CONTENTS

Routine proceedings

Oral questions.

Bedrock credit cards. Mr. Curtis — 3673

Leave of absence of Corrections Deputy. Mr. D.A. Anderson — 3673

Status of Causeway Esso site. Mr. Wallace — 3673

Progress of committee on basic education services. Mr. Gardom — 3673

Sunday horse racing. Mr. McClelland — 3674

Mailing of tax notices. Hon. Mr. Lorimer answers — 3674

Flaws in Westcoast pipeline. Mr. Rolston — 3674

Pay proposal for Hydro linemen. Mr. McGeer — 3674

Western Canada Lottery. Hon. Mr. Hall answers — 3675

Transfer of Liquor Administration Branch head office to mainland. Mr. D.A. Anderson — 3675

Complaints on freezer food operation in Columbia River. Mr. Chabot — 3675

Claims handled by Scrivener firm. Hon. Mr. Strachan answers — 3675

Interior food service on Gulf Islands ferries. Mr. Wallace — 3676

British Columbia Railway Company Construction Loan Amendment Act, 1975 (Bill 27). Committee stage.

On section 1. Mr. Phillips — 3676

Amendment to section 1. Mr. Phillips — 3677

Mr. Chairman rules out of order — 3677

On section 1. Hon. Mr. King — 3678

Division on section 1 — 3688

Report and third reading — 3689

Islands Trust Amendment Act, 1975 (Bill 97). Second reading. Hon. Mr. Lorimer — 3689

Income Tax Amendment Act, 1975 (Bill 101). Second reading. Hon. Mr. Stupich — 3691

Motor-vehicle Amendment Act, 1975 (Bill 108). Second reading. Hon. Mr. Strachan — 3692

Natural Gas Revenue Sharing Act (Bill 110). Second reading. Hon. Mr. Lorimer — 3694

Public Service Superannuation Amendment Act, 1975 (Bill 112). Second reading. Hon. Mr. Hall — 3699

Municipal Superannuation Amendment Act, 1975 (Bill 113). Second reading. Hon. Mr. Hall — 3699

Teachers' Pensions Amendment Act, 197 5 (Bill 114). Second reading. Hon. Mr. Hall — 3700

College Pension Amendment Act, 1975 (Bill 115). Second reading. Hon. Mr. Hall — 3700

Public Services Medical Plan Amendment Act, 1975 (Bill 116). Second reading. Hon. Mr. Hall — 3700

Public Service Group Insurance Amendment Act, 1975 (Bill 117). Second reading. Hon. Mr. Hall — 3700

Public Service Labour Relations Amendment Act, 1975 (Bill 135). Second reading. Hon. Mr. Hall — 3701

Public Service Amendment Act, 1975 (Bill 136). Second reading. Hon. Mr. Hall — 3702

Royal assent to bills — 3703

Appendix — 3703

The House met at 2 p.m.

Prayers.

MR. R.H. McCLELLAND (Langley): Well, Mr. Speaker, I'm not sure if this is a pleasure or not but I was informed earlier today that we now have a new addition, or are about to have a new addition, to the press gallery. I don't know whether it's a record or not either, but we have a father-and-son team now in the press gallery with Jim and Mark Hume. I think, whether it's a record or not, we should certainly recognize that achievement.

MR. G.B. GARDOM (Vancouver–Point Grey): I would like all of the Hon. Members to join with me in a cordial welcome to Mr. and Mrs. Bob Reid from Vancouver. Mr. Reid has been a cameraman with CBC for 20 years and is now retired. All best wishes to him.

MR. G.S. WALLACE (Oak Bay): Mr. Speaker, I understand that we have in the gallery an old friend who used to sit right here on my left — the former Member for Dewdney whose good humour remains everlasting, as Members of this House will know. I'd like to welcome Mr. George Mussallem.

Oral questions.

BEDROCK CREDIT CARDS

MR. H.A. CURTIS (Saanich and the Islands): Mr. Speaker, this is to the Minister of Consumer Services. Earlier today I forwarded to her information concerning a Bedrock credit card. I trust the Minister will be able to tell us just a little more about this today. She indicated this morning that the department was investigating, but I wonder when this came to her attention and if she has any indication from her department that it may be in violation of normal consumer relations.

HON. P.F. YOUNG (Minister of Consumer Services): Mr. Speaker, it first came to my attention when I received a similar thing in the mail about a week ago. I immediately sent it to my department. I've not had a report back from them yet on it.

LEAVE OF ABSENCE OF CORRECTIONS DEPUTY

MR. D.A. ANDERSON (Victoria): To the Provincial Secretary, Mr. Speaker. I wonder whether the Provincial Secretary, who's responsible for the civil service, could explain why Mr. Ed Epp, the Deputy Minister of Corrections, was ordered to take a three-month leave without any reasons being given.

HON. E. HALL (Provincial Secretary): I'll look into that for the Member.

STATUS OF

CAUSEWAY ESSO SITE

MR. WALLACE: Mr. Speaker, I would also like to ask a question of the Provincial Secretary regarding the property at the corner of Government Street and Wharf Street in Victoria, formerly called the Imperial Esso station. I understand that the City of Victoria transferred that property to the Capital Improvement District Commission in January, and there appears to be some suggestion that subsequently the title has been transferred from the CIDC to the provincial government. I wonder if the Minister could tell us first of all if that has happened, and secondly if there's any truth in the suggestion that it might be used as a sidewalk café or some form of fast-food service.

HON. MR. HALL: I anticipated a question on this, Mr. Speaker, and I asked my staff to look into that news story. I have unfortunately not yet had a reply from the secretary of the CIDC or my staff people. I'll tell the House as soon as I get the answer.

PROGRESS OF COMMITTEE

ON BASIC EDUCATION SERVICES

MR. GARDOM: A question to the Minister of Education, Mr. Speaker, dealing with committee on basic services referred to in the Premier's budget speech. I note that they're supposed to be reporting on August 1. In light of that, maybe the Hon. Minister could inform us whether groups such as the B.C. school trustees and the independent schools association have had an opportunity to participate. Have there been public hearings?

HON. E.E. DAILLY (Minister of Education): There was no intention to have public hearings, but certainly to have the participation of those two groups. At the present time it has still been on an informal basis and the Ministers, I believe, are now at the stage where they're prepared to meet formally.

MR. GARDOM: Do I take it from that, Madam Minister, that to this point there has not been any input from those associations?

HON. MRS. DAILLY: There has been input from one particularly — the independent schools association — and discussions with some staff members of the BCSTA. That is as far as it's gone at this time.

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MR. GARDOM: Will the Hon. Minister be requesting any public input?

HON. MRS. DAILLY: No, it has not been our intention at this time.

SUNDAY HORSE RACING

MR. McCLELLAND: A question to the Minister of Municipal Affairs, and I notice he got up on his feet before I asked the question. That's service. Mr. Speaker, I'd like to ask the Minister whether or not he's given any consideration to a request from the Lower Fraser Valley Exhibition Society — and I believe he may have had one from either the PNE or the Vancouver Jockey Club as well — with regard to changing of subsection 3 of section 210(a) of the Municipal Act to remove the prohibition of horse racing on Sundays in the province.

HON. J.G. LORIMER (Minister of Municipal Affairs): Yes, we've given it some consideration. I have had discussions with the Attorney-General. It's still under consideration and you'll notice it's not in the amendments proposed for the Municipal Act....

MR. McCLELLAND: Not yet.

HON. MR. LORIMER: Not yet at this session.

MAILING OF TAX NOTICES

I'd like, Mr. Speaker, while I'm on my feet, to answer a question that was asked by the Hon. Member for North Okanagan (Mrs. Jordan) in which she asked about the mailing out of tax notices to unorganized territory. I'm advised that there are 260,000 tax notices sent out, 230,000 of which were mailed out on June 13 and the balance on June 16. The statutory requirement is to mail them by June 15, but June 15 occurred on a Sunday, so the balance were mailed on the Monday.

FLAWS IN WESTCOAST PIPELINE

MR. P.C. ROLSTON (Dewdney): A question to the Minister of Transport and Communications. Mr. J. Sutherland, a former pipe welder, is again claiming that there are flaws in the welding of the pipe containing natural gas of the Westcoast Transmission. This pipe runs underneath the deck of the Agassiz-Rosedale Bridge. The flaws appear at random — he's x-rayed this. Last year the Attorney-General (Hon. Mr. Macdonald) doubted that there were flaws, but I'm asking you what is your most recent information. Have your inspectors gone out there? If not, will they go out? Is this 20-year-old natural gas pipe defective?

HON. R.M. STRACHAN (Minister of Transport and Communications): I want to thank the Member for giving me notice of this question. It is a serious charge that this Mr. Sutherland has made. He made the same charge a year ago. This pipeline is regulated and controlled by the National Energy Board. The province has absolutely no authority to usurp any of that jurisdiction. However, a year ago we were part of a committee that was involved because we felt the responsibility. Mr. Sutherland was employed as a welder on the construction of this line in 1957. Evidently he was fired by Beckton. He then went north and obtained a welding job on another Beckton job and was fired again after three days. He unsuccessfully applied for an inspector's job with Westcoast about four years ago.

I have here the report which Westcoast Transmission made a year ago where they examined all of the pipeline. The latest information I have is an x-ray job done by Westcoast engineering. On June 6, 1975, my Associate Deputy Minister contacted Mr. E. Phillips, the president of Westcoast Transmission, and he advised:

"Westcoast have now installed as part of their regular looping programme an additional pipe across the Fraser River at Agassiz. After this new section is tested and brought on stream in July, the company proposes to take steps to remove the so-called inconsistencies in the two wells in question so as to eliminate any possible future concern."

In the report that I had a year ago, it was pointed out to me that the line in question was constructed in 1957 and was tested to 1,225 pounds per square inch. The normal operating pressure is 936 pounds per square inch, but as this line is exposed and on a structure, it is only authorized to operate up to 780 pounds per square inch. In actual fact, it is operating at 600 pounds per square inch, which is less than 50 per cent of the original test pressure.

So two things: (1) the report of a year ago indicated the line was safe and (2) despite that, the company is moving to upgrade the line itself in that particular area.

PAY PROPOSAL FOR HYDRO LINEMEN

MR. P.L. McGEER (Vancouver–Point Grey): Mr. Speaker, to the Minister of Lands, Forests and Water Resources in his capacity as a director of the B.C. Hydro. Today it was announced that the B.C. Hydro would recommend acceptance of a proposal that would make the linemen by far the highest paid in the world, their pay including 17 new paid holidays per year. The directors must have thought through the impact of this settlement on consumer electricity rates. I wonder if the Minister could give us some announcement of what the impact to the consumer

[ Page 3675 ]

will be of this settlement if it is accepted by the company.

HON. R.A. WILLIAMS (Minister of Lands, Forests and Water Resources): It has to go before the board yet, Mr. Speaker.

MR. McGEER: I am astonished at what the Minister tells me. But will he be making an early announcement as to the effect of this on consumer electricity rates in British Columbia?

HON. R.A. WILLIAMS: Once the board has met, Mr. Speaker, I certainly anticipate it would have no impact on rates, in terms of my understanding of the situation.

WESTERN CANADA LOTTERY

HON. MR. HALL: Yesterday, the Member for Oak Bay asked me two questions regarding the operation of the Western Canada Lottery. He asked me, first of all, with regard to the Western Canada Lottery, if any money at any time has been transferred from consolidated revenue to the lottery fund as provided for in section 6(2) of the Act. Mr. Speaker, approximately $33,000 was paid out for salaries and expenses at the start of the lottery in the latter part of last year. The revenue of approximately $400,000 came in during the first month of operation and the $33,000 was repaid immediately.

The second question was whether some financial statement as of March 31 could be tabled in the House as provided for in the legislation regarding the financial status of the lottery fund. The Lotteries Act states: "The Minister shall annually prepare a report respecting the administration of the Act during the previous fiscal year and he shall lay the report before the Legislature within 15 days after the commencement of the first session in the following year." The comptroller tells me, and I checked this out this morning, that this would mean the report would be tabled in the Legislature within 15 days after the commencement of the 1976 spring session. That is the technical response.

However, I think I probably share the Member's — not dissatisfaction — interest in knowledge on the operation. I shall be looking into the possibility of tabling some interim statements later on in the year.

TRANSFER OF LIQUOR ADMINISTRATION

BRANCH HEAD OFFICE TO MAINLAND

MR. D.A. ANDERSON: To the Provincial Secretary, Mr. Speaker. May I ask the Provincial Secretary whether discussions have taken place with the officers of the liquor administration branch, soon to be renamed, about moving and locating the head office on the mainland rather than on Vancouver Island?

HON. MR. HALL: Not with me, Mr. Member. I will inquire with the Public Service Commission if any negotiations of that particular component have taken place with the public service. I will also find out for you, as I think is more likely to be the case, what type of discussions have gone on in the Attorney-General's department vis-à-vis the liquor administration branch.

MR. D.A. ANDERSON: A supplementary, then. I thank the Minister for undertaking those commitments. May I ask him at the same time to look into the possibility of having the senior officers of the liquor administration maintain their homes in Victoria and fly over by government aircraft on a daily basis to the new offices in Vancouver if indeed they have to be located in Vancouver or the lower mainland?

HON. MR. HALL: I will see if I can get that into the report of the implications of the move.

MR. D.A. ANDERSON: Thank you very much.

COMPLAINTS ON FREEZER FOOD

OPERATION IN COLUMBIA RIVER

MR. J.R. CHABOT (Columbia River): Mr. Speaker, to the Minister of Consumer Services. Could the Minister advise whether there has been any progress on the complaints made months ago by some of my constituents? They were bilked by Budget Freezer Foods Ltd. of Burnaby.

HON. MS. YOUNG: Mr. Speaker, under the provisions of the Trade Practices Act, section 12, I am not at liberty to comment.

CLAIMS HANDLED BY SCRIVENER FIRM

HON. MR. STRACHAN: Mr. Speaker, yesterday the Member for Langley asked me some questions regarding claims handled by D.A. Scrivener Adjusters Ltd. The information I gave to the House, I've checked it, and that is the information provided to me by Mr. Scrivener. Because of the strike that is on at ICBC I am unable to check the ICBC records, but I will do so as soon as the strike is settled.

MR. McCLELLAND: Mr. Speaker, as a supplementary, when that opportunity avails itself after the strike is over, will the Minister file with the House all of the information relating to claims which were handled by all companies which bear the name

[ Page 3676 ]

of Mr. Scrivener, and the total dollar values and the fees paid? Because I understand it's not commissions with an adjuster; an adjuster charges by the hour. We'd like to know the fees paid.

HON. MR. STRACHAN: I'll certainly consider that.

INFERIOR FOOD SERVICE

ON GULF ISLANDS FERRIES

MR. WALLACE: Mr. Speaker, to the Minister of Transport and Communications: several regular travelers on the Gulf Islands ferries have stated that the standard of cooking is poor and the meals are inferior to the meals on other ferries in the system. Could I ask the Minister if there has been any particular difficulty in obtaining experienced cooks on the Gulf Islands run?

HON. MR. STRACHAN: Not to my knowledge, but I'll check into it.

MR. WALLACE: Just a supplementary. Is there any system of review in regard to maintaining standards on the food service on the ferries — any regular monitoring device — or do you just wait to get complaints?

HON. MR. STRACHAN: No, as a matter of fact, I am aware of a programme within the ferry service itself for upgrading those employed in the provision of cooking for the ferries.

DEPUTY SPEAKER: The Hon. Member for South Peace River on a point of order.

MR. D.M. PHILLIPS (South Peace River): Mr. Speaker, it was brought to my attention that yesterday afternoon during the debate on the British Columbia Railway, I may have inadvertently referred to the Deputy Minister of commercial transport. I was really referring to Mr. Swanson, the chief engineer. I don't know whether the Blues can be corrected, but I want to make it perfectly clear that I wasn't at any time referring to the Deputy Minister.

AN HON. MEMBER: The present Deputy?

MR. PHILLIPS: The present Deputy Minister — or past either, as far as that goes.

Orders of the day.

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

Leave granted.

HON. MRS. DAILLY: Mr. Speaker, committee on Bill 27. I think you've heard that one before.

BRITISH COLUMBIA RAILWAY COMPANY

CONSTRUCTION LOAN AMENDMENT ACT, 1975

(continued)

The House in committee on Bill 27; Mr. Liden in the chair.

On section 1.

MR. D.M. PHILLIPS (South Peace River): Mr. Chairman, we still have some unanswered questions on the British Columbia Railway. The Minister has not yet answered for what Mr. Robert E. Swanson received $766.80 in direct payment to him after he became a director of the railway. We still haven't heard any more from the Minister with regard to the management report which Mr. Swanson drew up for the railway. I have now received information that there was a bill submitted by Mr. Swanson — there was an invoice submitted by Mr. Swanson' company. No, by Mr. Swanson — I'm sorry, Mr. Chairman. There was an invoice submitted by Mr. Swanson. I understand that the bill was in the amount of $1,900.

AN HON. MEMBER: Or thereabouts.

MR. PHILLIPS: Or thereabouts — $1,900 or thereabouts. I understand that the invoice was discussed before a board meeting and after a board meeting. I'd like to know if this invoice was ever paid. I understand that the comptroller of the railway and the then manager of the railway refused to authorize this bill, which they had to do because it was an expenditure of over $500 and less than $5,000. I understand that they refused to authorize this invoice because they considered it a conflict of interest.

Mr. Chairman, I understand that, after having the refusal by the comptroller and the then general manager to authorize this invoice because there might be a conflict of interest, Mr. Swanson brought it up again. I understand he discussed it with the Premier. The information I have is that the Premier passed the invoice to the Deputy Minister of Finance, who is a secretary of the railway, and asked him to check it out for a conflict of interest.

Mr. Chairman, I think that the Minister of Labour, who was a director of the railway at that time, should advise this Legislature whether that invoice was ever paid. Did the Deputy Minister find out that there was a conflict of interest? If the invoice was never paid was Mr. Swanson given any other instructions or any other method whereby he might collect payment for

[ Page 3677 ]

this management report which he prepared while a director of the British Columbia Railway? It was a management report that has meant a complete shuffle in the top management of the British Columbia Railway, and that shuffle has meant that the British Columbia Railway is going down the track of no return at the present time. And that is why, Mr. Chairman, we have this bill before us.

I'd also like, Mr. Chairman, the Minister of Labour to advise the House what company refurbished the Royal Hudson. Was it sublet to the CPR? If so, what company was employed by the CPR? I'd like to know, Mr. Chairman. I'd like the Minister of Labour to advise us who directed the refurbishing of the Royal Hudson on behalf of the BCR. Who drew up the plans for refurbishing the Royal Hudson?

Mr. Chairman, I think that the Minister of Labour should give us these answers because there's possibly another involvement of a conflict of interest. I think that to straighten this whole mess out the Minister of Labour had better come clean with the Legislature this afternoon.

Mr. Chairman, that British Columbia Railway over a number of years was well run. For 20-odd years when the British Columbia Railway needed money — not to cover deficits for operating, but to cover required capital expenditures for extending the line — the bills were brought before this Legislature. None of that money, Mr. Chairman, was used to subsidize losses on the British Columbia Railway.

Mr. Chairman, now we have a bill requesting $200 million. I would just like to ensure that none of this money is going to be required to cover operating deficits on the railway, to prop up the lack of cash flow and the losses due to poor management on the railway caused by political meddling in the management of the railway — specification changes, line changes, changing the Dease Lake extension from a resource railway line to a main line. Because of the intervention of the Minister of Labour while he was a director of the railway, because of the personal intervention of that Minister in settling wage disputes, I want to ensure that the taxpayers' money is not going to be used to cover losses on the railway due to poor management, Mr. Chairman.

We want to support this bill and we want to see the railway construction continued. We want to see it continue to expand. Because of this, Mr. Chairman, I would like to move an amendment by renumbering and adding to section 2 the following: "The moneys advanced to the company under subsection 1 shall be applied to the constructing, reconstructing, bettering and maintaining of the railway of the company and providing the necessary ancillary works in such a manner as may be directed by the Lieutenant-Governor-in-Council."

Mr. Chairman, this is just a little amendment which will put some guarantee on this $200 million that it's not going to be used or wasted by the present management and the directors of the railway for their incompetence in operating that railway line. We must have, Mr. Chairman, some guarantee that we are not going to be faced with another bill of larger proportions than this next year to make up even greater losses than the railway has had in the past year.

Mr. Chairman, I know that this little amendment will be gladly accepted by the government. Add it to the bill, and then we will be able to carry on with the work of the House.

MR. CHAIRMAN: The amendment is out of order. It requires a message to bring in an amendment of that kind.

AN HON. MEMBER: What?

AN HON. MEMBER: Why?

MR. CHAIRMAN: It imports a new principle on the bill that's there, and imposes an obligation on the Crown. It's out of order.

MR. PHILLIPS: There's no financial obligation!

MR. CHAIRMAN: It's not a question of a financial obligation.

MR. PHILLIPS: A point of order. There is no financial obligation on the Crown.

MR. CHAIRMAN: I didn't say it was a financial obligation.

MR. PHILLIPS: Oh, I'm sorry. Did I misunderstand you?

MR. CHAIRMAN: I said it imposes an obligation on the Crown.

MR. PHILLIPS: But not a financial obligation.

MR. CHAIRMAN: It is out of order.

MR. PHILLIPS: I just want to say, Mr. Chairman, how very greatly disappointed I am that the government would not accept this amendment to protect the taxpayers of this province against waste of their tax dollars.

HON. E. HALL (Provincial Secretary): It is out of order. It is not a question of acceptance; it is simply out of order.

MR. PHILLIPS: I'm terribly disappointed, Mr. Chairman, but it proves to me and the rest of the

[ Page 3678 ]

Members of this Legislature that a large amount of this $200 million will be used to make up losses on the British Columbia Railway, losses that have been incurred by poor management due to the fact that that government interfered politically with the operation of that railway.

MR. CHAIRMAN: Shall section 1 pass?

Interjections.

MR. CHAIRMAN: Did the Minister ask for a division?

Interjections.

MR. CHAIRMAN: The Minister wasn't speaking.

MR. D.A. ANDERSON (Victoria): Just hold the phone. The Minister was on his feet. Now you can't go back and say that therefore the vote took place, the rest of us were sitting down, because he was on his feet and he intended to speak — he stayed on his mike for some time. So don't bob around on this vote.

MR. CHAIRMAN: I didn't see anyone on his feet, so I put the vote and he sat down.

MR. D.A. ANDERSON: Now if he's not going to speak, other Members will. I, for example, have something to say, but I think he had the floor. You recognized him and he wants to speak.

HON. W.S. KING (Minister of Labour): I thought someone had called a division, Mr. Chairman. Someone called division.

Mr. Chairman, the Member for South Peace River (Mr. Phillips) raised two questions, one was a question regarding payments to Mr. Swanson. I made a clear statement yesterday in the debate that the only payments I can determine that were ever made to Mr. Swanson by the BCR were in connection with his duties as a board director, and it was a small amount, I believe in the area of $600 or $700, incident to travelling expenses as a director of the board.

MR. PHILLIPS: Why don't you look at the account? It had nothing to do with travelling expenses.

HON. MR. KING: Mr. Chairman, the Member goes into his long tirades, then he doesn't want to listen to the answers.

MR. PHILLIPS: Well, I'd like the honest answers. I mean.... I'll withdraw.

HON. MR. KING: Mr. Chairman, I would ask the Member to withdraw the imputation that lies have been told in this House.

MR. PHILLIPS: Yes, I will.

MR. CHAIRMAN: The Member withdraws.

HON. MR. KING: You can lead a horse to water, but you can't make him drink, and if Members are unprepared to accept the answers given, then obviously this whole exchange is a complete charade because they are not trying to elicit information, they're simply embarking on delaying tactics for other purposes.

Now I made the statement that Mr. Swanson had received expenses incident to his responsibilities as a director of the company. Public accounts, as revealed in my discussion yesterday, for six years, including 1971, indicated that Mr. Swanson had been paid, when he was the chief inspection officer of the Department of Commercial Transport, for other services rendered to the government. The fact that he may, in his capacity as a board member of BCR, have been paid by another government department for certain services to that department, in my view, does not constitute a conflict of interest.

There is no reason whatsoever why a director of certain Crown corporations should not be involved in a business arrangement with another department of the government. Indeed, as I indicated, that was the case in years prior to this government taking over, when the former government paid to Mr. Swanson, apparently....

Interjection.

HON. MR. KING: It is evident in public accounts. I believe it was a considerable amount of money paid out to Mr. Swanson's firm: 1971, $979; 1970, $11,592; in 1969, $869; and back in 1965, $10,000-plus. That was paid out to Railway Appliance Research, a firm in which Mr. Swanson is a principal.

Now that doesn't indicate to me that there was necessarily any conflict of interest. If the Members of the opposition wish to place that connotation on the fact that a person associated with one department of government, indeed a civil servant at that time, received payment to his firm for dealings with another department of government, then that's up to them.

But, Mr. Chairman, they should be consistent because that certainly occurred for at least six years under their administration.

In my view, the only clear-cut conflict of interest that would arise would be if any director of the railway received payment for services rendered to the

[ Page 3679 ]

railway and received payment by the railway. That is not the case, as far as I can determine. I have talked to Mr. Swanson on the telephone this morning. He has assured me that he was not paid for a report which the opposition Members referred to. He and the railway management people have assured me that he received no such payment and that the only payment he did receive was incident to travelling expenses as a director. That's a matter of common practice in any corporation or in any government agency, I would suggest.

With respect to the work that was done on the Royal Hudson, yes, Mr. Swanson's firm did some work on that engine. I indicated that yesterday. Mr. Swanson did, in my view, a very, very admirable job on behalf of the Province of British Columbia in terms of finding the old parts, in cooperation with CP Rail, to render that locomotive operable once again. It's my understanding that his expenses and his services were paid for by the Department of Travel Industry — again, an identical situation with what transpired in the years 1965, 1969, 1970 and 1971.

Now if the Members of the opposition wish to interpret that as conflict of interest, then that amounts to a self-indictment. I don't think it's the kind of gratitude that should be expressed to a long-time civil servant in this province, a man who has done a very great deal to contribute to the operation of the British Columbia Railway and also to the tourist trade of this province.

Now while I'm on my feet there's one other thing that came to my attention last night. There was a newspaper report which attributed certain statements to the Member for Boundary-Similkameen (Mr. Richter), the former Minister of Commercial Transport. He apparently made a number of statements outside this House. The opposition was saying that they knew that Swanson, as chief engineer for the Department of Commercial Transport, was....

AN HON. MEMBER: The official opposition.

HON. MR. KING: Yes, the official opposition, I beg your pardon.

They said they knew he was receiving money from the government for several years, which was shown in public accounts, so the government had full knowledge of the situation. That's obvious. In the face of this knowledge they're saying they took no action. In fact they kept extending Swansons periods of employment past retirement age. That's an admission by the official opposition. Surely if he was doing work for the government and it was shown in public accounts, the Minister of Commercial Transport was aware of it and the government was aware of it. But during that same period they kept extending the retirement age of Mr. Swanson. The former Minister of Commercial Transport yesterday made two completely conflicting statements outside the House. In the House he was completely silent. He didn't enter the debate. At 4:30 p.m. he was reported to have made the following statement to the Victoria columnist, Mr. Jim Hume:

"Frank Richter, the cabinet Minister in charge of commercial transportation in 1971 and still Social Credit MLA for Boundary-Similkameen said outside the House Tuesday at 4:30 p.m. Swanson wasn't fired. 'He was considerably past retirement age,' Richter told the Colonist. 'He had received three or four extensions to his retirement date and I just decided there were younger men who deserved a chance. So I didn't renew his tenure.' "

Now that conflicts completely with what the Member for South Peace River (Mr. Phillips) said. He made the statement yesterday in the House that as soon as the Minister became aware of a conflict of interest, he terminated, he fired Mr. Swanson.

AN HON. MEMBER: He didn't say "fired."

HON. MR. KING: But the former Minister at 4:30 said he just didn't renew his tenure, because he'd had some extensions. Then apparently he got news from his leader because at 6 p.m. he made another statement outside the House. At 6 p.m., presumably after hearing from the leader, he was reported to have said:

"But at 6 p.m., Richter said Swanson had been retired because of conflict of interest, although he said Swanson was never given that information, nor is there any evidence in the files."

He apparently had this evidence on hand when the NDP government took over office. But he didn't consider it his responsibility to pass on that information to the new government.

Now it seems to me, Mr. Chairman, that this situation is yet another and a very clear example of the duplicity of the former government. One of the statements made by the former Minister of Transport and Communications, the Member for Boundary-Similkameen, must be false, because they're in direct conflict and they were made an hour and a half apart.

I would suggest that it was the 6 o'clock statement that was false. I would suggest that in his 6 o'clock statement he was acting in accordance with a message from his master. I suggest that at 4:30 he told the truth but he had to reverse himself.

Interjection.

HON. MR. KING: The two statements — the 4:30 statement and the 6 o'clock statement — are

[ Page 3680 ]

completely at variance with one another. Obviously there must have been a reason for changing his position in the short space of an hour and a half. What would that motivation be except a conflict between what he had said in the corridor and the statements that were being made in the House by his own Members?

MR. D.E. LEWIS (Shuswap): He got orders.

HON. MR. KING: I think that's a safe assumption. So I assume that at 4:30 he told the truth. I make that assumption.

MR. W.R. BENNETT (Leader of the Opposition): You're wrong.

SOME HON. MEMBERS: Oh, oh!

HON. MR. KING: Mr. Chairman, that could well be, but I think that it's about time the individual in question got up and spoke his own mind on this question. He was completely silent all the way through the debate and because of some fairly irrational statements by Members of his own party he felt obliged to justify what had taken place under his stewardship of the Department of Commercial Transport.

I think at 4:30 he gave the facts. I think at 6 p.m. he tried to save face for the Member for South Peace River, who said in this House that when the Minister found out, he was fired. The two completely conflicting statements made by the former Minister are in line with everything that has been presented so far by the official opposition. They have attempted to introduce in debate any ruse that would detract from the central issues that were revealed by the Premier some time ago.

It should be remembered that with the full knowledge of the former government they presented auditor's reports that they had ordered restricted, and they deliberately hid B.C. Rail losses to the extent of $57 million. These are the facts, supported by documents tabled in this House that are irrefutable. I suggest that it's a sorry state of affairs when they are faced with documented facts and then seek to make a scapegoat out of an individual like Mr. Swanson, who has been a dedicated civil servant for many, many years. They are quite prepared to use him as a sacrificial lamb to cloud the issues that have been raised in this debate.

I don't know which of the statements of the former Minister of Commercial Transport are true — the statements that are attributed to him in the corridor yesterday. But they are in direct conflict. I think he owes it this House to rise in his place and clarify whether or not his first statement was true that the man simply retired, or whether it's a fact that according to an investigation he held he concluded that there was a conflict of interest, never notified the individual involved and terminated him. Mr. Chairman, I think that Member has an obligation to clarify that to this House.

MR. FX RICHTER (Boundary-Similkameen): The Minister of Labour has made certain charges regarding my administrative duties as Minister of Commercial Transport in the former government. The Minister said that I didn't enter the debate. If you'll look at the Blues, you'll find that I spoke for approximately 30 minutes the other day in this House on this bill. To be precise, I believe it was June 12, or about that time. I did mention at that time in that debate, and you will notice it in the Blues, that "I was under a cloud" regarding BCR because the chief engineer's reports given to me.... I had discussed on many occasions the inspections, the quality of the rail. The engineer's, Mr. Swanson's, reports speak for themselves. As long as I was Minister, he had very glowing reports. The reports are available.

Interjections.

MR. RICHTER: If I as a Minister cannot depend on the reports — especially in the light of the last report that Mr. Swanson has drawn up for the now present government — then of course I have to feel that the earlier reports were either not correct or there has been some change in Mr. Swanson's conclusions regarding that railway.

What I said at 4 o'clock yesterday — or 4:30, as the Minister has specified — to Mr. Hume.... He asked me specific questions: was Mr. Swanson fired? No, he wasn't fired. He was on extended employment by way of extensions by order-in-council every three months.

I had certain matters which I was investigating and on which I felt I had conclusive evidence to terminate these extensions. This came about the time one of the extensions was coming to a conclusion. I advised Mr. Swanson by letter that these would not be extended. I asked for an inventory of the government equipment that was in the building on Burrard St. This was prepared and is probably in the Department of Transport and Communications at the present time. A new appointment was made at the termination of Mr. Swanson. Mr. Turnbull was appointed.

The specific questions were asked at 4:30. At 6 o'clock there was a bevy of reporters out here asking a hundred questions, and they got exact answers to all those questions as to the whys and wherefores. I don't want to damage anybody's reputation, and I don't think I have, but at the same time, I don't want my reputation damaged either because I think I have

[ Page 3681 ]

tried to carry out to the very best of my ability my administrative jurisdictions and responsibilities under my oath of office as a cabinet Minister when I was within the cabinet of the previous government.

There is no conflict of interest as far as I am concerned with what I said at 4:30 and at 6 o'clock. One was more detailed and more extensive than the other, and I know more.

MR. L.A. WILLIAMS (West Vancouver–Howe Sound): I will just be a few moments. Ten days ago the Premier of this province, after much promise over past weeks and months, brought forward this bill and with it, a rather obvious attempt to create a scandal surrounding the former operation of the B.C. Rail. This small statute, so necessary for the continued operation of B.C. Rail, was used as the vehicle for the purpose, a very thinly-disguised vehicle, I must say.

As a consequence of that commencement, we have been treated for 10 days to a wide-ranging debate which has called into question the conduct and the integrity of past directors and past officers of the railway. It has called into question the integrity and competence of professional people within the Province of British Columbia who formerly acted for the railway and who are acting for the railway today in their professional capacities.

We now come to the situation where it is calling into question the integrity and performance of civil servants, former civil servants and people who are currently directors and employees of the railway.

Surely, Mr. Chairman, we have gone far enough with this campaign. Surely, it is clear to the government today that what the Premier began 10 days ago has gone far out of control. Surely, it must be clear to the government today that there is only one way of ending this sorry story, and that is for the Government of British Columbia to call a royal commission to investigate all of the operations of this railway and all of the intricate involvement that there may have been with persons who are today officers and employees, people who were in the past officers and employees and people who are in the civil service of this government.

So many words have been spoken, so much reflection has been cast upon individuals who have no opportunity to answer, that the government can only, with propriety, respond in this particular way. The government is guilty of it; Members of the opposition are guilty of it. Surely, we cannot use this instrumentality of political difference to besmirch the names of individuals who have no right to be heard in this assembly, and no way, no procedure, by which this assembly can call them before the Members and ask them to answer questions. Surely, we have gone too far.

We are not probing into the manner in which the railway is being operated, we are probing into the conduct of individuals, conduct of individuals who were responsible to the former government, and who were under the direction and control of the Ministers of that government. We are calling into question the conduct of Members who are still in this House.

I think that surely there is only one appropriate vehicle, and that is to have an inquiry established under the Inquiries Act where a commissioner charged with specific responsibilities can make the proper investigation and give to people the opportunity to defend themselves outside any question of political motivation. Only in that way will the people of this province know the answers. Only in that way will people who have conducted themselves properly be able to answer.

MR. D.A. ANDERSON: Mr. Chairman, I am pleased that the Member for West Vancouver–Howe Sound has seconded a call I made during second reading debate for a royal commission inquiry. Unfortunately, we have the complication about a lawsuit, which, according to professional advice given to me, would delay any such royal commission inquiry or judicial inquiry. But the Member's words are carefully chosen, they're right, and just as soon as that lawsuit is out of the way, this matter should be put to a royal commission. However, as it may be months, absolutely months, before such a royal commission or judicial inquiry could entertain witnesses or information and get going, there are some things which we have to try and clean up just as quickly and neatly as we can.

I read of the accusations made against Mr. Swanson with interest and regret. The man is unknown to me; I don't believe I have ever met with him or spoken to him. But no individual in British Columbia should be subjected to comments of this nature without some opportunity of defending his reputation.

The man, apparently, was released, was never informed of charges against him and was never informed of who was critical of him. Suddenly he reads in the newspaper — maybe it was phoned to him, I don't know — but presumably he read in a newspaper that he was fired for cause as a result of a secret investigation. The man is still in business in the Province of British Columbia — he still has two companies — and his reputation has been attacked.

Whether we have an inquiry or royal commission this fall or not — and I devoutly hope we do — it's a basic principle of justice that no man should be falsely attacked by this court or this House, or any other, without the opportunity of defending his name. No man should be accused and stand guilty in the newspapers, on the radio or on the floor of this House until it's proved beyond reasonable doubt that he is guilty as charged.

I do not know Swanson; I have never met

[ Page 3682 ]

Swanson. But I feel that at the present time we, collectively in this House, simply must do something to rectify the damage we have done to him. His reputation has been attacked. It is said that there was a private investigation done into his activities. It is said that these results will never be disclosed. Apparently, none of these results are available in the Minister's office. Apparently, none of the results of this are available within the department. Apparently, some other individual is involved, a person presently within the civil service. Let me digress for a minute on that, Mr. Chairman.

Is this person, who has to be protected, being protected because were the information made available, he also would be fired? Is this person therefore in jeopardy and under threat of dismissal if this information is released? If that is the case, then this man is subject to blackmail. He's a civil servant. His whole future, apparently, will be jeopardized if information is made public. The man somewhere in the organization is obviously amenable to blackmail by any individual or individuals who decide to release information about his activities prior to 1971. I have no idea who this can be, but we have here, essentially, a witch hunt.

This man, Swanson, obviously deserves a full apology. The information that is or is not available about this second man is clearly required to be made public and divulged, at least, to the Minister — perhaps, indeed, a judge should look into these matters.

It's not fair to use Star Chamber tactics. It's not fair to have private investigations carried out, people fired — because that's clearly what took place — people released, and the dates were convenient. But obviously, the implication is he should have been fired, and, obviously, the implication from what has come up is that he should have been fired earlier on. So we have two problems which are left as a result of yesterday's accusations. The Minister said yesterday in the House, and I'm quoting the Colonist newspaper again, the Jim Hume story referred to earlier:

"All King could say to the quotes from Swanson's report was that it was a confidential, internal document and that it would be interesting to find out how it came into Phillips' possession.

"Was this document released by a man who is open to blackmail? Was this document released by a civil servant or person working for the railroad, whom, if information were available about his activities before 1971, the Minister, or vice-president of the railroad would be required to fire? Is this civil servant being subject to pressure, a conflict whereby he must release information even though it violates his integrity as a civil servant?"

I feel, Mr. Speaker, that apologies are due to Swanson. I have no knowledge of what Swanson did with respect to his department, except what comes out of the Department of Commercial Transport's annual report. He was responsible for railways, pipelines, industrial transportation and aerial tramways.

The Deputy Minister, Mr. McLean, makes note of his retirement on page 7 of the annual report in 1971, which went in over the signature of the Minister. I wonder, Mr. Chairman, about the propriety of a Minister withholding from successors information which either should be made available or which should be buried for ever, but releasing information of this nature and at the same time stating that it's to protect somebody else who obviously must be under some cloud or must be subject to some accusation if the full story is known simply is impossibly bad form. We just cannot allow that to continue.

You can't have it both ways. Swanson's name first came up in this House when the Hon. Leader of the Opposition (Mr. Bennett) referred to his report on Tuesday, June 10.

MR. BENNETT: It was on Friday.

MR. D.A. ANDERSON: Okay. It occurred on Friday in the first week in June, and on Tuesday, June 10, six pages were read into the records, essentially in praise of Swanson, essentially pointing out what he had said. Later on, apparently, Swanson was no longer useful, and Swanson has been essentially, in terms of professional reputation, destroyed.

I know nothing about the charges. I don't know what any judge or any royal commission would find, but until such time as any man or woman is adjudged guilty, until such time as he has had an opportunity to see the charges against him and meet them if he can, the man should be left with his professional reputation standing intact.

Mr. Chairman, constantly in this debate we have had attacks — attacks on companies, attacks on accounting firms, attacks on whole professions, attacks on engineering firms such as Swan Wooster, attacks on individuals such as Swanson, Broadbent, and others. We've attacks now on the whole civil service.

I think it is time for these attacks to cease. If indeed there is information which is pertinent, it should come forward, but this constant attempt to attack, attack, attack, and besmirch names, raise new issues, red herrings, be they the Canadian dollars's value on the international market or an attack on the credit rating of the province, is getting to be quite sickening.

We cannot continue in this Legislature, when an issue of this nature is raised, to have the matter

[ Page 3683 ]

under discussion ignored by constant attacks, which up to now have turned out to be totally inaccurate, on other individuals, other companies, other professionals, other professions or, indeed, the civil service.

If there is information — hard information — let it come forward. When I heard the Hon. Member for Boundary-Similkameen (Mr. Richter) explain his remarks, I was indeed compelled to speak up again. Clearly, if indeed his second statement yesterday is accurate, he must come forward and provide information to the government. Clearly, if he allowed the government to continue to employ a person whom he believed to be untrustworthy, and did nothing to allow the government to know whether a person was trustworthy or untrustworthy, he has been delinquent in his duty to this House.

[Mr. Skelly in the chair.]

I wonder, Mr. Chairman. We have a great sign in Vancouver and it says: "Social Credit or chaos." I wonder, Mr. Chairman, whether that is a threat. When they can't have Social Credit what they are creating is the maximum chaos they can. They attack our credit rating, they attack the Canadian dollar, they attack the civil service, they attack whole professions — the whole accounting profession, they attack engineering firms, they attack individuals and they fail to back it up!

It is similar to the statement made in second reading. If indeed this government is returned, it was said, maybe the official opposition would vote against this bill. They don't judge it on its merits; they judge it on what the people will do. They'll punish the people if they don't decide exactly as they would like them to decide in terms of a future election.

Well, I for one say it is time for a halt. It's time for a halt to these individual attacks. It's time for the Member for Boundary-Similkameen (Mr. Richter) to either apologize to Swanson or come forward with information.

In any event, it is time for him to come forward with the name of this man he is protecting and therefore will not give Swanson a fair hearing. The idea that somehow there is a man being protected, without any indication of from what he is being protected, just is not good enough in this House.

I differ with the government. I don't wish to see the government returned. I think that Hansard shows that the bitterest debates in this Legislature in the last three years have been between myself and the Premier of the province. But if the people decide to re-elect the government, that is their decision. We certainly will not carry out a deliberate campaign of creating chaos to prevent the government from running this province.

I find myself disgusted. We now have this latest charge. If Swanson deserved to be fired, we deserve the information. If he did not, he deserves an apology. This may not seem very important to the Member for Langley (Mr. McClelland), but if we cannot protect the individual rights of citizens, if we cannot protect the good name of companies which have done nothing, if we just for political advantage besmirch anyone in any position in this province, then we have sunk to a low where indeed the people of the province should elect none of us again.

I find this thing here on the Swanson case and on this unknown person who is being protected the absolute end in terms of cynicism. We cannot have that type of thing carried on. I urge the Minister to reread the words of the Member for West Vancouver-Howe Sound (Mr. L.A. Williams), and at the termination of the Broadbent-BCR lawsuit to have a proper inquiry — a royal commission or judicial inquiry — into the entire matter of the BCR.

HON. MR. KING: Mr. Chairman, I want to thank the leader of the Liberal Party for what I feel is a very responsible position. Certainly we have our political differences. That is what we are elected for. But with those political differences and overriding those political differences should be a commitment to the best interests of this province. Certainly the British Columbia Railway is an inherent part of the economic structure of the northern section of this province.

I want to remind the Members of the House that, as I recall it, when the Premier made his speech and tabled the documents that have been before the House now for over a week, I believe at that time (I haven't got the exact reference to Hansard) he did indicate that when certain litigation was completed, he would be considering whether or not there should be some form of inquiry into this whole question of the B.C. Rail operation over the past number of years. I think that is a matter of record with the House.

It is a matter of regret to me that I read the article to which I referred earlier in last night's Daily Colonist where it was stated by the former Minister that there had been a conflict of interest in Mr. Swanson's duties with the government previously. Yet I find in the report of the Department of Commercial Transport, filed with this House, signed by the former Minister, that that gentleman had retired and there was an almost laudatory comment made after his retirement was noted, saying: "After a combined total of more than 66 years of service to the Province of British Columbia, Mr. Swanson and Mr. Bowering, professional engineers, retired." Certainly there was no indication, no hint, that there was anything untoward in the relationship.

I think the leader of the Liberal Party has put the duties and responsibilities of Members of this House

[ Page 3684 ]

very succinctly and I think all Members should pay attention to his admonition.

MR. BENNETT: Mr. Chairman, it is very interesting seeing people seeking comfort wherever they can find it these days and putting their own interpretation on remarks that are clearly spelled out in the records of this House and trying to create attacks where there were no attacks, assumptions where there were no assumptions, but one thing is very clear: this debate was led off by the Premier of the province and the president of the railway. It was led off in a highly political way after months of hearing both from the Prime Minister of this province and the Minister of Economic Development (Hon. Mr. Lauk) that we were going to have a scandal, perhaps involving fraud. And of course the Second Member for Victoria (Mr. D.A. Anderson) always chortled with glee when they brought up past government Members' names. Past directors of the railway were fair game for him.

For a Member that has such a history of personal abuse to stand up in this Legislature and try and keep it holy is the last straw in this Legislature. He invented the personal attack.

What I would like to say is that this whole debate has never had an opportunity to adequately discuss the financing of the railway, because the whole introduction of this bill was a political attack tied around the presentation of the rewritten financial statement. That had followed months of predictions by the Premier and president of the railway that he was going to unfold a scandal. In fact, the Economic Development Minister (Hon. Mr. Lauk) used the word "fraud," a word he hasn't dared use since, a word that neither the Second Member for Victoria (Mr. D.A. Anderson) nor the Minister of Labour have used in this debate.

He introduced at that time names of former directors of the railway to thunderous applause from the Second Member for Victoria and thunderous applause from their benches. That was the first introduction of personalities and people who couldn't defend themselves: past Ministers and past directors. Indeed, we're in an arena that's political; it's an arena in which once you're involved, I suppose you're always involved. But this selective bit of integrity that comes from time to time is just astounding to this side of the House, particularly that this bill right from day one in this debate has gone off in the highly charged political atmosphere of half-truths and misrepresentation introduced by the Premier and the president of the railway.

His charges, Mr. Chairman: let's start with them. I can quote from the Premier when he introduced the bill. He says: "As with the Columbia River Treaty the people of British Columbia are going to learn the true facts of the cost of the recent construction of the British Columbia Railway, costs which had to be borne for many years by the public of British Columbia." The Premier referred to the Minty report and the Price Waterhouse report to suggest that the auditing on the BCR did not meet normal accounting practices and the limited pre-engineering work resulted in poor estimates and consequent overruns.

If you read all of the reports that were presented to this railway — all of the reports which were presented by the Premier and some of the reports which were not presented — you get an entirely different picture. What we have is a political presentation with selective reporting, selective reading to sell a particular political position. Out of that we even had selective reading by the Minister of Labour last night in finishing off the debate in attempting to tell this House that these were the words — I quote from the Blues — that were contained in the financial statement. This is what he said was contained in the financial statement: "As described in note 2 of the notes to the financial statements, a review of the past accounting policies of the company has been carried out. It was concluded that the financial statement as of December 31, 1973, on an overall basis did not present fairly the cumulative operating results of the railway" and so on.

He left out two important words that change the whole intention of that paragraph. It implies that the report of the independent auditors said this, but he left out the very crucial words after "it was concluded." He left out "by management." By management.

AN HON. MEMBER: Shame on you!

MR. BENNETT: He purposely left that out of his report to the Legislature last night. The Minister of Labour purposely left it out because it changes the...

MR. CHAIRMAN: Order, please.

MR. BENNETT: ...connotation that was contained in this financial statement.

MR. CHAIRMAN: Order, please. The Member is imputing improper motives.

MR. BENNETT: Last night I brought it to his attention....

MR. CHAIRMAN: Order! The Member is imputing improper motives to the Minister of Labour in suggesting that he deliberately left out words in order to mislead this House. I would ask the Member to withdraw.

MR. BENNETT: Mr. Chairman, I'll withdraw.

[ Page 3685 ]

The Minister selectively quoted from the financial statement — selectively quoted, which distorted the meaning and intent of that statement by the auditors. It's this type of selective reporting that has happened right from the first presentation of the Premier and president of the railway to all of the speeches of the government over there. It is that type of half-presentation that has distorted even the intent as reported by qualified people in the Province of British Columbia. There was even a distortion in attacking and bringing to light over and over again the former auditors of the railway, who also were the auditors of the Vancouver Stock Exchange.

HON. MR. KING: Mr. Chairman, a point of privilege. The Member of the official opposition has made an improper statement and an unfair allegation and completely misquoted the report of the auditors. That report of the auditors is tabled in the House. It reads: "It was concluded that the financial statement as of December 31, 1973, on an overall basis did not present fairly the cumulative operating results of the railway." No mention of management, Mr. Chairman. The Member had better read the report of the auditors.

MR. CHAIRMAN: Order, please. The Minister can answer when his turn comes.

MR. BENNETT: In the financial statement it says: "It was concluded by management....

Interjection.

MR. BENNETT: Right on the financial statement — within the financial statement tabled by the Premier. Very important words — "concluded by management." Now, Mr. Chairman, "by management." That's a very, very important phrase contained within the financial statement.

I'd like to go back and say it was brought up, it was drawn out time and time again, or implied, or the impression was left, that Buttar & Chiene, the internal auditors, were somehow the comptroller of the company and an employee of the B.C. Rail. That's not true. The comptroller was a Mr. Miller, and the outside auditors were there to audit the books on an outside basis.

I think it should be clearly stated that the chartered accountants of British Columbia, as they do elsewhere, have an association that polices their accountants and makes sure that the clients get a fair and proper audit. From time to time, Mr. Chairman, they have to discipline one of their members when they do not get an audit as was stated by one of their member firms. It happens from time to time, and it happened here. It happened, as it says, before their committee. It happened when they did the investigation for the audit of this statement of the B.C. Rail for the year ending 1972. It was done while the Minister of Labour was a director. That was the incomplete audit. They don't state any other years. They state 1972. That's what it states in the report that the Premier filed in this House.

Now when we talk about the facts, let's take a look at some of these reports, because as revealed in the 1974 annual report prepared by Peat, Marwick the alleged auditing deficiencies centred around the formula used to compute depreciation. As the Peat, Marwick statements reveal, it was essentially the changes in the depreciation formula which resulted in the restatement or BCR earnings. That's a point we've been trying to make. The Price Waterhouse study states:

"While existing accounting and reporting practices may have been adequate to meet the requirements of the railway management in the past, with the anticipated growth and diversification of the company there is now a clear need for change and improvement."

Certainly, because up until this government took over, the railway was growing. Like a small business that's expanding it was growing. And changes must be made; they're ever made. That's why you have constant appraisal and upgrading, certainly. But we've seen what's happened to that growth between 1973 and 1974. No growth in revenues. No growth, but a tremendous growth in expenses so that the first time ever this railway has expenses higher than its revenue. Nothing to do with depreciation. Nothing to do with the extension of the railway, but a lot to do with management, a lot to do with wage settlements, a lot to do with direction initiated by the directors, the new directors of the company.

AN HON. MEMBER: Or lack of direction.

MR. BENNETT: Or lack of direction. Price Waterhouse further states: "Our principle conclusion, stated briefly, is that the financial control and reporting of capital expenditures in the British Columbia Railway is inadequate and should be improved as soon as possible." They go on to say: "This is not meant to imply that there has been improper use of railway funds in the last." That's what Price Waterhouse said.

They made no allegations. They gave a report that has been selectively presented to imply impropriety, an implication and a charge that surrounded the whole presentation from the government on this bill to extend the borrowing powers of the railway. Selective quotations from the president of the railway, Mr. Chairman. There may be opportunities for improvement of financial practices on the railway, but nowhere was there any impropriety suggested by the Premier.

[ Page 3686 ]

Now in the matter of depreciation, I tabled the McPherson study. The McPherson study clearly showed that depreciation formulas are a very subjective matter. They vary between railways. They vary between methods by which railways are extended. They vary between the way railways are run and what use they are put to. They vary between construction standards. They vary between the philosophies on extending a railway related to possible financial return. They don't vary illegally. They vary because the businesses vary. They're all railways but they vary in the type of load they're to carry, cargo they're to carry and how they're to fit that economy. When it's a resource railway, they're built to resource railway standards with resource revenue in mind. When they're mainline like the CPR or the CNR, they're built to carry passengers and a lot of finished product.

This railway in British Columbia, unlike the CNR, hasn't needed massive subsidies every year. It has operated on a cash flow basis right until now, and within the means of its revenue. For the first time ever, in 1974 and now in 1975, we're asked, through the borrowings of the railway, to subsidize the cash flow for the operation. This is a dramatic change, and the responsibility must be laid at the feet of the present management of the railway — the directors, the management and the philosophy by which that railway is operated and extending now.

We know that there has been overruns on the costs of extending this railway, yet, clearly, we see a report where the whole philosophy of that railway's extension was changed by existing management and directors. We saw a report that was tabled in this House last night that says they were going to change it to mainline standards — four different areas of that report. Certainly, this is a change: a change in philosophy and a change in costs and a change in the financial capability of that railway to pay its way. But who is responsible for that? The existing management and the existing directors.

We had some questions in this House regarding the philosophy of directors of the railway, and whether they are allowed to do business with the government or with the railway. It was asked last Friday, and it was asked all of this week in a very, very straightforward manner. It was asked because the financial accounts that were tabled in this House last Friday, even though they were late, show that one of the directors received $3,000 in salary and wages, as he should. It also has an area in that same section, under salary, wages and travelling expenses, for travelling expenses.

But in another section, there's a section called schedule of payments to corporations and individuals for supplies or services rendered. This deals with all the people who supply goods and services to the railway, and the same name crops up with an item for $766. We asked the question of what it was for. We asked the question last Friday — whether it was a conflict of interests or whether it was a mistake. Last Friday the Premier was so anxious to get on the plane, he never bothered to reply. From that request and the lack of response from the government, we have seen that situation develop into a series of charges and counter-charges in this House, but a question that should be answered.

During this debate we have seen the very real issue of a financial statement contained in a prospectus in New York being at variance with a financial statement as presented in the Legislature. We have questioned the timing of the Premier who had control over the timing of that prospectus and the timing of this statement in the House. We have questioned as to why that prospectus was not withheld.

That's not just my opinion, that opinion has been expressed editorially and in financial circles where the propriety of securing and obtaining loans takes place. Whether you agree with where we have to borrow money, or if we have to borrow money, you must agree, we must deal within the framework of the confidence of the areas we have to deal with. It's been seriously questioned; it's been questioned within our province and it's been questioned outside our province.

The First Member for Vancouver–Point Grey (Mr. McGeer) felt so concerned about it yesterday that he called for the resignation of the president of the railway, called for his resignation in absentia, wherever he is.

We have heard a debate where there has been selective reading, selective reporting. We've heard a debate where all Members of this House are concerned with the future of this railroad. We've heard a debate where it's been identified that the loading factor, the reason for this railway being extended in the first place, the minerals of the northwestern part of this province.... The feasibility and viability of mining those products, where there are minerals, has been threatened by the change in government attitude, by the introduction of Bill 31 and by the government's philosophy that has scared off the investment capital.

We have had no information offered to this House, although we've sought it, as to which firms are prepared to go ahead and develop those resources. Who is going to develop them? What are the projects? What will the daily, weekly, monthly, yearly loadings be? What will the economics of this railway be?

They're asking for a blind extension. We can't believe the feasibilities that went before. Right in one of the government's own reports, which they tabled, is a very significant statement. That statement is that, yes, the possibility of minerals is there, but along with the railway's policy of extension for extraction must be a government policy that encourages the

[ Page 3687 ]

development of those resources, and the two go hand-in-hand.

Yet, Mr. Chairman, there has been no attempt by the Premier when he was here, or by the Minister of Labour (Hon. Mr. King) in carrying this debate now that the Premier has fled, to tell this assembly that there is a change in policy, to assure this assembly that those resources will be developed, that the railway will have something to carry. We are asked to follow and develop this railway on a blind trust.

I have a commitment to that railway because I know what that railway has done for this province. My party has a commitment because many of us here represent communities that depend on that railway for their economy. All of us in this House represent communities of the whole province who benefit because of the resources that are transported on that railway. It built the economy of this province. Until it developed a beginning and an end, this province was not together. We had a community on the coast; the rest lived in isolation and our wealth was in isolation from the rest of this province. But that rail line drew this province together economically, just as the highways, poor as they are now, drew us together for communication as people.

We are committed to that railway being extended, but we need assurance. We must have the assurance that the government will change its policy to make sure the development will take place. We must have some answers and accountability as to why, for the first time, expenses are greater than revenue. We must have some rationalization of the economics that demand the change for going to mainline standards ahead of the ability of the railway to pay. We must have some rationalization over and above the tradition of extension that built the line, knowing full well that even constructing to mainline standards in the initial instance requires constant upgrading for years after as road beds sink in unsettled terrain, and as the freight develops and we change to heavier rail.

You don't build an elephant cage to hold a mouse — you wait until you get the elephant. It is the same in developing a railway. You develop a railway for the expected freight, and you upgrade as that freight loading increases.

I know it is hard for the Member for Alberni (Mr. Skelly), who has always known conflict with capital, to believe that somehow somebody has got to pay it back, and it should be spent rationally and wisely. But here we shouldn't be antagonists because that capital belongs to all the people of British Columbia. It should be spent wisely, and it should be developed with some plan in mind.

For more than 20 years, all the years of this railway, it has had a philosophy of development. It has had good years and bad, but by and large, it has served the province well. The changes that are now being made are dramatic from the style of this railway being developed before, and under various governments. The changes in philosophy of construction, depreciation, management and costing, the changes in the government of the day, and changed philosophy in providing that loading and expected freight, have changed the economics of this railway.

I have said, and I agree, that there shouldn't be charges and counter-charges, and earlier this week we called for a judicial inquiry. I still believe that a judicial inquiry, with the opportunity to see all the reports, an opportunity to interview all the witnesses, an opportunity to arrive at a judicial conclusion, will be even more conclusive than any court case than may be there.

But I do question one other attitude of the Premier, and this is: in making this political presentation to this Legislature, I would seriously question whether the presentation of some of the reports, the style in which they were presented and the way in which they were asked to be got, particularly the Hanrahan and Wakeley reports. I question whether, in his enthusiasm for political attack, he hasn't hampered the case of the government of B.C. and the British Columbia Railway in that court case which he mentioned, and which is well-known to all of us. I would hope that in his enthusiasm for a political kill he hasn't prejudiced the position of the British Columbia Railway which belongs to the people of British Columbia.

AN HON. MEMBER: Settle down.

MR. BENNETT: I would hope, Mr. Chairman, that in that resultant court case it doesn't come out that the Premier, against all advice on presenting those reports in that manner, has prejudiced our case, because we are all British Columbians, and we will all have to pay the bill.

I would like some assurance from the Minister of Labour that he, or whoever is in charge, will consider a judicial inquiry. We don't want a public witch-hunt, we want a judicial inquiry. I hope we can have it.

We will not withhold supply from this railway, nor will we retard its development. We want answers, but we want to see the railway go ahead. We want to see those resources developed. We want to see the economy of British Columbia approved. We no longer want to see 100,000 of our people unemployed.

We no longer want to see the massive losses that have been built up on this railway last year and this year that we are in now — $32 million lost last year, more this year.

Mr. Chairman, we'll support this bill, as I said. We have reservations. Our reservations are in our confidence in the government, both in their resource policies and in their policies in directing this railway.

It is not going to be easy to solve, but before we

[ Page 3688 ]

pass it in just a short time, perhaps the Minister would answer some of the questions that have been posed since last Friday in this House.

MR. G.B. GARDOM (Vancouver–Point Grey): I would just like to make this observation, Mr. Chairman. There is absolutely no question that the method in which the B.C. Rail accounting, engineering and estimating procedures that have been brought before this House was primarily for political purposes. I'm not condoning or absolving the past administration or the present administration from any excesses there may have been, be they administrative or executive excesses.

What I have asked for, not only in this debate, but way back in November of last year, after the Minty report but before the B.C. Hydro prospectus, and I believe also, Mr. Chairman, before the commencement in this province of the lawsuit that has been taken against B.C. Rail by one of the contractors concerning only one piece of line in this huge endeavour, was that the matter should have been dealt with by an impartial judicial inquiry under the Public Inquiries Act I requested then and have requested again in this debate.

This House has heard for many days selective statements and selective reports by each side of the House, and I don't think it's been right, I don't think it's been fair. Names have been put into public disrepute by each side, and we have been conducting, in this Legislature, unfortunately, a war of innuendo — all by Members enjoying legislative immunity. But the people who have been spoken of have not been able to enjoy that privilege. We don't find suits being started against these individuals by the government or by anyone else, if they think they have been improperly maligned.

The government could have initiated a public inquiry a long time ago, it should have initiated a public inquiry a long time, and it can initiate a public inquiry right away. I'm not suggesting for one second, Mr. Chairman, that the mere existence of a writ and the initiation of a lawsuit in this province can stifle a judicial inquiry under our Public Inquiries Act.

The people in this province have not received their value from this debate. There has been no mechanic for the general public to receive the true facts independently. So far in this long debate there has not been adequate evidence to the general public of the true need for the moneys that are requested under this bill. The House has not been furnished with economic projections, social projections or environmental projections of the need for this tremendous amount of money called for.

As I say, and would reiterate, Mr. Chairman, when the Premier in his opening remarks was highly political, it was a matter that was well prepared for him — we noted him reading from his podium, which is certainly not the style of the Premier of this province. We noticed that he had a well-documented summary of evidence, most of which was old-hat stuff, and it was sitting in the desk drawer. That material was before him, and he had a responsibility to come in with an independent judicial inquiry.

On a request from this side of the House that he do that, once again he sort of put up his hands and he said there was a lawsuit underway at the present time. There is nothing to prevent the government initiating an independent judicial inquiry today, that lawsuit notwithstanding.

The interest here is the public interest, and the public interest is not being served. It is not being served at all. All we have had, as I say, is innuendo upon innuendo from each side of the House. Facts, taken at their face value, clearly indicate measures that were improperly taken.

Everyone is entitled to the other side, to the other position, and everyone is entitled to a fair trial. The people who have been accused have not received a fair trial and the public have not received true and fair value.

The Premier chose to initiate this as a political mechanism. I think he would have been better fulfilling his function as the Premier of this province if he had seen fit to call a judicial inquiry. He could well have done that upon receiving the Minty report. There was enough within the Minty report to call for an independent judicial inquiry. The Hon. Members of the back bench know that. We haven't heard too many of them arguing against that fact. The only person who has stated on the government side that it is not possible is the Premier, and he raised this spurious suggestion that there was a lawsuit going on and that would prevent it. That's a smokescreen. That is absolute nonsense.

Section 1 approved on the following division:

YEAS — 35

NAYS — 2

[ Page 3689 ]

Hon. Mrs. Dailly requests that leave be asked to record the division in the Journals of the House.

Title approved.

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

Motion approved.

The House resumed; Deputy Speaker in the chair.

Bill 27, British Columbia Railway Company Construction Loan Amendment Act, 1975, reported complete without amendment, read a third time and passed.

MR. D.A. ANDERSON: A point of privilege. Mr. Speaker, a former civil servant has been accused falsely of having been fired from the government service. I would like with permission of the House to read into the record, so that at least there will be some information from him, the report of a conversation I had with him some 10 minutes ago. I would request unanimous consent to do that.

Leave not granted.

DEPUTY SPEAKER: The matter of privilege will be taken under advisement.

HON. MRS. DAILLY: Mr. Speaker, we're proceeding now with second reading of bills. Second reading of Bill 97.

ISLANDS TRUST AMENDMENT ACT, 1975

HON. J.G. LORIMER (Minister of Municipal Affairs): Mr. Speaker, basically, the principle of the bill is to allow the trust to hold lands in its name. At the present time it is unable to accept gifts of real estate and also personal estates and to hold anything in its name. The provision here allows the trust to be a corporation for the purpose of holding land and it allows the trust to carry on as an individual might do. In other words, it does have the power to buy or sell land as well. However, the basic purpose here and the need at the present time is for power to hold the land because we do have an offer of property which we would like to look into. At the present time it probably has to be put into the Department of Lands.

Most people don't want to donate property as a trust to a department of government; they would far rather prefer to donate it to a trust in which there would be some control and that the trust would be bound to exercise control of that particular land or personal property in conjunction with terms of the trust. It may be to hold the property in perpetuity or it might be for a given purpose or given length of time or whatever, and that could be set out in the trust documents.

I believe there are some housekeeping sections. There was an error in section 6. It's to change the wording of one of the Acts referred to. I think that basically the principle of the bill is for the purpose of holding the land.

Interjection.

HON. MR. LORIMER: Section 3 of this bill. There was an error in the original bill in reference to the name of a particular Act.

I move second reading.

MR. H.A. CURTIS (Saanich and the Islands): Speaking in second reading on Bill 97 which amends the Islands Trust Act introduced last year — and this is Islands Trust day I suppose inasmuch as this morning we discussed in committee of supply a number of other matters relating to the trust during the estimates for the Minister of Municipal Affairs.

The Minister's comments notwithstanding, with regard to individuals transferring land to the trust, and perhaps not feeling very warm towards the idea of transferring land to the Crown provincial, I still wonder if the amendment is necessary — that is, the main amendment contained in the bill — and if it would not be preferable to let the acquisition of land in the islands or the transfer of land be handled through the general provisions of the Land Act.

Clearly the Minister and I hold differing views on this inasmuch as he has indicated that this might be a little more palatable to those individuals, survivors in a family situation, who would like to leave the land for public use and enjoyment later on.

It's in respect of that main point, therefore, Mr. Chairman. It's somewhat of a puzzling amendment. If it is taken at face value as stated and as referred to by the Minister, it could be a reasonable addition to the authorities vested in the hands of the general trustees. But will bills before us such as Bill 127 which will be coming up at some other time, which clearly gives a Minister and his senior people such tremendous authority and power, I think we have to look very carefully at all legislation which is presented by this government and ask: is this bill really necessary?

The Crown does have the right to accept, under the Land Act, as has been indicated earlier. There will be some points, I think, to be raised in committee state. I note the Minister's comments with respect to section 3 which merely corrects an error from last year.

I would also point out that this bill has proved to be a repeat of a rather awkward situation for the Minister dealing with the Islands Trust. A year ago

[ Page 3690 ]

when he introduced the main bill, he was caught out in the corridor in terms of stating that there was something in the bill which was not...and I think he had the same unfortunate experience this year. So for his own well-being and comfort, I would suggest that perhaps when he brings in another amendment to the Islands Trust Act, he....

HON. MR. LORIMER: There'll be no more.

MR. CURTIS: There will be no more, the Minister says. Well, that's an interesting and thought-provoking comment from the Minister on the trust.

But the comments the Minister makes in the corridor and the items contained in the bill are sometimes at variance, and that is also unsettling. But we shall have further questions, I'm sure, in committee.

MR. G.S. WALLACE (Oak Bay): The content of the amendment is whether or not it is desirable for the trust to be able to buy and sell land rather than just inherit land by donation from the land owners. If there's one subject that's got this government into all kinds of misunderstanding since it took office, it has to be its policy towards land. It is a little disturbing that the Minister has stated that he never intended the amendment to give the government or give the trust the power to purchase land. It was simply intended to make it possible for the trust to have land or property donated to it.

The Minister went on to say in a news report dated June 11th that although he had originally instructed the department that the bill should not have the power to buy land, he would probably need that power in a couple of years. So it will remain in the bill. If we think of the basic concept of the initial legislation, Mr. Speaker, which was to try and bring about the best and optimum orderly development of the Gulf Islands, is seems strange that we might not need power to acquire or buy land now, but the Minister envisages that in a year or two that power might be desirable.

I wonder if in winding up second reading the Minister could tell us what kind of changes are going to occur in the next two years which would make that power desirable in 1977 when probably he feels it is not necessary in 1975 or within that kind of time-frame.

There is no doubt that I think all of us in the House voted in favour of the original bill for the very sound reason that this is a priceless area we live in, and the degree to which we want to preserve the islands in their best possible environment is sound. As I recall, the whole House supported the original bill.

Giving this additional power to the trust to buy land does raise the question of whether the government really wants to have much-extended powers through the trust. Really, I wonder if that extended power is necessary. In particular, I want to know why it might be necessary two or three years down the road when the Minister really doesn't think it is necessary now.

If he can convince me that the whole purpose of the amendment is to further improve the functioning of the original legislation, then of course we will be happy to support it. But I would like some more definitive explanation that we have had up to this point.

MR. L.A. WILLIAMS: I agree with what the Member for Oak Bay has just said. I wonder if the Minister, in closing the debate, would indicate whether the trust, now assuming the capacity and powers of a corporation, isn't also going to assume its obligations. With respect to land which it may hold, will it pay taxes?

MR. N.R. MORRISON (Victoria): Mr. Speaker, in closing the debate I wonder if the Minister could also explain to us.... I think the bill is perhaps a bit of a misnomer because it would lead you to believe that the Islands Trust Amendment Act, 1975 would only hold land which was within the Islands Trust itself — that is, in the area of the Islands Trust. Nowhere in the bill do I see that that is defined. The inference I would get is that you could own land and buy and sell anywhere — not only within the province, but anywhere.

It talks about some of the purposes of the fund in referring to section 2A where it says a "gift or will that is not subject to terms, conditions, and trusts that are inconsistent with the purposes of the fund." But nowhere does it tell us what the purposes of the fund are. I think that perhaps the bill, although the Minister may feel it is necessary, should not be called the Islands Trust Amendment Act. It may be a trust Act of some kind, but it certainly broadens the powers way beyond what was envisioned in the Islands Trust Act in the first place. I wish that he would give us a pretty thorough explanation of what the purposes are that are referred to but not defined.

DEPUTY SPEAKER: The Hon. Minister closes the debate.

HON. MR. LORIMER: A year ago, when the Act was originally brought in, it was felt that there was no need for powers to hold real estate or other types of personal property, that it could be held elsewhere. There are a number of areas in government which can hold land. We have found in the past year that people who were prepared to give donations objected to giving them to the government as such or to a department of government. They wanted to give it to

[ Page 3691 ]

the trust and wanted that understood in terms of a trust in which they would set out in writing what the terms of this particular trust were. So the idea was at that stage then to give the trust the power to hold personal and real property.

I will admit that I understood the amendment to be only to hold land. But when it came through the machine, it was of the power to buy and sell as well. I said that we wouldn't need that for a couple of years, and the reason for that is this: we expect that the trust will also receive donations of cash. We expect the trust will receive donations of total estates. Those total estates may be within the trust area in total, or maybe part of them will be outside that trust area. The funds may be in a bank account in Victoria or somewhere else.

The reason I said we wouldn't need the power to buy or sell for two years was basically on the fact that we had no such offers at the present time. When we got the offers and had those funds, we could then amend the statute a second time and take care of it. We have no reason at the present time for buying and selling of land. I can foresee that the need could well arise within a number of years. So that is why I said that we would present the bill to the Legislature in the way it came out. The Islands Trust will pay taxes, full taxes.

MR. McCLELLAND: What's the purpose of the fund?

HON. MR. LORIMER: I would suggest that the purpose of the fund is to develop and look after the islands, to acquire land for possible park purposes and for wilderness areas. It's also to look after the question of looking into water supplies and make studies in the area. There have been very few studies made up to now, and those have to be done. These grants will go in accordance with the terms of the trust. In other words, when they give money, they will say what that purpose is for, so in each case it might be different as to what the funds will be for.

Interjections.

DEPUTY SPEAKER: Order, please. There will be ample time to ask questions in committee. I would ask the Hon....

HON. MR. LORIMER: So I would suggest that the purpose could well change from gift to gift as to what the cash was wanted to be used for and so on.

I think I've answered most of the questions. I can verify the fact that at the present time there's no property there that we are looking to buy, and we have no funds to buy if we were looking to buy. I now move second reading.

Motion approved.

Bill 97, Islands Trust Amendment Act, 1975, read a second time and referred to Committee of the Whole House for consideration at the next sitting after today.

HON. R.M. STRACHAN (Minister of Transport and Communications): Second reading of Bill 101, Mr. Speaker.

INCOME TAX AMENDMENT ACT, 1975

MR. D.D. STUPICH (Minister of Agriculture): Mr. Speaker, the Members will recall during the presentation of the budget speech that the Minister of Finance forecast certain changes in provincial tax treatment of corporations. Bill 101 is the delivery of those promises.

There are several amendments. One of them increases the tax rate for large corporations from 12 per cent up to 13 per cent, but reduces the rate for small corporations, as defined by the Income Tax Act, from 12 per cent down to 10 per cent. In keeping with our policy of assisting small business, the tax rate, as was forecast, has been reduced, Again as an implementation of government policy, our belief that royalties are a cost of production, the bill does provide that royalties shall be deducted from corporate income in calculating the British Columbia portion of the income tax, and also provides that the additional income arising from the deemed selling price of gas — in effect, another royalty — will also be deducted in calculating the corporate income tax.

A further amendment to the logging tax allows for logging tax paid against corporate income taxes, an amendment so that the credit will be kept in line with the current income taxes payable, as provided for in this legislation.

The renters' benefits are scaled so that those on lower income will get additional benefits from this particular proposal, again an amendment to the Income Tax Act.

Finally, some changes that were requested by the federal government in keeping with our agreement for administration of the Income Tax Act. They have asked that some changes be made in the calculation of foreign tax credits. There is one further amendment to advance by one month the final income tax instalments paid by large corporations.

Mr. Speaker, on behalf of the Minister of Finance, I move second reading of Bill 101.

DEPUTY SPEAKER: Before the Hon. Member proceeds, I would note that much of the discussion probably should take place in committee. However, bearing that in mind, I would recognize the Hon. First Member for Victoria.

[ Page 3692 ]

MR. MORRISON: Mr. Speaker, you just took my speech. That's precisely what I intended to say — that since there were a number of subjects in the bill, we would be discussing them in committee and not at this point in second reading.

DEPUTY SPEAKER: The Hon. Minister closes the debate.

HON. MR. STUPICH: Mr. Speaker, on behalf of the Minister of Finance, I now move second reading of Bill 101.

Motion approved.

Bill 101, Income Tax Amendment Act, 1975, read a second time and refereed to Committee of the Whole House for consideration at the next sitting after today.

HON. MR. STRACHAN: Second reading of Bill 108, Mr. Speaker.

MOTOR-VEHICLE AMENDMENT ACT, 1975

HON. MR. STRACHAN: Mr. Speaker, this bill is similar to a number of others. It contains a number of amendments, and would also probably better be discussed during the committee stage.

It does, however, allow by proclamation the moving of the handling of dealers' licences from the motor vehicle branch to the Consumer Affairs branch, where both the Minister of Consumer Services (Hon. Ms. Young) and I agree it more properly belongs because it is a commercial operation.

It allows for the giving of dealers' licences from the motor vehicle branch to the Consumer Services department because it is a commercial operation, and it allows for it to be done by proclamation.

There are some other amendments. The Members will remember some comments made by judges on the not less than $250 fine for not having a driver's certificate. That has been changed. It changes the definition of bicycle. It gives a little more scope to school patrols.

I will be introducing a small amendment later on which adds "or adjudged to be a juvenile delinquent under the Juvenile Delinquents Act (Canada), by reason of..." and so on. It is a very small amendment which I will be introducing in committee stage.

I move second reading.

MR. GARDOM: I'm delighted to see that the Minister refers to the removal of that extremely harsh, preposterous section wherein there was an automatic fine of $250, or in default, three months imprisonment or both fine and imprisonment for an individual not having a driver's certificate in this province. This created a great deal of hardship for a large number of people. I do hope that the Hon. Minister, in closing the debate, will give his assurance to the House that any people who have fallen into the preposterous net that was developed by this section, and have paid those fines, will receive order-in-council assistance and the fines will be remitted to those individuals. It was a preposterous section when it came in, as was indicated and stated at the time, and the government has seen the folly of its ways and, fortunately, have agreed to an amendment.

But still, the general public — Angus or Agnes, I should say — are not too sure of the number of documents they are still required to have in their possession to be considered validly insured in the Province of B.C. The Minister always makes a great issue of correcting people when they are wrong, and in the strongest of language, and if I am incorrect I hope you will correct me — but I assume that the Minister has not yet informed the general public that they will be totally insured, notwithstanding they may not have all of these pieces of paper in their car at the time of an accident. Such was the case under the former system of insurance that the general public in this province enjoyed.

It certainly opened a question today that if a person doesn't have a valid registration certificate, and owner's insurance certificate, a driver's licence and a driver's certificate in their possession at the time of the mishap, they fall outside of ICBC and are not protected to the extent of the injuries that may happen to them or that they may cause to others and others could recover against them. It has been a serious problem. If it has been cured, I do hope that the general public have been notified adequately of that fact. If not, they certainly should be.

Secondly, or thirdly, perhaps. I would like to ask the Minister's comments on this: under what authority and what general statement is the law of this province now being followed? I gather that it is impossible for people to obtain driver's certificates today as the result of this strike of ICBC. Does this mean that there will be a complete moratorium ordered, or already ordered, for any convictions under this section of the Act for a person not having that piece of paper? Does it also mean that by virtue of this individual not having that piece of paper, they will still be considered to be adequately and properly insured?

Really, this Insurance Corp. of British Columbia has created more difficulties, I think, for the motoring public and for the government than the government ever envisioned. It has proven to be a millstone around the neck of government, and perhaps will end up being their downfall.

Mr. Speaker, I feel very strongly that the

[ Page 3693 ]

public.... We have got a set of laws in our statutes. There is no administrative discretion within the statute itself to see that these laws are enforced, and conceivably it has got to be done by executive action. I would assume that you would be bringing in an amendment, if nothing else, to cover these situations. Or are you merely instructing prosecutors in the province not to proceed according to the law as written? If you are doing that, and I think in the circumstances it should be done, but it is the sloppiest kind of practice and the sloppiest method in which to effectively administer justice in this province.

MR. MORRISON: There are a number of sections in this bill which we will deal with in committee, but I wonder if, in closing the debate, the Minister could just give me a little information.

I notice he said that the dealers' licences will be transferred to the Consumer Services branch, but it also talks about a fee and so on for that, a prescribed fee in section (b) in 34(A), and perhaps you would give us an indication of what that fee might be. I don't believe there is a fee currently charged now in addition to either the licence plate itself.

Another section, 34(c), odometers, is tightening up the problem of people turning back speedometers, but unless I incorrectly read this section, there is still that loophole which allows a private individual, while he owns the vehicle, to adjust the speedometer and then turn the vehicle in, and in this it would appear that the dealer could be held responsible even though the individual himself had changed the speedometer prior to trading the vehicle in. I would like some clarification on that point.

I think really the solution to the whole thing is to just simply say that no one can adjust a speedometer, period, or odometer, period.

The other item which I think would probably be better dealt with in committee is the section where vehicles are required to be registered whether they are sold or not. I think I'll leave that one to that section, but I think there should be some discussion on it in committee stage.

MR. WALLACE: A very small point, Mr. Speaker. I'm just amazed that the Minister, with the erudite background of a Scottish education and respect for the English language, could possibly define a bicycle as being a vehicle with "any number" of wheels. (Laughter.)

The definition in the dictionary described a bicycle as "a vehicle, usually designed for one person, consisting of a metal frame mounted upon two wire spoke wheels with narrow rubber tires in tandem."

We've heard such a long, tiresome debate with a lot of bad feeling, and I thought a little bit of humour might not go amiss at this point. I just wanted the definition in section 6 which refers to a bicycle being a device having any number of wheels just as long as it is propelled by human power.

Maybe the Minister would like to comment.

MRS. D. WEBSTER (Vancouver South): I would like to ask the Minister just one question, and that is concerning getting your registration and car licence renewed. In that case all you get is a very small slip of paper and it states on that slip that you must leave it in your car. You don't get anything else that you can keep on your person or keep in safekeeping to show that that car belongs to you if, for instance, the car is stolen or if it is burned or anything happens to it. I would like to know from the Minister what his answer to this is.

I was in the ICBC office one day with a problem of one of my constituents, and she was very concerned because her car had been demolished and it had disappeared completely. She was concerned for two reasons — first, because she didn't have her licence plates returned, and secondly because the registration was in the car. I asked the gentleman who looked after me what his attitude to that was, what his answer was, and he said: "Well, for myself, I have had mine photostated so I have got a copy of it in safekeeping."

This is the sort of question that I have been getting from people who are a little bit concerned because of the changeover from the time when we used to have very cumbersome papers concerning insurance, to the very opposite when this really almost skeleton or sketchy type of insurance papers that seems to look after everything. But there is always a fear that it could be lost, strayed or stolen.

DEPUTY SPEAKER: The Minister of Transport and Communications closes the debate.

HON. MR. STRACHAN: You know my bicycle with any number of wheels that is propelled by human power on which a person may ride. I guess that's the legal extension of the traditional use of the word bicycle.

Interjections.

HON. MR. STRACHAN: Well, anyway, you don't want the definition of a camel.

Interjection.

HON. MR. STRACHAN: What does that mean? You ride two bicycles? (Laughter.) You ride two bicycles, going in separate directions? That's the way it comes out, in order to provide coverage for vehicles that ride without a motor that have more than two wheels.

[ Page 3694 ]

The Member for Vancouver–Point Grey (Mr. Gardom) asked about insurance. As he knows, the superintendent of the RCMP, after discussions with I think the superintendent of motor vehicles, issued instructions some months ago to give any person who did not have his driver's certificate two weeks in order to get it.

MR. GARDOM: You can't get them at all now.

HON. MR. STRACHAN: That's right. It is my understanding that instructions have been given that that apply until 14 days after the strike is settled.

As far as the coverage is concerned, it is my opinion that the section in the other legislation does give the right to have them covered by insurance.

MR. GARDOM: Whether they do or do not have those four pieces of paper in their possession?

HON. MR. STRACHAN: There is a discretionary section in the Act. You will recollect that.

MR. GARDOM: That is the hardship section?

HON. MR. STRACHAN: Yes.

MR. GARDOM: You say they have got to go to the hardship section, then.

DEPUTY SPEAKER: Order, please.

HON. MR. STRACHAN: I was asked about registration even though the vehicle is not licensed. I think there is a section in here that does not allow a vehicle to continue to be registered even though it is not licensed. I would certainly consider issuing an extra copy of the car registration in duplicate form.

MR. GARDOM: What about refunding fines?

HON. MR. STRACHAN: I would have to discuss that with the Attorney-General.

DEPUTY SPEAKER: Order, please. I would ask the Hon. Members to save their questions until we are in committee when they will be proper.

HON. MR. STRACHAN: I would certainly consider the possibility of providing two pieces of paper so they can have one in the car, but the Member was complaining about them having too many pieces of paper now. However, I would have to check that other matter with the Attorney-General. I couldn't give a commitment on that. So I now move second reading, Mr. Speaker.

Motion approved.

Bill 108, Motor-vehicle Amendment Act, 1975, read a second time and referred to Committee of the Whole House for consideration at the next sitting after today.

HON. MRS. DAILLY: Second reading of Bill 110, Mr. Speaker.

NATURAL GAS REVENUE SHARING ACT

HON. MR. LORIMER: Mr. Speaker, this is a great little bill. I am really very proud to speak on this bill in second reading, a bill obviously made possible through the great work of our Premier in going back to Ottawa and getting a deal for the people of British Columbia, getting an increase in natural gas export prices and coming back from Ottawa with his hands and pockets full. It was probably the first time in the history of this province that a Premier has gone to Ottawa and come back with more than he went with.

Sharing with the municipalities is not an easy thing to work out. There are a number of difficulties. Any set programme or formula can work fairly well for maybe 90 per cent of the municipalities, but there is the odd case where there is no formula which will quite fit the picture. Some municipalities are not helped to the amount they need to be helped under this formula or any other formula we could think of. That is the reason why we have a portion of it for special grants. The areas which qualify for these grants will be decided by the executive of the UBCM and myself. We will try and be as fair as possible with these specialized areas.

We have avoided the per capita grant structures for two basic reasons. One is that we feel it doesn't take into account the difficulties and expenses in operation that some of the northern communities have in relation to some of the southern communities. Snow clearance is one item that is a substantial expense for some communities, whereas it is no expense at all for others. There is the problem of rock formation in the soil which causes more expense in some municipalities than in others. So we have worked out a system of actual cost in the municipalities and divided it in that way.

I have discussed the formulas with the Union of B.C. Municipalities executive in two meetings. They have agreed that this system is satisfactory, considering it was basically done in somewhat of a rush.

Interjection.

HON. MR. LORIMER: I'm sorry, I can't hear you. No doubt you will be able to speak and let me hear about it in due course, because I don't intend to be too long here.

The changes may well take place for distribution

[ Page 3695 ]

next year. The UBCM are going to take the formula to the UBCM convention and will see if they can arrive at a proposal that they will present to us for possible methods of distribution for 1976.

I now move second reading.

MR. BENNETT: Mr. Speaker, in speaking to this bill, while any help is greatly appreciated by the municipalities, those who have received their tax notices this year are aware more than anyone that this $20 million has gone nowhere to solving the financial problems of the municipal governments. They finally end up relating to the property owners and homeowners in this province who have had the biggest single one-year increase in our history in property taxes on their homes. Some homes have increased up to 30 per cent or more in their property taxes.

This bill shows a glimmer of light on a principle that should be recognized by this Legislature and by all provincial and federal governments, and that is the plight of municipalities. We all realize, Mr. Speaker, as I know you well do, that the financial sharing between governments in this country and between provinces and municipalities certainly isn't equitable. While our provincial revenues have doubled since 1972 — gone from $1.4 billion to $3.2 billion, hopefully, this year — our share with municipal governments has only advanced at 6 per cent a year.

HON. MR. LORIMER: No, it hasn't. It's doubled. It's over doubled.

MR. BENNETT: Six per cent in relation to provincial revenues. That relationship has only increased by 6 per cent a year.

HON. MR. LORIMER: Over doubled.

MR. BENNETT: Six per cent a year. Obviously the municipalities have not shared in the growth revenues of this province. It's obvious. No matter how you wish to play with percentages, they haven't shared and yet they have been forced to deal with many of the problems of growth. That is the extension, Mr. Speaker, of services to people both for those who are lucky enough in this year of no construction of houses for services to accept housing. The municipality has only one answer and that of course is to pass along increases to the property owner, and it's now evident that it's beyond the means of property to pay the costs which municipalities are called upon to expend on behalf of people. They need to share in the growth revenues of the province.

This bill deals with gas. It deals only in a minor way with the particular part of the gas revenues, and it doesn't come to grips with revenue sharing on a very specific basis so that it will reflect a share of the growth revenues in all areas. I repeat that the growth areas are sales tax....

HON. MR. LORIMER: Like they used to have.

MR. BENNETT: You know, the Minister says like they used to have. I agree. I agree that no government in Canada has yet committed itself to revenue sharing on this concept, with the exception of the studies done by Ontario. I agree that while it wasn't done in the past it has become evident in the high inflation times that have taken place in '72, '73 and '74, when we've seen the dramatic increase in property taxes, and we've seen the fact that the government hasn't kept pace in grants to homeowners or in grants to municipalities to deal with it, that the worst effect has taken place last year and this year. It's more evident now than ever that a specific share of income tax, both on a personal and a corporate level, a specific share of the sales tax, a specific share of resource revenues should be shared on a specified basis with municipalities to reflect the economy of the Province of British Columbia.

DEPUTY SPEAKER: Order, please. I would ask the Hon. Member not to stray away too far from the principle of this bill and to import new principles.

MR. BENNETT: Well, the revenues that reflect the growth of the province....

DEPUTY SPEAKER: Order, please. Before the Hon. Leader of the Opposition gets distracted again or starts again, I would like to make my point.

MR. BENNETT: Yes, Sir.

DEPUTY SPEAKER: I would ask the Hon. Leader of the Opposition to stick to the principle of this bill and not to import new principles or new concepts.

MR. BENNETT: Yes. The title of the bill is the Natural Gas Revenue Sharing Act, and we're talking about revenue sharing, and revenue sharing is fundamental to dealing with municipal governments. The whole Act talks about the provincial government and its financial dealings with municipal government.

I'm saying that this bill doesn't go far enough. It's too iffy, Mr. Speaker, because it deals with a revenue source that, if we listen to some of the Members of the House, they wish to be discontinued. They wish the export of gas to be discontinued. It then would mean that this bill sometime in the future won't deal with the needs of municipalities. We're talking about growth revenues of which natural gas, being one of the resource revenues, is one. The resource revenues of this province and other revenues that deal with the

[ Page 3696 ]

growth of the economy should be shared with municipal governments.

DEPUTY SPEAKER: I think the Hon. Member doesn't understand the ruling the Chair is making. I just want to make the point that it's permissible either to support or oppose the limit of the principle contained in this bill, but it's not permitted to expand or introduce new concepts beyond the scope of the bill. If this is to be done, it should be done by placing a bill on the order paper oneself. So I would ask you to stay within the scope of this particular bill.

MR. BENNETT: Thank you, Mr. Speaker, but I know that you are as concerned as I am with the municipal government, and in these dying days of this session of the Legislature I know that you too are probably a homeowner in this province and are concerned about the excessive tax bill that you've just received, and you would be interested in exploring a commitment from the provincial government, an extension of a commitment contained in this bill that would relieve the homeowners of this province from the type of increases they face this year, increases that we never want to see again.

These increases don't even reflect an increase in services in the municipalities. In fact, what we have are pat budgets, and the municipalities are still thwarted and cannot accept the very necessary growth. And of course that's thwarting the Housing Minister (Hon. Mr. Nicolson). We see that housing construction starts are down. We see municipal government unable to perform the functions and services for which it was intended.

Now surely, Mr. Speaker, you must recognize that we in this assembly are dealing with the very same taxpayers the municipal governments are dealing with. We cannot keep quibbling about who is best able to tax and deliver services. We know that municipal government has been given responsibility in certain areas. We must now recognize that we have a responsibility to share with them gross revenues so that they can carry out these responsibilities.

This is a bill presented by the Minister of Municipal Affairs. It's a bill that deals with revenue-sharing, but it's a bill that doesn't go far enough. It's a bill that does not provide enough money. It's a bill that's been proven not to provide enough money, because even after it was distributed the tax bills of this province have proven to be excessive, and the plight of the municipalities is greater than ever before.

In these days of double-digit inflation, Mr. Speaker, you must be aware that municipalities are facing great increases in costs. The very cost of services in dealing with housing construction and servicing of land has perhaps accelerated beyond other services and other areas of municipal government, and it hasn't been able to keep up with the demand. We've forced them into stand-pat budgets, increases in their own tax base and an unfair tax on the property and homeowners in this province.

It's time we took a look, because the Minister himself identified part of the problem. Within the meagre limits of this sharing he wasn't able to give an equitable distribution of the money. He said that, and in saying that he has come to grips finally with the problem that in sharing on an iffy basis with an iffy type of revenue that may be discontinued in the future if it's in the provincial interest not to export gas, we must tie revenue-sharing to something specific, to areas which reflect the growth of the province so that the municipalities have some opportunity to know and plan on a consistent basis for provision of services.

Right now we're forcing them to make decisions on a cash-flow basis. Here are municipalities turning down housing because it's a poor tax base. We're not allowing them to make decisions on a rational basis. We have municipalities encouraging industrial expansion. Why? Because they have to deal on a cash-flow basis.

But if we accept the principle of revenue-sharing from more than just this token approach, revenue-sharing that goes beyond a share of a revenue source that may disappear, we will solve the problems of municipal government. We will help them to be able to solve their own problems, and this important jurisdiction that is much more able to deliver services to people than any of the senior governments will be able to function.

We might involve them more in housing, because apparently it's beyond the scope and the ability of the Minister of Housing and his department to deliver housing in this province. We see a decline in housing, a decline in starts. Certainly if the municipalities had the money, they could come to grips with the problem. They're the ones that are asked to accept; they're the ones that can identify a need and for what types of housing. Certainly they are best able, now and in the future, to take over a major part of this important role in dealing with accommodation for the citizens of this province. But they are financially starved.

We haven't shared the revenues. This bill before us, Mr. Speaker, does not provide an adequate amount of money. As welcome as it is, it's like one of those relief funds: it's a token, but in its tokenism it doesn't come to grips with the problem. It's sweeping it under the rug. It's ignoring the problem, because we need more than token relief. We need a commitment to a financial principle. In these days of inflation senior governments get all the benefits of inflation and love inflation. It gives them big budgets

[ Page 3697 ]

to play with, big dollars to play with, and yet they share just a pittance with the municipal governments who are faced with the cost of inflation. The cost of inflation is borne by the municipalities who haven't participated in growth revenues.

Now, this bill is a fact. We've shared this revenue. But, let this assembly go on record in this debate that in the future, we will not only share revenue with municipalities, but we will be prepared as a province to help them plan their budgets with conferences that would go along with revenue-sharing.

It is not enough to just offer to share. There must be the consultation that takes place simultaneously, and be willing to share the power that goes with revenue sharing. It is a principle to which we are committed, Mr. Speaker, a principle which should be recognized not only in British Columbia, but in all of Canada. Senior governments, federal and provincial, must be prepared to deal with the modern fact, the 1975 fact, of urban, municipal, and regional government.

For this reason, while supporting this bill, we would advise that this Legislature and indeed this government and future governments should be concerned with more realistic measures, financial measures that will allow the municipalities to be a full partner in Confederation and not the poor child of Confederation as they are now. Allow them an increasing and more important role in a financial way.

MR. D.A. ANDERSON: Mr. Speaker, this is the bill about which the Premier talked so much prior to the Ottawa conference at which a new price was agreed to on gas.

It was a bill that was promised. The revenue was promised. Finally, indeed, the government had to promise the amount regardless of what happened in natural gas prices and regardless of what happened in Ottawa. It is perfectly clear that the connection between natural gas prices received for exported natural gas has absolutely no beating whatsoever on the needs of the municipalities of the Province of British Columbia to meet the requirements for roads, hospitals, lighting, schools, and whatever.

It is a phony bill in this respect. It is a window-dressing bill, because regardless of this bill, the money was coming anyway. It would have been promised that way. The Minister of Municipal Affairs spoke at that time about how this money was going to come and be divided up.

Mr. Speaker, there really is absolutely no connection between natural gas revenue and municipal expenditures. There is none. It is certainly money that they like to get. It is certainly a good idea to give the municipalities more money — no one objects to that. But the way this is done is strictly absurd.

The municipalities should receive set amounts of money budgeted by the provincial government via grants which bear some relation to their needs and requirements. They should not be subjected to what has to be a fluctuating return on a non-returnable resource. To put it in that context, it just makes the whole concept of municipal financing a bit of a lottery.

The one-third amount of the money is totally arbitrary. This is indicated by the fact they have to put in a $20 million guarantee. The taxes that the municipalities have had to be charging have gone up enormously. I spoke to a businessman yesterday who assures me that his taxes on his business properties are up by 300 per cent — three times what they previously were — and he is telling me the truth. I talked to a resident in the riding of the Member for Oak Bay who talked about the $1,700 taxation for a condominium in that community.

The bill we have here talks about the basis of grants. It talks about a basic support grant to each municipality, a grant based on the relative operating costs of each municipality, a water assistance programme — it talks about specific programmes and specific allotments, none of which has any bearing whatsoever upon natural gas revenues.

Mr. Speaker, I think the government should address itself not to giving us tarted-up legislation which seems to give the municipalities money from great sources outside the country, but should instead try and give us straightforward accounting for all these purposes.

What is the reason for having the municipalities funded in a variety of different ways when the money is going to essentially the same purposes? What is the reason for having a per-capita grant on the one hand and grants under natural gas revenue on the other?

I trust the Minister will indicate why there is this special need to have these different sources when in actual fact, he knows and I know, and he knows that I know, that really this money all comes from the provincial treasury and that it is essentially all for the same purposes in the municipalities. There is nothing special about it. To tie it to natural gas revenue is an attempt to tie it to the con game that the Minister of Finance has tried to play.

I think that it is a little unfortunate that the Municipal Affairs Minister should be responsible for this, because it really is part of a political sleight of hand which is being played by the Premier. I would like the Minister to explain why the per-capita grant, which was previously $30, then $32, then went up again and increased approximately 6 per cent, could not have been increased instead.

Why did we have to adopt this bill which requires this money to come through this funny formula with minimum guarantees for certain specific purposes? Why is there this great pretence that this money comes indeed from Americans and the municipalities

[ Page 3698 ]

are being helped by overseas gas sales, when in actual fact they all know full well this was just another way of them getting revenues which would otherwise come to the provincial government, and is, in essence, another per capita grant?

Now, I hope that the Minister will reply on that. I hope he'll also say a word or two, Mr. Speaker, about whether this meets needs — $20 million for British Columbia's 2.5 million people is not a great deal of money on a per-capita basis. Will this have any effect upon the 50 per cent decline in new housing starts that we have seen in British Columbia in this last period? The rest of Canada has approximately a decline of 10 per cent, but British Columbia has a decline of 50 per cent.

HON. L. NICOLSON (Minister of Housing): No.

MR. D.A. ANDERSON: The Minister of Housing says no, but he knows full well that the total across the country is 16 per cent — am I right? If you deduct British Columbia's contribution to that total, you will find that the rest of the country perhaps may be 11, but is down around 10 or 11 per cent — and he's now busily sticking his nose in a bill or something to hide his embarrassment at the terrible, terrible results that he is achieving in the housing field.

I wonder whether the Minister would indicate whether any of these specific channelings that occur in this Act are going to help our housing at all.

The bill's explanatory note talks about the bill "enabling municipalities and regional districts to share in natural gas revenues to be used for certain prescribed purposes." Well, how much leverage are you going to put on those municipalities and what are the purposes, apart from those listed, that the Minister is going to emphasize? This is a straightforward financing bill, or should be a straightforward financing bill for municipalities, giving him some opportunity to squeeze and push municipalities in the directions that he thinks would be a good way, and he really hasn't told us very much about the direction that he would like to see this money put into.

The Minister might also indicate, when he closes this debate, whether or not he has looked into some other system for financing municipalities, and indeed another basis for the whole question of raising taxation from the public.

You know the Swiss have a system, Mr. Speaker, whereby the municipalities have a major responsibility for taxation. They collect income tax. They collect a whole pile of other taxes, and in turn these filter upwards. We, in this country, seem to have the reverse system where the governments which are least in contact with the people, most distant, collect the money, and it filters down to the local level of government.

The Minister, I know, is a man who is a thoughtful person, and I'm quite sure he's had a look at some other taxation systems with respect to municipalities. I wonder whether he would indicate to us whether or not it would not be possible in this province, to reverse our present topsy-turvy system and to make the municipalities far more responsible for taxation. They, in their turn, would take a slice of the taxation base and pass it on up to the provincial and federal governments and then on.

I am intrigued by this system, because it appears to me that the municipalities and the local assessors, local tax collectors, probably have a better idea of who is cheating on their taxes than would a system based either in Victoria or in Ottawa.

Mr. Speaker, we stand pledged to having the municipalities being given a percentage of the taxes raised within their municipalities or regional districts. For example, the liquor tax, or the tremendous revenues from liquor, might well be shared with the municipalities. The Attorney-General (Hon. Mr. Macdonald) collects over $100 million a year, and here he is giving a miniscule $20 million by comparison, and there is certainly no reason why revenue that is steady, that is generated within the community, should not be returned to the community that way.

Income tax — there is absolutely no reason in my mind that the municipal government should not be given a percentage of the income tax collected by the province. It is collected by the federal authorities by the province, but there is no reason that we should not put aside a certain number of percentage points of the income tax as collected for the municipal government. Give them some incentive to have people within their boundaries pay taxes in that way. Get away from the idea that the municipalities are going to simply be children of the provincial Legislature and government, and that they, in their turn, get the odd bit of candy or the odd bit of money which the Minister happens to give out from his pocket.

Let's try and reverse the system. Give them a tax base other than the base which they have now, which is, of course, direct taxation for businesses and things of that nature, give them a share and make them more responsible, because our present system where the municipal councils are becoming more and more simply agencies for spending provincial funds, is wrong. If the system continues, as the Minister had indicated and as this bill indicates, we are going to wind up in the future with less and less responsibility by the local councils.

Perhaps the Minister, in closing the debate, would like to comment on those points.

Interjection.

[ Page 3699 ]

DEPUTY SPEAKER: Is that agreeable to the Member for Oak Bay?

MR. WALLACE: I didn't have much to say....

HON. MRS. DAILLY: If I could explain it...because the Hon. Minister has to leave at this time. But if you wish to adjourn it, that's fine with me so you can pick it up.

Mr. Wallace moves adjournment of the debate.

Motion approved.

HON. MRS. DAILLY: Mr. Speaker, second reading of Bill 112.

PUBLIC SERVICE SUPERANNUATION

AMENDMENT ACT, 1975

HON. MR. HALL: In moving second reading of this bill, I would draw to the attention of the Members that if all amendments to several sections are included, the changes have very limited financial significance. They are designed to merge the provisions of part 1 and 2 that the Members will see in the Act, as the distinction between those two parts has essentially disappeared. We're introducing, Mr. Speaker, the terminology which has been adopted in the master agreements that we have now successfully negotiated under the Public Service Labour Relations Act. We're having the Act cover the Registered Psychiatric Nurses Association of British Columbia as an employer. This amendment is made at the request of the association.

We're clarifying the provisions related to the escalation of pensions which were introduced last year. We found that the wording did not accomplish our objective, which was to adjust pensions at quarterly intervals on the basis of the change in the consumer price index. The amendment would also extend the escalation principle to include those who retired at a time when pensions were provided with less than 10 years of service.

Last year the provisions of escalation resulted in increases of 12 per cent on July 1, 1974, for allowance granted in 1972 and earlier and a 4 per cent increase in rate for those allowances granted in 1973. On April 1 of this year the provisions resulted in further increases of 12.4 per cent for allowances granted before July 1, 1974, with a 5.7 rate for allowances granted between July 1, 1974, and December 31, 1974. Those increases covered a full year of change in the consumer price index. Starting next month, July 1, 1975, the increases will be made at quarterly intervals and will therefore be smaller. In the event, we will, of course, total whatever is required under the Act. For example, the increase effective on July 1, 1975, will be about 2.2 per cent.

Lastly, Mr. Speaker, the amendments to the re-employment provisions are designed to remove the provision for adjustment where the spouse of a contributor who dies in service or after retirement is employed or re-enters the work force after the pension was granted. The provisions which are being removed were regarded by many surviving spouses as being an unfair penalty, as the adjustment only applied in the case of employment with approved employers.

It will be easier, I think, for me to answer questions in committee stage, Mr. Speaker. Therefore, with that assurance to the Members that I will as usual entertain all questions in committee stage and will have my staff for any detailed investigation of the various sections, I move second reading.

Motion approved.

Bill 112, Public Service Superannuation Amendment Act, 1975, read a second time and referred to Committee of the Whole House for consideration at the next sitting after today.

HON. MRS. DAILLY: Second reading of Bill 113, Mr. Speaker.

MUNICIPAL SUPERANNUATION

AMENDMENT ACT, 1975

HON. MR. HALL: Mr. Speaker, most of the amendments in this bill are designed to bring the provisions of the Municipal Superannuation Act into line with the corresponding provisions of other Acts which we administer. However, in determining the highest average salary there appears to be a wide variety of practices employed by employers under this Act in the making of supplementary payments upon retirement. In order to assure equality of treatment to all employees under these circumstances, provisions have been made to restrict the uses of supplementary payments where such payments are not uniformly applied to all employees and where it has a significant effect on the calculation of the highest average salary of the employee at retirement.

Mr. Speaker, at the request of the Health Sciences Association of British Columbia, the application of the Act has been extended to include that association as an employer and its employees brought within the scope of this Act by resolution. Again, I will entertain questions in committee stage in full.

I move second reading.

Motion approved.

Bill 113, Municipal Superannuation Amendment

[ Page 3700 ]

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

HON. MRS. DAILLY: Second reading, Mr. Speaker, of Bill 114.

TEACHERS' PENSIONS AMENDMENT ACT, 1975

HON. MR. HALL: Mr. Speaker, most of the amendments on this bill, the Teachers' Pensions Amendment Act, are designed to bring, again, the provisions of this Act in line with the corresponding provisions of the Public Service Superannuation Act, particularly those dealing with the equality of treatment between male and female employees, the escalation of pension after retirement, the re-employment provisions, the reinstatement provisions, and the death-in-service provisions, as we slowly move forward on a broad front to make sure that these publicly administered plans are four-square each with the other.

There is, however, one new principle introduced in this bill dealing with those cases where the contributor transferred to the service of a reciprocal employer prior to July 1, 1973, and elected to have his refundable credit transferred to his voluntary account in the plan of a reciprocal employer. In this case, the amendment provides that his previous service is counted as though no such transfer had occurred.

I move second reading, Mr. Speaker.

Motion approved.

Bill 114, Teachers' Pensions Amendment Act, 1975, read a second time and referred to Committee of the Whole House for consideration at the next sitting after today.

HON. MRS. DAILLY: Second reading of Bill 115.

COLLEGE PENSION AMENDMENT ACT, 1975

HON. MR. HALL: Mr. Speaker, most amendments on this bill are, again, designed to bring the provisions in line with all the corresponding provisions in the other Acts that we administer, particularly those dealing with equality of treatment in the various fields I have just mentioned in the previous debate.

There is one new principle. It is the same as the one I have just introduced in the question of Bill 114, that is, the case where the contributor transferring to the service of a reciprocal employer before July 1, 1973, elected to have his refundable credit transferred to his voluntary account in the plan of the reciprocal employer.

I move second reading.

Motion approved.

Bill 115, College Pension Amendment Act, 1975, read a second time and referred to Committee of the Whole House for consideration at the next sitting after today.

HON. MRS. DAILLY: Mr. Speaker, second reading of Bill 116.

PUBLIC SERVICES MEDICAL PLAN

AMENDMENT ACT, 1975

HON. MR. HALL: Bill 116, Mr. Speaker, contains only one amendment to the Public Services Medical Plan Act. It is considered necessary to make provision for certain groups of persons who, by contract, have elected a different programme of medical coverage from that provided under this Act. This amendment will ensure continued medical coverage for all other persons who are not covered by a supplementary contract.

I move second reading.

Motion approved.

Bill 116, Public Services Medical Plan Amendment Act, 1975, read a second time and referred to Committee of the Whole House for consideration at the next sitting after today.

HON. MRS. DAILLY: Second reading of Bill 117.

PUBLIC SERVICE GROUP INSURANCE

AMENDMENT ACT, 1975

HON. MR. HALL: There is only one amendment to the Act. It is considered necessary to make provision for certain groups of persons who, by contract, have elected a different programme of group life insurance from that provided under the Act. The amendment will ensure continued coverage for all the persons who are not covered by a separate contract.

May I add, Mr. Speaker, as the Members have gathered, that flowing from our activities last year in the signing of various contracts and so on, those efforts have to be recognized, and our legislation amended accordingly.

MR. D.A. ANDERSON: Mr. Speaker, there is some difference between a medical plan and a pension plan. The pension plan that a person enters may well by only one of a number. A medical plan, however, where bills and medical expenses are paid, obviously should not be paid twice. A pension plan, however, where upon the death of a spouse, the surviving spouse might well wish to receive the

[ Page 3701 ]

benefits of more than one insurance policy and indeed, in the normal course of events, often does. There may be more than one private plan; there may be more than one public plan.

I wonder whether the Provincial Secretary, in closing the debate, could indicate to me whether or not we are in a situation where the government is now moving towards having only one group pension plan for such people, even though they may want to be members of more than one.

Again, let me assure him that, clearly, in the case of medical insurance where bills are paid, if you have two policies, it might be possible to get paid twice, which would indeed be wrong. But in the case of life insurance, it is a very different matter. Perhaps the Provincial Secretary could straighten me out on this particular point.

HON. MR. HALL: Mr. Speaker, the question was on the pension plans, essentially. The question was: are we prepared to accept decking principles, or are we trying to move towards one large plan? Frankly, my department, the Minister of Human Resources (Hon. Mr. Levi), in terms of Canada Pension Plan, the Minister of Labour (Hon. Mr. King) and others have engaged ourselves in terms of looking at the whole thrust of pensions in this country. We are nowhere near finished with our research. I would like to beg time on the question, Mr. Speaker, because it contains a very important principle. Perhaps, if the Member will be good enough to spark debate under one of those pension Acts from 113 to 116 — I don't care which one — we can cover it in committee with some to-and-fro, which I think would be better than doing it within the constraints of second reading debate where you can't now answer what I just said. I give the Member that assurance.

I move second reading.

Motion approved.

Bill 117, Public Service Group Insurance Amendment Act, 1975, read a second time and referred to Committee of the Whole House for consideration at the next sitting after today.

HON. MRS. DAILLY: Second reading of Bill 135.

PUBLIC SERVICE LABOUR RELATIONS

AMENDMENT ACT, 1975

HON. MR. HALL: Mr. Speaker, the Public Service Labour Relations Act that this bill seeks to amend was proclaimed in January, 1974. It was an historic document for British Columbia, granting for the first time in our history the right to employees of the provincial Crown to bargain collectively with their employer as first-class rather than second-class citizens.

This legislation has been eminently successful in that during this short period of 17 months the machinery for collective bargaining for this tremendously diverse group of citizens has been set up and has been brought to successful conclusion, with two master agreements and component agreements for some 90 per cent of the province's employees. Only one master agreement and its subsequent component agreements for some 5 per cent of the province's employees holding professional positions remains to be concluded. The master agreement, I should advise the House, will be signed on Friday of this week. It's in its final stages of ratification.

The fact that only four sections of this bill require amendment to clarify and facilitate the full realization of the principles of this Act reflects well on the basic validity of the legislation and the determination and effort put forward by the province's employees and the Public Service Commission to make collective bargaining work in the public service of British Columbia.

This bill, therefore, is introduced to clarify one or two points which have arisen during the course of the Act's first year of operation, and to safeguard the most basic of the public's interest in the event a serious disagreement should occur despite the best efforts of the parties concerned to each agreement.

We are covering, Mr. Speaker, some exclusions from collective bargaining. We've extended the list of exclusions to include a justice of the peace so that they, together with legal officers, sheriffs and court registrars, are in a position which must be considered apart from bargaining units. Similarly the position of physician and medical specialist in the public service is recognized as being unique. The extraction of this specialized group from the collective bargaining unit will permit the Public Service Commission and the licensed professionals to conclude their collective agreements.

We're also changing the language on section 4 of the Act, Mr. Speaker, in view of some recent decisions of the Labour Relations Board. I think the changes are fairly self-evident.

We're ensuring in another section that similar conditions are bargained for employees in similar circumstances. This section tidies up the possible situation where the original language prevented the parties from bargaining certain uniform general conditions in their master agreement simply because it might not apply to each and every occupational group.

We have copied the labour Acts of this province, Mr. Speaker, in another section by laying out the procedures for the orderly settlement of disputes. It provides for the taking of a strike vote, should that extreme condition take place.

[ Page 3702 ]

Mr. Speaker, that's the main thrust of the bill. Again, in committee stage we can get into the details of the various sections and I move second reading.

MR. J.R. CHABOT (Columbia River): Mr. Speaker, I notice that there are some new principles in this bill and that there are some new exemptions that have been added. There must have been quite a battle in cabinet to eventually ratify or eventually approve some of these exemptions which are related in this bill.

Mr. Speaker, I would like a little more opportunity to examine the full impact of the exemptions that have been finally added to this piece of legislation. In order to do so I'd like to move adjournment of this debate until the next sitting of the House.

Motion approved.

HON. MRS. DAILLY: Second reading of Bill 136, Mr. Speaker.

PUBLIC SERVICE

AMENDMENT ACT, 1975

HON. MR. HALL: Mr. Speaker, the present Public Service Act was proclaimed in January, 1974, following major revisions to the former Civil Service Act. Based on the past year's experience and the negotiation of the province's first collective agreements with employees, several amendments are required to permit the Public Service Commission to carry out its important work more effectively and at the same time to clarify that the employees of this province have the right under collective bargaining to participate in many of the decisions affecting their conditions of employment.

What we've done in this bill, Mr. Speaker, in the various sections — and there are some 11 in number — is first of all to start to use the language that is in the master agreements and to make sure that where a master agreement has been concluded to place the Public Service Commission and its employees on a certain course of action, the Public Service Act is amended to cover that situation.

It's become apparent, Mr. Speaker, during the past 17 months since the Public Service Act was proclaimed, that the present members of the Public Service Commission have been expected to carry and have devotedly carried a workload and a work pressure which we can't expect them to sustain indefinitely except at serious risk to their own welfare.

May I add parenthetically that on two occasions last fall, two of the commissioners, one a long-serving member of the province and the other a newly-appointed public service commissioner, both had to take medical treatment and time off following long, arduous, tenseful meetings. I'm talking about Mr. Higgins, the vice-chairman of the Public Service Commission, and Mr. Clay Perry.

I think, knowing the difficulties in collective bargaining any time of the day, let alone in the first contract, we should recognize that that work pressure really is at times unreal. I want to pay tribute to those two gentlemen in particular for the way they carried on in spite of those health difficulties.

Mr. Speaker, there is also a risk to the continuing orderly performance of the commission's vital duties if we continue that kind of overload on the membership. We recognize the commission as an essential personnel agency of the largest employer of the province. Because we believe in the importance of that work and its effects on the employees and the general public, the membership by this bill, Mr. Speaker, will be expanded to ensure the best and broadest representation possible in its deliberations and actions. Therefore, we're making provisions to increase the number of commissioners. We're then removing any language difficulties that we found flowing from 17 months' experience, and again, Mr. Speaker, in view of the diversity of the various amendments, I expect questions and answers in the committee stage of the bill, and I move second reading.

MR. CHABOT: Mr. Speaker, speaking to the principle of the bill, there are certain sections here that puzzle me and I would like to have an opportunity to examine the implications that are apparent, and the various changes that are taking place, such as the massive increase in the membership of the Public Service Commission from five to nine.

In order to examine the possible implications of these various changes, Mr. Speaker, I have no alternative but to move adjournment of this debate until the next sitting of the House.

Motion approved.

The House took recess at 5:24 p.m.

The House resumed at 5:42 p.m.

DEPUTY SPEAKER: Will all Members rise? His Honour the Lieutenant-Governor is approaching the chamber.

His Honour the Lieutenant-Governor entered the chamber and took his place in the chair.

CLERK: British Columbia Railway Company Construction Loan Amendment Act, 1975.

Legal Services Commission Act.

Small Claims Amendment Act, 1975.

National Cablevision Limited Transfer of

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Jurisdiction Act.

In Her Majesty's name, His Honour the Lieutenant-Governor doth assent to these bills.

His Honour the Lieutenant-Governor retired from the chamber.

DEPUTY SPEAKER: Would the Members be seated?

Presenting reports.

Hon. Mr. Levi presents the annual report of the Department of Human Resources for 1974.

Hon. Mrs. Dailly files answers to questions. (See appendix.)

Hon. Mrs. Dailly moves adjournment of the House.

Motion approved.

The House adjourned at 5:46 p.m.

APPENDIX

149 Mr. Gibson asked the Hon. the Minister of Education the following question:

For each school district in the Province, what is the net taxable value for school purposes by types of property?

The Hon. Eileen E. Dailly replied as follows:

This information is not available in my Department. Assessed values are compiled by the Assessment Authority. I would suggest that the question be directed to the Hon. the Minister of Finance.