentations said first they would, for their own protection, want to be able to convince me that they represented not only a majority of the farmers in that area but also the majority of the producers of any commodity before they would pretend to be consulting on behalf of the producers of that commodity. That is the position I would take, too, in entering into any consultations with any organization.

If an organization were established on an area basis, before I would enter into consultation with that organization for any commodity I would want to be satisfied that that organization also had a majority of the members producing that commodity or farmers producing it.

MR. PHILLIPS: I appreciate the Minister's explanation of that fine point. It doesn't really spell it out that clearly in the Act, but I'll certainly take the Minister's explanation of the intent for the present time.

MR. McCLELLAND: I don't understand why he needs this amendment at all. Would the Minister not confirm, if somebody comes to him today and establishes to the Minister's satisfaction that they represent a majority of a group of farmers or a majority of commodities, that he can't sit down and consult with them on any matter in his office today, whether it is in regard to an income insurance plan or anything else? You can do that right now. Why do you need this amendment?

HON. MR. STUPICH: Mr. Chairman, the Member is quite right. We can do this now. We have been doing it, we are doing it and likely will be doing it

[ Page 3220 ]

whether the House gives me this amendment or not. However, in consultation with Members of other provincial governments, and in consultation with our own federation of agriculture and with the federation of agriculture in other provinces — and, as I point out, even in the wording of the Canadian Federation of Agriculture brief — they feel that our whole presentation of trying to get other provinces moving in the same direction and of trying to get more cooperation from Ottawa in this whole question of farm income assurance negotiations, although it says consultation in this amendment...that all of this process will be enhanced if all the provinces will agree in legislation to provide for consultation with farmers' organizations.

Now that argument has been presented to me. I accept it as a reasonable one, and it certainly is not going to harm negotiations in any way. I have been persuaded that it will help to have it spelled out in legislation.

MRS. JORDAN: Would the Minister advise the House what procedure he has in mind for establishing and satisfying himself whether or not a group that approaches him does represent the majority of the producers, and on what basis?

Also, would the Minister not agree that by enshrining these words in the legislation it does strengthen his hand in terms of making Ministerial. decisions, as it relates to the income assurance programme?

HON. MR. STUPICH: I don't agree that it gives me any more or any less authority than is already in the legislation, Mr. Chairman. I still have to conclude these consultations and negotiations, or whatever, and still make presentations to cabinet before any income assurance scheme is put in place. So I think it does not give me any more authority than I had in the first place.

What was the first question again?

MRS. JORDAN: I asked the Minister if he could outline briefly the procedure, the criteria that he hopes to establish to satisfy himself that in fact a group approaching him does represent a bona fide group of producers. I would also ask as a follow-up if he contemplates a vote. I think the fruit industry is an excellent example where there may be those within the industry who wish to operate outside certain aspects of the system as it is established today. Supposing there is a fairly large percentage of these people who are now excluded from income assurance, but who might well band together and make a formal presentation to the Minister to become part of income insurance. How would he satisfy himself in that case, for instance, as to whether or not they are a bona fide group and whether their method of marketing should be considered under income assurance?

HON. MR. STUPICH: Mr. Chairman, the amendment before us does say that the organization must represent a majority of the farmers or classes of farmers. So in a case of the fruit industry, for example, I'd have to be satisfied that an organization represented a majority of the farmers. No question was ever raised as to whether or not the BCTGA, for example, had the authority to represent a majority of the farmers. It is an organization to which all of the fruit farmers belong. A plebiscite was taken not long ago — well, just about the same time as we were dealing with this legislation — that indicated a majority for that organization. So the question never arose.

The time when the question would arise would be when we are starting to deal with an area, and I can appreciate then that that is when we would have to get down to the business of defining exactly what a farmer is. We have been considering that sort of a definition. Regulations would have to be provided to define a farmer. Then there would have to be some sort of registration, In the case of all the commodity groups with which we have dealt so far and with which we are dealing there's no problem because they do belong to organizations that have previously shown that they represent a majority of the farmers in that particular commodity. We could run into problems in the area. There it's a matter of defining the farmer.

MRS. JORDAN: The Minister got ahead of me as far as my thoughts on the B.C. Federation of Agriculture are concerned and the questions I had relating to that. This is a decision by the commodity group — whether to join the B.C. Federation of Agriculture and to contribute to their maintenance. Does this legislation mean that every commodity group must belong to the Federation of Agriculture in order to negotiate income assurance? Are there still groups who may not wish to belong to the Federation of Agriculture who might wish to consult on income assurance? Would this make any difference as to whether they can do it through the federation or on their own?

HON. MR. STUPICH: Mr. Chairman, this legislation doesn't make any difference with respect to those questions.

MR. McCLELLAND: Mr. Chairman, this section bothers me somewhat in relation to the procedure by which an income assurance plan will be established in the future. The Minister has agreed that he has all of the powers right now that are laid down in this amendment. If someone comes to him and convinces

[ Page 3221 ]

him that they represent the majority of the hog farmers in the Fraser Valley, the Minister can sit down and talk with them about income assurance plans or the price of marketing or transportation or anything else, without this amendment. By formalizing that procedure, which the Minister has whether or not the people convince him that they represent a majority.... I would hope that someone who was interested and happened to be a hog producer who doesn't represent the majority would have the opportunity to come into the Minister's office and discuss something of interest to them and to the Minister at any time. You don't need any formal legislation for that. My experience is that the Minister's office is open for people who want to come in and consult about things like that. Some individual may come in and give the Minister a really good idea that he may want to advance to some other group in the future.

By formalizing this I think what you might do is circumvent the logical procedures that are now being followed. The Minister has recognized that there is a group in this province which represents the majority of farmers as such, and he's set up, through that group, a negotiating committee which negotiates the broad terms of income assurance plans in British Columbia today. By formalizing the idea that another group can come in and talk to the Minister while the negotiations are going on with that committee would seem to me to break down that whole process and could, in fact, break down the negotiations leading to a successful conclusion of an income assurance scheme. I think that instead of making that kind of formal amendment to this legislation, what should happen is that if there is a group which represents and has the interest of a group of growers of an area at heart, then that group or that special interest should then go to that negotiating committee and put their case forward to the negotiating committee. Certainly the Minister should always be open to this kind of approach. But to formalize this would seem to me to break down that procedure and to break down the negotiating routine that has been set up and which the Minister admits is successful to this point. So why would you want to take this to that kind of formal conclusion that might damage that delicate negotiation in the future?

HON. MR. STUPICH: Mr. Chairman, I do appreciate the Member's words to the effect that my door has always been open. Secondly, I can only repeat what I've said already, and that is that there are farm organizations throughout Canada which have argued that it will strengthen their hand in trying to sell this kind of programme in other provinces and federally if they are able to wave around a piece of legislation that says right in the legislation itself that we will consult with agricultural organizations that represent farmers in developing our income assurance plan. I'm persuaded that that is a good move, and anything that will help sell it across Canada will be good for the farmers of Canada in every province in the whole country. On that basis I urge the adoption of this amendment.

MR. McCLELLAND: Okay, so some people have said they'd like to have a piece of legislation to wave around. Is that reason enough to pass a meaningless piece of legislation that doesn't mean anything and doesn't do anything, but may in the future jeopardize the proper negotiation of income assurance schemes?

MRS. JORDAN: The Minister seems to have exhausted his answers. I would just like it to go on the record, Mr. Minister that we really, on this side of the House, view your reasons for bringing in this legislation with rather grave concern. It's not often, even with some of the weird and wonderful legislation that's been brought in by this government, that along with many flimsy excuses we get such an excuse that really the people in other provinces want a piece of paper to wave around. I'm not sure that this government should be in the business of satisfying the paper needs of other provinces unless it's in the area of production. However, we will accept the Minister's explanation in terms that he needs this, but I want it on record that we view his explanation with grave concern.

We wish to caution the Minister that should he abuse the intent that he has stated here we shall be quick to bring it to his attention, and we shall be very quick to bring to the attention of the producers of this province his words in Hansard today. I hope this won't be necessary. I hope we can expect, as I say, this rather peculiar explanation on the basis of the Minister's words. I feel that it's difficult to support this, although we will.

I think it might also, again, be reasonable to point out the concern that the official opposition feel when there is a controversial piece of legislation, such as section 2 of bill 126, in light of the Minister's statement. This type of legislation is brought in, really, and just rushed through the House in unseemly haste. When the Minister's explanations don't really satisfy the questions of the opposition, it's a matter of great concern. There simply is not time, when this happens, for all Members of the House to discuss the details of these amendments with the commodity groups involved or with producers in this province who may have concerns that they may wish expressed. I urged the Minister in second reading and I urge him again to desist from this type of practice in the future.

Again, we will support this section, but we want it on record that we view it with considerable concern in light of the Minister's lack of statements.

[ Page 3222 ]

Section 2 approved.

Sections 3 and 4 approved.

On section 5.

MRS. JORDAN: Would the Minister give an explanation of section 5, please, other than just the words in the explanatory notes?

HON. MR. STUPICH: I think it would be more appropriate if the Member asked some questions that are not answered by the explanatory note. I'm not trying to be difficult, but I'm just wondering what it is she's asking about. I'd like to try to answer the question.

MRS. JORDAN: Well, my problem again, Mr. Minister, is that I discussed this with some of the commodity people on the weekend. In light of the fact that they haven't seen the legislation they had some difficulty in pinpointing their concern. The Milk Industry Act, as the Minister knows, is a very sensitive Act. There are problems in the milk industry and they're just a little concerned that there may be more to such an amendment than appears in the statement.

HON. MR. STUPICH: Well, I'll have a go at it then.

Section 40, which is the one that is being replaced in the Milk Industry Act, right now names two areas in particular and then gives to the cabinet — the Lieutenant-Governor-in-Council — the authority to name any other such areas it wants to establish. So the Milk Board is bound with two particular areas that are clearly defined, and can then do anything it wants with the rest of the province. What we're saying here is we're replacing that section with a section which will give the Lieutenant-Governor-in-Council the authority to change milk production areas as the Milk Board feels they should be changed in managing the production of milk in the province.

MR. McCLELLAND: Mr. Chairman, perhaps I'll get ruled out of order here, Can we talk about classification and utilization of milk production quotas in this section?

HON. MR. STUPICH: It depends on what you say about it.

MR. McCLELLAND: Okay. Well, here goes.

This section does allow for establishing classes of milk according to acceptability for utilization in each of such classes, and there is a serious problem with relation to the utilization and classification right now, and the income assurance plan for dairy farmers in British Columbia.

Last year the provincial government gave every indication to the dairy farmers of British Columbia that they wished to have large-scale expansion of milk production in this province and, in effect, told the farmers to go ahead and expand their herds, expand their quotas, build new barns, and get lots of milk out there, and the farmers did respond to those requests. They borrowed money from the bank, built new facilities, bought quotas, added to their herds, with the full belief that that situation would prevail today and five years from now, as far as that goes. They put themselves into hook to do this kind of thing. The government said that it wanted lots of milk, so the farmers went ahead and gave it to them, The banks loaned money on the basis of the words from the government, as well as the income assurance scheme.

Now, however, it seems, first of all, that the federal government has cut back, as I understand it, on the MSQ, the milk surplus quota, by $1.50, and the NDP government's Agriculture department, is now, contrary to what the farmers thought in the first place, paying income assurance on the basis of that MSQ. They didn't tell the farmers at that time that they'd be paid only on the MSQ, but they in fact thought that they would get income assurance-based on the cost of production of all the milk that is shipped.

I've done a random survey of farmers in the area, and I'm told that about 50 per cent of the farmers in the Fraser Valley are going to be very seriously affected because of this cutback, because the dairy farmers....

Interjection.

MR. McCLELLAND: Yes, $200 a month cutback. That's right. I know of one farmer who's selling milk, for instance, at $4 instead of $10....

HON. MR. STUPICH: A point of order, Mr. Chairman.

MR. McCLELLAND: Mr. Chairman, I know that if he sells....

MR. CHAIRMAN: The Minister on a point of order.

HON. MR. STUPICH: The Member did ask whether or not he could discuss this question. I said it depends on what he would say about it. Certainly I think that what you're saying now has no bearing on this particular amendment.

MR. McCLELLAND: Mr. Chairman, I don't know whether the Agriculture Minister rules on that or whether the Chairman rules on that.

[ Page 3223 ]

MR. CHAIRMAN: He's raising a point of order; we'll rule on it from here. We'll let you continue for the time being.

MR. McCLELLAND: Thank you, Mr. Chairman. I'd like to say that what I am really talking about is the utilization and classification of milk as it relates to the income assurance plan. I think that I'm in order in speaking about that at this time. I won't speak much longer at any rate.

The farmers in British Columbia now are all right because they're going to be paid for everything they ship at the moment. But in four or five months — I have it on good authority that there may be some farmers in the valley that will fold their business because they can't keep it going. One farmer that I know of who went ahead and expanded earlier in the year now is going to have to get rid of 80 or 90 cows — at a reduced price, incidentally, because those cows aren't worth what they were a short time ago. The income assurance scheme, because of this, may backfire in the face of the Fraser Valley dairy farmers.

At the same time, those farmers who now find that their only way out is to expand their milk quota have to go out and buy more milk quota. They're finding that the quota that was $35 a pound just a few short months ago is now selling for $60 to $63 a pound. They just can't afford it.

I know of one farmer right now, Mr. Chairman, who stands to lose $200,000 — $200,000! — this year because of this change in procedure that the farmers are now faced with. Those are farmers who took the government at face value and really stepped in and expanded when the government asked them to expand. The government said: "Give us lots of milk." They gave them lots of milk; now they're getting kicked in the teeth because of it.

Mr. Chairman, I hope it wasn't out of order, but it's a serious problem in the Fraser Valley and on Vancouver Island as well. It's one that I think the Minister should address himself to.

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

MRS. JORDAN: Is the Minister going to answer the Member for Langley?

MR. CHAIRMAN: I recognize the Member for North Okanagan; you're dealing with section 5.

MRS. JORDAN: Don't get touchy, Mr. Chairman. I'd like to ask the Minister under this section whether he discussed the matter with the milk board about the increasing of production of cheese in the Province of British Columbia in light of the fact that his initial words were, when approaching income assurance, to expand milk production in B.C. A study was done by the former administration in cooperation with a number of the private sector to see if we couldn't develop a stronger British Columbia cheese industry. I'd like his views on that.

The second point I'd like to ask the Minister about is really going back to his own statements. This, in fact, gives the Minister the power — reinstates the Minister's power — to really order any changes he wishes in the milk areas of the province. Would he guarantee this House that there would be no changes unless a vote is held? Is that vote to be held on an area basis or would it be held on a province-wide basis?

The other point I'd like to bring to the Minister's attention under this section of the Act is this whole matter of the butter that is being sold in the Province of British Columbia. There are many consumers — certainly our own family — who feel that British Columbia–produced butter is among the finest....

MR. CHAIRMAN: I wonder if the Member can tell me how you're relating that to section 5.

MRS. JORDAN: Because butter production comes under the milk industry...

MR. CHAIRMAN: You're dealing with areas here, I'm afraid.

MRS. JORDAN: ...and is produced in various areas of the province. Various cooperatives produce butter and they come under the control of the milk Act in terms of the amount of butterfat, et cetera, that they have to dispose of.

They have to operate their co-operative. It's a co-operative and it's producer-owned; all the producers must operate under the Milk Industry Act. It makes a great deal of difference to them, Mr. Chairman, just what is going to happen, because the situation in British Columbia now is that we produce only about 5 per cent of our butter.

MR. CHAIRMAN: I believe that kind of connection is very, very remote. I would hope that you would stick to the section 40 that's being deleted and the new section 40 that's being recommended here.

MRS. JORDAN: I appreciate the Chairman's concern. Could you explain to my why it's remote, if we're amending the Milk Industry Act which gives the Minister the power to change the various designated areas of production in the province? This has a very decided effect on the....

MR. CHAIRMAN: I would just urge you to continue your remarks on section 5 of this

[ Page 3224 ]

amendment Act.

MRS. JORDAN: I'll do my best to keep within the confines. The problem is that the B.C. producers have built up a reputation for British Columbia butter. But as the Minister is aware, our supply nowhere meets our demand. I'd like to know if he has the intention of increasing the allowable supply in order to try and build up a more profitable and more productive butter industry in British Columbia.

The fact that there's growing concern among the consumers in butter production is that they believe they are buying B.C.-produced butter when in fact that butter is largely imported. It's not only imported, which may or may not....

MR. CHAIRMAN: Order. I think you are really stretching the rules here. There is nothing to do with production quotas here; they are talking about areas in section 40. I would urge you to deal with section 5.

MRS. JORDAN: Mr. Chairman, do you know enough about the dairy industry? I would suggest, with due respect, that the Chairman knows very little about the dairy industry and very little about the problems there are in various areas of production because...

MR. CHAIRMAN: Order! I think that you have to deal with the order of the House, and we are dealing with section 5...

MRS. JORDAN: ...marketing these products is one of their problems.

MR. CHAIRMAN: ...which asks for the removal of section 40 in the present Act, replacing it with one that is stated on page 2. I think that if you check both of these Acts, you are clearly out of order in the line you are following right now.

MRS. JORDAN: Perhaps the Minister will answer my former questions.

HON. MR. STUPICH: Mr. Chairman, there was one relevant comment — that it gives the Minister more power. I deny that because....

MRS. JORDAN: I asked if it did.

HON. MR. STUPICH: It clearly says that it is the Lieutenant-Governor-in-Council who will have the authority. There was one relevant question that was asked, and that is: would I assure the Hon. Member for North Okanagan that there will be a vote and that it would only be carried by a majority vote? This section does not provide in any way at all for referendums of any kind. It is the recommendation from the Milk Board that initiates the action.

Section 5 approved.

On section 6.

MR. PHILLIPS: Mr. Chairman, I would just like to ask the Minister what provoked this amendment, particularly section (b), which would allow you to enter residential premises without entering the residence. Why?

HON. MR. STUPICH: Is that section 6 or 7? You are on 7, I think.

MR. PHILLIPS: Aren't we on section 7?

HON. MR. STUPICH: We are on section 6.

MR. PHILLIPS: Pardon me. My humble apologies.

MR. CHAIRMAN: The fault may be mine. I thought you were rising on 6.

Section 6 approved.

On section 7.

MR. PHILLIPS: Same question on section 7.

HON. MR. STUPICH: Mr. Chairman, the concern here is that the legislation, as it is presently worded, apparently gives the inspector the authority not only to enter residential premises, but the house itself. It is to make it clear that they may enter the land and buildings apart from the actual residence. They have no authority under this. It is made quite clear now — they would not have authority to enter the residence.

MR. PHILLIPS: I will be ruled out of order for this, but I just hope that the weed inspectors will get onto some of the government property, particularly the Department of Highways' rights-of-way, and B.C. Hydro's rights-of-way. Make sure that you clean up your own house first before you start into anybody else's premises to inspect for weeds, because I find an ever-increasing number of weeds growing along the beautiful highways of British Columbia. Weeds are growing....

MR. CHAIRMAN: You're quite right, you are out of order.

MR. PHILLIPS: Thank you, Mr. Chairman.

Section 7 approved.

[ Page 3225 ]

On the title.

MRS. JORDAN: Speaking to the title, Mr. Chairman, I would like to ask for the Minister's assurance that this type of Act, which is a relatively new procedure under his administration, is not going to become commonplace. Apart from the problem that it was introduced one day and had second reading the next day and has had third reading the third day without an opportunity for the Act to even be circulated among the producers of this province, those who should be interested in this legislation, it touches on seven major agricultural Acts in this province.

In itself, it does not allow debate, as you yourself have pointed out, Mr. Chairman. During this debate Members have tried to question the Minister on some of the real reasons behind these amendments. They are not satisfied with his answers, There is a feeling, without disrespect to the Chair, that it confines debate far more than is healthy for this legislature or for the agricultural industry itself.

It also is a type of Act which means that it is basically not debatable in second reading, as the Minister said himself. Also, I am sure that the Chair and the Minister are aware, and certainly the Members are aware that it is a type of Act that is extremely difficult to amend. The opposition feel that there is a great deal of danger in the Minister of Agriculture embarking on this type of legislative changes.

We would hope that in future he would have his legislation prepared well ahead of time, that the amendments would come in in their proper form, that there would be ample time for the producers and the commodity groups and those interested in agricultural legislation in this province to study the ramifications of the change, and that there would be time for the opposition to offer constructive suggestions and constructive amendments.

I hope that in speaking to the title of the Act, the Minister will assure us that basically this is a one-shot entry and that we don't look forward to this type of legislative approach in the future.

HON. MR. STUPICH: Mr. Chairman, I would just like to reassure the Hon. Member for North Okanagan that I am prepared at any time to stack my record as the Minister of Agriculture against the collective efforts of the four Ministers of Agriculture under the previous administration.

MR. McCLELLAND: Your humility is touching.

MRS. JORDAN: One must ask if modesty is not one of the Minister's stronger points. Is it not?

Just in closing, I feel that the Minister's rather childish response is all the more reason why his legislative programmes must be more responsibly presented to this Legislature. We would hope that he would build his reputation on a positive approach, not trying to downgrade former Ministers of Agriculture who, in spite of their thinking, may well have served this province well.

MR. CHAIRMAN: Order! I think we've overdone the title.

MRS, JORDAN: Mr. Chairman, I believe that debate is for the Members of the House, not for the Chairman's personal opinion.

MR. CHAIRMAN: Well, it's a question of order.

Title approved.

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

Motion approved.

The House resumed; Mr. Speaker in the chair.

Bill 126, Agriculture Statutes Amendment Act, 1975, reported complete without amendment, read a third time and passed.

HON. E. HALL (Provincial Secretary): Committee on Bill 86, Mr. Speaker.

SAVINGS AND TRUST CORPORATION
OF BRITISH COLUMBIA ACT

(continued)

The House in committee on Bill 86; Mr. Liden in the chair.

On section 3 as amended.

MR. PHILLIPS: Mr. Chairman, I don't wish to prolong the debate on this, but I think that....

MR. WALLACE: You didn't want to prolong the debate.

MR. PHILLIPS: Thank you. But I do think that the Minister of Finance owes the House an explanation here. He would not accept our amendments to ensure that the government was not going into areas in direct competition with the credit unions. He hasn't stated that yet in this House. As I look further in the bill, in section 7, I see where branches of this British Columbia Savings and Trust Corp. can act as agents for the Insurance Corp. of British Columbia.

[ Page 3226 ]

I think it's only fair, Mr. Chairman, that the Premier tell us what his ultimate plan is for this new corporation that's being set up, because the legislation certainly gives him the prerogative and the power to set up offices of this corporation in every area of the province. I think, Mr. Chairman, if this is the intention of the bill, if this is what the Premier really intends to do, well, I think that he should level with the Legislature. We don't want to prolong the debate, but let the Minister of Finance tell us. We've discussed this over and over again and he knows that it says that the credit unions may have the opportunity to own 10 per cent; they don't have to. But if the Minister would just assure the House, or at least explain to the House what he plans to do under this section, with all of the powers that are given to him.... The Minister of Finance, Mr. Chairman evidently doesn't seem very interested.

MR. CHAIRMAN: You have the floor; you may continue.

MR. PHILLIPS: If I resume my seat, would the Minister tell us, level with the House?

HON. MR. BARRETT: Mr. Chairman, we've canvassed this subject a number of times. I've made it clear over a period of time. Perhaps the Member was unaware of my statements. What I said was that if the credit union movement wishes to take the opportunity of participating, and of course they will decide — I think they're having a meeting this month — that we would then limit the number of offices to — regional offices, arranging between the number of 8 to 14 and that's all.

MR. PHILLIPS: Mr. Chairman, if the credit unions don't wish to participate to the amount of 10 per cent, will the Minister of Finance be opening offices of the B.C. Savings and Trust Corp., the same as Royal Trust or any other trust company in all areas of the province? Is this your intention? Just level with us.

HON. MR. BARRETT: Mr. Member, it is impossible for me to answer that question because up to, this point we are very hopeful — and we have had no indication that otherwise may not be the case — that the credit union movement, which have planned this institution with us right from the very beginning in May, and have been part and parcel of meeting with us.... We have no anticipation that their participation won't take place, so you are asking me to speculate on something that I don't expect to happen.

MR. PHILLIPS: Did I hear the Minister of Finance correctly when he said that the credit union have participated in drawing up this legislation?

HON. MR. BARRETT: Not the legislating — the programme. They have participated in the development of the programme all along. We've met with them frequently.

MR. PHILLIPS: What programme are you referring to?

HON. MR. BARRETT: The programme of a financial institution — not the specific bill itself, but the programme. We have been discussing this with them for months. We even helped them, through the first deposit, to initiate that experiment with low-cost mortgages that they initiated.

MR. G.F. GIBSON (North Vancouver–Capilano): We haven't established very much under this section. We haven't been able to establish whether this institution is going to make a profit or a loss, what percentage below-market loans will be, what percentage of government funds are going to be taken from the current accounts and put there. We haven't established a tax status, we haven't established a constitutional status, which is very vague.

I have one more question, and I want to make it clear to the Premier that I ask this question in the most neutral way possible. I just want to get something on the record. There have been fears expressed that a bank of this kind or an institution of this kind could become a political institution in the sense of people being pressured to do business with it because of the powers of government.

HON. MR. BARRETT: That was canvassed before.

MR. GIBSON: I just want something specifically on the record.

HON. MR. BARRETT: It was already in Hansard. You were out of the House when that was asked by a backbencher of the opposition side. Look in Hansard for a clear-cut answer to that exact inquiry.

MR. GIBSON: I just want a clear-cut guarantee. You give me a guarantee that no one....

HON. MR. BARRETT, Mr. Member, it's all in Hansard. It's already been canvassed. I can't help it if you were out of the House. Check the words in Hansard.

MR. CHAIRMAN: The Member for North Vancouver–Capilano has the floor.

MR. GIBSON: Thank you, Mr. Chairman. I just want a clear-cut guarantee...

[ Page 3227 ]

HON. MR. BARRETT: It's there, in Hansard.

MR. GIBSON: ...that no one in your government, as long as it is your government, will ever put the slightest pressure on any person or corporation or institution to do business with this B.C. Savings and Trust Corp. or else be fired. That's all I want to know.

HON. MR. BARRETT: Mr. Chairman, I find it very difficult to believe that the Member is asking that in a neutral way. The very question, I think, is a debasing question. There is an implied suggestion that someone on this side of the House would even consider such a thing, and it is headline seeking rather than doing the proper kind of research, Now you weren't here for the debate. The question was asked, in a far more gentle manner than the "neutral" aspect, and the answer was no.

MR. N.R. MORRISON (Victoria): Mr. Chairman, just one question on 3(g). The item here is to provide a full range of credit facilities and collection services, including the processing of payments from the Crown. Would those be on a fee-for-payment basis, or have you got a policy established on that particular item?

HON. MR. BARRETT: Fee-for-payment.

Section 3 as amended approved.

On section 4.

MR. GIBSON: Section 4, Mr. Chairman, suggests that the company is an agent of the Crown. I would ask the Premier if he contemplates that it will be acting as a fiscal agent for the Crown in the floating of loans and one thing and another, and what savings this might make for the people of British Columbia.

HON. MR. BARRETT: We may do this, Mr. Member, depending on the situation that we analyse where there is a direct saving to the people of British Columbia. That is why the word is "may" rather than "shall." Each case will be analyzed on its own merits.

Section 4 approved.

On section 5.

MR. GIBSON: I hope this is the right section to ask it on. I've looked through the bill as closely as I can, and I can't find the 90 per cent figure — this would be the 10 per cent for the credit unions — anywhere in the bill. Is this a matter of stated policy, or is it somewhere in the bill?

HON. MR. BARRETT: It's a matter of stated policy.

MR. GIBSON: Well, could I then ask the Minister why it is only 10 per cent for the credit unions? It is conceivable they might be interested in going a good deal further with this institution than 10 per cent.

[Mr. Skelly in the chair.]

HON. MR. BARRETT: It's obviously a tax advantage to the Crown and to the people of British Columbia.

Section 5 approved.

On section 6.

MR. MORRISON: There has been considerable discussion on section 6 as to whether this is constitutional, and I wonder if the Premier could give us an explanation of that point at this time.

HON. MR. BARRETT: Mr. Member, I want to thank you for the question. The question of constitutionality did come up early in the preparation of this material. I asked the committee of senior civil servants who were working on this bill to check very closely with the Attorney-General's department as to the constitutional aspect, We had, as I jocularly referred to them, three lawyers with nine opinions, but through the substance of all those opinions we came to the conclusion that we were within our constitutional rights to follow the bill under the Act, the way it is presently written.

MR. MORRISON: One other final item. Has there been any limit on the amount of reserves that the provincial government might lodge with this new banking institution? Do you have a limit, or is it open ended?

HON. MR. BARRETT: There's a limitation of capital.

MR. MORRISON: No, I wasn't referring to the investment in shares or anything of that nature, but the money that you might put on deposit.

HON. MR. BARRETT: I'm sorry, Mr. Member. Either I'm confused with your question, or I'm confused by the answer.

MR. MORRISON: What I'm referring to, with this new banking institution, is that some of your liquid reserves will obviously be put on deposit with them for either short or long periods. Is there any limitation on the amount or is it open ended as

[ Page 3228 ]

to...?

HON. MR. BARRETT: There's no limit. We would expect them, on the whole, to be fairly competitive bidders for short-term money.

MR. MORRISON: But obviously if you removed large sums of money from the other remaining banks you have quite a lever there, and that's what I'm driving at.

HON. MR. BARRETT: Yes. Look, I don't see us placing the province in that position, quite frankly. I said in my opening remarks that we're not going to fight the banks because we couldn't beat them anyway. The question is a policy of government of the day. I see this instrument lasting for a long time. It would be foolish — I think everyone would agree — for any government to assault the existing good relationships we have and, frankly, good lines of credit that we have with the banking community. When we came to power, a number of banks had not been permitted to do business with the Government of British Columbia. Our position was that all banks and the credit union would be allowed to bid. We have a traditional banking arrangement with the Canadian Imperial Bank of Commerce Ltd. that goes back a number of years in this province. I don't feel any allegiance to any particular bank. You know, if they all want to compete for the same amount of money, fair enough; but on the other hand, all things being equal, long-term customers shouldn't kick over the traces for whim, or fancy or anything else. I think that's harmful to the province as whole.

The position that I see us in is that we would compete for short-term deposits. I see us with not unusual favour, if the financial institution can make a case for putting some temporary deposits, but in no way do I see us threatening our existing relationships with the banking community that has served this province, the new banks that we've allowed to come in and the Credit Unions to have access to that money.

However, I don't believe that any bank would put leverage back on us either. I really believe that letter was sent in the best of goodwill. My feeling is that the institution will survive, our traditional contacts with those banks should remain, and then let the nature of competition at that level take its course.

MR. MORRISON: I wouldn't want you to misunderstand my words, because I don't believe that you would in any way make any change which would favour this at the expense of others.

HON. MR. BARRETT: No.

MR. MORRISON: I wouldn't want you to take that inference from what I've said by asking you if there was any form of limitation.

HON. MR. BARRETT: No, I think that certainly when something new comes in everyone's life, and there's a pattern that may be disturbed, people wonder what's going to happen. I think your question is valid. It's important for me to make the statement I'm making.

I'm especially pleased with the response in the financial pages of some of the people in banking circles and trust circles. I was really pleased with Trevell's statement, for example, who is a very experienced person in this field, and will be a competitor. And yet Mr. Trevell's response was, I felt, very positive and saw the limitations, but the possibilities that exist here. Aside from politics, which can be very emotional and rhetorical on occasion, I don't think it's good for the province for us to engage in that kind of leverage.

MR. MORRISON: Well, that's the reason I asked.

HON. MR. BARRETT: Yes, and it's a good question.

Section 6 approved.

On section 7.

MR. GIBSON: Mr. Chairman, two questions here: one related to subsection (e) and one related to subsection (f). Subsection (e) enables the company to be a general agent of an insurance company. I'd like to ask the Minister if this agency power can be passed on to the credit unions by the bank or if the credit unions will simply be acting in some kind of...?

HON. MR. BARRETT: Yes, it will be passed on.

MR. GIBSON: The next is subsection (f), which states that the company may act as an auditor. Would this be an auditor in the sense we think of a chartered accountant — someone in the business of auditing books — or how would that be construed?

HON. MR. BARRETT: This would allow the company to provide audit services to small companies only. To a small operation we would provide a small audit service.

MR. GIBSON: This would mean then that the company might get into the accounting business?

HON. MR. BARRETT: No. Not on a great scale. Just for a small company as a service to that small company.

[ Page 3229 ]

MR. GIBSON: A service without charge, you mean? They wouldn't be competing with the established accounting firms?

HON. MR. BARRETT: No, no. There might be minimal charges for expenses or something. If we send a staff member in at their request to help with an audit we might charge for expenses, but that is all.

MR. L.A. WILLIAMS (West Vancouver–Howe Sound): You are guessing.

HON. MR. BARRETT: No, no, we'd have a regular audit, not a guess. This is not the BCR bill.

MR. GIBSON: But there's no intention of entering into the accountancy business per se?

HON. MR. BARRETT: No, no.

MR. MORRISON: I was pleased to hear the Premier's response to that because that section (f) is a very broad section, and it would be embarrassing to anyone to think that they might be wanting to audit Hydro or some of the other accounts such as ICBC through that section. Yet it would appear that the power was there to do it. Before we leave section 7, (a) and (b) of section 7 give fairly wide powers to public bodies. We did have some discussion a little earlier about public bodies. We did have some discussion a little earlier about public bodies and what he had in mind for those, and I wonder if you'd give us a little more explanation of these sections 7(a) and 7(b). The definition is open-ended on that. Could the Premier give us an answer on that?

HON. MR. BARRETT: I think the wording is necessary in terms of the existing Crown corporations, Mr. Member.

Section 7(a) is the same as any trust company: it can give full service by handling the printing and transfer and receipt of money arising out of the sale of securities. It does not mean the company can initiate a sale of securities; it can only act as a middleman.

Section 7(b) is the same as the above. This is to act as an agent for a company requiring services such as a transfer agent.

MR. MORRISON: When we get down to section 7(o), "carry out any of its objects in the province or elsewhere," is that really outside of provincial power that you're looking for, or what would be the reason for that?

HON. MR. BARRETT: No, that's the same as the Trust Companies Act — the exact wording of the Trust Companies Act.

MR. MORRISON: You have no anticipation at the moment of doing business outside of the Province of British Columbia?

HON. MR. BARRETT: No, I don't see how we could. We'd run into the constitutional problem — other than being the fiscal agent. I would like to see us branch out and offer this service to Washington state, Idaho, Montana, the Yukon, the Northwest Territories, Alaska, Alberta.

MR. MORRISON: Now you've got me scared.

MR. CHAIRMAN: Order!

HON. MR. BARRETT: Unfortunately, we are hampered by a very limiting federal bill, which confines us to operating in British Columbia. However, if any of these other jurisdictions wish to consider merger with British Columbia, we'll consider them one at a time.

Section 7 approved.

Section 8 approved.

On section 9.

HON. MR. BARRETT: I move the amendment standing in my name on the order paper, page 22, to section 9. (See appendix.)

On the amendment.

MR. GIBSON: On the amendment, Mr. Chairman, this is the first time I've seen it, to be quite honest,with you.

HON. MR. BARRETT: It's been on the order paper for a couple of weeks.

It's by deleting the word "insurance."

MR. GIBSON: But the intent of that is that the company may wish to engage in the insurance business?

HON. MR. BARRETT: No, I don't think so, Mr. Member. It's mortgage insurance.

MR. GIBSON: That is the only insurance that is contemplated by this?

HON. MR. BARRETT: Yes, we have ICBC to handle the rest.

Amendment approved.

On section 9 as amended.

[ Page 3230 ]

MR. MORRISON: Section 9 again is a very broad one, and it refers to the business of banking. I realize the Premier does not plan on printing any money...

HON. MR. BARRETT: Right.

MR. MORRISON: ...but in reality, no matter what you call it, even though we don't use the word bank, we're getting so technically into that banking business. You know, the common law states that it's not what the institution is called; it's what it does. section 9 is a very broad section and would appear to be putting us into the business of banking, even by its own definition.

HON. MR. BARRETT: We know we're subject to that federal Act, Mr. Member. We would follow it, but the idea is not for us to be a bank per se.

Section 9 as amended approved.

Sections 10 and 11 approved.

On section 12.

MR. GIBSON: On section 12, with the fantastic access to capital markets that's given to this company under section 14, I wonder why the Minister needs power to advance money to the company for temporary or especially long-term purposes.

HON. MR. BARRETT: I'm advised that it's not often convenient to go to the capital markets. For instance, there may be fluctuations in interest rates that we may observe as being unstable, and we may want to wait for a while.

MR. L.A. WILLIAMS: I think this is a very serious section we're dealing with now because the section would seem to point out the purposes for which the Lieutenant-Governor-in-Council may approve advances. In fact, it's not purposes at all but only the term.

What it is is that the Minister can advance, on a short-term basis or on a long-term basis, money for what purposes the bill does not define. This seems to me to give the Minister clear authority to utilize the moneys of the Crown for whatever needs this bank may have. I would have thought that if we were going to advance short-term money or long-term money, it would be for purposes specifically spelled out in this legislation, or else we're giving the Minister carte blanche. I'm surprised to find that there is not some restriction upon the Minister to require some legislative approval for the advance of moneys, because it's without limit here.

HON. MR. BARRETT: I'm advised that legally we are limited to the purposes as ascribed in section 7 under this Act — that's what we're limited to — sections 6 and 7.

MR. L.A. WILLIAMS: Again we find ourselves in a situation where the Minister stands up and indicates what, in his view, the section says.

HON. MR. BARRETT: It's the lawyers' view.

MR. L.A. WILLIAMS: If it is for the purposes spelled out in sections 6 or 7, then put that in section 12. Because section 12, as it reads, does not limit the Minister in that respect at all. It says: "for short-term or long-term," but the reasons for which the money will be advanced are not spelled out. As we well know, this Minister of Finance one day will no longer be with us, and we won't have the kind of commitment from the then Minister of Finance. I wouldn't like to see these powers given to anybody else — or you.

HON. MR. BARRETT: This is the same section as exists in the B.C. Hydro, Mr. Member. However, I would have no objection to amending it to reiterate again, as in sections 6 and 7, if you wish to forward such an amendment. My understanding is that the lawyers interpret that as being, in effect, a limitation. The addition would be redundant, but if.... That's my advice. But I have no objection to putting redundancy into the bill.

Section 12 approved.

On section 13.

MR. MORRISON: The borrowing powers in 13 are extremely wide; in 14 the guarantees also of these borrowing powers are extremely wide. Can the Premier give us some indication of what he has in mind for those two sections, because you're really having the power to pledge the assets of the province to this one corporation?

HON. MR. BARRETT: I am advised that it would be the same as B.C. Hydro, that it's tradition for the province to follow the standard form of Crown corporations in this regard.

Sections 13 and 14 inclusive approved.

On section 15.

MR. G.F. GIBSON (North Vancouver–Capilano): Mr. Chairman, section 15 gives permission for a board of "not less than three nor more than 10 directors." They will be elected in accordance with the Companies Act, which means, in effect, that the

[ Page 3231 ]

Minister of Finance appoints the directors.

HON. MR. BARRETT: That's correct.

MR. GIBSON: I would like to know how the Minister would propose to use this power. Specifically, let's assume that the credit union movement comes in for their 10 per cent, or almost 10 per cent. Could the Minister guarantee that they would have more than one out of 10 directors? It seems to me important that outside advisers are useful on a board of directors of this kind. Perhaps he could tell us that 30, 40, 50 per cent of the directors would be from the credit union movement.

HON. MR. BARRETT: If the credit union movement wished to participate, certainly at least 20 per cent — that is two. The reason for that, Mr. Member, is that when you have this kind of partnership, it's necessary to at least have someone second your motions at a board meeting. Certainly two would be sufficient for that.

Last week I made mention of an appeal to one segment of the community that had not been approached as groups to being fiscally involved in jurisdictions such as ours in the past, and that is the trade union movement. Perhaps we would have a person from the trade union movement participate; also persons from other walks of life who would not perhaps normally be seen on such a board of directors and yet not weaken the traditional strength that is necessary for a financial institution such as this.

We would like, especially, to find some women to serve on the board of directors because women have been discriminated against in conventional institutions. There are any number of women who are really cutting the mustard in the financial community. We'll look very, very closely at broadening that. But at least two — at the very least, two — from the credit union movement if they wish to participate.

MR. GIBSON: Just briefly, Mr. Chairman, I'm glad the Minister said "at least two". I would commend to him the possibility of more than that, because be they male or female, union or non-union, I think he will find it useful to have on that board, which has great responsibility under this Act, people with a certain amount of expertise and experience in looking after the security and checking of financial institutions, which is so important in these cases.

Section 15 approved.

On section 16.

MR. L.A. WILLIAMS: Mr. Chairman, I wonder if the Minister could indicate whether or not it is proposed that the president of the company and other senior officers will also be directors, and whether the omission of that section of the Companies Act which requires that the officers be appointed by the directors from among themselves was something more than an accident. Are we to have 10 directors plus the president and other officers who may be appointed by that board of directors from persons outside of their own number?

HON. MR. BARRETT: Stay within the body of 10, Mr. Member — out of the 10.

MR. L.A. WILLIAMS: Is the answer specifically that the president and other senior officers of the company will be directors as well?

HON. MR. BARRETT: Not the senior officers. The president, yes, but not the senior officers.

MR. L.A. WILLIAMS: So the executive vice-president and other vice-presidents may not be directors. The secretary, I understand, need not be, but....

HON. MR. BARRETT: The executive vice-president could be, but that would be it. The rest of the staff, no. That would be it.

Section 16 approved.

Sections 17 to 19 inclusive approved.

On section 20.

MR. PHILLIPS: Mr. Chairman, I'd just like to question section 20. There's nothing in here that says the reports shall be tabled in the Legislature. It says: "The Comptroller-General or an auditor appointed by the Lieutenant-Governor-in-Council for the purpose shall audit the books and account to the company from time to time and at least once in each year, and shall report to the Minister and to the company."

HON. MR. HALL: That is in section 25.

MR. PHILLIPS: Pardon me, thank you.

Section 20 approved.

On section 21.

MR. MORRISON: Section 21 does give very wide powers to the government, and does really put them in position of direct control if they wish to use that direction. I would hope that I could get some assurance from the Premier that that was not the intention of that section to use it in that manner.

[ Page 3232 ]

HON. MR. BARRETT: With the Hydro Act and the B.C. Rail Act, that's the authorization with which we sent Mr. Minty into both the Hydro and BCR shortly after forming the government. Certainly, we would want the same access by the comptroller-general to this Crown corporation as well.

MR. MORRISON: It gives you enough power to operate it if you choose to.

HON. MR. BARRETT: Oh, yes. When the questions were raised about Hydro and BCR, we checked at that time, and you'll recall I filed both reports. The comptroller-general, on the advice of the government, had the authority to go in under this very section, so it would be the same thing.

MR. GIBSON: Mr. Chairman, I may be wrong, but I think there's a different sort of provision for the inspection of other B.C. trust Companies. I wonder why that same machinery wasn't used for the inspection of this Savings and Trust Company rather than going to this different avenue.

HON. MR. BARRETT: This authority to carry out inspection of activities of the company with B.C. trust companies is done by the inspector of trust companies. Here the comptroller-general has the power to report to the Minister.

MR. GIBSON: But why was it not given to the inspector of trust companies to look after this case inside his expertise?

HON. MR. BARRETT: Well, because the pattern, the policy that we inherited, and we continue, is that the comptroller-general is the person to be called upon to do this. That's his function of all Crown corporations. We have Mr. Minty in ICBC, in Hydro for the first time and BCR for the first time.

Interjection.

HON. MR. BARRETT: It's available. The audited statements are available.

MR. GIBSON: I just want to register an objection to that, Mr. Chairman. It seems to me logical enough that the government auditor-general should be in on every government company; I don't disagree with that. But the trust company inspector who looks after the other companies should have the first line of supervision because that's his expertise and his duty, and he should do it in this company as in any other.

HON. MR. BARRETT: Mr. Member, I'd like to go back to that. One of the problems is that the trust company inspector works for the Minister of Finance, and it would be far better to have Mr. Minty rather than somebody right out of the department.

Interjection.

HON. MR. BARRETT: Yes, but he's by legislation removed from this.

Section 21 approved.

Sections 22 to 39 inclusive approved.

On section 40.

MR. MORRISON: By regulation, again, we give the powers to the cabinet to control all facets of the corporation. As in so many bills, the regulations really determine what in fact does happen. This certainly is a very wide regulation section. I wonder if the Premier could give us some comment as to their intentions under this section.

HON. MR. BARRETT: I am advised that we would be guided by the legislation as much as possible, but if something unforeseen comes up, then, of course, like all legislation, the regulations are the governing factor.

MR. MORRISON: I would assume that with this, none of the regulations are written, and depending on what happens with the trust companies and so on, that is when you are going to have to write that section of regulations.

HON. MR. BARRETT: Yes, that is correct.

MR. L.A. WILLIAMS: Mr. Chairman, this extensive power of regulation which is given to the Lieutenant-Governor-in-council by section 40 is sufficient to destroy all of the other sections of the legislation, and is, in my view, one of the principle reasons for my opposition to this particular bill.

The Lieutenant-Governor-in-council is being given the authority to prescribe additional objects and purposes for the company, and is also given power to accomplish such additional objects and purposes. Then we always have the draftsmen of legislation of this kind going to the final, ultimate step — giving the Lieutenant-Governor-in-Council power to make regulations respecting any matters necessary or advisable for carrying out the intent and purposes of this Act. It isn't necessary to speak at length on this matter. If the legislation is properly and carefully drafted, as this legislation appears to be in setting up this bare-boned structure of this savings and trust corporation, then these extensive powers to change the legislation by regulation should not be necessary.

[ Page 3233 ]

I oppose section 40.

MR. P.L. McGEER (Vancouver–Point Grey): Mr. Chairman, in the last two years since the present government took over, we have had a complete erosion of the powers of protection granted the public with respect to the taxes paid to government eventually going into the consolidated revenue fund. The changes to the Revenue Act give the Minister total power to invest any moneys from consolidated revenue at his discretion, and no one else's, in any venture of any kind. Prior to that piece of legislation being introduced, there was considerable protection given to the public, not only by the Revenue Act, but by the Audit Act and by meticulous procedures that had been adopted since the commencement of responsible government in this province. While sections such as 40 frequently appear in bills of one kind or another, in a financial bill when all of these other protections have been removed by the Premier and his government, it becomes most dangerous licence.

Just on Friday we were given an indication of the kinds of things this government was prepared to do, resulting in the Member for North Vancouver–Capilano (Mr. Gibson) raising a very serious matter of privilege, the like of which we have never had occasion to raise in this assembly before.

If the Legislature passes this particular section, it is taking one further step down the road of irresponsibility in the handling of public funds.

Remember this: we have no auditor-general in British Columbia; we have nobody to probe the expenditures of the government itself, let alone Crown corporations such as this one. The Premier felt obliged, on our last sitting day, to enter a harangue against the former government for its failure to give proper safeguard to the public in the matter of protection of public funds through its Crown agency. Yet the practices of that former government, suspect as they may have been, were a model of restraint compared with what the Premier is prepared to embark upon with this legislation and companion legislation which he has introduced since taking office.

While I for one recognize the necessity of giving general powers under legislation for adjustments to be made by regulation instead of amendments brought before the House, when it concerns financial institutions within the new and rather novel framework of financial safeguard that we have in this province now, I would say it is totally out of place that even the smallest change in the objects and purposes of a company, or different modes of investment, or information required to be furnished by the company, or securities in which the company might be permitted to invest, and so on, are appropriate matters for amendments to appear before this House and be agreed to by legislation and the whole assembly.

Therefore, Mr. Chairman, I have no hesitation in opposing section 40.

Section 40 approved on the following division:

YEAS — 30

NAYS — 15

Mr. L.A. Williams requests that leave be asked to record the division in the Journals of the House.

On section 41.

HON. MR. BARRETT: Mr. Chairman, I move the amendments standing under my name on the order paper. (See appendix.)

Amendments approved.

On section 41 as amended.

MR. MORRISON: I wonder if the Premier could give us an indication of why it's necessary for this particular company to be excluded from all these other Acts.

HON. MR. BARRETT: The same exemptions as all other trust companies.

MR. MORRISON: I'm not sure that that's correct. Not all other trust companies are exempted from these following Acts; I don't think that's a correct statement. Particularly the trust companies aren't exempted from the Trust Companies Act.

HON. MR. BARRETT: This is one of the lawyers. I've got three answers. (Laughter.)

[ Page 3234 ]

MR. PHILLIPS: I thought you only had one lawyer.

HON. MR. BARRETT: That's what I mean — one lawyer, three answers. What do you want? Yes, no and maybe. They have been checked with the administrator of each of these statutes and they agree that these exemptions are appropriate in each case.

SOME HON. MEMBERS: Oh, oh!

AN HON. MEMBER: That's pretty confusing.

HON. MR. BARRETT: That's very good, Dennis. (Laughter.) I don't know about you guys — I'm impressed! (Laughter.)

MR. GIBSON: Mr. Chairman, I wonder if the Premier could explain the appropriateness of exempting a trust company from the Trust Companies Act. I have difficulty in seeing that.

AN HON. MEMBER: The answer is he can't explain it.

Interjections.

MR. CHAIRMAN: Order!

HON. MR. BARRETT: Anything from the Trust Companies Act that is applicable at all is prior to sections 41.

MR. McGEER: Mr. Chairman, I'm not....

Interjections.

MR. CHAIRMAN: Order, please.

MR. McGEER: I didn't even think that was clever, Mr. Chairman; I really didn't.

HON. MR. BARRETT: Very few people can match your abilities, Doctor.

MR. McGEER: Mr. Chairman, I wasn't impressed at all; I was really rather appalled. We are supposed to be passing legislation here that is important to the public of British Columbia, and just off-the-cuff answers really aren't good enough. I don't think it should be good enough for any Member of the House to have a consultant saying that, really, it isn't important that these things apply. It may be good enough for the government Members; it may be good enough for some of the cabinet Ministers, but I am not sure it is good enough for the public. Crown corporations are operating in a pretty fast and loose way in the Province of British Columbia.

They are getting money from sources that are of questionable legality. They are operating, for all we know, without the kind of insurance that protects the public. In view of this kind of hit-and-miss record of Crown corporations, I think it is kind of important that we fasten down exactly what Crown corporations may or may not do. When they are given whole lists of exemptions which permit them to operate in a fashion that probably would place them at a lower standard than a private corporation, then I think the government must give some explanations.

We had one trust company in British Columbia, governed by the Trust Companies Act but sponsored by friendship for a former government, go bankrupt in this province with a loss of savings of average citizens, which in some cases amounted to a lifetime of effort.

Presumably, average citizens of British Columbia of limited means may be investing directly or indirectly in the paper of this corporation. It isn't good enough to have a Crown corporation operating outside the normal restrictions of other financial institutions.

HON. MR. BARRETT: It is not!

MR. McGEER: I think we had better get in specifics as to exactly why these exemptions are necessary, or let us remove them from the legislation.

HON. MR. BARRETT: They are exactly the same as exist for a bank, a trust company, a credit union, a cooperative association, insurance, or the Industrial Bank of Canada. It is designed to make them operate exactly the same way, not outside of it, Mr. Member. It is not a blanket exemption.

MR. McCLELLAND: Mr. Chairman, as I read this section, the Premier is correct with regard to subsection (2) of the section. But subsection (1) specifically exempts this new trust company from the Companies Clauses Act, the Trust Companies Act, and part 10 of the Insurance Act. Mr. Chairman, the explanation that you gave us earlier is just gobbledegook, We sat in here a few moments ago and had the Agriculture Minister (Hon. Mr. Stupich) tell us that he put a section 1n one of his bills just so that he could wave it in the face of somebody else, it didn't have any meaning. Now you are telling us almost the same thing. That is not good enough. I think the people of this province certainly demand and have a right to a far better explanation than that, particularly with regard to the Trust Companies Act.

HON. MR. BARRETT: The trust companies' provisions are already in the Act prior to section 1, Mr. Member. Already in the Act.

[ Page 3235 ]

MR. McGEER: Then you don't need it in section 41.

HON. MR. BARRETT: You don't want to have to look at two places every time you look at the Act, Mr. Member.

MR. MORRISON: Well, then by 41(l), this new company is no longer required to obey the Companies Clauses Act. That excludes it completely. The Trust Companies Act is excluded completely and part 10 of the Insurance Act is excluded completely. But 41(2) only excludes the company from the same items that other trust companies or other banks might be excluded from. That part I understand.

I am not too sure in sections (g) to (k) exactly what the reference is there either because we are now excluding the Collection Agents' Licensing Act, Mortgage Brokers Act, Personal Information Reporting Act, the Real Estate in which you are obviously going to be dealing and the Securities Act, also in which you are going to be dealing. What is the additional reference to that? Is that still part of...?

HON. MR. BARRETT: Those are the Acts from which they have the partial exemptions.

MR. MORRISON: I just want to be sure of that — just partial exemption.

HON. MR. BARRETT: In section 1(a), the Company Clauses Act...(b) is covered in the Act itself, section by section. I am told that section (a) of the Companies Clauses Act is under review; it is archaic. I am advised that there is an examination by the department to remove the Companies Clauses Act itself because it is apparently causing litigation unnecessarily.

MR. MORRISON: And part C of the Insurance Act — what is the reference there?

HON. MR. BARRETT: For re-insurance of mortgages — if we go into re-insurance of mortgages.

MR. GIBSON: Mr. Chairman, throughout this debate, Members have been concerned about the constitutionality of the Act, and the Premier has been at pains to tell us. section 9 of the bill says that this institution is not a bank, because were it a bank, it would come under federal jurisdiction.

Therefore it rather puzzles me that subsection 2(a) says that this company is exempted from certain Acts as it if were a bank. That puzzles me very much, Mr. Chairman, because when anyone wants to come along and challenge this, they can say that it at least has these qualities of a bank, whatever other qualities it may have.

HON. MR. BARRETT: Mr. Member, it reads: "The company is exempted from the provisions of the following Acts to the extent that a bank is..." — not as if it were one.

MR. GIBSON: No, but it takes on the qualities of a bank for the purpose of being excluded from these Acts.

HON. MR. BARRETT: I'm advised that some of the financial aspects of what we're unable to do are certainly within our constitution, and are also what a bank can do, so the way of handling it is to put it in this way. The company is exempted from the provisions of the following Acts to the extent that a bank is.

MR. GIBSON: But I would suggest to the Premier that anything within the competence of the province, or an institution of the province to do, could be so specified without using that word "bank". By using that word "bank," you bring in that whole constitutional question. If there's anything this company is going to do that only a bank can do, then we're really in trouble. So I ask: which is it?

HON. MR. BARRETT: No, I think that it's only the limitation of those things as I described, Mr. Member. Only that limitation.

Sections 41 and 42 approved.

Title approved.

HON. MR. BARRETT: Mr. Chairman, I move the committee rise and report the bill complete with amendment, and ask leave of the House to record a division that took place during one of the amendments.

Motion approved.

The House resumed; Mr. Speaker in the chair.

Bill 86, Savings and Trust Corporation of British Columbia Act, reported complete with amendment to be considered at the next sitting of the House after today.

Division ordered to be recorded in the Journals of the House.

HON. MR. HALL: Mr. Speaker, third reading of Bill 73, and the motion by a Member that the order for third reading be discharged and the bill recommitted.

[ Page 3236 ]

SCHOOL TAX REMOVAL
AND RESOURCE GRANT ACT

HON. MR. BARRETT: I adjourned the debate on the motion to discharge the bill.

MR. SPEAKER: To discharge the bill and return it to committee, I believe. Is that correct?

HON. MR. BARRETT: That's correct. Now Mr. Speaker, I've had the department look at the reasons given by the Member for West Vancouver–Howe Sound (Mr. L.A. Williams), and while the department says that there is some ambiguity, the explanation is as follows: if we were to take an amendment as suggested by the Member, his amendment would place people in the age of 65 and over in a worse position.

The example given is: under 65, if the school taxes are $300; the homeowner grant would be $200; the school tax removal would be $40 and no resource grant, under the existing procedure, which would be wiped out by the Member's amendment. So what I'm suggesting is that the error anticipated by the Member is not, in fact, a matter that would exist, but would come up if the amendment was accepted.

MR. SPEAKER: I think before closing the debate on the motion to discharge, does anyone else wish to speak on the motion to discharge third reading?

MR. GIBSON: I would support the motion, because I'm afraid I can't understand the Premier's arithmetic. If I understand it rightly, on the budget debate he suggested that persons under 65 with a $400 gross school tax bill would receive a resource renters' grant of $80, therefore their total abatement would be $280.

He went on to say in the budget debate — which the Hon. Member for West Vancouver–Howe Sound, I think, cited in his remarks — that a person over 65 would receive an abatement of $330, again with a $400 tax bill.

Now a statement in the budget, Mr. Speaker, must be considered a commitment of the government and the Minister. The only way, or at least the only logical way you can arrive at $330, that amount stated in the budget, is to follow this kind of arithmetic: you take the gross taxes. You subtract the ordinary homeowner's grant of $200. You add back 40 per cent of the remaining $200, being $80, and you then add on the special $50 credit given to persons over age 65. That brings the total to the $330 that the Premier, as I say, specified in his budget statement, which must be considered a commitment of the government.

That, if I understand it correctly, was the logic of the Hon. Member for West Vancouver–Howe Sound (Mr. L.A. Williams) in moving for recommital. In other words his motion, far from giving less to persons over 65, would have given them a good deal more.

While the Premier is conferring there, taking the $300 example he just gave, the abatement to ordinary taxpayers would be a total of $240; the abatement to persons over 65, using this system, would be a total of $290. In other words there would be that $50 floating credit always on top for persons in excess of 65.

Now that is the understanding I have of the speech by the Hon. Member for Vancouver–Howe Sound, so I just want to make sure that the Premier hasn't....

MR. SPEAKER: Since this is a formal debate in the House, I would suggest that leave be asked to make any further remarks out of order.

MR. GIBSON: May I have leave, Mr. Speaker?

MR. SPEAKER: Shall leave be granted?

Leave granted.

HON. MR. BARRETT: Mr. Speaker, because of the confusion that arises as outlined by the Member for West Vancouver–Howe Sound, to be absolutely sure what the purpose is in terms of the agreement that is stated in the budget speech, I have asked that the department redefine the language and bring it in to clear it satisfactorily for all sides of the House.

With leave, I would ask a further adjournment so that we can clarify this matter, so that we are all reading the same thing the same way. Until that is done I would ask leave for adjournment of the debate until that is brought in.

Leave granted.

HON. MR. HALL: Second reading of Bill 106, Mr. Speaker.

MUNICIPALITIES AID
AMENDMENT ACT, 1975

HON. MR. BARRETT: This bill is proposed to allow additional per capita grant payments to municipalities to reflect increases in population between the five-year interval between the federal government's census counts.

It is proposed to pay an additional grant for each year for 20 per cent of the increase in population in the period between the last two census counts. To bring this into effect for the period between the '66 and '71 census counts, a 1975 grant of 80 per cent of the population increase in that period has been paid, and each subsequent year 20 per cent will be paid.

[ Page 3237 ]

The cost of these additional grants to the province will be $6.8 million in 1975, bringing the total per capita grant payments to $70.8 million in the current year. It's a bill that I am sure will be welcomed by all Members of the House, Mr. Speaker.

MR. H.A. CURTIS (Saanich and the Islands):The principle of permitting per capita grants to catch up with growth in various cities, district municipalities, and so on, has been advanced on many occasions by individual municipalities and also by the Union of B.C. Municipalities.

However, in speaking in second reading debate of this bill, I would simply like to refer the Minister of Finance (Hon. Mr. Barrett) to comments which were made at the time we debated Bill 73 and at the time we debated the budget. If I could simply send a note over to the Minister of Finance and give him the quotes from Hansard, then he could refresh his memory.

We still have a very fundamental and basic problem in British Columbia: municipalities do not have the funds necessary to operate today, tomorrow, and as long as this government is in power. Of course this change is a good one, but it is relatively mechanical when one steps back and views the total problem facing local government in this province.

MR. WALLACE: I just want to make the point very quickly that this seems to me to be a step in the right direction. In terms of the total problems in the municipalities we have a long way to go. Our party has expressed its qualified support of the other steps that this government has taken in terms of the revenue from natural gas for much the same reason. The support is qualified in that case because it is uncertain and it seems a piecemeal or perhaps a periodic approach to the problem, and the municipalities have no idea what the position will be next year.

In this particular bill at least I like the very rational approach that if there is to be a per capita grant, surely it would be based on up-to-date figures. That sounds like one and one makes two, and usually it does — not always, not in every administration. But at least this bill, I think it is fair to say, represents a step in the right direction.

I would just like to add that we feel that the per capita grant per se is a crude, inadequate and unfair method of financing the municipalities. While this improves the way in which the formula is working, or will work, the formula itself is not what we really favour, and we would like to see the financing of municipalities related more accurately to some other indicator such as provincial gross product or provincial income tax, or some form of revenue, and have a formula whereby as the revenue of the provincial government rises so does the proportionate amount of money allocated to municipalities.

Since, at least, this bill makes the use of the per capita formula a little more rational, a little more fair, we certainly support the bill.

HON. MR. BARRETT: If I were in a mood today of heaping scorn on the Social Credit Party, the opening invitation came from the Member for Saanich and the Islands (Mr. Curtis) to do that. Far be it from me to heap scorn on the Social Credit Party. But if I would do it, I would quote from the former Conservative MLA from Saanich and the Islands, whose memory is as short as his future political career is going to be. Time and time again, when he was a Conservative, he stood up.... I don't want to heap scorn on him. But I think it's important to remind the House what that Member said when he was a Conservative candidate and a Conservative MLA, standing up in this House and criticizing the Social Credit Party as starving the municipalities; that the per capita grant was unfair; that the whole method in terms of keeping up with the population wasn't correct.

Now that we have a bill to correct it, the esteemed memory of the speeches from the Conservative Member for Saanich and the Islands has been abused today by the Social Credit Member for Saanich and the Islands (Mr. Curtis). The memory of those great fighting speeches against Social Credit given by the Conservative Member for Saanich and the Islands has been abused sorely, and the logic has been tested today by the Member who's now a Socred for the same riding. Don't ask me to say if it's the same person.

Interjections.

HON. MR. BARRETT: Well, the principle of the bill was abused by that Member saying that under the NDP the municipalities are hard done by, but give us Social Credit back and they'd get a break. Who's he trying to kid? This was never done by Social Credit. Never! They never updated the census. Never!

To have that Social Credit Member abuse the memory of the speeches from the Member for Saanich and the Islands when he was a Tory is a test of credibility — political credibility and logic, Mr. Member. When you talk about Hansard here today, would it be only possible for your sake that every word you uttered could have been eliminated, because when you did that whirling dervish dance to jump from Tory to Social Credit, you took with you all of your speeches, all of your positions. Now it would have been better for him to sit silent, not say anything, or perhaps have one of the true Socreds get up and complain. But for him, with his record? I don't want to ruin his supper, Mr. Speaker. I'll leave him alone. His ulcer's bad enough.

[ Page 3238 ]

Now the Member for Oak Bay (Mr. Wallace). We are the only government in Canada that shares natural resource revenue with its municipalities. I have received letter after letter from municipalities, some representing areas that have got Socred MLAs in this House, humbly thanking this little government for the further assistance given by this Act.

Interjection.

HON. MR. BARRETT: I'll bring them in. How many would you like? I'll bring them in. I certainly will. I'll table them.

Interjections.

HON. MR. BARRETT: We'll make a note of that, certainly. How much would you like to pay for each letter? Would you like copies to distribute in your riding? Table letters.

Interjections.

HON. MR. BARRETT: Mrs. Kay Grouhel, who is active in a political party in this province, wrote a letter to The Vancouver Sun attacking their editorial which was critical of this government by saying that the municipalities had not been consulted. Mrs. Grouhel had to write the Sun and tell them they were wrong again. The Vancouver Sun — wrong again. And when you have someone who is active in the Social Credit Party writing those kinds of letters...and he wants the letters tabled! I'll give them dozens of copies.

Interjections.

HON. MR. BARRETT: Table letters from all municipalities that have sent in letters re natural gas. Do you want them distributed in your riding? Is that your request?

Interjections.

HON. MR. BARRETT: I've been up in your riding, and I'm telling you that the major problem with the depletion of natural gas in that area has been your absence from town. (Laughter.)

So the point is, no government has treated the municipalities of this province fairer than this government, doing something they asked. In terms of the per capita grants on the additional money, we said to the UBCM committee that we met with — and who were appreciative of those meetings, as attested to by Kay Grouhel — that this September we could sit down and work out a formula that's more amenable to them. We recognize that in the past there was an edict ordered down from above and granted to them, and we appreciate their point of view.

They helped us formulate the formula that gave $25,000 cash to every town, village, municipality and everything else right across this province. Why, I think your own area got over half a million dollars. Who's the mayor in your riding — is he a Socred?

Interjection.

HON. MR. BARRETT: Oh. But he got half a million bucks! I'll file the list with the House — tell you every one of the areas and how much they got. I haven't had a single letter from a Socred MLA saying to me: "Thanks, Dave, for the additional money." They're the ones who said: "When you go down to Ottawa you won't get a nickel." The Liberals are the ones who said: "You're not prepared to go down to Ottawa. Big Daddy government in Ottawa won't give you a cent."

Which was the only government that walked away a victor from the last energy conference to enable the municipalities?

I'm now going to see a big editorial in the Vancouver "Fun" outlining this great success in Ottawa, and a subeditorial in the Vancouver "Doffince" or whatever it is...what's the name of that little Southam paper that's struggling to get by? It's struggling, it's choking, it's grinding. I'm going to see an editorial in there saying: "Fairness to Municipalities at Last! As much as it is difficult for us to say anything nice about the NDP, we do have to quietly admit that today they took another small step to aid the municipalities."

D'you think we'll see that in the papers?

MR. WALLACE: Yes. The Times wrote a good one.

HON. MR. BARRETT: That'll be the death knell of them. The lance corporal will cut the guts out of that paper after that editorial, you wait and see. (Laughter.) The decision from Winnipeg will be, Mr. Speaker — that I now move second reading of this bill.

Motion approved unanimously on a division.

Bill 106, Municipalities Aid Amendment Act, 1975, read a second time and referred to Committee of the Whole House for consideration at the next sitting after today.

HON. MR. HALL: Second reading of Bill 122.

MINING TAX AMENDMENT ACT, 1975

HON. MR. BARRETT: The Mining Tax Amendment Act is consistent with government policy

[ Page 3239 ]

as stated in the budget speech to effectively restore royalties paid to the Crown as a deduction from income. This is necessary because of recent federal government taxation policies. The bill will also not require the inclusion of deemed income in taxable income.

The Mining Tax Amendment Act allows for the deduction from income of royalties paid to the Crown. The precise formula for the calculation will be provided by the regulations to allow flexibility for change in the event the federal rules are amended. I now move second reading.

MR. D.E. SMITH (North Peace River): I think we should point out to the government that some of the things we objected to so strenuously on the original amendments to the Mining Tax Act and the problems we have foreseen at that particular time are probably reflected in this bill and are one of the main reasons it is before the House today. We said at the time, in opposition to the mineral royalty tax on mining, that it was going to provide a means of double taxation upon the industry. While we welcome the bill, which will at least clarify that particular situation, Mr. Speaker, it is another example of too little and too late.

The industry that is most affected by the taxation imposts of the last two years is practically non-existent in the Province of British Columbia. The exploration end of the mining industry is non-existent in the Province of British Columbia unless you consider a 95 per cent reduction in exploration...

AN HON. MEMBER: It's 99 per cent.

MR. SMITH: ...or 99 per cent — unless you consider that somehow reflects some sort of healthy state in the economy. I can't see it. As a matter of fact, we would probably still have a viable industry if the Minister could just get through his head, Mr. Speaker — not the Minister of Finance, but the Minister of Mines and Petroleum Resources (Hon. Mr. Nimsick) — that there is a relationship between the amount of taxation you can reasonably impose upon any industry and their ability to pay those imposts by the Crown and still retain a viable industry in the province.

Unfortunately, neither the Minister of Mines and Petroleum Resources, in discussing the administration of his department, nor the Minister of Finance seem to appreciate that fact, because we have seen a great reduction in the activity in the province. Perhaps it could be said now in retrospect that the amount of tax that you will receive, whether you reduce the tax now or not, is incidental to the main problem, and the main problem is that you have destroyed an industry in the Province of British Columbia. You have done it by punitive taxation.

So while we welcome the small measure that this bill provides to recognize that, I have to say again, Mr. Speaker, that it is too little and too late. It's like locking the barn door after the horse has been stolen. You provide the solutions after the fact, and it is not going to create a great wave of new exploration in the Province of British Columbia. It's not really going to provide anything except a clarification of the taxation position between federal and provincial jurisdiction on this one particular segment of tax, and that is royalty tax, It is not going to restore investor confidence in the Province of British Columbia. It's not going to do any of the things that will provide more jobs or even restore those that have been lost.

So it's a very, very small step, in our opinion, Mr. Speaker. It's one that would have never been necessary had government looked down the road a little ways in the type of legislation that they put before the House and projected not on the basis of personal bias but, on the basis of generally accepted business practices, the imposts and the position you would put industry in with the tax impost you put against them not only in mining but in other areas of the economy.

So we accept this small amendment as it is to the mining tax Act that clarifies the position. But it won't return the mining industry to the Province of British Columbia, unfortunately for those people who look to that profession for a job and those people who would have invested money in British Columbia. You've got to go far, far beyond this particular amendment before you'll find anyone accepting in good faith the intentions of this government.

MR. GIBSON: Mr. Speaker, this bill has some minor impact on the employment situation in the mining industry and the taxation situation in the mining industry. It improves the taxation situation from a disaster to a calamity — that's about all. It adds perhaps on the dollar...where before in the super-royalty range a company could expect to be paying about 104 cents on the dollar, the effect of this amendment, as near as I can calculate, will reduce it down to something like 98 cents on the dollar — perhaps 97 cents. So that's progress. You don't pay more than 100 cents on the dollar for making a profit in the mining industry any more, but that's about all it's going to do, Mr. Speaker.

It's unfortunately not going to bring anything back in the mining industry in this province, because the concern and the lack of jobs come from entirely other things which aren't touched by this bill — things such as Ministerial discretion, things such as the whole royalties structure. But for the minor improvement it is, we will be supporting it.

MR. WALLACE: Mr. Speaker, we certainly also

[ Page 3240 ]

will support the bill for the same reasons that the Liberal Member has just mentioned: there obviously is trouble in the mining industry. There's unemployment, loss of revenue. There's every reason that we should make efforts to enhance the health of the industry. This is one way, I'm sure, that will be of some assistance in providing a happier climate and a greater incentive to the investors.

There are two questions I would like to ask. The Minister in introducing second reading said that a great deal of flexibility would be built into regulations. Again, it seems we are debating a bill with some impact where the real impact will depend on what is written into the regulations. This is a point that I will be touching upon later on in these two very important liquor bills. So much of what we do in this House is a broad general outline of certain principles which can be thwarted or exaggerated or minimized in various ways by regulations. Not being any kind of an expert on constitution, I sometimes wonder who first brought up this basic approach to legislation that you put just certain general principles in a bill, but you leave as much power as you can to be written into the regulations.

The second question that I'm not clear about from the reading of the budget speech is the amount of royalty which will be allowed as an income tax deduction. In working out the calculation, will it be all royalties paid both the provincial and federal levels? And what sum of provincial revenue does the Minister anticipate he will be losing? Assuming the projections suggested in the budget are correct — I can't remember the exact figures — the Minister in trying to justify the royalties in his budget speech said that they were down this year and they would be down, I think, around $9 million or some such figure in 1975-76. I wonder if the Minister could tell us in winding up second reading just what figures we're dealing with so we can have some idea of what impact this is likely to have on the industry.

MR. PHILLIPS: Mr. Speaker, it's regrettable, when the government realizes that it has made an error in a particular piece of legislation — they've made many — that they don't back up all the way and admit the error and have the intestinal fortitude to admit an error and back up all the way. We've seen so much of this plunge in and back up just a little bit — it's just patch-up work. It really isn't going to do the mining industry that much good. We warned the government about the error of their ways, but they barge ahead full bore without being able to realize the error of their ways. Then we get these little bits of back-up — just a few feet when they should be backing up the whole way.

We'll support the bill, but it is regrettable that there isn't more conciliation on the part of the government to undo the damage, or at least try to undo some of the mismanagement that we have seen in handling the mining industry in this province.

The Premier runs around the province and elsewhere saying that British Columbia is run on love. I find that as I travel through this province, there is a tremendous amount of hate out there.

HON. MR. BARRETT: Oh!

MR. PHILLIPS: It's not just normal not-liking-the-government, but hate. Hate! Complete dislike and distrust and anguish!

HON. MR. BARRETT: What are you doing to cool it?

MR. PHILLIPS: More citizens in British Columbia have that attitude toward their government today than who have ever had. It is not just a case of not liking the government; it is a case of having a sincere hate and distrust for the government. I think it is time the Premier recognized that. If he wants to have a little love out there, particularly in the mining industry, he should be man enough to go to his Minister of Mines and Petroleum Resources (Hon. Mr. Nimsick) and stand up and say that he has made a mistake, take some of the discretionary powers away from that Minister, and get the mining industry back on its feet here in British Columbia.

AN HON. MEMBER: Hear, hear!

MR. PHILLIPS: Mr. Speaker, even this little back-up bill is put through in the absence of the Minister of Lands, Forests and Water Resources (Hon. R.A. Williams), who was the architect of the legislation in the first place. So I have to think it probably went through cabinet also when he was away.

Mr. Speaker, the people in British Columbia are sick and tired of the disregard that this Minister of Finance has for the, rights of individuals and for the rights of any industry. He hasn't really hurt the large mining companies, They are large enough that they will move to other jurisdictions. They will continue. It is the little people in the province, the small businessmen. The Premier says in glowing terms he has done more for them than has been done in any other province or by any previous administration. I will tell you, Mr. Speaker, you ought to talk to some of the small business people who relied on the mining industry in this province for their livelihood. You won't hear them saying that Mr. Premier has done for the small businessman than any other government or any other jurisdiction. Thousands and thousands of little people have been hurt by the mining legislation in this province, and it is regrettable. We have seen such a mishmash and complete

[ Page 3241 ]

mismanagement of the affairs of this province that we don't accept it, but we realize it is coming.

The people in the province, as I say, are not full of love. They are full of hate, they are full of anguish, and they are full of distrust. It is because of this government's attitude, because of this government's mismanagement of the affairs. As I say, when they do back up and they should be backing up a mile, they back up a few feet.

HON. L.T. NIMSICK (Minister of Mines and Petroleum Resources): Just a few remarks, Mr. Speaker, in regard to this bill. This bill would not have been necessary had the federal government recognized royalties as a cost of production, which they had done for years in the case of oil and natural gas and iron ore. We had royalties on those things and on coal, and the federal government accepted that as a cost of production. The federal government are the ones that have really backed away, and they don't recognize it. Two wrongs don't make a right. So we are going to at least put our house in order and recognize the royalties as a cost of production.

While the Hon. Member talks about the 100 per cent, he is just listening to the accountants of the mining companies. If you figure it all out, even when the price of copper was high, the revenue minus the operating costs was 82.9 per cent, which went to the mining industry. In 1974, with royalties on, they still got 5 1.4 per cent of the total take. I think that that is pretty good. The mining industry has always told me that if they can at least get 50 per cent, they will be satisfied. And I think they are satisfied.

I think that in a lot of your talk, you didn't get down to facts in your figures or anything, I think that you should. The next time you get a chance to discuss the mining situation, I would like you to get down to facts and we may be able to discuss it properly.

Nevertheless, this is correcting something the federal government has failed to do.

MR. McGEER: Mr. Speaker, I just want to reiterate what one or two Members have said about the disastrous state of affairs of the mining industry in British Columbia.

HON. MR. NIMSICK: How many men are out of work who are miners now? Everyone who comes out of the Rockland school is picked up.

MR. SPEAKER; Order, please. Would the Hon. Member who has the floor...?

MR. McGEER: Mr. Speaker, for the information of the Minister of Mines, expenditures on new mines in British Columbia are down 98 per cent this year, and drilling for new mines is down 99 per cent.

HON. MR. NIMSICK: That's got nothing to do with it.

MR. McGEER: Claim staking is down 80 per cent, and I think it unfortunate that the Minister of Mines is unable to make any connection between these rather dismal facts and the legislation that he's introduced.

I would have thought that if the Minister was unable to grasp that, as a matter of first principle, the frequent briefs that he's received and the visitations that he's had from members of the mining community would have got that message across. The things that have happened to the mining industry didn't happen just in a vacuo. The Minister was given adequate forewarning that unless changes were brought in the industry would have no choice but to give up on all its operations except the mines that were already well established and were able to continue producing in the face of punitive legislation. They're locked in and we've had a dismantling, really, of the capability in our province to bring on new mines. Geologists are leaving, and exploration companies are folding their tents and going down to Mexico and the United States and South America and other countries of the world.

It's been an oft-stated truism that British Columbia has some of the lowest-grade minerals in the world but has the highest technology. For that reason we're able to bring copper properties, for example, into production that would be unthinkable in other countries of the world. But that's in the past and it's now becoming unthinkable for us to bring properties into production — even wealthy ones — in this province. Five properties that were in advanced stages of planning to be brought on line in this province have all cancelled their plans. The only question, Mr. Speaker, is: how many of the existing mines in this province will be able to hang on in the face of the policies of the NDP government? That's the only question.

Interjection.

MR. McGEER: Well, it has something to do with price in that the break-even point for existing mines has greatly diminished as a result of the NDP legislation, and with the softening of world market prices it's now a question of whether mines that had decided to carry on in the face of the NDP will in fact be able to do so.

MR. GIBSON: The break-even price has gone up.

MR. McGEER: The break-even price has gone up, yes.

AN HON. MEMBER: What is that price?

[ Page 3242 ]

MR. McGEER: Well, it varies according to the richness of the property and the particular mineral that's under consideration. It's an individual matter for each mine, but for every single mine in British Columbia the break-even point has increased since the NDP took over. It's a direct consequence of the legislation brought in by the Minister of Finance and the Minister of Mines, and it should be a matter of deep concern, not just to the people of this Legislative Assembly but to all of the people of British Columbia. the destruction of an important industry is a matter, always, of serious concern. But when it's the No. 2 industry of the province it's more than a serious concern; it's grave concern.

I would have hoped, Mr. Speaker, that this bill might have contained something a little more optimistic so that we wouldn't be able to look at figures such as a decline of 99 per cent in the drilling exploration for new mines. It seems to me that's a figure that's rather telling, and would alarm most governments and most Ministers of Finance. It apparently hasn't disturbed the Premier very much because he's obviously not a mining man. Perhaps in summarizing the Premier might indicate to us whether there's any long-term hope for the mining industry.

Again, Mr. Speaker, he went into a long harangue about the B.C. Railway on Friday. It's very clear that it's losing enormous amounts of money, but the biggest losses have occurred in the past two years. The biggest losses will continue to occur because there's an enormously expensive extension going way on up into the wilderness and as long as the NDP stays in power that area's going to remain wilderness. There's no possibility of new mines coming along in that particular area. The former Minister of Mines well knows this. So what in effect is happening is the former government builds a railroad into a resource-rich area which the present government has made totally uneconomic. For that reason we're stuck with a Crown corporation that has a potential asset which is not an asset at all but an enormous liability. It's been turned into a white elephant by the Minister of Finance's policies.

One of the things I discovered when I was down in Mexico, Mr. Speaker, was that some 20 Canadian companies had taken out mining exploration permits in the past six months. They had ceased operation in British Columbia and were looking for new areas for development of copper properties. The country of Mexico demands national ownership of any resource; 49 per cent is the maximum that any foreign corporation can own there, but that doesn't stop Canadian companies and it doesn't stop Canadian mining exploration. It isn't ownership that is the issue, it is whether or not you can make a buck.

What the Mexican government does in areas that are difficult to develop, the remote areas, is that it has completely different tax laws. So here we have a third of British Columbia or more which is a wilderness area that is now serviced by a railroad but where resource policies, which certainly aren't designed for British Columbia but particularly aren't designed for that part of British Columbia, are rendering those resources uneconomic to develop and leaving us with an enormous white elephant on our hands in the form of this railroad extension.

In Mexico, faced with that situation, what the government would do would be to bring in special incentive legislation effectively removing resource taxation from an area like that in order to encourage development. It is really in our own interest to open up that area and try and do what we can to save the railroad. I wonder if the regulations under this bill might permit this kind of special dispensation for this pioneering area of British Columbia.

MR. CHABOT: The giveaway gang.

HON. MR. BARRETT: I once asked that Member for a clinical definition of blood rushing to the head and the face turning red. I never got it from him, but we've seen another example of it here today. The Member has been described by his former colleague as a "man with elastic jaws." I think now we can expand that elasticity to his logic. I find that that Member, in his preparation for his political future — that is, putting the province ahead of politics, as we understand it — is now stretching the elasticity to the point of unbelievable proportions.

I can sympathize very much with the Liberal leader having lost his expert on everything. Now the Liberal Party has to do research rather than just blab it all out. Some of the statements by that Member, who just blabs it all out, are incredible.

To bring in the BCR when he has made these long speeches about proper accounting in the House, and then on television he said: "Oh, it's just little white lies." Then he said: "Oh, well, there are vast resources up there, but your policies killed it." You have not one factual economic report to base that statement on, Mr. Member. For you as a scientist to come into this House and leave the impression that you hold this wisdom beyond anybody else in this province is obviously meant to prepare your way for your own decision politically. You have to live with it, Mr. Speaker, he has to live with it. But I find it a little bit much to be lectured to by a presumptuous Member who comes into this House with the elasticity of arguments so adequately described by the leader of the Liberal Party. Stretch it all you want, Mr. Member. Your credibility is gone anyway.

Interjections.

HON. MR. BARRETT: Mr. Speaker, this bill is to

[ Page 3243 ]

restore a royalty deduction that Ottawa cut out. That is all that the bill is all about. All the rhetoric, all the talking, all the political fuzzy-wuzzy dancing by the Member for Vancouver–Point Grey is all meaningless. It simply means that Ottawa cut out a royalty deduction and we are restoring it. I now move second reading.

Motion approved.

Bill 122, Mining Tax Amendment Act, 1975, read a second time and referred to Committee of the Whole House for consideration at the next sitting after today.

HON. MR. BARRETT: Mr. Speaker, I would like to introduce Bill 80, Supply Act, No. 2, 1975.

SUPPLY ACT, NO. 2, 1975

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

HON. MR. BARRETT: I move that from out of the Consolidated Revenue Fund there be paid and applied in such manner and at such times as the Lieutenant-Governor-in-Council may determine a sum not exceeding in the whole $269 million towards defraying the several charges and expenses of the public service in the province for the fiscal year ending March 31, 1976, not otherwise provided for, and being substantially one-twelfth of the total amount of the votes of the main estimates for the fiscal year ending March 31, 1976, as laid before the Legislative Assembly in the Province of British Columbia at the present session.

MR. GIBSON: On a point of order. I believe we're in Committee of Supply. Unless leave is asked, I think that rule 45A would apply, if I'm not mistaken.

Interjections.

HON. MR. BARRETT: No, not for interim supply as I understand it, Mr. Chairman.

Interjections.

HON. MR. BARRETT: If it does apply, we take the vote.

SOME HON. MEMBERS: Oh, oh.

MR. CHAIRMAN: You have heard the motion....

MR. D.A. ANDERSON: You have a point of order — could you decide that. If we could get a judgment on that, perhaps we could vote.

MR. CHAIRMAN: Rule 45(c) doesn't apply because this is preliminary to putting in a bill.

Interjections.

MR. GIBSON: I know, but it was you who put 45A in, and in Committee of Supply it applies.

MR. CHAIRMAN: The ruling you refer to deals with estimates, and we're not dealing with estimates.

Motion approved.

The House resumed; Mr. Speaker in the chair.

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

Leave granted.

MR. SPEAKER: When shall the resolution as reported be considered?

HON. MR. BARRETT: Mr. Speaker, I move that the report from the Committee of Supply on June 9, 1975, will now be taken as read and received.

Motion approved.

HON. MR. BARRETT: Mr. Speaker, I move the resolution be now read a second time.

MR. SPEAKER: The resolution is that from and out of the Consolidated Revenue Fund there may be paid and applied in such manner and at such times as the Lieutenant-Governor-in-Council may determine a sum not exceeding in the whole $269 million towards defraying the several charges and expenses of the public service of the province for the fiscal year ending March 31, 1976, not otherwise provided for, and being substantially one-twelfth of the total amount of the votes of the main estimates for the fiscal year ending March 31, 1976, as laid before the Legislative Assembly of the Province of British Columbia at the present session.

The motion is that the report of resolution from the Committee of Supply on June 9, 1975, be now taken as read and received.

Motion approved.

HON. MR. BARRETT: Mr. Speaker, I move that the Speaker do now leave the chair for the House to go into Committee of Ways and Means.

Motion approved.

The House in Committee of Ways and Means; Mr.

[ Page 3244 ]

Liden in the chair.

HON. MR. BARRETT: I move that from and out of the Consolidated Revenue Fund there may be paid and applied in such manner and at such times as the Lieutenant-Governor-in-Council may determine a sum not exceeding in the whole $269 million towards defraying the several charges and expenses of the public service of the province for the fiscal year ending March 31, 1976, not otherwise provided for, and being substantially one-twelfth of the total amount of the votes of the main estimates for the fiscal year ending March 31, 1976, as laid before the Legislative Assembly of the Province of British Columbia at the present session.

Motion approved.

The House resumed; Mr. Speaker in the chair.

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

Leave granted.

MR. SPEAKER: When shall the resolution as reported be considered?

HON. MR. BARRETT: Now, Mr. Speaker.

Mr. Speaker, I move that the report of the resolution of the Committee of Ways and Means on June 9, 1975, be now taken as read and received.

Motion approved.

HON. MR. BARRETT: Mr. Speaker, I move the resolution be now read a second time.

MR. SPEAKER: The resolution is that from and out of the Consolidated Revenue Fund there may be paid and applied in such manner and at such times as the Lieutenant-Governor-in-Council may determine a sum not exceeding in the whole $269 million towards defraying the several charges and expenses of the public service of the province for the fiscal year ending March 31, 1976, not otherwise provided for, and being substantially one-twelfth of the total amount of the votes of the main estimates of the fiscal year ending March 31, 1976, as laid before the Legislative Assembly of the Province of British Columbia at the present session.

Motion approved.

HON. MR. BARRETT: Mr. Speaker, I present Bill 80, intituled Supply Act, No. 2, 1975.

MR. SPEAKER: I think we pause for a moment while the bill is distributed to the House.

Interjections.

MR. SPEAKER: Oh, I'm sorry. Thank you. That's what I call efficiency.

HON. MR. BARRETT: Mr. Speaker, I move that the bill be referred to Committee of the Whole House forthwith.

Motion approved.

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

HON. MR. BARRETT: Mr. Chairman, I move the committee rise and report recommending introduction of the bill.

Motion approved.

The House resumed; Mr. Speaker in the chair.

MR. CHAIRMAN: Mr. Speaker, the committee reports recommending introduction of the bill.

HON. MR. BARRETT: Mr. Speaker, I move that the report be adopted.

Motion approved.

SUPPLY ACT, NO. 2, 1975

On a motion by Hon. Mr. Barrett, Bill 80, Supply Act, No. 2, 1975, read a first time to be considered forthwith.

MR. W.R. BENNETT (Leader of the Opposition): Mr. Speaker, I had hoped that this interim supply bill would have been introduced a little earlier because there is some comment that should be made on supply, although we're going to support it as it relates to the budget. Naturally we'll support it, because we don't want to hold up services in this province. I believe that in second reading if we didn't comment on some of the unusual happenings, we would be remiss in our duties.

On February 28 the Premier introduced a budget into this House for $3.2 billion, which at that time we found questionable as to expected revenues, particularly after last fall when the Premier had said, and was quoted in the papers on September 3, 1974, that it was belt-tightening time for B.C. and there would be restrictions. We felt that many of the programmes that were instituted last year — many that may have been contained in this budget — could not be realistically instituted. Staff may not be hired;

[ Page 3245 ]

programmes may have to be curtailed before they get started.

The Premier called us gloom-and-doomers and said this wasn't true. But since that time there have been consistent rumours and consistent stories from top-ranking civil servants that there have indeed been spending cuts of as much as 10 per cent, a freeze on civil service hirings, a curtailing of programmes that are contained within the very budget that we are still debating in estimates. It's of some concern to me that programmes we are still debating may be in the process of being curtailed.

It's unfortunate that the confusion is being helped along by statements from the government. They have blamed a lot of the curtailment on the continuing debate on estimates in the Legislature. You know, Mr. Speaker, that this isn't true.

Last March 26, the government introduced — the Premier introduced — a supply bill for $537 million, one-sixth of the budget that would have guaranteed the continuation of services in this province and the continuation of the normal legislative rights of questioning estimates while the business of government went on. Yet we have the opposition being flooded with letters — such letters as I brought up the other day, which I didn't get a very serious answer to — where the government may be politicizing the civil service and having them offered as an excuse for curtailing services contained in this budget, blaming it on the right of the Legislature to debate estimates.

We have a letter where a firm has a successful contract for 100 trucks. The successful tender is already called, and to date of these 100 trucks only 15 have been taken up by various departments such as Fish and Wildlife, Forestry, Parks Branch and others. The reason being given is not that there isn't supply, but that the Legislature and the opposition is holding up estimates and holding up the budget.

You know, Mr. Speaker, this isn't true. We didn't get a denial the other day, but there it is in black and white from a member of the public who believes what he is being told. His business has suffered and he gives credence to the argument that there is a curtailment of government programmes already in the budget and estimates that aren't yet passed.

When it was brought before the House by the independent Member for West Vancouver–Howe Sound (Mr. L.A. Williams), the Premier denied that there was any such curtailment. The Agriculture Minister, Mr. Stupich, gave an unequivocal no that there was any curtailment. The Provincial Secretary (Hon. Mr. Hall) stated there was no curtailment, yet in my hand here I have the memorandum of May 23 to the corrections branch. What does it say?

"Re positions vacant: senior instructor, four positions; instructor-principal officer, four positions; staff training; institutional services.

"Further to the above-mentioned competitions, which closed May 14 and May 9, 1975, respectively, this is to advise they are being suspended due to budgetary restrictions as detailed in the Treasury Board directive dated April, 1975."

Interjections.

MR. BENNETT: This is the memorandum that the Minister of Finance, the Provincial Secretary and the Agriculture Minister say doesn't exist. Yet we're having the curtailment of these services that were promised in an unrealistic budget blamed on the right of free debate in the Legislature.

I thought we had fought that fight about the limitation of debate, but here the government, the Premier and the departments are playing the worst sort of politics in blaming the opposition over the traditional rights of the Legislature when we had passed supply once.

They deny there is a curtailment, yet we have memorandums. They deny there is curtailment, yet we have letters from concerned citizens who have accepted tenders, and yet we are still debating this budget and estimates that may not be accurate or accurately reflect the programmes being presented to the people of the province this year.

I find it shocking that the other day, June 4, after we passed interim supply last March 26 — and it was for one-sixth, approximately two month's supply which would have taken us through April and May — I brought it to the attention of the Minister of Finance that perhaps we needed another one because we are already in the third month, and here we have concerned citizens and I didn't want this as an excuse. He took it as notice.

I took some cheap shots from the Minister of Finance about not a dime without debate, as if this was the reason for the very attack that the member from Siva Transport Ltd. makes on the government as to blaming the Legislature for the freeze they have instituted from Treasury Board. I have him playing fast and loose in the Legislature, Well, we were concerned because we don't want to hold up supply. That's why we brought it up June 4, and that's why I was hoping that it could have been brought in last Friday or even early today. But I am glad now that services will continue — that is the amended services, the curtailed services, the amended budget that isn't being debated for this Legislature, but amended while we are still debating the original estimates which may be, and possibly are, and surely are, according to this information, inaccurate.

Now we've had a lot of concern over the way the finances are being handled in this province. We've had a lot of concern expressed, even in newspaper columns, that the government may be making

[ Page 3246 ]

expenditures a s questioned b y the comptroller-general's office that aren't authorized. We have this quote in the paper the other day which says: "As for the employees of the now defunct rent review commission, he said," — this is a member of the comptroller-general's office — "they shouldn't be paid. I told them in the department they shouldn't be paying them."

I was concerned about that, and I asked the Minister of Finance last Thursday if perhaps he was concerned about this comment in the newspaper. He asked me to send across information, and I did. Upon reading this, m y office phoned the comptroller-general's office and talked to a gentleman in the office. The Premier asked for the name, and out of courtesy I gave it to him because we are concerned with these procedures about unauthorized payments that may be being made. There was some concern that there may have been unauthorized payments surrounding the Marguerita.

HON. R.M. STRACHAN (Minister of Transport and Communications) : It's the Marguerite. Marguerita is a cigar.

MR. BENNETT; We were concerned about all of these questions surrounding the budget, surrounding the spending of public money and surrounding the curtailment of public services. Now today we are called upon to vote continuing supply, yet it's interim supply, another one-twelfth of the proposed budget, that from the memos and from the concern of the public, as expressed in this letter, is probably inaccurate and not as it was presented to this Legislature.

The concerns we have now are the concerns we expressed earlier, or that were expressed by the civil service, or by the independent Member for West Vancouver–Howe Sound (Mr. L.A. Williams). Is there a freeze? Are services being curtailed? Is there a waste of public money on a high cost of starting programmes which are completely abandoned? Is this budget and this resultant curtailment a waste of public funds? Why has the Legislature, while we are still debating estimates, not been advised or given an answer to these questions? Clearly it is of concern to US.

While we will pass this bill, because we want to see services continue, I believe it would be an ideal opportunity for answers to this Legislature about whether the government and the Minister of Finance are ignoring this body and its right to have the opportunity to pursue all expenditures. Perhaps if what is happening now and what is proposed to be happening in the future with the proposed Bill 127 and more powers being taken away from the Legislature and being given to the Minister of Lands, Forests and Water Resources (Hon. R.A. Williams) and his new company called Bob Williams unlimited, perhaps there will not be any need for this Legislature at all.

AN HON. MEMBER: Hear, hear!

MR. BENNETT: The public is concerned, Mr. Speaker. We are concerned. I think the Minister of Finance owes us some answers.

MR. GIBSON: Mr. Speaker, the purpose of this bill, if I understand it rightly, is to provide certain money on an interim basis for specified items as set out in the estimates. The control by the Legislature in the British parliamentary system is one of the most ancient of powers gained by the House. Citations in May stretch back well before 1600.

MR. WALLACE: Don't read them all, Gordon. (Laughter.)

MR. GIBSON: Mr. Speaker, the bill that we have before us is similar to Supply Bill No. 1, Bill 11 of this session. The second clause specifies that: "No sum out of the supply shall be issued or applied to any purpose other than those provided in the main estimates." It is very clear.

Mr. Speaker, I say to you that the moneys appropriated on an identically-worded bill earlier on this year were not all so applied. I suggest to you that there were illegal payments made out of those funds, and this House should satisfy itself before passage of this bill that illegal payments will not be made out of these funds that we are being asked to make right now.

I ask the Minister of Finance to stand up in this House and deny that illegal payments were made. He knows that they were made in the case of the Marguerite in respect of the procurement of supplies and certain wages. He knows that they were concerned enough about it that a private company with a couple of MLAs as directors, one of them a cabinet Minister — whether they be directors in legal standing or not is another question — came along and reimbursed that account on June 4 or 5, which shows they thought there was something a little bit fishy about it. We have it in the fact that payments were made illegally to persons working for the rent review commission when statutory authority ran out on March 31.

HON. A.B. MACDONALD (Attorney-General): There is a bill on the order paper. Read it.

MR. GIBSON: The Attorney-General says there is a bill on the order paper. Mr. Speaker, since when does something which is illegal today made legal by something which is done tomorrow? That's wrong,

[ Page 3247 ]

and the Attorney-General knows it perfectly well. That is a moral monstrosity that the Attorney-General is proposing there.

SOME HON. MEMBERS: Oh, oh!

MR. SPEAKER: Order, please. I think the Hon. Member is anticipating debate on a bill that is on the order paper. This bill does not include any item of that sort, so it obviously would not be the proper place.

MR. GIBSON: That is exactly the problem, Mr. Speaker. The Attorney-General provoked me there, That is exactly the fact of this bill, that neither it nor Supply Act, No. 1, include any such object of expenditure. Yet the expenditures were made. I say to the Minister of Finance: in controlling those expenditures and in controlling the money he is asking us to vote now, to what extent is he living up to his duties under the Audit Act, which are very specific? The Minister of Finance is chairman of the Treasury Board. The Treasury Board, under section 4 of the Audit Act, is to call to the attention of the executive council whenever it thinks anything is wrong. Has the chairman of the Treasury Board done that?

Section 13 suggests that accounts shall be kept of the precise financial condition of the province. Mr. Speaker, I ask, with respect to the Marguerite, where are the agreements in the operation of that ship with this private company? That is a part of the precise financial condition of this province. I asked the Minister who owns that ship and he couldn't tell me in the House. Is that part of the precise financial condition of this province?

AN HON. MEMBER: No answer.

MR. GIBSON: Mr. Speaker, before we give the Minister of Finance any money under this bill, I want to ask him what is happening under section 24: "The Comptroller-General shall see that no cheque is issued for the payment of any public moneys for which there is no direct legislative authority." Mr. Speaker, I say to you that such payments were made.

Mr. Speaker, I say to you that such payments were made, I ask that Minister of Finance to deny it, because he knows he can't. When there's no certificate, section 25 provides for a written opinion by the Attorney-General (Hon. Mr. Macdonald) to make it legal. I ask the Attorney-General to stand up and say that he gave such a written opinion under section 25, if he did.

MR. SPEAKER: Order, please. I think the Hon. Member is transgressing on a bill that is before the House where he has had ample opportunity to debate the purchase of a vessel or the use of ferry service. The issue is quite narrow in second reading on an interim supply bill; it is whether the amount of money is a proper amount to carry on a service to the province until the estimates are concluded. Therefore the scope of discussion is not on the whole of the finances of the province, save for the period of this month or so that is required, apparently, in the terms of the bill.

MR. GIBSON: Mr. Speaker, I respectfully submit to you, Sir, that the question of the adequacy of the amount is one of the questions. The other question is the application of those funds as is set out clearly in section 2 of the bill. If this House has reason to believe that the application of those funds is not being properly controlled by the Minister of Finance, those funds should not be granted to him.

HON. D.G. COCKE (Minister of Health): Then vote against the bill.

MR. GIBSON: We want some answers from that Minister of Finance, Mr. Minister of Health. Don't you just sit there in the back row chirping away.

SOME HON. MEMBERS: Oh, oh!

MR. GIBSON: You can stand up and make your own speech on this if you like.

HON. MR. STRACHAN: What an arrogant ass! What arrogance!

MR. GIBSON: Mr. Speaker, I just heard that Minister of Transport and Communications say "what arrogance." This is a government that sits over there and feels no need to account to the people. It is a government that wants a bill to create Crown corporations without reference to this Legislature, and they say "what arrogance." That's a fine Minister!

You stand up and answer those charges, Mr. Minister of Health, because you know you can't answer them and neither can the Minister of Finance. There were illegal payments made, and the Minister of Finance, Mr. Speaker, hasn't had the grace to show that he was a little bit worried about it. He was asked in the House on June 3 or 4 if reports of this kind had come to his attention. He said no such reports had come to his attention, and he didn't seem very interested in it in the House.

Mr. Speaker, I've been asked to move an adjournment of the debate so we can resume after 6 o'clock. That's fine with me.

Motion approved.

Hon. Mr. Hall moves adjournment of the House.

[ Page 3248 ]

Motion approved.

The House adjourned at 5:56 p.m.

APPENDIX

86 The Hon. David Barrett to move, in Committee of the Whole on Bill (No. 86) intituled Savings and Trust Corporation of British Columbia Act, to amend as follows:

Section 9, lines 3 and 4: By deleting "or insurance".

Section 41, subsection (2): By adding "or" at the end of paragraphs (a), (b), (c), and (d).

Section 41, subsection (2), clause (e): By deleting "and" and substituting "or".

Section 41, subsection (2): By deleting paragraph (g) and substituting the following:

"(g) Debt Collection Act;".