[ Page 2045 ]

CONTENTS

Routine proceedings

Presenting reports

British Columbia Assessment Authority annual report for the year ended

December 31,1975 –– 2045

Corporation Capital Tax Amendment Act, 1977.

Report and third reading –– 2045

Home Purchase Assistance Amendment Act, 1977. Committee stage.

On section 1. Mr. Lea –– 2048

Mr. Gibson –– 2045 Mr. Gibson –– 2048

Hon. Mr. Curtis –– 2045 Hon. Mr. Curtis –– 2048

Mrs. Wallace –– 2046 Mr. Barber –– 2049

Mr. Barber –– 2046 Hon. Mr. Curtis –– 2049

On the amendment. Division on the amendment –– 2049

Hon. Mr. Curtis –– 2047 Report and third reading –– 2049

Mr. Nicolson –– 2047

Medical Services Amendment Act, 1977. Committee stage.

Report and third reading –– 2049

Consumer Protection Act. Second reading.

Hon. Mr. Mair –– 2050 Mr. Rogers –– 2054

Ms. Sanford –– 2050 Mr. Cocke –– 2054

Mr. Gibson –– 2052 Hon. Mr. Mair –– 2055

Mr. Wallace –– 2052

Consumer Protection Act. Committee stage.

On section 12. On section 34.

Ms. Sanford –– 2056 Mr. Gibson –– 2061

Hon. Mr. Mair –– 2056 Hon. Mr. Mair –– 2061

On section 22. On section 35.

Mr. Wallace –– 2057 Ms. Brown –– 2061

Hon. Mr. Mair –– 2057 Hon. Mr. Mair –– 2061

On section 26. On section 36.

Mr. Gibson –– 2057 Mr. Wallace –– 2061

Hon. Mr. Mair –– 2057 Hon. Mr. Mair –– 2061

On section 3 1. Mr. Macdonald –– 2061

Mr. D'Arcy –– 2057 On section 40.

Hon. Mr. Mair –– 2058 Ms. Brown –– 2062

Mr. Lea –– 2058 Hon. Mr. Mair –– 2062

Mr. Wallace –– 2058 On section 43.

Ms. Sanford –– 2058 Mr. Gibson –– 2062

Mr. D'Arcy –– 2058 Hon. Mr. Mair –– 2062

Mr. Lea –– 2059 On section 47.

Mr. Wallace –– 2059 Mr. Wallace –– 2062

Mr. D'Arcy –– 2059 Hon. Mr. Mair –– 2062

On section 33. On section 48.

Hon. Mr. Mair (amendment) –– 2060 Mr. Gibson –– 2063

Mr. Wallace –– 2060 Hon. Mr. Mair –– 2063

On section 33 as amended. Division on motion to report –– 2063

Mr. Wallace –– 2060 Report and third reading –– 2064

Hon. Mr. Mair –– 2060

Shelter Aid for Elderly Renters Act. Second reading.

Hon. Mr. Curtis –– 2064

The House met at 10 a.m.

Prayers.

CLERK OF THE HOUSE: Under standing order 12 1 inform the House of the unavoidable absence of Mr. Speaker.

MS. K.E. SANFORD (Comox): I would like to introduce to the House this morning Irene Walton from Denman Island. She is here accompanying her husband, an elected member of the Islands Trust who is at this moment attending the general meeting of the Islands Trustees. I would like the House to make Irene welcome this morning.

MR. D.D. STUPICH (Nanaimo): Later on this morning there will be a group of students from Woodlands Junior Secondary School in Nanaimo accompanied by their teacher, Mr. Hornett. I would ask the members to welcome them.

Presenting reports.

Hon. Mr. Wolfe presents the annual report of the British Columbia Assessment Authority for the year ended December 31,1975.

Orders of the day.

HON. G.B. GARDOM (Attorney-General): Prior to proceeding with the business of the House, I would very much like to introduce to the Legislative Assembly a gentleman who has just joined us now on the floor of the House, Mr. Slade Gordon, who is the Attorney-General for the state of Washington. He was the majority floor leader in 1967, and he is completing his third term as Attorney-General. He is presently the president of the National Association of Attorneys-General. He is attending lively Victoria for a meeting of the Comparative Law Institute, and I am sure all the members would like to pay him a most cordial welcome.

HON. MR. GARDOM: Mr. Speaker, I ask leave to proceed to public bills and orders.

Leave granted.

HON. MR. GARDOM: Report on Bill 8, Mr. Speaker.

CORPORATION CAPITAL TAX

AMENDMENT ACT, 1977

Bill 8 read a third time and passed.

HON. MR. GARDOM: Committee on Bill 14, Mr. Speaker.

HOME PURCHASE ASSISTANCE

AMENDMENT ACT, 1977

The House in committee on Bill 14; Mr. Veitch in the chair.

On section 1.

MR. G.F. GIBSON (North Vancouver-Capilano): I have a question for the minister. Perhaps out of an abundance of caution I set down on the order paper last night an amendment desired to cure something which may already be cured in the Act; I just want to check with the minister. I'm concerned about the case where a spouse, not a co-owner of a residence, would be in the process of being separated or actually separated from the owner of the building and seeking, in that capacity, to acquire a loan or a grant.

Now it may be that the removal of the words "or whose spouse" from the old section 6 cures that problem. The minister at second reading said:

In the past we've had much difficulty with respect to persons who are divorced or separated who wanted to buy a home and apply for a second mortgage or grant. Under the existing legislation such a person is debarred or disqualified, even though the spouse was not an owner of the property at the time the grant or the second mortgage loan was made. If this amendment is acceptable to the House, then only those who are owners or co-owners at the time the grant or mortgage loan would be made would be disqualified or prevented from receiving further benefits.

Now to me that seems likely to solve the problem, but I'm not a lawyer and I would be grateful for the minister's advice as to whether that does solve the problem I wanted to get at with my amendment.

MR. CHAIRMAN: Hon. member, there appear to be some difficulties with this amendment. While I'm not ruling it out of order, it may be difficult to amend one section of the Act without amending the whole Act.

MR. GIBSON: It may well be that the amendment is not required. Perhaps the minister could speak on that.

HON. H.A. CURTIS (Minister of Municipal Affairs and Housing): Mr. Chairman, while you are considering whether the amendment is or is not in order, the member was thoughtful enough to put this on the order paper and we are assured that the amendment is not necessary. The matter is covered. The hon. member has observed that he is not a

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lawyer. Nor am 1. However, we've had a very careful legal review of this amending Act. I'm quite satisfied on the basis of the information that I've been given that there is no need for the amendment which the member may propose.

MR. CHAIRMAN: Have you moved the amendment, hon. member?

MR. GIBSON: No, Mr. Chairman. I've not moved the amendment on that assurance from the minister that the case of persons who are separated or divorced and were not co-owners has been covered under the government's amending legislation. That satisfies me.

MRS. B.B. WALLACE (Cowichan-Malahat): I just want to make very sure that we have the commitment from the minister that the intent of this Act is to remove that problem from the Act, a problem that he's well aware we've had many difficulties with, and that this will allow a man or a woman in a second marriage situation to participate if they have not been co-owner of a habitation that has had the grant.

HON. MR. CURTIS: Mr. Chairman, in answer to the hon. member for Cowichan-Malahat, that is correct. I think many of us in this House have had these matters brought quite clearly to our attention. That's the raison d'etre, if I may say so - that's not bad, Mr. Member! - for the amendment that is before this House today.

MR. GIBSON: The raison d'etre!

MR. C. BARBER (Victoria): I have two concerns about the amendment as a whole, and then wish to introduce one of my own. The amendment, as we understand it, does indeed prevent a certain kind of abuse of the AHOP programme, and in that it is commendable - we support it. It certainly prevents the peculiar phenomenon of people getting mortgages and putting nothing down in the process, who take undue advantage of not one, but two programmes.

We're concerned, of course, about the continuing limit or tie under this amendment to the AHOP programme.

MR. CHAIRMAN: Hon. member, which amendment are you speaking to? We haven't moved any amendment.

MR. BARBER: The Act is an amendment.

MR. CHAIRMAN: The bill is an amendment. Proceed, please.

MR. BARBER: The Home Purchase Assistance Amendment Act is what I'm referring to; the bill, then, if you wish.

We're concerned about the fact that it continues to be tied to the AHOP programme which, in our view, is unrealistically low. Indeed, this opposition would most certainly recommend - we'll do so later on during the minister's estimates - that he consider increasing the limit to, say, $65,000 on average, rather than tying it to the $52,000 average limit which we're faced with. Precisely because when one examines this bill, Mr. Chairman, one determines that if it is tied to the AHOP programme, then you have to ask the question whether or not this Act in its original form is actually doing the job that the minister hoped it would do.

It's my information that applications for assistance under this Act have declined from 800 to 300 a month, precisely because it's tied to AHOP which, in turn, is an unrealistically low figure. If that information is not correct, I will certainly withdraw it, but that's the information we got from the department. Now the reason that it's been reduced from 800 to 300 is precisely because, in our view, tied to the federal level, which is itself too low, no one wants particularly to use this programme. They don't want to use it because the federal programme is more accessible; they don't want to use it because this programme isn't as generous or as appropriate to most of them.

This programme serves people who are interested in purchasing, say, condominium apartments in Fairfield or in Kitsilano or in Kerrisdale or in Surrey. It does not serve, however, many more people than that very, very small market. It does not serve many more individuals than that, and that's a fairly serious problem. That, as well, may be one indication backing up the claim that the applications for assistance under the Act have been reduced from 800 to 300 a month. There's simply no need for this particular programme as the minister has described it. Indeed, the only need that would be anticipated would result if the minister decided not to tie it to the AHOP level which again, in our view, is artificially low. So we're concerned about the bill and this amendment to it.

Interjection.

MR. BARBER: It's roughly $52,000. It varies from region to region, referring to the AHOP limit, Mr. Chairman.

No one, except those who are not particularly in need, is benefiting from this particular programme. Unfortunately and disappointingly, Mr. Chairman, this amendment doesn't provide for that.

Secondly, I'm somewhat more concerned about another aspect. I learned this morning at caucus, Mr. Chairman, through you to the minister, that the

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government has now asked that if amendments are to be entertained, they be placed on the order paper. I regret that I didn't know that before. So we have an amendment which we hope the government will consider seriously. If they're prepared to do so, we might also be, prepared simply to move an adjournment of debate.

I'm concerned about a situation which fortunately has not occurred very often in this province, a situation which occurred, I understand, last in Prince George. That is the situation of people who find themselves, by virtue of expropriation, forced into a position of having to pay back under this programme, and thereby not be eligible again because of the amendment brought in this morning for a second assistance under the Home Purchase Assistance Act in its original form. Persons who, through no fault of their own, have seen their own properties expropriated are not protected under this Act from the results of that expropriation. One of the results is that they are not eligible again for assistance under this Act. Fortunately, that does not apply to a great many people in the province of British Columbia. It has applied to some, however, as recently as just a short while ago in Prince George.

I'm sure that the minister, like ourselves, would not want persons, who through no fault of their own have their homes expropriated, to suffer as the result of thereby being ineligible in the future for assistance under this Act. You understand the anomaly or the contradiction. I apologize, but I was unaware of this particular convention. I would now like, if I may, to move an amendment if the minister thinks it's reasonable to cover this particular, quite curious loophole that allows people whose properties have been expropriated to be thereby ineligible for assistance in the future. Would he consider simply adjourning it until he's had a chance to study this amendment? If it fails and he wishes to put forward another one, we'd certainly welcome that.

Therefore, Mr. Speaker, I would amend Bill 14, section 1, line 10, by inserting after the words, "Leasehold and Conversion Mortgage Loan Act, " the following: "save and except a person whose grant has been terminated by reason of an Act of expropriation." I so move at this time, Mr. Chairman.

MR. CHAIRMAN: One moment, please, while we consider the amendment.

The amendment appears to be in order.

HON. MR. CURTIS: The amendment, now or later, is not acceptable to the government. I thank the member for offering it.

I trust that I'm not moving away from the discussion on the amendment by pointing out that what we are doing here is making every effort to liberalize the Home Purchase Assistance Act. I think that that is an important point to realize. There may still be, from time to time, those anomalies or those individual difficulties. I think, Mr. Chairman, that the member, with respect, is tying this too closely with AHOP, and AHOP only. It's true that AHOP does enter into it to an extent. But with respect to the specific instance he cited in Prince George, I believe, I have no direct knowledge of that one.

However, while we thank the member, the amendment is not acceptable.

MR. L. NICOLSON (Nelson-Creston): Speaking in favour of the amendment, Mr. Chairman, I think I can understand the minister's hesitancy and caution to accept a motion that is being brought in without time for him to look at it. But I would ask the minister very seriously to consider amendments of this type.

This section which would be amended covers persons who have received assistance under, for instance the old Provincial Home Acquisition Act. Many people today are still the beneficiaries and are still operating under the terms of that Act - persons who received the grant prior to its repeal which was, I imagine, just a few months ago.

If B.C. Hydro deems it necessary to go into some home - perhaps an older home, in which the people got the grant or the second mortgage for their first-time purchase of a home - after they've been in that home only one-and-a-half years, and they don't want to move, under the powers of their Act necessary to expropriate them these people will no longer be eligible to apply for assistance under some other programme to have a second start. They've just gotten started, maybe a year and a half rolls by, and then their legs are cut out from under them. This is a fact and it was a problem. It was one of the anomalies that we sought to rectify under the old Provincial Home Acquisition Act. It's like the problem mentioned by the hon. member for North Vancouver-Capilano (Mr. Gibson) about the anomalies which arose with spouses, with second marriages and with divorced single persons and such, trying to qualify. They were really needing this kind ~of assistance being perhaps even more deserving than they were in the first instance.

Expropriation is a fact of life. When it is deemed in the public interest, I think that this is the way to deal with it. I don't think it is sufficient to rely upon the arbitration process to fix the lost value of the grant as being part of the terms of the expropriation. I think it would be much better if the loss of opportunity simply did not exist in the case of an expropriation. When I think of the unreasoned, impassioned and emotional debate that used to issue from the Social Credit benches, Mr. Chairman, I could be tempted to respond in kind to such an indifferent approach towards expropriation.

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1 certainly would have been much more reassured if the minister had said: "Well, this has not been checked over by legal counsel. We can't accept this amendment for these reasons, but we will certainly be considering it because it is a very good point." If the minister had acknowledged that this was a good point, well, I think the members on this side of the House would be more assured. But we certainly do have to think about those few people who are going to be affected by expropriation.

I reject that such a thing can really be settled by arbitration or as terms of settlement. People should be allowed to have this second chance. I would consider putting it into the terms of reference of the mortgage eligibility committee. Perhaps he could do it by regulation; perhaps he could at least see if it could be done by regulation and put into the terms of reference of the mortgage eligibility committee. This response of the minister is a disappointment. It certainly isn't good enough for a minister who would seek to protect the shelter of people in this province and to provide shelter when most acts of expropriation are acts of government or perhaps of utility companies which have extraordinary powers.

MR. G.R. LEA (Prince Rupert): Mr. Chairman, I suspect what the hesitancy is on the part of the minister. Oftentimes, in cases where there has been an expropriation, people have made a great deal of money, regardless of that, over the years on the escalation of the price of the property. I think it would be possible to put a sliding scale or a set amount where it wouldn't affect them if they were expropriated. Maybe that could be done by regulation.

As I understand it, the government is working on an expropriation Act, too, which I look forward to seeing. But what happens when you go through a higher- or a middle-income socio-economic neighbourhood? They aren't really affected because they get a price for their house so they can go out and buy another house in some other area of town. They have the bother of having to move from one neighbourhood to another neighbourhood when they didn't want to move at all. But oftentimes, when there's an expropriation in a lower socio-economic neighbourhood, even though they do get fair market value for their home, they can't relocate because there isn't any place in the city that they can move to where they can purchase at the same price that they are being told is a fair price by the method of expropriation. They are just up against it.

Here they are, out of their home without enough money to go into another neighbourhood, and they could dearly use money to help them get a start in that new neighbourhood. It's a very unfair part of the expropriation laws as they stand on our books. But it would be a help if those people at least had the opportunity of getting that mortgage money for the second time. Through no desire of their own they're being asked to move, and they can't move to another part of town.

Oftentimes, I know that when I was a minister dealing with expropriation, you bent over backwards to see that they got a little higher price for their property than the market would allow because you knew that they just could not get into another home for the kind of money you were paying them. Expropriation should deal with a relocation as opposed to paying them for the property that you're expropriating.

I think it could be done by regulation. You could put a dollar amount and say that anyone who gets this much money for their house can't apply and receive mortgage money help. At least under a certain dollar value I think the minister would be wise, Mr. Chairman, to take a look at it and see whether it can't be done by regulation.

I wonder if the minister could indicate to us whether he would examine legislation and regulations to see whether or not he couldn't take care of that problem until such time as a new expropriation Act is placed before the House.

MR. GIBSON: Mr. Chairman, I just want to ask the minister to explain something. If I understood him right, in replying to the hon. second member for Victoria (Mr. Barber) . he described the situation described by that member as an anomaly. As I listen, it does sound like an anomaly to me. If it is an anomaly, why does the minister not wish to remove it and restore equity, or add equity, as this amendment would appear to do?

HON. MR. CURTIS: Mr. Chairman, I think the hon. member for North Vancouver-Capilano knows that within the narrow confines of an amendment which is before this committee now, I'm not in a position to launch into a lengthy discussion of expropriation matters. Indeed, that is not a responsibility of this ministry. But I can assure you, Mr. Chairman, and the members who are interested in advancing this amendment, that certainly this ministry has and will be making representations to other ministries with respect to expropriations. I've identified it as an anomaly, but we are not prepared to accept it in this amending bill, which up to now I understood was pretty good. We're really trying to improve the thing and are just not prepared to take a step in isolation in one particular instance. For that reason, as I indicated earlier, the amendment is not acceptable to this side.

Interjection.

HON. MR. CURTIS: Mr. Chairman, in answer to

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an interjection from the member for Prince Rupert, yes, there's good communication from ministry to ministry in this government. Where there is a particular problem, that will be identified and pursued. If we can do it by regulation, and I'm not certain that we can, then that's one course of action open to us. But certainly we expect considerable input into any legislation which may be under consideration with respect to expropriation.

MR. BARBER: I'm disappointed that the minister won't at least give this House an undertaking that he recognizes there is anomaly here which may affect no more than one or two or three dozen people in the province. But for those people, that's a very important anomaly and they would be concerned about it.

If an expropriation Act comes through, Mr. Chairman, this bill would still have to be amended, at least as I understand it. I'm not sure how reference to a proposed expropriation Act handles the problem we've raised here, which the minister, I believe, has agreed is a problem, and which the hon. Liberal leader (Mr. Gibson) has agreed is a problem for those one or two or three dozen people who, as the result of expropriation, through no fault of their own, find themselves ineligible for future assistance. If the minister would just give an undertaking that he would be prepared to consider at some future date an amendment which would ensure that that anomaly is ended, then we would be very happy with that assurance.

HON. MR. CURTIS: Mr. Chairman, I cannot give such assurance. That would be a matter for another debate on another day. I have attempted to indicate to the hon. members of the opposition that the situation is something we recognize. In the event that at some point there is expropriation legislation - and I have no comment on that beyond saying "in the event" - then I am informed that this bill and others would be so covered by that legislation. So really I can't do much more for you than that this morning.

Amendment negatived on the following division:

YEAS - 18

NAYS - 26

Mr. D'Arcy requests that leave be asked to record the division in the Journals of the House.

Sections I and 2 approved.

Title approved.

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

Motion approved.

The House resumed; Deputy Speaker in the chair.

Bill 14, Home Purchase Assistance Amendment Act, 1977, reported complete without amendment, read a third time and passed.

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

HON. MR. GARDOM: Mr. Speaker, committee on Bill 20.

MEDICAL SERVICES AMENDMENT ACT, 1977

The House in committee on Bill 20; Mr. Veitch in the chair.

Sections I and 2 approved.

Title approved.

HON. R.H. McCLELLAND (Minister of Health): 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 20, Medical Services Amendment Act, 1977, reported complete without amendment, read a third time and passed.

HON. MR. GARDOM: Second reading of Bill 28,

Mr.Speaker.

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CONSUMER PROTECTION ACT

HON. K.R. MAIR (Minister of Consumer and Corporate Affairs): I am very pleased to move second reading of this bill. I do not intend to take any great time of the House going over its details in principle because, with one or two exceptions which I'll deal with, it is virtually identical to Bill 65 which died on the order paper last year.

MR. G.S. WALLACE (Oak Bay): Tell us anyway.

HON. MR. MAIR: You want us to tell you anyway, Scotty? Okay. A long speech?

DEPUTY SPEAKER: Order, please.

HON. MR. MAIR: Probably the principal area that this Act deals with in some detail, which is very apropos at this time of the year, is the question of the tax discounter. I am hopeful, Mr. Speaker, that with the assistance of my colleague, the House Leader (Hon. Mr. Gardom) , and this House, we can bring this bill into legislation quickly so that the pernicious practice of charging sometimes over 1,000 per cent to someone who is getting money back from the government can be brought to an end. The section of the bill which deals with this particular practice would restrict the tax discounter to the point that he would have to return 85 per cent of the tax return to the taxpayer and, in addition - something that is often overlooked - he would have to pay any additional sums that it was later discovered that the taxpayer was entitled to. As it presently stands, Mr. Speaker, the tax buyer not only gets the agreed percentage which runs into the hundred of percent, sometimes thousands, but if it is discovered later on that the taxpayer was entitled to more than originally intended the tax buyer pockets that also. This bill would put an end to that practice.

If I may, Mr. Speaker, I would just like to run over very briefly the features of the Act which, for the most part, formed part of Bill 65 last year. The cooling-off period of the Consumer Protection Act, as is presently on the books, is extended to seven days on door-to-door contracts over $20.

It will be unlawful for a credit-card company to make an arrangement with a merchant whereby the merchant cannot offer a discount for cash.

There is a restriction in terms of the term and the amount of contracts for future services, and these contracts are, of course, the health spa and dance-studio contracts. One significant change, I might add, is that the amount has been raised from the $500 in Bill 65 to $750. 1 might say that it is very difficult to come up with a precise figure, but after listening to industry and all people involved in this particular area over the period of time since the House rose last June until now, $750 did seem to be a more appropriate figure.

There will be restrictions that were in Bill 65 on food plans, limited to $ 100.

The 15 days for a negative option - that is, the situation where you have the record company or the book-of-the-month and that sort - will remain.

The provision in Bill 65 with respect to unconscionable mortgages wherein the onus of proof goes onto the lender instead of the borrower will once again be in the Act. The Act will require full disclosure of costs of borrowing.

Six months' notice must be given before rates on revolving credit or variable credit can be raised.

Referral selling, which of course has been against the law for some time, remains and invalidates a contract.

Fifteen days must be given for a consumer to pay a bill before interest may be charged on a revolving credit account. As far as prepayment is concerned, consumers have the option of preparing interest-bearing debts at any time and will be entitled to rebates.

Incorporating in what is generally the practice of credit-card companies, the amount of loss sustainable by the consumer when a credit card is lost is limited to $50.

Mr. Speaker, I might say that, to a large degree, this bill dovetails with the proposed Borrowers and Depositors Protection Act presently before the Parliament of Canada. I have great pleasure now, Mr. Speaker, to move that the bill be read a second time.

MS. SANFORD: The opposition welcomed this bill when it appeared last year and we welcome it again with the changes, or at least some of the changes, that the minister has outlined.

We are particularly pleased about the section that relates to the income tax refund discounters. These tax buyers, at long last, are going to have some legislation which can deal with that unconscionable practice, as the minister mentioned. It was really with a sigh of relief that we know these sharks, who have taken advantage of people who were so desperate for cash they were willing to surrender their income tax T4 slips to them for a very minimal amount in many cases.... I understand that the percentage that some of the discounters have been getting is not just 1,000, but well over 2,000, according to some of the articles that I was reading. The practices that they were using were indeed reprehensible in my view.

Sometimes the tax buyers would offer the person coming into their office to pay half the cash now and then the person could come and get the other half when the rebate actually arrived. Now what happened was that when the rebate actually arrived from the federal government, the tax buyer had closed shop and left town. Others, when the rebate arrived, found

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that there were new charges suddenly added. The rebate then, of course, was much less than what the person seeking to get some cash at the time was actually expecting.

But I'm wondering if there is anything you can do, Mr. Minister, with those people who will still set up shop for a very short period of time and who will then close shop and disappear. They obviously will not file the papers as required in this new Act by July 31 of the year. They will just simply disappear and presumably could reappear again next year under a new business name. I'm wondering if the minister can do anything about that at all.'

The other point I would like to make, Mr. Speaker, relates to the section on executory contracts. This has not been changed from last year's bill. This section of the bill makes the contract illegal if the seller of the contract gets in return the names of others - referral buying. It makes it illegal for the seller to give him a rebate or a discount or any other kind of consideration, if, in return, the person who's making the purchase must submit names of others whom they can go to.

Now my question to you is this: if you have dealt with this - and I think that's been dealt with effectively in this bill - why have you not included in this bill something to deal with the problem that arose a few months ago with Eaton's, who were selling off the names of people on their lists to people who wanted to buy them? The minister was concerned at the time, Mr. Speaker, that Eaton's was able to do this, that no one could prevent them from selling the lists that they had of all of the people who were receiving their catalogue. The minister wanted to do something about it. He looked in all of the statutes under his jurisdiction and found that there was nothing he could do. Now here we have a bill which covers a wide range of areas. Why couldn't you have included in this bill something which would deal with that specific problem? I would like the minister to comment on that.

The other thing that I would like to recommend to the minister, Mr. Speaker, is that these door-to-door salesmen should be given some kind of an identification through the Ministry of Consumer and Corporate Affairs. People make misrepresentations at the door. Many people in the past have gone to the door and said they're representing such and such a company. When the Better Business Bureau checks them out, they find they in fact are not representing that company and in fact are taking cash and cheques from people at the door because people have assumed that, yes, they are working for such and such a company and they would like to purchase whatever it is they're selling. There is no identification of that person.

Interjection.

MS.SANFORD: That could well be. I don't know if we want to do anything about that, do we?

Mr. Speaker, I feel that the Ministry of Consumer and Corporate Affairs, it seems to me, could issue to companies some kind of identification card or identification paper - probably similar to a driver's licence - where a picture is on it. The company could be responsible for putting the pictures on of the salesmen. The card could be signed by yourself or someone else within the Ministry of Consumer and Corporate Affairs. That way, when the salesperson appears at the door, the customer can say: "Well, where is your identification? Are you really representing the company that you say you're representing?"

There is still nothing in this legislation that deals with those problems. I'm wondering if the minister would take that into consideration and perhaps consider an amendment to ensure that ', proper identification is available to people when salesmen appear at the door.

The other point that I would like to make relates to a point that I raised last year when this bill was under discussion. It concerns a particular constituent of mine who was bilked by a builder. This particular constituent made a large down payment to a building contractor. I have also spoken to the Attorney-General (Hon. Mr. Gardom) about this; he knows all about it. The builder commenced construction on the house and then suddenly left for a holiday in Hawaii. He came back and declared bankruptcy.

Now there was absolutely nothing my constituent could do in order to get any of his money back. As a result, he ended up losing that home entirely. There was just no way he could pay somebody else to come in to do the work; he didn't have that kind of money. The money had gone out to him, but apparently there was nothing he could do.

Now when I raised this last year, the minister replied in the House that.... Maybe I should quote what the minister said at the time because I would like to know what's happened. I just have to find it.

Insofar as some of the questions about the new homes are concerned, Mr. Speaker, through you, to the member for Comox, I quite agree that there are a large number of problems in this area and, Madam Member, they are being looked at very actively by the department right now.

Almost a year has gone by since this bill received second reading and I don't see anything in here yet that deals with the problem that was being looked at , 'very actively" by the department at that time. I'm hoping that the minister can give me some assurance that this practice - which I know goes on all over the province - can be dealt with.

The minister didn't really explain one of the other changes that was made in the bill. Last year's bill

[ Page 2052 ]

allowed the seller to take only 10 per cent of the total contract price. But that's now been changed to 30 per cent. I don't think the minister really explained why that has happened. This seemed to give less protection to the consumers by allowing the seller to take that initial 30 per cent with the rest going into a trust fund to be taken out as the service was delivered. I would like to know why it was okay last year to have 10 per cent; and why that has suddenly gone up to 30 per cent. Mr. Speaker, those are all the comments I have at this moment.

MR. GIBSON: Mr. Speaker, I'll be very brief at second reading because I think that this is, by and large, a good bill. I compliment the minister and the government for it.

The cooling-off period on executory contracts and the disclosure requirements there, I think, are good. The maximum term and repayment provisions for future-service contracts are good. With respect to the disclosure of costs of borrowing, my reading of the Act, which I will take up at the committee stage, would seem to indicate that it does not apply to a disclosure of interest rates on charge accounts. But I will come back to that at committee stage.

I would particularly compliment the minister for finally enacting into law the clear impropriety of a credit card company attempting to bind merchants not to offer cash discounts for persons who choose to buy by cash instead of by credit card. This has been an iniquitous business for many years. Credit charges can run from 2 per cent to 5 per cent, and even higher on some purchases. What we have, in effect, is people who are paying cash, paying the record-keeping and credit charges of people who are using credit cards. That's not right. It's not right that a person should be forced to pay for a service which he is not receiving, and has no means of receiving as long as he doesn't have that credit card.

I have investigated some of the contracts which some of the credit card companies have with their merchant clients. They have contained those provisions and they were wrong. The merchants did not like them in many cases, and certainly the customers - if they know about them - don't like them.-at all. Henceforward, let the consumers of this province know that they have every right to go into any credit card establishment and, first of all, ask the question: "What is your discount rate? What do you give to the credit card companies as a return for the service?"

Suppose it's 2 per cent, 3 per cent, 5 per cent -whatever it is. Then they have every right to say: "I'm going to pay cash and I want that 5 per cent off" - or whatever the number is. And consumers should do that, because I'm telling you, if you're paying cash you're paying for somebody else's services, and if you're not getting those services you're entitled not to pay for them. This is an excellent section in the bill.

Interjection.

MR. GIBSON: Yes, the credit card companies do assume the risk. But again, that's one of the services that, as a cash buyer, you're paying for and yet you're not getting.

Let me make it very clear: I'm not against the credit card system. It's one of the ways that allows small merchants to have a credit apparatus that the large department stores can afford on their own and the small dealers and the small restaurants can't. I'm not against credit cards, but credit cards have a very definite cost and that cost ought to be paid by the users of the credit cards and not by the payers of cash. The payers of cash should insist on those rights and this bill gives them a way of doing that. They're still going to have to stand up for their rights. They're still going to have to ask the merchant or the restaurateur: "What is that percentage that you're paying to the credit card company?" Then they're going to have to demand it. They won't always get it, and they're not given a legal right to get it by this bill, but they at least can now say: "As a vending establishment, you no longer have the excuse that you are bound by contract that you can't give me this cash discount."

The income tax refund discount has been dealt with. I support it. The food plan contracts are good. The mortgage transactions relief section again is good, but I will come back to this in committee.

There is a provision here that the debtor is protected if the lender has reason to believe that at the time of the transaction there was no reasonable probability of full payment of the principal sum and full repayment of the cost of borrowing. The lender is not protected, rather than the debtor, in the case where there has been fraudulent misrepresentation by the debtor - a representation which in effect was fraudulent but may not be provable.

I said to the minister's department for investigation earlier on this year.... I think there is an investigation continuing in the case of a person who had a piece of land and deliberately mortgaged it two or three times for amounts far in excess of its value. That, as I understand it, is not yet covered by this legislation. I'll be asking the minister about that in committee, or he might choose to speak of it in closing debate on second reading.

That's all I have to say at this stage, Mr. Speaker. Generally speaking, this is an excellent bill and I support it.

MR. WALLACE: Mr. Chairman, I wish to support this bill. I think there are many excellent sections in the bill.

[ Page 2053 ]

1 think initially I'll just say that it demonstrates one point that we've often discussed on both sides of this House - that it's a great idea to introduce a bill and not necessarily proceed with it at the time. This bill was given a great deal of public dialogue from the time it was introduced last year and the minister has been able to refine the bill and add improvements. I think that just bears out the concept that maybe there should be more time given for bills with this amount of public impact for the public to be given a real opportunity to respond and meet with the minister and suggest ways in which things could be changed.

On that point I would like to support the question by the member for Comox (Ms. Sanford) as to why, in the case of advance buying of contracts, the seller can now acquire 30 per cent of the contract price instead of 10 per cent immediately and put the remainder into trust. I notice that in regard to dance studios and health spas they're given an extra year to phase in their arrangements with the established criteria in the bill. The bill we had in the House last year suggested that five years was an adequate period of time. Since the whole reason for this kind of bill coming before us is that some of these sellers of service have been less than fair with the consumer, I'm just a little puzzled as to why the minister has made such a substantial difference between last year's bill and this year's bill in regard to section 22.

The seller can obtain 30 per cent of the value of the contract right at the start, whereas the previous bill limited the initial amount of cash the seller could obtain right at the start of the contract to 10 per cent. The phasing-in period for the dance studios and the health spas has been increased to six years from five years, which may have some very valid reason, but I'd just appreciate the minister explaining that.

I think we're all particularly pleased with the bill's attempt to deal with tax and the selling of tax refunds by the taxpayer when he is pressed for ready cash. I want to just quickly ask two very specific points.

A rather militant statement appeared in the press by a Mr. Richard Gordon, who is the owner, I believe of Surrey Tax Services. I don't like the tone of his remarks at all. He suggested that this bill was not even constitutional since any matters dealing with federal income tax could only be dealt with through federal legislation. I'm delighted to see the Attorney-General (Hon. Mr. Gardom) paying close attention to the comments I'm making. Mr. Gordon said: "We feel this whole matter is out of the jurisdiction of the provincial government. Anything pertaining to income tax is handled at the federal level." That is a quote from The Vancouver Sun ~of March 12.

I notice that the minister himself is reported on another occasion, in the Victoria Times of March 11, as saying:

"He does not expect the provincial law to eliminate the buyers. 'They'll keep taking a chance; that's the nature of their business.' He will continue his efforts to get the federal government to introduce changes."

Now I think the minister is making a most worthy and creditable attempt to deal with a vicious problem. So don't misunderstand me, Mr. Speaker, I'm thoroughly in favour of all the attempts the minister is making to control this. But he obviously is not fully convinced that this bill can be enforced. It is also obvious that we could do with help from the federal government, and the minister is on-record as making it very plain how they could help us with a very simple amendment to federal legislation whereby cheques would be made out payable only to the taxpayer. I haven't sufficient knowledge of the federal legislation to know if it is a simple amendment, but the minister is on record in the press as saying that he felt this would be reasonably straightforward and easy to do.

So my questions are twofold. To what degree does the minister feel this provincial piece of legislation can be effective? Does he think it will be effective half the time or 90 per cent of the time? The people he refers to who will keep trying and are always ready to take a chance.... Just what percentage of the total number in the field at the present time does he consider will continue to be a problem and will not live within the 85 per cent allowance that the taxpayer must receive out of this refund? How many does he anticipate will perhaps try to flout this bill in other ways?

Secondly, how are we progressing in our discussions with the federal government? I, in part, have to agree with Mr. Gordon that the federal income tax is one of the most vital functions that the federal government carries out in this country. How are we making out in our request for their co-operation? To what degree is there a real chance that the federal government will change the regulations so that the refunds must always be made payable to the taxpayer? It seems a very simple matter, and I don't know why there's all the problem of getting them to co-operate to that extent.

I think the section on credit cards is also an excellent one. I just want to suggest, though, that there may be one little anomaly. Again, I seem to be hammering away at the federal government today. This legislation seems to assume that we have an efficient post office in Canada and an efficient mailing system.

MR. J.J. KEMPF (Omineca): You couldn't be further from the truth.

MR. WALLACE: I think it's section. . It doesn't' matter. We'll get into this more in committee

[ Page 2054 ]

perhaps. Dealing with the notice requirements, there's a part here which states: "The statement of account shall be deemed to have been received by the borrower on the fifth day after it was posted, if posted in Canada by first-class mail." We all know that it sometimes takes even more than five days to get mail not necessarily from distant parts of Canada. It can take you five days to get mail from Victoria to Oak Bay sometimes - that long, beautiful drive from Victoria to Oak Bay.

But the interesting anomaly - well, I don't know if it's an anomaly - in one of the other sections under credit cards, where a person discovers that they've lost their credit card, the legislation states that the notification shall have been deemed to be given to the credit-card company on the day that you mail the notification. So in that regard, I suppose if the Canada postal system is the mess it is - and it certainly is, in my view - this legislation is trying to give some favour, I suppose, or some better opportunity to the credit card owner who loses his credit card and is in a hurry to notify the company. At least the legislation makes it very clear that the notification will be deemed to have been given on the date of mailing. But on the other hand, in regard to being notified of your debts, the notification apparently will only become legal five days after it was mailed in Canada.

I think this is an important point. I'm sure all of us have paid debts on our credit card within the 15 days, but the mail system again being what it is, next month, having paid the total balance.... I had one the other day on an Air Canada credit card. I paid the total amount, and I know that I paid it within the time assuming that when I mailed it it didn't take a week to get to Winnipeg, or wherever it goes, and then I get a bill next month for $2.50 interest.

Interjections.

MR. WALLACE: The fact that there are some private discussions going on around me about a quorum truly reflects the exhilarating nature of my speech, Mr. Speaker. (Laughter.)

At any rate, Mr. Speaker, I feel that the section on credit cards, the question of notifying the borrower of the latest statement of account, and the various ways in which the minister is trying to ensure reasonable protection for the borrower, I think, is one of the most excellent parts of this whole bill. I can't too strongly support the Liberal leader's (Mr. Gibson's) comments that where someone is paying cash, the way in which the minister has made it possible for the seller to negotiate a cash discount for cash is an excellent idea. We've talked in previous debates in this House about the fact that people are borrowing at rates that they don't even know about themselves - or don't take the trouble to inquire.

What we can do to encourage people to recognize what they save in the long run by paying cash is very much to be commended in the minister's bill.

I think the other comments can wait for committee stage, Mr. Speaker.

MR. C.S. ROGERS (Vancouver South): The remarks b y the member f o r North Vancouver-Capilano (Mr. Gibson) prompted me to stand in my place and make a few remarks about merchants offering discounts for cash, as opposed to credit cards. I would ask you to picture in your mind the storefront of the average restaurant with about 12 symbols in the door reminding you which credit cards are acceptable on those premises. The charge that the credit card companies lay on the merchants varies from credit card company to credit card company, and it also varies as to volume.

The two bank cards in Canada in common use are the lowest charges - Master Charge and Chargex - so if someone tenders an American Express Card the charge to the customer is actually higher than to someone who tenders, say, Master Charge or a Toronto-Dominion Chargex card. There probably needs to be a little clarification as to what the merchants are going to be able to offer in the way of a discount because it would vary enormously between cards. I would suggest that there are probably 15 or 20 cards acceptable in most commercial premises, and the rates at least vary that much.

MR. D.G. COCKE (New Westminster): Mr. Speaker, this bill has been before the House for some time. There was a bill before the House last year saying some of the same things. However, we're delighted with the extension into the area of tax rebates - tax buyers. What this government could do with the federal government with respect to seeing to it that the federal government will not mail the tax returns to the.... That's really the specific problem. It's the mailing situation. The mailing address appears on the tax form, and so therefore it's mailed back whether it's in the person's name or not, and they hold it. They've got their hands on the hot little cheque, so it's the address problem. The minister's nodding his head. That's quite right.

Mr. Speaker, the bill, as I said, has been on the order paper for some time. We've as much involved in this situation, as far as our conscience is concerned. I'm not particularly happy with 15 per cent. I think it's too high. I think that the government should think in terms of what that is. Oftentimes a person takes the tax form in. He has two months before the tax buyer gets his money back, and 15 per cent over a two-month period, in my view, is a pretty high rate of interest. However, the minister's thought about it. Maybe next year he'll bring in an amendment.

I don't want to have anything slow this bill up. I

[ Page 2055 ]

would suggest to you that we will, today, if the minister wants, facilitate all three readings on this bill, providing we're given an undertaking from the government that the L-G will be called in and proclaim this Act so that we can stop the ripoff now. We've already waited too long. So that's our position, Mr. Speaker. Let's get on with it as quickly as possible. We'd like to hear when he'll be brought in.

HON. MR. GARDOM: Within a week.

MR. COCKE: Mr. Speaker, what's the point in us going through all three readings? The Attorney-General says he can't tell us when. Within a week?

It's been discussed for the last week. As a matter of fact, it was your side that was talking about this before as well, so, Mr. Speaker, there is no point in us going the route if we're doing it just for fun.

HON. MR. MAIR: I would like to answer, if I could, one or two of the comments made by the members opposite. If I do not deal with each and every matter raised, I'm sure that we could do it in committee.

The member for Oak Bay (Mr. Wallace) is quite right that we did offer Bill 65 as something of a trial balloon. The reason we have affected a lot of changes to the bill is as a result of what we heard in the ensuing time.

Dealing with the question of the tax refund and the comments of many members opposite, I would like the House to know that about two weeks ago I spent considerable time with the Hon. Donald Macdonald, the Minister of Finance, and the Hon. Monique Begin, the Minister of National Revenue, on this particular point. I urged as strongly and as eloquently as I am capable that they do just what the members opposite suggest: that they make sure the cheque goes to the taxpayer and not to the tax buyer. Then we wouldn't have to go through a lot of the things we are now going through.

Insofar as the suggestion that it may very well be that the tax buyers simply set up shop and disappear, I can quite see that there may very well be an enforcement problem. Our department will do its best to enforce. It may be that in some cases we simply get the signs down off East Hastings Street and the tax buyer into the beer parlour. We can see that this is a problem. However, just because we're going to have a problem in enforcement does not seem to me to be a reason not to bring in legislation that is going to make the practice illegal, or at least control it.

I believe it was the member for Comox (Ms. Sanford) who talked about referral buying. We think that this is a particularly good part of the Act. I think that the feature of referral buying is that you usually pay at least half as much again for the object in the first place and then, if you work your butt off, you might get it back, so you're only paying what you should have paid for it in the first place. We think that this is a good part of the legislation.

Insofar as the question raised by the member for Comox on the Eaton's selling of names and so on, I have asked my staff to look into the possibility of amendments either to the Privacy Act or to the Trade Practices Act with respect to this particular practice. I've gone on record as saying I think it is a very pernicious practice indeed. It doesn't matter whether it's done by government or done by private companies such as Eaton's. It seems to me that when a person's name and address is disclosed to somebody for a specific and isolated purpose, it is disclosed for that purpose only and ought not to be sold.

On the question of identification for door-to-door salesmen, I will take the member's suggestion under advisement. It occurred to me when she was making that suggestion that it might be difficult for us as a provincial government to enforce and somewhat easier for a municipal government to enforce in that they are handing out the business licences in the first place. But I think that the suggestion is certainly worthy of consideration and we will look into it.

On the question the member raised about the builder, I do remember the discussion we had last year, Mr. Speaker, through you. I don't remember the precise details, but I can say this: my department and the Ministry of Housing are working at this time, and have been working over the past year, on the question of new home warranties and warranties on homes in general. I don't want to get into a protracted discussion of this at this stage, but I'm sure that if the member were to consult with my predecessor, who was a colleague of hers some years ago, she would realize that the problem is a difficult one as it has a number of serious impacts. It is not one that a person can answer easily. I do hope, however, that my colleague, the Minister of Housing, and I will, in due course, be able to do something about it.

The member raised the question of raising the original amount allowed to the seller from 10 per cent to 30 per cent. Perhaps I can deal with this in the same way I dealt with the $500 or $750. You're talking about figures; you can make arguments out for all propositions. We listened to industry, listened to it carefully and, I might say, cross-examined it carefully. I took the view from the beginning that probably they were making out their own case much more strongly than they were that of the consumer. Notwithstanding that, Mr. Speaker, through you to the member, we felt that in all equity and fairness this was not an unreasonable amount of money to allow.

In dealing with the member for North Vancouver-Capilano (Mr. Gibson) , I got the

[ Page 2056 ]

impression that he felt his concerns might better be raised in committee in any event. Other than to say that I agree wholeheartedly with his comments and that of the member for Oak Bay (Mr. Wallace) on the question of credit cards, I think I could perhaps deal with his concerns a little more carefully in committee.

I think that the point raised by the member for Oak Bay on the constitutional aspects of the tax-discounter situation is a very good point. We feel that under the province's powers of property and civil rights we have the power to deal with this. I, too, have heard the tax buyers say they are going to challenge us on constitutional grounds, but I would remind the House that they have tried it twice and lost two cases, so thus far their batting average is not good. I expect that their batting average against us will not be good.

I think it also worthy of comment, if I may, Mr. Speaker, to say that while all other aspects of industry which were covered by this bill came to my department with their concerns, we did not hear from one tax buyer. We have heard from them through the press, but we have not heard from them directly.

I think that the member for Oak Bay also was concerned about what percentage of tax buyers we felt we'd be able to control. Frankly, there's no way that we can answer that. I gather from the fear that they are expressing through the news media that we're going to be able to control a fair number of them, because obviously, they're concerned about this legislation. But I want to assure the House that our trade practices branch will be instructed to enforce, as best as they are able, this bill when it has passed the House, as the indication is that it will be.

Just one final word, Mr. Speaker, if I may, to the first member for Vancouver South (Mr. Rogers): perhaps he might have missed the point. The point with respect to the credit cards is that it would be unlawful for a credit card company to make an arrangement with a merchant that for the use of that credit card the merchant would be unable to offer a discount. I think that's the basic point. He can make whatever deal he wants to with a credit card company; that's of no concern to us. What is of concern to us is that what the credit card companies have hitherto - not so much lately as in years gone by - gone to the merchant and said is: "In order to use the Ajax credit card, you cannot offer a discount." We say that's wrong.

I move the bill be read a second time.

Motion approved.

HON. MR. MAIR: Mr. Speaker, I ask leave to refer Bill 28 to a Committee of the Whole House for consideration forthwith.

Leave granted.

Bill 28, Consumer Protection Act, read a second time and referred to a Committee of the Whole House forthwith.

HON. MR. MAIR: Mr. Speaker, while we're waiting for Mr. Chairman, I wonder if I could take the liberty of introducing to the House ...

DEPUTY SPEAKER: With leave. Shall leave be granted?

Leave granted.

HON. MR. MAIR: Thank you very much.

... the 54th company of Girl Guides from Vancouver, accompanied by Mrs. Yates. We do hope they'll have a pleasant day in Victoria.

CONSUMER PROTECTION ACT

The House in Committee on Bill 28; Mr. Veitch in the chair.

On section 1.

MS. SANFORD: Mr. Chairman, in this section, the full name and address of the seller and the buyer was on executor contracts in the old Consumer Protection Act - that is, the one passed in 1967. I'm wondering why that provision has been dropped in this Act. I'm wondering if the minister could give us any information about that. I think it was a good provision in the old Act to have both the seller's and buyer's full name and addresses made available. It's been dropped.

HON. MR. MAIR: Mr. Chairman, it is the intention of the ministry to cover that by regulation.

Sections 1 to I I inclusive approved.

On section 12.

MS. SANFORD' Section 12 (2) (c) indicates that:

within seven days after the day it was signed by the buyer, and the guarantor if applicable, a copy of it has been received by the buyer . . ." and so on. I don't need to read it because I'm sure the minister is familiar with it. But most finance companies do not give a copy of the contract. What they do give is something called a "disclosure notice, " but they don't give a copy of the contract itself. I think that this should be made a requirement under that section.

HON. MR. MAIR: I will certainly take the member's comments under consideration, Mr.

[ Page 2057 ]

Chairman, for any future amendments.

Section 12 to 21 inclusive approved.

On section 22.

MR. WALLACE: Well, I know the minister has given a general answer to this question already, but I wonder what criteria he used to come to the 30 per cent decision. He did mention that he met with various groups. I agree that in an issue of this kind, I suppose, the final figure that's chosen is somewhat arbitrary. But on the other hand, there must be some definite criteria as to why this was the amount that the seller could acquire in cash at the outset of the contract - namely, 30 per cent. After all, it is three times the amount that the minister thought was appropriate just a year ago.

When one thinks of buying goods other than this kind of contract for service in a dance studio or whatever if we buy a fridge, a stove, a home or motor car not too many people put down 30 per cent of the cash on such purchases, whereas this seems to have been a fairly substantial increase that the minister has agreed to. Could the minister just give me some idea of what the criteria were that were used to agree to that figure?

HON. MR. MAIR: As the member knows, I am sure, this particular matter was covered, first of all, by a prep aid-contract study, and a number of figures were bandied about. After Bill 65 was on the order paper and we received all the submissions from various people affected, we took these submissions and we ran them by our own accountants whom we had employed for the purpose of deciding what indeed was fair. Now I am not prepared to stand in the House and say that 30 per cent is a figure that should be etched in tablets of stone, but I am persuaded, after talking to our accountants and looking at their figures, that this is a fair and reasonable figure.

Sections 22 to 25 inclusive approved.

On section 26.

MR. GIBSON: Mr. Chairman, I would like to ask the minister which major forms of credit transactions this section does not apply to. I support it as far as it goes. I am wondering, however, if it covers things such as charge accounts.

HON. MR. MAIR: Yes, it would cover revolving credit - credit cards. I would take the view that it would not cover, however, a house mortgage.

MR. GIBSON: If I am a little late in paying my Dairyland bill, and they tack on extra charge on that, would they have to specify what percentage that is and give any justification for it?

HON. MR. MAIR: Notwithstanding, Mr. Chairman, the fact that I know the member opposite has a personal grievance against Dairyland by reason of the way they package their milk these days, the answer is yes.

MR. GIBSON: Hear, hear!

MS. R. BROWN (Vancouver-Burrard): Could the minister tell us, Mr. Chairman, why it will not cover house mortgages?

HON. MR. MAIR: This is covered in a subsequent section. I believe, Madam Member - section 40.

Sections 26 to 30 inclusive approved.

On section 3 1.

MR. C. D'ARCY (Rossland-Trail): I'm not a lawyer but perhaps the minister could let us know.... It seems to me I have read of test cases where issuers of credit cards have sued holders, and holders have refused to pay for charges that were made after they were lost or stolen. In fact, the holder has won, the contention being that the card is the property of the card-issuing company and any purchases made against that card which were not authorized by the credit-card holder are, in fact, the responsibility of the company and not the holder himself. I realize it is a gray area.

Initially I was very glad to see this section in here; I thought it was a real step in the right direction and it does some good things. Then it occurred to me: suppose this is still a grey area? Will not the very fact that there is protection in here for the holder to some degree legitimize the issuer's case that there is some liability there? I am not going to introduce an amendment, but if section 31 (2) (b) ended after the word "use". . . . "If the credit card has been stolen, the holder if not liable for any debt incurred through its use."

If I allege that somebody's purchases on my Chargex are not valid because the card is no longer in my possession, what difference does it make whether I sent a registered letter out this afternoon or whether I don't? Either I am liable or I am not liable. As I say, on the surface it's a really good section, but I am just wondering if it's not missing the mark. It appears to be designed to protect the holder; I am sure that's what the minister means. I am concerned that it may have exactly the opposite effect - it may legitimize the contention of the issuer that there is responsibility to the holder for a card issued by the

[ Page 2058 ]

company, still technically owned by that company, even though the holder may have no control over the expenses and charges being made against that card.

HON. MR. MAIR: Mr. Chairman, I think that one must recognize that certainly in common law the contract between the credit card company and the individual often imposes almost limitless liability upon the individual holding the credit card. It was his right to credit, as expressed in that card, and it was his duty to make sure that he kept it. Of course, provisions usually are in the contract whereby he could report it stolen. Then, only things that were :charged after the theft was reported were calculated against him. This is an effort to try to assess the risk and we felt that there must be come risk attendant upon a person who owns a credit card.

It is not fair, if it's lost or stolen and somebody takes trips to Las Vegas and so on, that all of that fall upon the holder of the card. On the other hand he should not be able to deal with his card in a careless manner without any penalty whatsoever. So once again it's a question of judgment and the ministry felt that the amount of $50 was a fair and reasonable assessment of the risk against the card holder.

MR. LEA: Mr. Chairman, a question to the minister: I know that in the past you could get credit cards without soliciting for the card. I also know that you could get a card in the mail. I wonder if that's still allowed.

HON. MR. MAIR: I believe, Mr. Member, if you'll look at section 32, that unsolicited Credit cards are covered under that section.

MR. WALLACE: I want to clarify with the minister the question of notification. As I mentioned earlier, the notification is deemed to have been given at the time the notice is mailed, presumably that very date. I just want to be sure that what the minister is saying in this bill is that if that notification takes two weeks to get to Detroit or wherever it's going, the person notifying the issuer of the credit card is by no means committed to pay for any unauthorized use of that credit card between the date of mailing and the date that it's received in the office of the issuer of the credit card.

The second point is that since 2 (a) and (b) specifically give the reasons why this issue is important, if you lose a credit card or have a credit card stolen, what, if any, protection is there in the case of an individual who does not become aware that his credit card has been stolen until he gets the bill for a trip to Las Vegas that somebody else has taken? The minister made the point that there is shared responsibility. There's responsibility on the part of the company issuing the card; there's responsibility on the part of the holder. I agree with that. But I presume that there are cases where the holder is unaware that his card has been stolen until such time as he gets faced with a bill for services that the thief has incurred. I realize it is a very difficult area to cover. But has the minister got anything in the bill -I can't see anything here - to deal with that problem? If my credit card is stolen and I don't find out about it for a week or two or three, during which time somebody has incurred $2,000 or $3,000 worth of service, am I legally under this bill still stuck with paying that kind of debt?

Interjection.

MR. WALLACE: No. There is an interjection that I'd only be stuck with $50. But if I didn't know that card had been stolen until two weeks after the act, and in that two weeks somebody spent $1,000 or $2,000 under my signature, from the way I read this bill I assume that I would still be faced with that debt on the assumption that not knowing it had been stolen is no defence.

HON. MR. MAIR: There is another question. I'll take the other question first.

MS. SANFORD: I'd like to agree with the member for Oak Bay (Mr. Wallace) . It seems to me that there is sloppy drafting here in terms of when the notification actually occurred. Is it on the day on which the letter was put in the mail? For instance, in the bill last year, a subsequent section was, in fact, rectified in this new bill. Section 34 (l) states specifically: "that a payment made by a debtor shall be deemed to have been made on the date the payment is received by the creditor." Now I'm not sure what this section means - whether he means that it's on the day on which the letter is registered or on the day on which it is received.

HON. MR. MAIR: First of all, Mr. Chairman, the significant date is the date that it is mailed. I think that that's clear and that answers, I think, both the member for Oak Bay (Mr. Wallace) and yourself on that particular point. And the overriding feature - to the member for Oak Bay - is that the limitation, even in the case that he has presented, is still $50. The maximum the person can be responsible for is $50 regardless of the fact that he may not have known that his card was stolen. I might say also that as a matter of practice, Mr. Member, certainly for the major credit card holders, this has been the practice with them for many years.

MR. D'ARCY: I just have to disagree slightly with my good friends from Comox and Oak Bay. I am not convinced at all by the minister's contention that

[ Page 2059 ]

there is some kind of liability in common law. I would like to see him produce.... I don't have any precedent to show otherwise, but I am aware - I've heard it reported in the news - of cases where credit card issuers have sent bills to holders and the holder has said: "I'm sorry, I've lost that card, or it was stolen, and I refuse - to pay you anything after 4 o'clock on Friday afternoon which was the last time I knew I had the card." In fact, a court case ensued. The company went after the individual for the debt, and, in fact, the court ruled in favour of the holder. They said that this card is the property of the credit card company and unless they can show that this individual either signed for these goods or services under a false name or in fact authorized somebody, even verbally - in other words, somebody connected with him in some way; a friend, or relative, or an associate - unless they can draw some connection, there is no liability at all on behalf of the holder.

Now we have a thing here where you're legitimizing liability up to the point of $50. You're setting a floor of $50, but my contention is that the floor should be zero. Because you're getting into a case where this could be used against a holder who claims no responsibility whatsoever. This could be thrown up in his face by the issuer of the card saying: "Well, you at least owe us $50." As I say, I agree with the intent of the section. I think it's excellent, but in fact I think it's missing the mark and really, in practice, is going to come down on the side of the issuers of the cards. I would like to see the whole second p art of the section end, as I say, approximately in the middle. Let the courts decide whether a holder of a credit card, in fact, has any liability for expenses incurred or charges incurred on that card through persons whom he has not authorized.

MR, LEA: Mr. Chairman, I don't think there's any misunderstanding on either side of the House by any member about what the intent of it is. I think everybody, including the minister, agrees on what we'd like to see. I wonder whether it would be possible, the minister being a lawyer, to give some sort of opinion on whether or not this couldn't be taken care of by regulation. It wouldn't, I don't think, contravene the intent of the section to clear it up by regulation.

HON. MR. MAIR: First of all, Mr. Chairman, I don't think that there is any question as to what the section says and what it intends. In answer to the member for Rossland-Trail, you can read court cases from all over the world and get different answers because it depends upon the jurisdiction in which the case was heard. It depends upon the contract that the person entered into with the credit card company. So you've sort of got me punching at a bag of feather because I don't know what case you're talking about in what particular area. What we are trying to do here in British Columbia is impose not a floor, but a ceiling of $50, so that under no circumstances can you be liable for more.

In answer to the member for Prince Rupert, I think the answer is clearly yes, that we can, if there turn out to be any problems with this section, cure it by regulation.

MR. WALLACE: Mr. Chairman, I just want clarification of the answer the minister gave to me. If my credit card is stolen on the first of the month, and it's a month or five or six weeks later that I get a bill on that card for $3,000 or $4,000, you are saying that this section can be interpreted to mean that because I did not know the card was stolen, I am not liable, even though I have not given notification that the card was stolen. Because the way I read the early part of the section, the whole process of notification is most clearly defined to imply the responsibility on the part of the credit holder to notify that the card is lost or stolen.

Yet the minister's answer, Mr. Chairman, which is really the answer I would like to get, to me is not really encompassed within the language of this section. The language of this section seems to make it very plain that you have a responsibility to notify if it gets lost or stolen. But the section doesn't really get the holder off the hook, in my view, if you don't know that it's stolen. I would have thought that maybe some small additional amendment is needed to cover the holder in the circumstances where he was unaware of the fact that someone had stolen the card.

HON. MR. MAIR: May I observe that in the committee today we obviously have a doctor who needs a lawyer and a lawyer who needs a doctor, because my eyes are so bad I have to have somebody else read for me. But let me say this: my interpretation of this as put to me by my deputy, particularly, is that after notification you don't owe anything. There's no problem once you notify. You don't owe $50, or any amount at all.

SOME HON. MEMBERS: Ah!

HON. MR. MAIR: I think that's the point. Now if you don't notify, can't notify, forget to notify, or don't know that you've lost your credit card, the maximum of your exposure is $50.

MR. D'ARCY: I'm glad that the deputy could get through to the minister where I couldn't. This was my contention all along. Rather than putting in a ceiling of $50, the ceiling now without this section was zero, and in fact the minister was raising it to $50. But I'm glad to realize that the deputy, who

[ Page 2060 ]

must have drawn this section up, knew that all along but didn't tell the minister.

Sections 31 and 32 inclusive approved.

On section 33.

HON. MR. MAIR: I propose a minor amendment to section 33 (l) in the second line: that the figure be changed from 15 to 10. Then in 33 (3) (a) , second line, last number, the figure again should be changed from 15 to 10. 1 so move, Mr. Chairman.

MR. CHAIRMAN: Do you have that in writing, hon. minister?

HON. MR. MAIR: In a manner of speaking, Mr. Chairman.

MR. CHAIRMAN: One moment, please, while we wait for the amendment.

MR. WALLACE: While we're waiting, can the minister tell us why?

HON. MR. MAIR: In dealing with the industries affected by this particular section, it became clear that, for technical reasons as much as anything -particularly computer reasons - the 15 days was simply unworkable and the 10 days was the maximum allowable that would have been workable from a practical point of view.

MR. CHAIRMAN: The amendment appears to be in order.

Amendment approved.

On section 33 as amended.

MR. WALLACE: Mr. Chairman, I'd just like to get back to the point I raised earlier about subsection (4) (b) that:

"a statement of account shall be deemed to have been received by the borrower . . . on the fifth day after it was posted, if posted in Canada by first class mail to the borrower's last known mailing address."

Why was five days chosen when, in point of fact, as I mentioned in the credit card debate a minute ago, the notification is deemed to have happened on the day the notification was mailed? I think whether the minister had chosen to make it five days or eight days or three days or 15 days reflects the minister's awareness of the pathetic state of our postal system in Canada. I wonder what happens or to what degree the borrower is legally committed if he never receives the mail at all.

On more than one occasion, I just know that I never received a communication that I was told I should have received. What is the legal standing of a person who - never mind getting it five days after it was mailed - doesn't get it at all? In fact, we know very well of cases like this. There was an instance in the paper the other day where somebody got a letter nine years, I think it was, after it had been mailed. That wasn't by putting it in the water of one side of the Atlantic and waiting for it to get to New York 10 years later. Someone received a notice in the mail the other day saying they no longer had to make payments because they were deceased.

Now. these things happen. I realize they happen in minority situations, but we're here to protect the rights of....

Interjection.

MR. WALLACE: Yes, they got a letter telling them that they needn't send any further payments because the records now showed that they were deceased. I heard that tragic example the other night. A lady phoned me. The other side of the coin is that her husband did die two years ago and she got a letter in the mail from the federal government asking for information about why he hadn't been making contributions to the Canada Pension Plan.

So we have to acknowledge the real problems we have with the Canadian postal system. I would wonder why five days were chosen. Secondly, what is the legal status of somebody who never got the notice at all?

HON. MR. MAIR: I think the only answer that can be given as to the five days is you simply have to pick some time that is reasonable to expect the mail to be delivered. I quite agree that the mail service is not as it might be in Canada, but the department felt in drafting this that five days was as close as you could get to a reasonable date, taking into consideration that there are obligations and rights on both sides for both the person who is purchasing and the person who is selling.

Insofar as the mail not being received is concerned, subsection (5) , 1 think, Mr. Member, covers most of the problems that you have raised under that section. I suppose it does not cover the situation where, for reasons which you simply cannot determine, the mail did not ever get there, but I think we must also remember that you know you got the goods and you know you have to pay for them. So it is not as if you are caught completely by surprise. While we attempt to cover as many difficulties as we can, there is no way we can cover all the possible situations which might arise, particularly bearing in mind the state of the Canada Post Office.

[ Page 2061 ]

Section 33 as amended approved.

On section 34.

MR. GIBSON: Mr. Chairman, this says when a payment "shall be deemed to have been made." Once again we have this mail problem here that the payment shall be deemed to be made on the date the payment is received by the creditor. Things again might be held up in the mail for several days and I would ask the minister if he couldn't give consideration to having the payment deemed to be made on the date that the envelope is postmarked, if it is sent through the mail.

HON. MR. MAIR: The only comment I can make to the hon. member for North Vancouver-Capilano is that I'm advised by my colleague, Mr. Abbott, in Ottawa, that they tried this with the Borrowers and Depositors Protection Act and found that it simply wasn't feasible to do it in that manner.

Section 34 approved.

On section 35.

MS. BROWN: Mr. Chairman, again I'd like to ask the minister whether this applies to mortgages or not. When I asked for information on sections 26 and 27 he said he thought it was covered under section 40. Well, sections 40 to 45 deal with mortgages. Nowhere in any of these sections does it deal with disclosure of what the final cost of the mortgage is going to be. I'm wondering whether under section 35, which says that if the lender fails to provide this kind of information the borrower doesn't have to pay the debt, this applies to mortgages too.

HON. MR. MAIR: I would refer the member to the Mortgage Brokers Act, which specifically covers the point which the member has raised.

Section 35 approved.

On section 36.

MR. WALLACE: In regard to cash discounts for goods or services, is this the section, Mr. Chairman, that precludes any discount where a person decides to pay off a mortgage on a home in cash, or is there another section which... ? This is a point I want to be clear about - the fact that there have been questions asked in the press, for example, about why mortgages are not included in those cases where you can gain a financial benefit by paying off the amount of capital owed without any penalty.

HON. MR. MAIR: The answer is no. First of all, Mr. Member, we feel there is a constitutional problem in dealing with that particular problem under this statute. This is designed to mesh with the Borrowers and Depositors Protection Act, Bill C-16, in front of the federal House, which does indeed deal with this problem. Assuming that is is passed, or at least that that part of it is passed, the questions raised by the hon. member will be taken care of under that Act.

MR. WALLACE: I just want clarification. Does the minister mean that the provincial government has negotiated at the federal level on the borrowers protection Act, and that as far as he is aware the federal government intends to make it possible to pay off a mortgage without penalty?

HON. MR. MAIR: I think that the term "negotiation" is perhaps putting it a little too strongly, Mr. Member, but extensive discussions have been held ever since I took office. Now I'm not at liberty to - and I couldn't, of course - assure the member what precise section, if any, will pass the federal House. They will deal with this particular point. I don't think that they are going to deal with it on the terms of no penalty whatsoever. That's not my present understanding. But the problem that is raised by the member will be dealt with by that Act of the federal parliament.

MR. A.B. MACDONALD (Vancouver East): I hope the minister, when he's talking to his federal counterpart, will point out this is one of the real anomalies of Confederation - that jurisdiction should be split. I agree with what you say, because the federal government has got interest. You can't provide for easy repayment of mortgages, but it seems ridiculous that two jurisdictions in Canada should hold sort of equivalent powers in this area and stymie one another, as has happened through the years. If Réné Levesque is not going to break up this thing....

HON. MR. GARDOM: Red Réne.

MR. MACDONALD: Réné, le grand Réné.

You know, this is something where Levesque and many other people have got a perfectly valid point. Here's the federal government having power, because of the little word "interest" in the BNA Act, to set up.... They have to - a bunch of civil servants -begin to administer what should be administered under this Act. I hope that the minister and the government will make it plain that there are all kinds of areas like this where we have duplicating bureaucracies and overlapping jurisdiction. That's the kind of thing that's making Confederation unworkable and less saleable to the Canadian people. It's confusing. It makes it very difficult for us to

[ Page 2062 ]

legislate in these areas, and these things should obviously be provincial and local concerns. The BNA Act is way out of date on these things. I think Ed Broadbent would probably agree with what I am saying.

SOME HON. MEMBERS: Ed who?

MR. MACDONALD: Ed Broadbent, not the guy who got mixed up in the MEL case.

HON. MR. MAIR: May I just say with absolutely no modesty whatsoever, Mr. Chairman, that as a result of suggestions that I made to the ministers on February 16,1976, we now have a committee set up of senior officials through which all of these problems are not vetted. The co-operation between the federal department and all provincial departments is at the highest level, I'm sure, in the history of Confederation. Great leadership!

Sections 36 to 39 inclusive approved.

On section 40.

MS. BROWN: I just wanted to say that I've been reading the Mortgage Brokers Act, and I'm still not convinced that I've had an answer to my question so far. I've found that where there are additional things such as bonuses, commissions, discounts, finder's fees - these kinds of things have to be disclosed. I cannot find a section which says where the lender has to give a clear statement of what the final cost of the mortgage is going to be. That's all I want to know.

HON. MR. MAIR: I think if the member would look at the schedule that the.... I never say "shedule"; I always say "schedule." Why did I say "shedule"? She said "schedule." If you look at the schedule, Madam Member, as well as the regulations, you would see that it's covered the render.

Sections 40 to 42 inclusive approved.

On section 43.

MR. GIBSON: Mr. Chairman, this is where I have the question I raised briefly on second reading. This section, as I understand it, protects the borrower as against the lender. I'm asking the minister where in this Act, or in any other Act - I'm not certain that's precisely in order at this time - is the person who is lending the money protected by a borrower who is mortgaging something that does not have anything like the value that is provided for?

I sent a case of this kind to the minister's department three or four months ago, I think it was, in which a particular piece of property that was owned in part by a constituent of mine has a true value of.... No, I'm sorry, it wasn't owned by a constituent of mine; it was owned by another person. It had a true value of around $50,000. By the time all the first, second and third mortgages were added up, that piece of property was in hock for something in the neighborhood of $110,000. In other words, it had been misrepresented to the people who were lending the money on that basis. Now does this section cover it, or how do people have protection against this kind of thing?

HON. MR. MAIR: To the member for North Vancouver-Capilano, I'd remind him that this is a consumer protection Act, not a lender protection Act. The lender, of course, under the circumstances which he has recited, would have a right in fraud. He probably should have had a proper appraisal done in the first instance. But in any event, I think the short answer is what I gave in the first place: this is a consumer protection Act, not a lender protection Act.

Sections 43 to 46 inclusive approved.

On section 47.

MR. WALLACE: I think when we get into the area of investigation, inquiries, ex parte applications and so on, we should be sure that the powers and the way they're to be supervised are very well defined. I think the bill in general accomplishes that, but there's one part of section 47 (2) (a) where it says, "The director or an investigator can inquire into and examine the business and affairs of the person in respect of whom the investigation is being carried out, and may, on production of his appointment, enter at any reasonable time the business premises of the person, " et cetera.

I'm just puzzled by this phrase "on production of his appointment." I presume the minister is guaranteeing in this legislation that the investigator just won't turn up unannounced and that some prior appointment is made. There's nothing in subsection (2) (a) to suggest what might be reasonable notice for the person concerned. In other words, it's one thing to say you have an appointment; but if you just made the appointment half an hour ago, that might not suit the person being investigated. Now is it one day or two days? How much notice will you be giving the person being investigated that such an appointment has to be set?

HON. MR. MAIR: The words "his appointment" means his authority, not the time that he's actually made, Mr. Member.

MR. WALLACE: Again, it's very obvious that I do

[ Page 2063 ]

need a lawyer. But anyway, my question is still valid. In fact, you're got me more worried now because you've made it sound as though the investigator can present himself on the person's doorstep and say: "I'm here to investigate you." Is that a fact?

HON. MR. MAIR: The answer is yes. I would just like to take an analogous set of circumstances that happened recently to point out why this power, albeit used very sparingly, is necessary. I am referring to the Haina Travel extravaganza. Now if it had not been for the ability and right of the director of the trade practices to enter into premises, seize bank accounts and do that sort of thing on reasonable and probable grounds - which words appear here, of course - then many thousands of dollars would have been lost. I think the key words, Mr. Member, are "reasonable and probable grounds." I think they are time-honoured, are well-defined in the law, and give the director, under these circumstances, only the appropriate powers.

MR. WALLACE: Well, I understand the point the minister is making, but it should be stressed that this is a very considerable power. We've talked in the last few days about how concerned we were about another department having officers with powers that could be abused very readily. While I can see that there are occasions when this kind of speedy action is needed, I hope that the minister can assure us - as he appears to have done by using the word "sparingly" - that this is a power that will be used most sparingly and only where the so-called "reasonable grounds" are most reasonable, not just possible or probable or suspicious.

My second question is a follow-up to the minister's answer. What redress does the businessman being investigated have if he considers that the action was taken on unreasonable grounds?

HON. MR. MAIR: To answer the second question first, there's an action for damages in common law for anybody where there was not reasonable and probable grounds. I would think it was trespass, if nothing else. But let me point out to the member, if I may, that in the Kamloops Health Spa case of a couple of years ago, had this power been available to us, in all likelihood $100,000 of consumer money would have been saved. That's the money that went up the flue by reason of the fact that we simply had no way of acting. You have to act quickly in these cases, Mr. Member, and I can assure you that -certainly in the time that I've been in this ministry -I have not seen even a suggestion of abuse of the power that has been granted unto the director.

Section 47 approved.

On section 48.

MR. GIBSON: In section 48, for the first time -to my reading - this word "justice" appears: "Where a justice is satisfied, or an ex parte application by the director. . . ." and so on. I am just wondering who the minister means by a "justice". It is not defined in this bill. When I read the Interpretation Act, "justice" means a justice of the peace and includes a judge of a provincial court. A justice of the peace includes those guys to whom you pay your traffic tickets, I think, among other things. Exactly what level of the judiciary is authorized to grant these ex parte applications?

HON. MR. MAIR: Both the member for North Vancouver-Capilano (Mr. Gibson) and I come from relatively well-populated areas. Sometimes, however, our problems arise in areas where judges are not readily available - that is, judges of county court or supreme court. It is intended by this section to allow a provincial court judge to exercise that jurisdiction, thereby enabling justice to be done readily even though there's not a higher level of judge available.

MR. MACDONALD: That includes a JP.

HON. MR. MAIR: Sure it does.

MR. GIBSON: It includes a justice of the peace, however, which is a lower level of the judiciary than a provincial court judge, is it not? What would be the intention wherever a provincial court judge or a county court judge were available - to consult the highest readily available authority?

HON. MR. MAIR: The justice of the peace, of course, has sworn information’s since time immemorial in this province, and that's the reason for it, Mr. Member. We can't allow investigations not to proceed simply because there is not a judge of sufficiently high order available. I think we have to make allowances for the fact of the size of our province and the sparseness of its population in many areas.

Sections 48 to 62 inclusive approved.

Title approved.

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

Motion approved unanimously on a division.

Mr. Gibson requests that leave be asked to record the division in the Journals of the House.

[ Page 2064 ]

The House resumed; Deputy Speaker in the chair.

Bill 28, Consumer Protection Act, reported complete with amendment, read a third time with leave and passed unanimously on a division.

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

HON. MR. GARDOM: Second reading of Bill 24,

Mr. Speaker.

SHELTER AID FOR ELDERLY

RENTERS ACT

HON. MR. CURTIS: Mr. Speaker, the government is particularly proud of this bill. I can tell you and members of the House that it represents many i months of preparation and work to reach this stage. r

More importantly, it represents a landmark in Canadian housing policy because, in our view, nowhere in Canada has a provincial government made such a strong commitment to meeting the shelter needs of the elderly.

Under this programme, the ministry will be empowered to make direct cash payments to elderly renters in need. The shelter aid for elderly renters programme will provide assistance to all of our senior citizens who pay greater than 30 per cent of their income on rent. The programme is based on the ability-to-pay principle, and will take both income and rent into consideration in determining the amount of assistance payable. To ensure an incentive t for economy in this programme, as is common in many other programmes, the amount of assistance payable will be equal to 75 per cent of the amount by which the applicant's rent exceeds 30 per cent of their income.

For single senior citizen households, we shall recognize rents of up to $175 per month and shall make shelter aid payments of up to $70 per month, or $840 per year. For households consisting of two or more senior citizens, we will recognize rents of up to $200 a month and will make shelter-aid payments of up to $50 a month, or $600 a year.

The maximum assistance level for couples is lower than for singles, a point, Mr. Speaker, which has caused some interest on the part of those who have been in contact with us - and the press - because two in fact can live, on average, cheaper than one.

I should emphasize that households with rents higher than the prescribed maximums may still qualify for shelter aid. That's an important point, I think, as we examine this bill. However, we will only recognize the first $175 of rent for singles and the first $200 of rent for couples. In calculating the amount of assistance payable, amounts of rents paid in excess of these maximums will be the responsibility of the applicant.

Mr. Speaker, I would like briefly to outline why British Columbia in 1977 so desperately needs a programme of this kind. The ministry estimates that 25,000 to 30,000 of our senior citizen households are currently paying in excess of 30 per cent of their incomes on rent. Some, in fact, are paying as high as 50 and 60 per cent, and higher, of their income on rent or shelter. This is not acceptable to this government. Even with rent control, many senior citizens are seeing a steady increase in the portion of heir income required for shelter.

For example, in January, 1974, a senior citizen receiving assistance, then known as Mincome, and paying rent of $ 100 a month was paying about 47 per cent of his or her income on rent. In January, 1977, after three years of rent control, this same individual s now paying 53 per cent of his income on rent. As a result of this trend, senior citizens are understandably becoming more and more apprehensive and fearful of what the future holds for them.

Mr. Speaker, we've all suffered to a certain extent - lesser or greater - from the ravages of inflation. But if there is any one group which is truly victimized by inflation and for which there are few, if any, options, it is the elderly. Again I want to stress that senior citizens with rents higher than the established maximum rent levels may still qualify for shelter aid. We shall, however, only take into account the amount of rent I previously stated in calculating the amount of assistance payable. The shelter aid for elderly renters programme is therefore universal with respect o senior citizens in need.

Mr. Speaker, I'd like to bring to your attention some of the advantages of providing assistance through a shelter-aid programme. First and foremost, under this type of programme we are subsidizing people, not bricks and mortar. This is beginning to occur in other parts of the free world as well. I think that's very important to note. Consequently, senior citizens who wish to move from one location to another, or have to move for reasons of family or whatever, will not forfeit the assistance. The shelter aid for elderly renters programme allows the recipient freedom of choice in choosing his or her accommodation.

Another very important advantage of the programme is its low per unit per month cost compared to the cost of constructing new senior citizens' projects. I hope that members of this House will bear with me as I go through some details here, because I think it is important and there is a change in direction in this province with respect to assisting our seniors.

Senior citizen projects. constructed in the early 1960s still have rent as low as $40 a month. For projects constructed in 1970, rents are currently in the $60- to $80-per-month range. By 1976, however,

[ Page 2065 ]

construction and land costs had escalated to the point where subsidies of $275 per unit per month were required to bring rents within the range of senior citizen incomes. I repeat the figure for the third time: $275 per unit per month subsidy to construct and operate public and non-profit units. Now the ministry estimates....

Interjection.

HON. MR. CURTIS: Taxpayers' money, Mr. Speaker.

The ministry estimates an average cost of only $35 per unit per month under SAFER. It would be virtually impossible, I suggest, for any government in this province to keep pace in the near future with the demands for senior citizens' housing through a non-profit construction programme. The shelter aid for elderly renters programme will apply universally to all elderly renters in need. However, the public and non-profit construction programme has the capacity to assist only a portion of those in need, which we've known for some time.

The public and non-profit construction programme for senior citizens' housing began in 1955 and by 1966 had produced 7,500 units. This represented 10 per cent of all senior citizen households in British Columbia. By 1977, 18,000 units had been built, representing 13 per cent of all senior citizen households. If we continued this programme by constructing at the same level - that is, approximately 1,500 units per year - by 1986 public and non-profit units would still only represent 15 per cent of all senior citizen households, and that is a key percentage.

Therefore, Mr. Speaker, not only would it be impossible to absorb the high subsidy costs of a full-scale continuation of the public and non-profit construction programme, but I suggest it would also be physically impossible to produce enough units to keep pace with growing demand. This is not to say that the construction programme in which all of us can take pride will be discontinued. It's anticipated that the shelter aid for elderly renters programme will reduce the need to construct senior citizen projects - again, subsidizing individuals rather than bricks, mortar, stone and steel.

I would like to emphasize in particular, Mr. Speaker, that in smaller communities where there is an absence of private rental units, where there is a very limited supply, where the shelter-aid programme will not be as appropriate as in the larger centres, this ministry will continue to build senior citizen units. I might add that we continue to support the construction of units suitable for senior citizens under ARP, the Assisted Rental Programme.

Mr. Speaker, the Shelter Aid for Elderly Renters Act also makes provision for an integration to the existing renter tax credit programme. Effective January 1,1978, those persons receiving shelter aid will not be eligible to receive the renters tax credit. In addition, the Shelter Aid for Elderly Renters Act includes an amendment to the provincial Income Tax Act which will eliminate the guaranteed $80 minimum renters tax credit, again to be effective January 1,1978. This action will result in better use of provincial revenues and will also allow us to provide greater assistance to those elderly residents -those renters - clearly in need of government help. I feel that assistance of this kind should be made available not only in a fair and equitable manner, but it should also be relevant, Mr. Speaker. It gives $840 a year for those in genuine need rather than $80 to everyone regardless of need.

Mr. Speaker, I'd like to mention briefly our intentions regarding the disseminations of information and application forms for shelter aid for elderly renters programme. In doing so, I think that all members of the House will agree that our senior citizens are particularly interested in the programme and feel that somehow they must write in order to qualify. I seek the assistance of you and all members, Mr. Speaker, in assuring our senior citizens that that is not necessary. We will be in touch with virtually every senior citizen who qualifies. I do hope that we can avoid individuals writing letters, buying postage stamps, or in some cases - many cases - feeling that they have to send a registered letter to us in order to state their interest in the programme and their desire to qualify.

We intend to mail applications, Mr. Speaker, and informational brochures to all persons in receipt of the old age security and to widely publicize the programme in the media. We have held back, correctly I think, pending second reading debate, although we are in the process at the moment of distributing the first informational package to various senior citizens' groups. Now we're going to have that major mailing take place in June. There will be no need for senior citizens to write in and request an application.

Also, in co-operation with the Ministry of Human Resources, we propose to offer applicants assistance in filling out applications in field offices around the province, as well as in the few field offices which the Ministry of Municipal Affairs and Housing has. In this manner, therefore, the vast majority of senior citizens will have access to personal: assistance in completing their application for shelter aid.

I think I would, if I may, Mr. Speaker, at this point, express appreciation to individuals and various community groups, professional groups, retired accountants and others who have assisted senior citizens in claiming the renters tax credit. I hope that they will continue to provide assistance to senior citizens applying for help under the new programme,

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under SAFER. Those individuals have given many, many hours of time and effort, and they've certainly done yeoman service to the seniors and to British Columbia as well. I would not want to overlook their participation thus far.

This ministry is presently working towards the early implementation of this programme. It's our intention to make shelter-aid payments effective July 1,1977. Again, it's a big job. In view of the anticipated volume of applications coming in during the initial weeks of the programme, it's quite possible that we will not be able to process all applications immediately. I again, therefore, Mr. Speaker, assure you and our senior citizens that all payments, regardless of when the applications are received following July 1, will be made retroactive So July 1,1977.

Mr. Speaker, in closing, it's interesting to note that a recent study indicated that 84 per cent of low-income elderly renters are satisfied with their present accommodation. They like their apartment, their unit. They like the neighbourhood. They're familiar with the supermarket, with the drugstore. The doctor may be in the same neighbourhood. They've established friends in the neighbourhood. They like the area. But only about 55 per cent felt their income was sufficient to pay for rents and other necessities of life.

Correspondence received in great volume by this ministry tends to confirm the conclusions of that study. The very large majority of our senior citizens wish to remain in their present accommodation, but to do so they need the help of the province of British Columbia. Admittedly, other groups within our population have problems, but they generally have prospects for improving their financial situation. This is not the case for the elderly. The shelter aid for elderly renters programme will provide our senior citizens with the help that they need, the help they deserve.

I'm immensely proud, Mr. Speaker, to be the minister who is able to present this programme in 1977 on behalf of this government. I move second reading.

Mr. Barber moves adjournment of the debate.

Motion approved.

Hon. Mr. Gardom moves adjournment of the House.

Motion approved.

The House adjourned at 12:54 p.m.