[ Page 3595 ]

CONTENTS

Routine proceedings

Committee of Supply: Ministry of Municipal Affairs and Housing estimates.

On vote 195.

Mr. Macdonald –– 3595

Hon. Mr. Curtis –– 3596

Hon. Mr. Mair –– 3598

Mr. Gibson –– 3598

Hon. Mr. Curtis –– 3601

Mr. Barber –– 3602

Hon. Mr. Curtis –– 3603

Mr. Levi –– 3610

Hon. Mr. Curtis –– 3611

Mr. D'Arcy –– 3613

Hon. Mr. Curtis –– 3616

Mr. Wallace –– 3618

Hon. Mr. Curtis –– 3619

Mr. Barber –– 3620

Hon. Mr. Curtis –– 3620

The House met at 8 p.m.

Orders of the day.

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

ESTIMATES: MINISTRY OF

MUNICIPAL AFFAIRS AND HOUSING

(continued)

On vote 195: minister's office, $147,856 -

continued.

MR. A.B. MACDONALD (Vancouver East): Mr. Chairman, to change the subject, I just want to ask the minister a couple of questions on conflict of interest and how it might arise in some of the towns and cities in the province of B.C., because the minister has made some very interesting statements on this important subject.

The minister gave a very important interview to the Vancouver Province on March 21,1977. He said that he would not stand for office in an area where he was active in real estate. He also pledged that he would introduce legislation tightening up B.C.'s existing conflict-of-interest laws sometime during his term. I think that's very commendable. The former Minister of Municipal Affairs, the Hon. Jim Lorimer, our tiger who is now sharpening his claws and preparing for a resurrection, is now a Burnaby lawyer. He says he had planned to bring in laws that would have prohibited public officials from dealing in real estate while in office. Then he went on to say: "All that is now required under the single section of the Municipal Act dealing with conflict of interest is that a council member not vote on matters affecting his or her private interest." That's all that is required now, but I know the minister is concerned that this is not enough.

I put a case to him, Mr. Chairman. Supposing you had a lawyer in a small town in British Columbia -not too small, say - and he put together four lots. He bought one, say, from his wife for $36,000 in the name of a holding company; one from somebody else for $23,000; and one for $26,000 - that's $85,000. Then he goes to the municipality for a land-use contract, which naturally will make these lots far more valuable. You could put up a modern office complex in that situation. The person is not only a lawyer in this small town, but he's also an alderman and he does the right thing; you know, he knows the ropes.

He brings it up to the point where there's going to be a vote by the land-use committee of the council and then he says just before the vote: "I have sold my interest in this holding company to my partner." But he's still the solicitor for the holding company and active in the management of the project. So he's present and votes on the land-use contract for the four lots that he has acquired in the name of the holding company. He voted, but he made the declaration before the vote: "Well, I've sold out to my partner." That's commendable and that's all the existing law requires.

But obviously and I hope the minister will get up and say this it's not sufficient to protect the public interest. An alderman, knowing the ropes, with the information that's available in council, comes right up to the point of decision in the land-use contract, and then having assembled with his partners four lots in the heart of downtown Kamloops, buys them for $85,000. He sells them off for $125,000.

And then it's reported in the Kamloops Sentinel, which is a well-known paper in British Columbia, on February 14,1977:

"Mr. Mair said: 'A land deal for property on Lorne Street a few years ago was one of the worst deals we ever made, both in the buying and the selling.'

Well, on the figures I've given I'd hate to think what some of the good ones were.

"Mair and two partners bought the land for the BAM Building, 'but we sold it, ' he said. Mair said he sold his shares to another partner before the property was sold, as it was sold a few months after the land-use contract was approved by city council."

Mr. Chairman, it's my submission that this raises important questions as to whether municipal elected officials should be dealing in land at all in the municipality for which they were elected. The hon. member for Delta (Mr. Davidson) is pounding his desk. I hear him distinctly. I think he agrees that that situation is ripe with the possibilities of conflict of interest.

You say: "Well, I've sold out." Just before the land-use contract is approved, you've sold out to a partner. Have you sold out in the expectation that things are going well and the land-use contract will be approved at that point and therefore you will get an additional amount? Incidentally, when you sell out on a thing like that, you should inform the registrar of companies. Change the records, because the poor people who drew up the deed to sell it finally for the $125,000 assumed that the president of Mair, Butcher Holdings Ltd. was still the same president it was before because there never was a change in the records of the registrar of companies.

So the question I ask the minister is: does the minister not think it's wrong that elected officials should be able to engage in land speculation in the municipality for which they were elected while holding elected office? Is it right that they should

[ Page 3596 ]

even act as solicitors while they're an alderman, say, for companies engaged in land speculation within that municipality? I think there's a whole area of conflict of interest to be.... I'm not talking about Mayor Ney of Nanaimo, who owns the town. You can't build a water sewer in Nanaimo without benefiting the mayor.

HON. H.A. CURTIS (Minister of Municipal Affairs and Housing): A water sewer?

MR. MACDONALD: No, you can't lay a sewer pipe without benefiting the properties of the mayor, because he owns so much, and the minister knows this. But there's inevitably a conflict of interest when municipal officials are part and parcel of speculation within their own municipalities.

So I put it to the minister that he should live up to the fine words that he has expressed in this article and tell this House that he does not believe that that kind of conflict of interest should be allowed to arise, and that justice should not only be done, but seem to be done. It's not good enough for an alderman to say before a vote of that kind, "I just sold out, " and then vote. It's not good either that he should sit back and see the thing ready to be passed and still have an interest in it and not vote. Either way, he's too close to the transaction for the health and integrity of municipal government in this province.

HON. MR. CURTIS: Mr. Chairman, thank you to the first member for Vancouver East.

Interjection.

HON. MR. CURTIS: But I never held my hand behind my ear - never did! That's an "in" joke and we won't get into that. Does he still? I don't know.

Mr. Chairman, I'm not discussing the style of broadcasters good and bad, but rather we're discussing a very important matter that the first member for Vancouver East has raised, and I feel that he really seeks from me a legal opinion. I respect the fact that he's been in this House many more years than I and I am not going to fall into that particular pitfall. The newspaper article to which he referred -that is the one in the Vancouver paper of some time ago - accurately reflected my views. The Attorney-General (Hon. Mr. Gardom) for this government can confirm that I have expressed to him, and certainly I've discussed with representatives of the ministry, concern about this very grey area.

Now the former Minister of Municipal Affairs indicated that at one point at least he thought one way to resolve the problem was to prohibit real estate agents from standing for office or offering their names for elected office in municipalities. I believe that is correct. With respect, that was a rather simplistic approach to a very complex problem. 1 don't pretend to have all the answers with respect to the difficulty.

1 know that frequently a Caesar's wife situation comes into play. If 1 could just take a moment of the committee's time, one day when I was in municipal office as mayor, 1 responded to a telephone call from an elderly lady who claimed that the municipality's blackberries were encroaching on her garden. She thought that something should be done about this and she had received no satisfaction in talking to the municipal staff. So 1 visited her, saw the problem, agreed that something should be done and agreed that it should not be done at her cost, inasmuch as this was municipal land. Her closing remarks to me were to the effect: "I knew you would come around because my neighbours said that you owned property in this neighbourhood and you would be interested."

1 did not then own any property in the neighbourhood, had not looked at owning any property in the neighbourhood and did not eventually own any property in the neighbourhood. The lady had difficulty, therefore, understanding that in simply responding to a request for an elected representative to see a problem, somehow that elected person had to have a rather special interest. Some of this does border on the jurisdiction of the Attorney-General.

We spoke this afternoon - I'm not sure if the first member for Vancouver East (Mr. Macdonald) was in his place at that time or not - about the allegations which come fairly regularly and which came to the Ministry of Municipal Affairs - or the department, as it was then known - in the period 1972 to 1975. Some of the allegations were unfounded but one of them led in fact to an official inquiry.

Now I think we have a double-barrelled programme, both with respect to elected people in a municipality or regional district - but particularly in municipalities - and also with respect to staff. A number of the complaints which we've received thus far this year relate more - not in every instance -towards staff. Whether they're correct or incorrect is beside the point; the allegations have been made more to staff than to elected persons. So we need all the assistance we can get and we need all the careful thought we can get with respect to doing two things: first of all, we need framing, either in the Municipal Act or in some other statute, of conflict-of-interest legislation which clearly spells out what one may or may not do; and then we need to be assured that it is fair. If we take the simplistic approach of saying if you are a lawyer or if you are a real estate agent or if you are whatever, you cannot hold office or you must not be involved in municipal decisions in that particular area, then 1 think we're shutting out a lot of people who perhaps would have something to contribute to the decisions made in the interests of

[ Page 3597 ]

the municipality as a whole.

I don't have all the answers, Mr. Chairman, through you. I say I agree with the member. It's a problem. I won't comment on the specific, but it is a very serious problem. It's one to which we are addressing ourselves most carefully through the course of this year thus far and through the balance of the year in an effort to find something which is fair, which provides the necessary safeguards for the municipal taxpayer or regional district residents, but which is also not so rigid nor provides such a degree of overkill that in fact individuals who might otherwise serve their municipality are discouraged and/or prohibited from serving.

MR. MACDONALD: I'll be very brief because I know the member for North Vancouver-Capilano (Mr. Gibson) is probably on a different subject. I'll be very short.

You know, I'm glad that the minister has taken this stand in terms of public integrity in municipalities. I want to say in defence of the former minister, Jim Lorimer, that he did not say that just real estate people shouldn't run - I don't think that was his stand - but he did say as stated here. He had planned to bring in laws that would have prohibited public officials from dealing in real estate while in office. The hon. minister who approbates this article and his statements in the article has said that he would not stand for office in an area where he was active in real estate. You know, I commend that. He said further, in the same article, and I'm repeating it: "Were I very active in real estate then I do not think I should be involved in the local government in the jurisdiction. Now that's my stand but I can't point to any statutes which support that position."

Mr. Chairman, that was not the standard that was being practised in Kamloops in 1974.

HON. K.R. MAIR (Minister of Consumer and Corporate Affairs): That's a lie!

MR. CHAIRMAN: Order, please!

MR. MACDONALD: The minister's standards are different from the standards on that city council in Kamloops in 1974.

HON. MR. MAIR: Slanderer!

MR. CHAIRMAN: Order, please.

MR. MACDONALD: The minister further went on: "Should the politician be required to divest himself of his land holdings before taking office?" The present hon. Minister of Municipal Affairs says he's not sure.

Now these are standards that I think should be applied throughout the municipalities of B.C. As I said earlier, an alderman who has sold out to his partner before the land-use contract is approved has done the right thing, even though he carries on as solicitor and it is still registered under his name in the office of the registrar of companies. But I say it isn't good enough that in the events leading up to that land-use contract an alderman should be active in speculative profits within a municipal district while he's an alderman of that district. That's not the standard that this minister is defending.

AN HON. MEMBER: Mud, mud, mud.

HON. MR. MAIR: Say it outside of the House!

MR. CHAIRMAN: Order, please.

MR. MACDONALD: If this member has any argument, let him argue with the Minister of Municipal Affairs who has upheld the standards which we approve of on this side of the House.

AN HON. MEMBER: Mud, mud, mud!

AN HON. MEMBER: You're loaded with blanks. Give them both barrels!

MR. CHAIRMAN: May I remind all members on both sides of the House that matters involving legislation or matters requiring the need for legislation are not subjects to be covered during Committee of Supply. The Chairman has allowed reference to these matters, but if they are to create a disturbance in Committee of Supply, then perhaps that's the reason for them having been outlawed in the first place.

MR. G.F. GIBSON (North Vancouver-Capilano): Mr. Chairman, I think the minister is anxious to speak, so I'm quite willing to defer. Please don't lose sight of me, though.

HON. MR. MAIR: I'll try to deal with the allegations and the innuendo of the first member for Vancouver Fast (Mr. Macdonald) as calmly as I can, although it's difficult for me to do so.

MR. CHAIRMAN: May I remind the hon. minister that we are debating vote 195.

HON. MR. MAIR: May I raise it please then as a point of order?

MR. CHAIRMAN: State your point of order.

HON. MR. MAIR: Certain things have been said about me. My name has been used as an alderman

[ Page 3598 ]

who had somehow betrayed the public trust. That was clear innuendo.

HON. J.R. CHABOT (Minister of Mines and Petroleum Resources): Mud!

HON. MR. MAIR: Mr. Chairman, this is not the first time that this particular member has used this innuendo tactic, The fact of the matter on this particular piece of property is that in consort with one other person I owned two pieces of property on a block; we lost a lot of money on it and I sold my interest to him. Later he came along and had put together some partners using the same company, Mair, Butcher Holdings, in which I had no interest and new lawyers who had somehow not changed the names of the officers. I had no interest whatsoever. I lost money on the entire deal and the four lots remain vacant to this day. 1 voted on nothing in which I had any kind of an interest - real, imaginary, future, prospective, anything of the sort.

If the hon. member wishes to say anything to the contrary, for the first time since I have been in this House let him have the guts to say it outside the House.

MR. CHAIRMAN: Standing orders provide that if a statement is made and it's deemed to be in error, it can be corrected by another member. I commend the minister for waiting until the end of the statement to make the correction. That is the conclusion of the matter.

HON. MR. CHABOT: Mud under immunity!

MR. MACDONALD: Mr. Chairman, I simply recited the facts that the minister....

MR. CHAIRMAN: Hon. member, the matter of statements made in your previous speech are concluded; they have been corrected. All members' statements are honourable statements.

MR. MACDONALD: Well, Mr. Chairman, I've got the floor. Let me talk then for a minute about conflict of interest. Mair, Butcher Holdings Ltd. did in fact acquire the four lots on Lorne Street. That company in fact sold them after a land-use contract had been approved.

MR. CHAIRMAN: Order, please, hon. member.

MR. MACDONALD: The minister says he sold out in the meantime to a partner. Okay, I didn't say he's done anything illegal ...

MR. CHAIRMAN: Order, please, hon. member.

MR. MACDONALD: I just said it isn't the standards that are now being upheld by the Minister of Municipal Affairs.

[Mr. Chairman rises.]

Interjections.

MR. CHAIRMAN: Order, please. May I acquire order from both the first member for Vancouver East and also the Minister of Consumer and Corporate Affairs? The statements made by the member for Vancouver East and the corrections made by the minister conclude that matter. The matter of those topics requiring legislation is out of order for discussion at this time,

I recognize the member for North Vancouver Capilano.

[Mr. Chairman resumes his seat.]

MR. GIBSON: I want to raise a conflict-of-interest situation involving a former director and officer of the Housing Corporation of British Columbia who was at the same time president of a private mortgage company having dealings with the Housing Corporation.

MR. CHAIRMAN: Is this a matter that requires legislation, hon. member?

MR. GIBSON: No, it doesn't, Mr. Chairman. As a matter of fact, I plan to introduce a bill tomorrow on conflict of interest ...

MR. CHAIRMAN: I take the hon. member's word!

MR. GIBSON: ... but tonight I'm talking about a specific conflict of interest, in my opinion, which occurred in a Crown corporation or agency for which the minister has responsibility. The end result, I might say, of this particular conflict of interest was the postponing of occupancy of some 53 units by a number of months and an injury to the security position of the small contractors and subcontractors who were out on a limb on that particular project. Just let me briefly recite the facts, Mr. Chairman.

It started with a proposed call by Dunhill, answered by a developer named Cedarhurst Properties. This was back in early 1975. What was involved was 53 units on a property in Matsqui. The developing company, as I say, was called Cedarhurst Properties. I don't. think the ownership of that company matters. The mortgage holder that eventually came out of the deal was a firm by the name of Canterbury Mortgages. I will return to them in greater detail later, but at the moment suffice to say that they were incorporated in 1974. The officers

[ Page 3599 ]

were: president David Howard, late of the Dunhill Development Corporation, just before it was taken over by the government; a Mr. John Bull, also of Dunhill at that time; and other officers. The shareholders in Canterbury Mortgages were unknown to me at this time.

A successor company to Canterbury was incorporated in January, 1976, and received its right to deal in mortgages in March, 1976. That company was called Bancorp Polygon. The president of that mortgage company was Vern Paulus, who was, at the same time, chairman and director of the Housing Corporation of British Columbia. I think it was around that time that the name of the Housing Corporation of British Columbia was changed. Mr. Howard of Canterbury Mortgages shows up on Bancorp as executive vice-president and Mr. Bull, I think, is still in there as an officer. It's not clear at this time exactly what the relationship is between Bancorp and Canterbury, but it is clear that Bancorp is managing the mortgages - at least this one mortgage - that were issued by Canterbury.

Mr. Chairman, with that background the sad fact is that the project went sour. As a matter of fact, in October, 1975, Canterbury moved to protect its position by having what they call an irrevocable assignment of moneys paid by Dunhill to improve its standing above that of other creditors. Dunhill concurred by letter. Mr. Chairman, I have certain documents in these regards that I'm prepared to table if any. member wishes. The payments to Bancorp as a result of this irrevocable transfer were made in the spring of 1976. They were made to Bancorp though they were still described in part by the lawyer for Cedarhurst as being made to Canterbury.

By the summer of 1976, Mr. Chairman, things were very sour. The project, as a matter of fact, was almost completed but the funds to pay for it were not there. Dunhill had either committed or had in its holdback fund - it would naturally hold back until all liens are satisfied - virtually all of the money that had been provided for that project. Things were still around $150,000, according to my account, short of settling things. Cedarhurst apparently didn't have any money and Dunhill, in my opinion, very properly refused to meet the cost overruns at that time.

The Housing Corporation attempted to work out a settlement. In this connection, Mr. Bronc of the Housing Corporation worked with the solicitor for Cedarhurst, Mr. Peterson, to attempt to set up a deal where the roughly $214,000 in the holdback account would be paid to the small contractor and the subtrades creditors and the remaining $250,000 would be secured unto them by some kind of a second position in other properties owned by Cedarhurst. The main property considered in this regard, if my understanding is correct, is a lot that was adjacent to the subject development - the

53-unit development. Canterbury held a mortgage on that particular property. What the solicitor for the Housing Corporation was trying to do - and I think certainly in good faith and quite imaginatively - was to say: "Look, we want to get the liens off this building so that it can be occupied and we want, in any way we can, to secure the position of these creditors. However, we, the Crown agency, aren't going to pick up the bill for the mistakes that the private developer made."

Obviously the co-operation of Bancorp, which was at that time administering the mortgage for Canterbury, was essential. As time went on, we reach November 18, and the solicitor for the Housing Corporation at this point is becoming concerned that the -Bancorp-Canterbury Corporation, as he refer, ~ to it in this letter, might commence foreclosure proceedings. Indeed, that was quite prescient of Mr. Bronc because on December 17 Bancorp Polygon did file a writ against Cedarhurst Properties and others, because there had been personal guarantees and other properties on the note, asking that this mortgage be paid.

Now that, of course, destroyed the deal that Mr. Bronc had been trying to work out. That destroyed the deal whereby the creditors could have been paid about 50 cents on the dollar out of the holdback funds and then received security on the remaining equity of the Cedarhurst property adjacent to this development, the first charge on which was held by Bancorp-Canterbury.

Mr. Bronc writes to the president of the Housing Corporation, then Mr. Webb, on December 28 - not a happy Christmas present, I'm sure. I'd like to read this memorandum somewhat more fully into the record:

"You will recall that it was anticipated we could resolve the above problem" - that being Cedarhurst - "by way of a settlement proposal being worked out by Cedarhurst. The settlement proposal required that the balance of the money secured by the mortgage in favour of the Crown would be paid out to lien claimants to cover part of their claim and the balance of the lien claim be secured by mortgages given by Cedarhurst on other properties owned by Cedarhurst.

"Unfortunately, one of the properties given by Cedarhurst was encumbered by a mortgage in favour of Canterbury Mortgage, a Vern Paulus company."

I'll repeat that: "Canterbury Mortgage, a Vern Paulus company" - I'll return to that.

"This mortgage was outstanding. Canterbury Mortgage commenced foreclosure proceedings pursuant to the terms of their mortgage, thereby eliminating the possibility of giving the property as security."

[ Page 3600 ]

Now, Mr. Chairman, what happened at that point was that Bancorp president Vern Paulus foreclosed on a mortgage that was instrumental in a bait-out situation that the Housing Corporation - Vern Paulus, director - was trying to put together to literally save the hides of some of the small subtrades and the small contractor on this job. If ever there was a conflict of interest, it was this. Here's the president of a private mortgage company saying: "I see my mortgage going sour." Here's a director of a public housing company saying: "I see a way that we can maybe work something out here and we can maybe get these units occupied reasonably quickly, if this company over here - which I happen to be president of - co-operates."

Well, Mr. Chairman, Mr. Paulus made his decision. I will not at this time comment on that decision except to say it was obviously made in a conflict-of-interest situation. He could properly serve the Housing Corporation or he could properly serve his private mortgage company in this case, but not both. His private and public interest in this foreclosure action were clearly in conflict.

Equally important, Mr. Chairman - and so far I've just been reciting what I believe to be facts to the minister; now I want to mention to him some things that I hope he might investigate - is the meaning of the statement in Mr. Bronc's memorandum of December 28 where he refers to Canterbury Mortgage as "a Vern Paulus company. 11

Canterbury Mortgage, you will recall, was staffed by former senior officers of Dunhill. There is some evidence to indicate that those senior officers maintained a fairly cosy relationship with the new Dunhill firm. For example, in correspondence with the principal of Cedarhurst Properties in a letter dated March 3,1975, the president of Canterbury Mortgage was discussing with the principal of Cedarhurst Properties the possibility of a 53-unit proposal for which Cedarhurst was thinking of getting approval from Dunhill. He made this remarkable statement. This was March 3: "1 would anticipate that you will have a firm answer through Dunhill on this 53-unit site prior to the end of March."

Now, Mr. Chairman, it could just have been that the president of Canterbury Mortgage was guessing or it could have been he knew that things were being urgently approved in those days. That's beyond my knowledge. But I find it surprising that a private mortgage company would venture to predict how quickly a government agency would act in a matter as complex as this.

Later on, we find that Canterbury Mortgage was able to persuade Dunhill Development - and this is in early fall of 1975 - to enter into this thing called an "irrevocable direction." I'm now quoting from a letter from John Peterson to David M. Howard, president of Canterbury. This is October 28,1975:

"We understand that you are in the possession of an executed copy of the irrevocable assignment of funds from Cedarhurst Properties Ltd. to Dunhill Development. On the understanding that this assignment has been acknowledged by Dunhill Corporation, we hereby undertake to you that we will forthwith, upon receipt, pay to you any and all moneys received by us after March 2,1976, from the Department of Housing or its agent, Dunhill Development Corporation Ltd., under the irrevocable direction to pay above referred to up to an amount which is the lesser of $150,000 or the amount then owing to you by Cedarhurst Properties Ltd. We trust this meets with your approval."

Well, I would trust that would meet with their approval, too. It was a pretty good deal. It was a pretty good improvement of the security held by Canterbury Mortgage in this by now soft loan, and it was done with the approval of Dunhill Development. I would suggest that the approval of Dunhill Development in that irrevocable assignment is one that prejudiced the position of many smaller creditors of that particular development.

What I want to know from the minister, basically, is: how long was Canterbury a "Vern Paulus company"? When did it become that?

The original conflict-of-interest situation I outlined is clear, I think. It's on the record from the superintendent of mortgage brokers that Mr. Paulus is president of Bancorp, and it's on the public record, of course, that he was chairman of the Housing Corporation up until, I think, November, 1976, and a director up until January 13,1977. So that conflict of interest is clear, and the move to foreclose the mortgage in that period is clear. There's no doubt about that. But how much worse it was if, earlier on in the times of these cosy dealings between Dunhill and Canterbury, Canterbury was at that time a Vernon Paulus company. That's what I would like the minister to inquire into and report on. He moved quickly in one of these matters before; I hope he will do it again. I hope that he finds this second conflict of interest does not exist, but in view of the words in that particular memorandum, I think it has to be investigated. The facts as they stand I think only give rise to questions. I won't draw conclusions from them at this time, but I would ask the minister if he would seek to provide us with more facts on this particular affair.

I might, just for the benefit of the House, tell him the' end of the story. After this particular arrangement broke down because of the foreclosure of the mortgage, the liens were finally discharged on April 12, many months after these accommodations could have been occupied. The small creditors got paid something under 50 cents on the dollar.

[ Page 3601 ]

Collectively they're out something around $250,000. They're going to try and recover that through some kind of lawsuit, which is always an unfortunate ending to what I know was a good thought in the beginning - to just provide some more housing.

There are some other fascinating questions with respect to Dunhill's management of this whole affair which I will not go into because it seems to me that they would be involved in the lawsuit which these contractors now have. But this conflict of interest seems to me something separate and distinct and I would be very grateful for any comments the minister would have, first of all, on the existing situation; secondly, will he undertake the further investigations; and, finally, and I suppose most importantly of all, what can he do to bring these kinds of situations to an end? In that regard, of course, I commend to him the bill I will table tomorrow.

HON. MR. CURTIS: Mr. Chairman, I can't comment on the merits or otherwise of a bill the hon. member intends to introduce tomorrow. Will you have another sign tomorrow for this one?

Seriously, Mr. Chairman, the Cedarhurst matter has been of concern to us. You will note that some of the correspondence to which the hon. Liberal leader has referred was dated in a period prior to December, 1975. 1 think it's important to understand that and to identify again some of the difficulties which we found upon forming government in December, 1975, and some of the arrangements which had been made - and I use "arrangements" in a perfectly straightforward sense - and a number of the complexities which had to be resolved and worked out in the first number of months of a new government. As far as I am able to say tonight in debate on my estimates, the facts which the hon. member for North Vancouver-Capilano has outlined are correct.

Mr. Howard, to whom the member referred, was originally part of the Dunhill management package, if I can use that term "package" with respect to individuals, who came along when the former government purchased Dunhill, now known as the Housing Corporation of British Columbia. But I am informed that through the initiative of one side or the other, Mr. Howard was released from the Dunhill commitment in order to be a principal in one of Mr. Paulus' companies.

What have we done since? I think we've done a great deal. First of all, we inherited Dunhill and this chamber has echoed back and forth over quite some time with respect to Dunhill Development Corporation, now the Housing Corporation of British Columbia.

We made a number of changes in senior staff. I don't want any member of the committee to take as an inference that changes in senior staff relate to the specific situation which the member has outlined for the committee this evening. Nonetheless, these changes have taken place. The total organization has decreased in size - that is in numbers - of staff. Mr. Paulus, who was the chief factotum of Dunhill when the government changed, stayed on for a while. He resigned as chairman in the latter part of 1976. Prior to that, I might point out, Mr. Chairman, the directorate was enlarged and new directors came in and we started our work with respect to Dunhill. We eventually introduced the change of name to more accurately reflect this government's attitude with respect to Crown-owned companies.

Mr. Paulus therefore resigned as chairman in the latter part of 1976. He missed some meetings through that period and then he resigned finally as a director of the board of the Housing Corporation of British Columbia in very early 1977, as the member has said.

We then addressed ourselves - actually prior to that, perhaps - and finalized a conflict-of-interest policy for HCBC which took some time to work out. This applies to senior staff. It was approved by the board and ultimately came to my desk for approval and it is in place. I don't have a copy of it handy but I consider it to be a very straightforward declaration by the individuals who were requested to sign it, indicating that they worked for a Crown corporation - that is, one owned by the people of British Columbia - and they must recognize that in all their dealings. I think that if I understand the theme developed by the member tonight and his comments on previous occasions, he would applaud the introduction of that type of conflict-of-interest statement and requirement for the signing of a declaration.

We had more than one bankruptcy in that particular period. I think we had one in Port Alberni; we had a couple of others at about the same time. In this particular case, Cedarhurst was of great concern to us because of two things. First of all, it was vacant housing. It was housing which should have been used and enjoyed by families. Secondly, it was a situation which certainly placed great strain and great difficulty on the subtrades: individuals with perhaps one or two employees; very small firms who were caught up in this battle between the mortgage company and the Housing Corporation of British Columbia.

I was advised that we were not in a position to make any ex gratia payments and indeed I think the member would agree with that aspect too. The matter seems to be resolving itself.

I have the actual dates with respect to Mr. Paulus now, by the way. I think the member quoted them pretty well as I did: in November, 1976, Mr. Paulus stepped down as chairman and he stepped down as a director on January 13,1977.

So it's taken quite a while to sort this one out but

[ Page 3602 ]

we have firmly in place now the kind of conflict-of-interest declaration and prohibition which I must say should have been in place in that particular situation quite some time prior to it being introduced.

MR. GIBSON: I thank the minister very much for his statement. Something he said in passing might answer my other question about the ownership of Canterbury Mortgage prior to the early part of 1976.

1 think the minister referred to that company as one of Mr. Paulus' companies, but I don't want to read into that more than I should. He may have been speaking of a later point in time. What I had asked him is, because of the potential for conflict of interest on an earlier occasion, whether the minister would agree to inquire into the interest, if any, of Mr. Paulus in Canterbury Mortgage before it became succeeded by Bancorp in the early part of 1976, Bancorp, of course, being a company of which Mr. Paulus was president.

I beg to ask if the minister could attempt to ascertain for us whether or not Mr. Paulus had any interest in Canterbury Mortgage before that, because it does relate to the earlier possibility of conflict of interest in a rather important way.

HON. MR. CURTIS: Mr. Chairman, we don't have that here this evening, obviously, but I will undertake to make inquiries and attempt to provide the information to the member, if that's what he wishes, when it is available, if indeed we can locate it. I think we can determine the precise answers to the questions that the member has put and we'll provide them to him.

MR. C. BARBER (Victoria): I appreciate the willingness of the minister to provide those answers on this very serious question raised tonight by the member for North Vancouver-Capilano, and I associate myself with his call for an examination into that.

The minister, when talking about Cedarhurst - if I quote him correctly - said: "Vacant housing, should have been used and enjoyed by families." The minister was referring to vacant housing which was otherwise unavailable because of the legal actions and financial problems in which that particular company found itself. I'm sure the minister was sincere when he was referring to the problem of vacant housing lying idle that should have been used and enjoyed by families. The problem is, Mr. Chairman, that, thanks to this minister, more than 250 units tonight are lying idle that could and should be used by families in this province because of the hopeless incompetence of this minister in his dealings at Quesnel Green.

I raised this question first on Thursday night and the minister made no reply. There was not time on Friday to raise it. Monday, the minister was preoccupied. 1 raise it again today, Mr. Chairman. Let me review the case.

At Quesnel Green, located near the Loughheed Mall in Vancouver, there are some 282 units of housing presently available for citizens of British Columbia. This was a special project developed by the previous administration. At the site some 24 units have now been turned over and are being operated successfully by the Norman Bethune Co-operative. The same co-op, having established through those 24 model units their fiscal competence and their managerial competence to maintain those units properly, has indicated that there are some 300 families waiting to get into co-operative housing units in that area.

The Norman Bethune Co-operative maintains that it had an agreement with the previous government that, having demonstrated its competence to manage the 24 units, they would then be given possession of the remaining units in the development. When this minister came into office 1 am informed that he reviewed that situation and relatively shortly after taking office decided that they would not be turned over to the Norman Bethune Co-op. Instead, Mr. Chairman, the minister decided that these units would be re-established as condominia.

Well, we see the unhappy results of this minister's decision, Mr. Chairman. The minister who just five minutes ago complains that there should be vacant housing anywhere which should have been used and enjoyed by families tonight is responsible for more than 250 units having stood absolutely vacant for the last year in the province of British Columbia.

In the first week of June of this year, Mr. Chairman, according to John Brigham, who is the sales manager for the Housing Corporation of British Columbia, only 17 of the 282 units at Quesnel Green had been sold as condominia.

Now 1 am informed privately, although perhaps the minister can correct his, that as of tonight no more than 25 units in total have been or are presently committed for sale as condominia at Quesnel Green.

Now the minister is well aware that the condominium market in British Columbia is extremely soft these days. There is no great demand; there is no great need. Indeed, owners of condominia have been losing their shirts left and right. In this particular case the condominia are being sold on average between $39,000 and $47,000 apiece. In metropolitan Vancouver - Burnaby, to be specific -given the housing market that exists, there is no apparent demand for more than 250 condominium units at this time. A year ago, when the minister made that decision, based as far as we can tell solely on ideology and not in the least. on economics, there was no great demand either. So the minister who bemoans the fact that housing should be standing

[ Page 3603 ]

vacant at Cedarhurst is responsible tonight for the fact that more than 250 units are vacant at Quesnel Green in Burnaby, B.C.

Now, Mr. Chairman, it seems to me that when John Brigham is quoted in The Vancouver Sun on June 4 as saying, "Sales are going slower than we anticipated, - and later in the article says, "however, we have hopes that the market is improving, " the minister finds himself in a very embarrassing situation. He is responsible, for reasons which, in our view, are wholly ideological and are entirely dogmatic in nature and character, for the refusal to turn over 250 units to a co-operative which has established a successful track record and which has 300 families on its waiting list ready to occupy that housing, and for the fact that more than 250 units stand vacant tonight.

Mr. Chairman, later on in this session we hope to be providing information to this House about the financial cost of all of those units standing vacant. There is a direct economic charge to the people of British Columbia. The penalty being paid is more than just the penalty of seeing 250-plus units sitting vacant when families need them. The penalty being paid is more than just that a successful co-operative should have its face slapped by the Minister of Housing. The penalty being paid is more than just the fact that the taxes that should be paid, the improvements that should be made, and the income and the moneys that should be generated and circulated are not being generated and circulated. All of that is to the minister's discredit. Further to that, however, and perhaps more importantly, Mr. Chairman, is the fact that the interest charges on the money invested in the first place in order to build these units are accumulating day by day. Had they been turned over to the co-op more than a year ago when they should have been, that interest would now be being repaid. People would be occupying those homes. People, as members of that co-operative, would be using those homes and paying the interest charges, and the total indebtedness of that project would be being reduced over a period of time.

Instead, when the market is soft and there's no demand for the condominia, the minister turns around and says: "No, you're a co-op; you can't have them. We're going to call them condominia instead and try to sell them." The problem is, Mr. Chairman ' as the sales manager, Mr. Brigham, is quoted as saying, that sales are slower than we anticipated. Indeed, on the day he said that, they had sold all of 17 out of 282 units. Now again, information I've received indicates that no more than 25 in total are now committed. Perhaps the figure is slightly higher. I'd be amazed if it was much higher at all. The problem is, Mr. Chairman, that for months and months, for reasons which make no economic sense whatever -that don't even make any political sense because surely the minister must realize the difficulty in which he finds himself with all of these housing units sitting vacant.... There can only be one reason. The reason is ideology. The reason is dogma. The reason is the refusal of that coalition to support the concept and the principles of co-operative housing. We can find no other justification for the fact that tonight some 250 units plus at Quesnel Green in Burnaby, British Columbia, are sitting idle.

My first question to the minister is: can the minister as of this evening give us a precise figure as to the actual number of sales completed and can the minister tell us whether or not he has any immediate hopes for further sales? If the minister can answer that question, 1 have some others to come.

HON. MR. CURTIS: Well, put them now. Go ahead.

MR. BARBER: Well, on the basis of your answers, I'll then be able to frame further questions. Otherwise, questions put at this point might be hypothetical. 1 would rather hear your answers first, if that's okay, Mr. Minister.

HON. MR. CURTIS: Mr. Chairman, as of this evening, no, 1 can't inform the committee as to the number of units which have been sold. The second member for Victoria said that 1 was preoccupied on Monday. He was rather busy on Monday too. 1 didn't notice him in the House a great deal Monday afternoon. He may, therefore, have missed some of the discussion which took place between the two sides of the House with respect to Quesnel Green, when the hon. member for Burnaby North (Mrs. Dailly) spoke about it and I replied to the best of my ability and knowledge at that point.

I think that I've heard the words, "ideologically, dogmatically opposed to co-ops" used just a little too much in the statements made by the hon. second member for Victoria. Perhaps he also missed the statement yesterday when 1 indicated that I support co-operative housing as a form - one part of the full spectrum - of housing for British Columbians. 1 guess he was busy with someone at that point on another matter, which is understandable. I've indicated that I've participated in openings of co-operatives, where 1 have met with Shirley Schmidt of the Columbia Housing Foundation and others, and where I have done the very best I can to encourage co-ops. There's strong support for and interest in the co-op form of housing of shelter for the people of this province.

With respect to the specific that the member has raised again this evening, we tried, Mr. Chairman, to create a smaller co-op, but the co-op board itself turned us down. They said in effect and I'm paraphrasing: ---No, we want it the way we want it or not at all.--- We pressed on with discussions with the

[ Page 3604 ]

district municipality of Burnaby and we found that in the opinion of municipal staff this was not technically or legally possible. We felt at the time that the original co-op made up of 24 units would benefit economically from expanded membership. If the member has any constructive suggestions to make on this issue, 1 would welcome them. If, on the other hand, the member simply wants to further identify the fact that the party he represents and the party I represent are both concerned with housing British Columbians, and then to accuse me of acting in an ideologically hidebound manner or following some dogma which is laid out, then 1 don't think it's going to be a very productive discussion.

Frankly, Mr. Member, if you want to carry on the ideological discussion, I'll stay here tonight; I'll come back tomorrow; I'll come back the next day and the day after that and next week, if that is what you wish. But 1 ask you to step back and examine whether it was your party in power or ours. We are attempting to house British Columbians. Every once in a while you run into what is not dogma in terms of this House, but a degree of selfishness with respect to people who see an opportunity to form a little group and to control that group. I'm referring to this particular co-op and individuals who have not shown a co-operative attitude, but rather have appeared to attempt to block us at every turn.

MR. BARBER: I'm well aware of the minister's repeated public statements that he supports co-ops. The problem is when you talk to members of his own back bench, when you hear the thumping, when you review the financial commitments made by this government to co-operative housing, when you review the opportunities they've missed to share in co-operative housing funds through the federal government, then you have to realize that the minister's public statements vary considerably from the actual performance of his government. I'm concerned about the performance.

The minister has not replied, Mr. Chairman, to our charge that thanks to his decision, no matter what its root, for almost a year now more than 250 units of housing have sat idle and vacant at Quesnel Green in Burnaby. Seventeen only of those 282 were sold by the first week of June. Again it's my information - 1 stand corrected if the minister will provide more up-to-date figures - that no more than 25 in all of those have now been committed for sale. That's less than 10 per cent, Mr. Chairman. That is, at the very least, gross mismanagement.

The minister wants a constructive suggestion; 1 happily make it. I have no brief particularly to bear for the Norman Bethune co-op. If that particular co-op is unable or unwilling to conclude a satisfactory arrangement for the use and the occupation of those 282 units, find another co-op.

AN HON. MEMBER: Hear, hear!

MR. BARBER: Find another co-op and do that tomorrow. If the Normal Bethune co-op, given its present membership and philosophic direction, is unwilling to make the contractual arrangement that's satisfactory, that's fair. If they don't want to do that, they're not obligated, nor is the minister. Indeed, if the minister is willing to realize that he has made a very serious economic misjudgment of the market and simply cannot sell those units as condominia and has not been able to sell more than 90 per cent of them for the last year, then perhaps he might go back to Shirley Schmidt or to some other competent and reputable person within the co-operative movement and ask them if they would be willing to consider establishing, for the purpose of obtaining Quesnel Green and the units therein, a new co-op, one which would get along with the particular obligations and commitments of the present minister. I think that's a reasonable approach.

I have no special brief to bear for Norman Bethune. If they aren't particularly co-operative, that's fine. Find another group that is. Mr. Chairman, it's senseless to pursue a policy of reclassifying this housing as condominia in a market that is not interested in purchasing condominia. No one wants these units; 90 per cent and more of them have been unsold for a year.

That, I think, is a relatively positive suggestion. If the minister wants names and addresses of people who might be interested in participating in the creation at Quesnel Green, that could handle them on the basis of their own track record with competence and responsibility, we'd be happy to provide those names. I'm sure Shirley Schmidt would be equally happy.

It seems to me, Mr. Chairman, absolutely scandalous that these units should be sitting idle and vacant for a year; that they're returning nothing in the way of investment or housing to the people of British Columbia; that every day the interest charges on the money is mounting up. You and 1, Mr. Chairman, are paying for that. It's simple mismanagement. It was a misjudgment of the market in the first place compounded by an apparent unwillingness to reconsider in the second.

If the minister is signaling tonight that he's willing to reconsider and willing to consider perhaps what should have been undertaken a while ago, which was another co-op with another organization willing to enter into a contractual , arrangement with the present owners, the Housing Corporation of B.C., then that would be to his credit and that might be a reasonable way out. At the moment, Mr. Chairman, this minister's very shoddy administration of this project is costing us money, is costing us housing and is costing him a lot of embarrassment. If he accepts that

[ Page 3605 ]

suggestion tonight, we may have found a way out of it.

HON. MR. CURTIS: Mr. Chairman, that is a suggestion which I will take note of. But this particular member from time to time does indulge in a bit of hyperbole. He's told us many times this evening that the place has sat empty for a year and that it is my fault. I'll give him the benefit of the doubt; he may not know that the Norman Bethune co-op tied us up in court for many, many weeks in the course of that year, Now I didn't hear any reference to that. Our hands were tied as we were taken to court by the Norman Bethune co-op directors and we were unable to move.

Mr. Member, again, if you're going to be the critic, if you're going to point out all the failings of this ministry and this minister, fair enough. But tell the whole story, not just with selective recall.

I even have to correct you yet, Mr. Member, for another mistake you made last Thursday night. You said that I led a delegation to Europe on behalf of the Municipal Finance Authority. I never led a delegation to Europe on behalf of the Municipal Finance Authority. First of all, I had to help you with the name of the authority. You said it was the Assessment Authority, and then you got onto the Municipal Finance Authority.

I've had some free time in the last few days to review some of the statements. Mr. Member, the kind of criticism, discussion and debate that we had with several members of the opposition today is great, but when you take me to task for having vacant units for one full year, at least admit that for a good portion of that year - not all of it, but for a good part of that year - we were tied up in court.

MR. BARBER: The reason you were tied up in court was because of your own unwillingness to proceed with an agreement which the directors of the present co-op felt was rightfully and properly theirs, inherited as such from the previous government. The minister is no longer in court; he hasn't been in court for months. He's had a free hand for months and months, to the best of my knowledge. The legal action was withdrawn, I understand, around Christmastime. If I'm incorrect, I stand to be corrected, but that's my recollection after my discussions with the Norman Bethune co-op. It was the minister who, in the first place, repudiated an agreement which the co-op believed it had with the province of British Columbia and ended himself up in court. The minister now says: "You have to have some sympathy for me because I ended up in court." It's not very persuasive.

HON. MR. CURTIS: I didn't say that.

MR. BARBER: Now regarding the other matter, I earlier apologized for my misuse of the name "Assessment Authority" in place of "Municipal Finance Authority." I do apologize; I did so before.

11 did not say the minister led a delegation to Europe. I said he went to Europe. I am informed that he was involved in negotiating for bonds in Europe. Whether he went with a delegation or his wife is immaterial. He went, I am told, on behalf of the Municipal Finance Authority.

I do appreciate the minister's willingness tonight to consider the matter, although I do indeed put him on notice that sometime soon we expect to be tabling financial information in the House to indicate just how much of a direct charge, in the way of interest and other matters, the vacancies at Quesnel Green have been to the people of British Columbia.

I wish to raise another matter and just ask the minister for some information. I'm referring to the Minnekhada farm, which is presently owned by the people of British Columbia through the Housing Corporation of British Columbia, for which the minister is responsible. The Minnekhada farm has been operated as a farm quite successfully for a number of years. I received some information a while back and I wrote to the minister. He replied to me on July 5, indicating that a letter which I had written on June 21 to Mr. Walter Webb, president of the Housing Corporation of British Columbia, would be answered by himself.

The Minnekhada farm is presently occupied on lease by a couple of people who have been operating it as a farm. The lease, according to the minister's letter, has been terminated as a result of several incidents in which the lessee has violated the conditions of the agreement.

My questions to the minister tonight concern the famous member for Coquitlam (Mr. Kerster) , who appears once again to have been his busy self on behalf of those who appear now to be obtaining the farm. Again, the first statement, Mr. Chairman, is that it would appear the people who presently have the farm on lease are in the process of losing it by virtue of the claim they violated the lease.

My first question to the minister is: has he received any information, or advice of any kind, from the member for Coquitlam regarding the disposition of the Minnekhada farm?

HON. MR. CURTIS: Mr. Chairman, I think the member for Coquitlam may have mentioned the Minnekhada farm to me, but certainly the bulk of my discussion and review has taken place within the ministry where, in my view, it properly belongs -within the Ministry of Municipal Affairs and Housing - and also, because there is a possibility, with the Ministry of Recreation and Conservation.

[ Page 3606 ]

MR. BARBER: Is the minister aware of whether or not the member for Coquitlam has had any correspondence or verbal dealings with officials within the Housing Corporation of British Columbia, again regarding the Minnekhada farm? If there has been such correspondence in writing, would the minister agree to table with the House any of the correspondence between the Housing agency of the ministry and the member for Coquitlam regarding the disposition of the Minnekhada farm?

HON. MR. CURTIS: Mr. Chairman, I don't know. I think it is important to point out once again that quite apart from contacts I have with senior people in the Ministry of Municipal Affairs and Housing through the week, we have a regular Monday morning staff meeting which can last for an hour - that's unusual - or up to four hours, whether the House is sitting or not, where each of the participants has free opportunity to raise matters which are of concern to his section of the ministry. The Minnekhada farm has therefore been on that agenda. This is within the Ministry of MAHOS and, as a matter of fact, it was decided two or three weeks ago that I would visit the Minnekhada farm again with the deputy minister, Mr. Bell. We were to have gone last Saturday, but for a number of reasons, we postponed it one week and we are going this Saturday.

MR. BARBER: I have a couple of other questions. Will the minister be escorted on the tour by the member for Coquitlam?

My next question is: In his letter to me of July 5, the minister indicates that transfer of management responsibility for the farm to the B.C. Land Commission is under consideration. Has that decision been taken? Are you closer to reaching one? Can you indicate to us tonight when you expect to make final resolution of who shall own or be responsible in the future for the Minnekhada farm?

HON. MR. CURTIS: Mr. Chairman, I can't guess when that might take place if, indeed, it does. I said, in a July 5 letter, the copy of which you lost and we had to send you another one....

MR. BARBER: No, I've got the original here.

HON. MR. CURTIS: Oh, you found the original.

MR. BARBER: I never lost it.

HON. MR. CURTIS: Well, we understand you lost it. Anyway, we were quite happy to provide you with another one.

From July 5 to the present date the situation hasn't changed. I want to view the property in company with the deputy minister. If the MLA for Coquitlam chooses to come along, that is certainly his right, as indeed I have traveled in the member for North Vancouver-Capilano's (Mr. Gibson's) riding recently and discussed matters affecting his riding with him.

MR. BARBER: Mr. Chairman, I think the minister, to his great credit, has lately been talking about the very interesting and imaginative work of David Spearing, the architect principally headquartered in Nanaimo, who is talking about housing on the sides of mountains.

I'm aware that the minister has taken some steps, starting several months ago, to consider the possible planning of a hillside development in the Chilliwack district. I have had some discussions with officials within that minister's department and feel relatively confident that it is indeed the minister's personal commitment to examine those kinds of possibilities. I commend him for that.

I wonder if the minister might care to report to us tonight on the present standing, if any, of the proposed engineering and other examination that might have taken place in the Chilliwack district. There was a particular hillside in question. I would like to know whether or not he remains committed to that study and, further, whether or not the obstacles that apparently were thrown up to that study by the Chilliwack council remain thrown up in the air and remain a substantial obstacle to the progress of that examination.

Again, Mr. Chairman, I think that the minister's willingness to consider these very new and very innovative forms of housing is absolutely commendable. I'm glad he's doing that. I'm familiar with some of the work of Mr. Spearing and I'm well aware that the minister is even more familiar with it. I very much hope that he has been able to overcome those obstacles and might be able to report some considerable progress to us tonight.

[Mr. Veitch in the chair.]

HON. MR. CURTIS: Mr. Chairman, one thing we're not short of in British Columbia is hillsides. Therefore, in the face of local opposition - if there is local opposition in the Chilliwack case - fair enough, we'll move on. We'll just pack up the wagon and move on to another location, because a great deal of the study which Mr. Spearing undertook applies to a hillside - not necessarily to a specific single hillside.

We are still in the process of examining and we determined some weeks ago that we would postpone this for a short while - a matter of the balance of the summer. We're still reviewing Mr. Spearing's very detailed preliminary report. It is detailed and that's what we wanted. He has now proposed phase II -that is, a degree of implementation - and we are not

[ Page 3607 ]

at the point to say whether we are prepared to i proceed with recommending that to Treasury Board and recommending that to cabinet. What we do have is a first study which merits very careful concern.

I've had some extremely interesting conversations with Mr. Spearing. I referred to him this afternoon in another context and that was in the Mount Benson stage 3 senior citizens' housing project. So I cannot answer the question, Mr. Member, because the decisions have not been made.

If we decide to proceed further, then we would seek out a regional district or a municipality where we were welcome to carry on with the work, rather than to bang our heads against a brick wall in the case of local opposition. But I emphasize for you, Mr. Chairman, that word "if" we decide to carry on, because there are obviously a lot of problems in terms of servicing. We have to assess the cost; we have to assess the response to the kind of housing that would be provided. Would it be moderate housing? Would it be ultra-expensive? If it is ultra-expensive then we have to analyse it, I think, in another light and perhaps look to the private sector to take it from there with Mr. Spearing. But it's one of the active programmes in the ministry and the situation will develop as it should.

MR. BARBER: Mr. Chairman, for what it's worth, we congratulate you on that. I think that's an excellent initiative. It's kind of a shame that a local municipal council might, in this particular instance, where farmland is at an absolute premium and where we can afford no further incursion on it, be able to stand in the way of something as exciting as this. As far as I'm told, Mr. Chairman, it's only an examination and a study. No one is proposing any immediate building. But anyway, we're really pleased with what the minister has done.

The minister earlier reported on the progress of the investigation being conducted by Mr. Alf Hood into the claims of conflict of interest and maladministration in Matsqui.

I again would like to congratulate the minister, Mr. Chairman. Mr. Hood is an excellent choice, absolutely first-rate, and I'm sure he will produce a first-rate report. I had the pleasure of working with Mr. Hood when he was an alderman at Victoria council for a number of years. I respect him; I consider him a personal friend. He has been into my home. I think he's a fine fellow and we look forward to that report.

I wonder if the minister tonight, Mr. Chairman, might give us an indication of the progress of the other examinations, inquiries and so on that are presently going on. My first is about the probe in Surrey which on February 15, Mr. Longl the inspector of municipalities, indicated would be concluded likely by March. This is a probe into the peculiar circumstances of the application of Capt. Harry Terry for the Meadow Creek racetrack in the Hazelmere Valley. March has most certainly come and gone and I wonder if the minister could tell us tonight if Mr. Long's report has been concluded. If so, what are its contents, and would he agree to table it in the House?

HON. MR. CURTIS: Do you want to run through the whole list or do you want to deal with them one at a time? You said this was the first. So, Mr. Chairman, I would defer to the member. If he wants to list those which interest him I can comment on them in sequence.

MR. BARBER: Well, I'm happy to accept that suggestion. The first about which we're curious is the probe into the Capt. Harry Terry racetrack proposal.

The second is the other Surrey probe which has been announced by the minister - the land dealings by municipal officials in the municipality of Surrey.

The third was the inquiry which the minister announced - these are in-house and not necessarily official inquiries under the inquiries section of the Municipal Act - prompted by complaints by the chamber of commerce about the operations of the Dewdney-Alouette Regional District.

The next is the one proposed and presently undertaken in Chilliwack regarding allegations of maladministration on the part of certain persons connected with the Sardis land development company and with Chilliwack council, and in particular regard to the extension of sewers and applications for removal of land from the agricultural land reserve.

The fifth the minister has already handled to our satisfaction, which is to tell us that Mr. Hood's report on the Matsqui problem is expected in a day or two.

HON. MR. CURTIS: I think it is appropriate to point out, as I did this afternoon, that there are frequently flowing into the office of the Municipal Affairs section of the ministry - and it was quite clear that this happened in the period of the former government's administration as well - allegations. So first of all, there is a review: a member of the inspector of municipalities' staff or the inspector himself will make initial inquiries. What ultimately happens, of course, is a public inquiry under section 728 of the Municipal Act, and that is what has occurred in Matsqui. That is the only one that has been directed or requested or recommended to date in this current swarm of requests or allegations - a swarm similar to that which has occurred in previous years.

The alleged land purchases in Surrey by an official

[ Page 3608 ]

of the municipality, conflict of interest.... It's still under review. I have no information for the member or for the committee in that regard.

Similarly, the rezoning for use as a racetrack is under investigation by the inspector of municipalities and his staff.

Dewdney-Alouette, Mr. Chairman, to the hon. member, goes back - and this is one file which we did bring down - to mid-1972. It's been going on for a long time. I don't want to dismiss it other than to say that in effect the chamber of commerce of Maple Ridge does not like the way in which the Dewdney-Alouette Regional District operates. Under the date of May I I of this year, the deputy inspector of municipalities, Mr. Taylor, replied to the then president of the Maple Ridge Chamber of Commerce indicating that in effect the matters which were brought to the attention of the inspector of municipalities' office were purely within the competence and jurisdiction of the regional district. Now I don't know that I can be of much more help on that particular one.

Was Chilliwack No. 3?

MR. BARBER: Yes, Sardis land development.

HON. MR. CURTIS: This is the construction of sewers in sewer area No. 10. Preliminary investigation of this is complete and the report will be finalized within the next few weeks.

MR. BARBER: Will you table it?

HON. MR. CURTIS: I don't want to interfere with the process that has been tested over a lot of years. If the report recommends to the executive council that an inquiry be conducted, then the executive council will order an inquiry. Any time you have contact with members of my staff - members of the ministry - or any time you want an updating on these, Mr. Member, you'll continue to receive the same degree of co-operation which you spoke about favourably the other night or the other day.

The next one, which was....

MR. BARBER: I mentioned Matsqui.

HON. MR. CURTIS: Matsqui, yes. Well, we're all awaiting the filing of a report by Colonel Alf Hood, former alderman of the city of Victoria. I agree that he certainly is well qualified to carry out that activity. I will read his report, along with other members of this House - as will municipal people -with a great deal of interest.

MR. BARBER: I appreciate the minister's answers to those questions and we, too, look forward to Col. Hood's report.

I wonder if the minister, being in a very friendly mood tonight, might be willing to tell us that he's willing to honour a campaign promise made in the last election. Indeed, during Thursday night's estimates, Mr. Chairman, I read into the record statements made by the minister as reported on May 1,1974, in which he agreed that the provincial government should be prepared to pay its full share of property taxes on the property it owns throughout the province of British Columbia. To refresh the minister's memory of his own statements, 1 would like to read briefly into the record a report which appeared in The Vancouver Sun on that date.

-Victoria - Members of the three opposition parties in the Legislature attacked Municipal Affairs minister Jim Lorimer Tuesday over the failure of provincial Crown corporations to pay full taxes in municipalities."

Who was first quoted in the report, Mr. Chairman? It's the minister.

MR. CHAIRMAN: Hon. member, you've canvassed this on two previous occasions.

MR. BARBER: Well, the minister has not yet replied at all to my request that he honour his promise and persuade his cabinet colleagues to honour their campaign promise to pay their property taxes, particularly in my own riding, the capital city.

MR. CHAIRMAN: Hon. member, I'm pointing out to you that you have canvassed this quite completely on two separate occasions. This is the third time, hon. member.

MR. BARBER: I'll be very brief, Mr. Chairman, I assure you. We'll very much hope that the minister will reply.

MR. CHAIRMAN: Move on to new material, hon. member.

MR. BARBER: Well, Mr. Chairman, I've received no answer at all - not even an unsatisfactory one, except a lack of action.

MS. R. BROWN (Vancouver-Burrard): You're harassing the member.

MR. CHAIRMAN: Hon. member, I'm telling you for the fourth time that this has been canvassed on three separate occasions.

MR. BARBER: Are you satisfied that the minister has made any reply at all?

MR. CHAIRMAN: It's not up to me to be

[ Page 3609 ]

satisfied. I'm merely pointing out the fact that you are treading very dangerously on standing order 43, which refers to tedious and repetitious debate.

MR. BARBER: Oh, now, now. Mr. Chairman, this coalition campaigned in my riding on a promise to pay their fair share of property taxes in the capital city. They promised it. They made it public over and over again. I will not hesitate to speak up on behalf of my own riding, the capital city, to ensure that that promise is kept.

AN HON. MEMBER: Order!

MR. BARBER: It may not be as new as some other material that's been canvassed tonight, Mr. Chairman, but it's a very important promise. The minister made the promise in May, 1974. The minister's party made the promise in the last campaign. Will the minister tell us tonight if he's prepared to honour his own promises? He says: "The tax-paying property owner is subsidizing the province for the loss of revenue, a practice which has gone on too long. Referring to the Premier's statement, Mr. Curtis said that if it's not fair for private firms to be given tax concessions, then it's not fair for Crown corporations either."

I agree with the minister, Mr. Chairman....

MR. CHAIRMAN: Hon. member, this would also involve legislation and it is completely improper to discuss matters requiring legislation in Committee of Supply. I must rule this line of debate out of order, hon. member.

MR. BARBER: Mr. Chairman, with respect, it can be done by regulation, if only under the legislation called the British Columbia Buildings Corporation Act. That legislation, now an Act, specifically provides that the minister may have authorized the payment.

MR. CHAIRMAN: Continue.

MR. BARBER: I'm sorry you forgot it, but we've read it carefully.

Now the minister, Mr. Chairman, as a member of the coalition cabinet, is responsible for persuading his colleagues to honour his and their promises. That's my question. I'll stop for the moment. Will the minister tell us tonight if he's prepared to honour his own promises and to persuade his own cabinet to do so by paying its property taxes in British Columbia where it owns property? In May, 1974, he thought it was a pretty good idea. Hopefully, in July, 1977, he still does.

HON. MR. CURTIS: Mr. Chairman, the funds for this appear within my estimates. The preparation of a regulation through the executive council rests with the Minister of Finance (Hon. Mr. Wolfe) . I have no reason at all to refute the spirit of what was said - or what has been read back to me - in May, 1974. That's the way 1 felt then and that's the way 1 feel now. But 1 think that any further pursuing, 9f this by the hon. second member for Victoria would really intrude into discussions between members of an executive council. For that reason I'm not able to answer.

MR. BARBER: Well, it's obvious he's not able to answer because he has nothing to answer. He tells us it's in his budget; 1 don't see where it is in his estimates.

HON. MR. CURTIS: No, no, no. The fixed payment.

MR. BARBER: He tells us, if 1 understand him properly, that by regulation and, indeed, within funds presently available, that promise can be kept. I'd like to know where those funds are. Can the minister name a vote? Is the minister prepared tonight to identify the exact source of the funds whereby this particular promise would be kept? If so, 1 wonder if the minister would be so good as to phone the mayor of Victoria. He's probably at home in bed; I'll give you his home phone number. Tell him the good news because we haven't heard this before.

HON. MR. CURTIS: Mr. Chairman, 1 think the member misunderstood me. 1 was referring to the allocation which presently exists, not to some new vote. This is the 15 mills which has existed for a good long time under vote 197, and that's what 1 said is in my budget in my estimates.

AN HON. MEMBER: Take it all back.

HON. MR. CURTIS: No, 1 don't take it all back. He should. 1 accept his retraction.

MR. BARBER: Mr. Chairman, what 1 feel honourably obligated to retract is my congratulations to the minister that he's given us some good news. It's clear there's no new news and no good news at all. Vote 197 is like it's always been: 15 mills. In Victoria the tax rate is 45 mills. They pay 15. That's absolutely unacceptable. We'll be hassling and harassing the minister more and more as the days go on and his estimates continue and continue and continue. We look forward to his estimates next year when, no doubt, we'll be back in the very same debate.

1 have a couple of other matters that I'd like to raise with the minister, Mr. Chairman. I asked the

[ Page 3610 ]

minister whether or not he would be prepared now, in advance of trouble which appears only to be worsening, to conduct an examination in some detail into the obvious conflicts presently going on within Saltspring Island. There has been a great deal of newspaper publicity. I have received correspondence and verbal advice by phone from residents of Saltspring. It's clear that there's an anger and a hostility and a poison in the air that's totally unacceptable. It is in the minister's own riding.

It does concern allegations of conflict of interest around members of the regional board. It centres around charges and counter-charges made by and about members of the Islands Trust. The minister has a specific constitutional right, I believe, to conduct such an examination. The minister, as a member for that particular island, has an obvious political interest in the matter.

I wonder if tonight, in advance of worsening troubles, he might be able to reassure this House that some kind of inquiry will be going on. The minister, 1 think quite properly, has said in the papers that he's concerned about it. We wonder if tonight he might be willing to announce some form of examination which could at least set to rest temporarily the fears on the part of some islanders that their legitimate concerns are being overlooked and ignored by government insular, regional and provincial in the case of these particular allegations. Would the minister care to comment on that tonight?

That was the end of my question about Saltspring. I'll defer at that point to my colleague for Burrard.

MR. N. LEVI (Vancouver-Burrard): I thought we were going to get some good news but I guess we just misunderstood. It's a long way from here to the other side.

I'd just like to discuss the minister's policy in respect to Quesnel Green, only in relation at the moment to what 1 presume is still going on - the sale of condominia rather than renting.

1 would like to just bring his attention to a housing statistics report that was issued by Central Mortgage and Housing Corporation. It's dated April, 1977, and it's headed: -Apartment Vacancy Survey, Metropolitan Vancouver." I'm not going to read all of it but I'm going to refer to the second paragraph which reads:

"The continued easing of the vacancy rate in the metropolitan area resulted from a modest increase in the supply of privately owned rental apartment suites and from the availability of alternate sources of rental accommodation, notably the rental of condominium suites.

"In respect to the former, the survey universe had increased by 484 units for the April, 1977 survey as compared to 1976."

The survey area was something of 89,000 units.

"With respect to the latter, it is worth noting that 9,195 condominia suites have been completed in metropolitan Vancouver over the last two years, 1975 and 1976. A good number of these condominium units have been rented rather than being sold, hence an increase in the supply of alternate sources of rental accommodation."

Now, within this statement, they note that apparently the popular way of dealing with these condominia was to rent them. We have the minister who has come up with a policy - which exists, I gather, for four or five months anyway - where he has decided he wants to sell them. Now I would be interested in knowing, first of all....

I'm sure he's listening although I can just barely see the top of him. Well, the Minister of Mines (Hon. Mr. Chabot) will take notes for him, I'm sure. Oh, the Minister of Mines is floating out of the House.

Perhaps the minister could tell us the basis of the policy that he has. Earlier my colleague from Victoria (Mr. Barber) suggested it was ideological. Well, I rather agree with my friend that it was ideological. After all, the minister himself, Mr. Chairman, is a bit of a political tourist. He started as a Liberal, he became a Conservative and now he's along with you and the rest of your group on the right hand of Genghis Khan.

So we can presume that you people have no commitment in the way that we had commitment. So I would suggest that it is ideological in the sense that they've decided to sell rather than rent. After all, we heard very often during the period of the last government about how what this province needs is a free-enterprise government that can capture the imagination of people who want to invest in the province - particularly those people, Mr. Chairman, who want to invest in housing. We used to have before you came here a member who first was here and then was in the front on the opposition who had leather lungs, who used to get up and tell us all about what the free-enterprise system could do.

Now the minister has a policy in which he has decided he is going to sell the condominia, despite the fact that the most success that has been had with condominia is to rent them. Perhaps the minister would explain - and I want to go on to something else before he replies - exactly what the purpose of the policy that he has is. Is he, in the face of the problems that he's having in selling, now going to revert to the question of renting? We shouldn't kid ourselves that just because we have nearly 200 empty apartments they're going to be available to low-income people. This is not necessarily affordable housing as we define it. But the point is: is he going to move now from the policy that he's had of selling into the one of renting?

Now in relation to the free-enterprise system and

[ Page 3611 ]

the investment community, perhaps the minister will comment for me on just what is really happening in the construction field and the housing field when investors like Daon, Block Brothers, Wall and Redekop and Nu West Karma are moving to the United States. Figures in June indicate that they have more than $100 million invested in the United States. It's conservatively estimated that that's something like the loss of the equivalent of 2,500 housing units to British Columbia. That money has gone to the United States. Perhaps the minister would tell us because he is the spokesman for the government. He belongs to a government that was going to create an investment climate. But, Mr. Chairman, in the history of this province we have never had in such a short time such an incredible flight of capital. It's well over $100 million. Daon has pretty close to $50 million down there. There is every indication that this is going to continue.

We've got a policy from the minister. He says you've got to sell rather than rent. Consequently we have almost 200 units empty, a scandal far greater than the scandal that used to be hawked around this House two years ago about the empty office space. After all, we're dealing with a multi-million dollar investment on the part of the taxpayer. There we are; it's still sitting there.

Then we have a policy in terms of the province where the province is not healthy economically. The major developers in the provision of housing are investing in the United States. That's where they are; they're in the United States. Now perhaps the minister would answer first the question in respect to his policy on condominia, and secondly why he he thinks that these people are going to the United States in terms of investment and in terms of the development of housing, and are not remaining here in British Columbia. I'm prepared to sit down and hear the minister's reply.

HON. MR. CURTIS: Mr. Chairman, the second member for Victoria (Mr. Barber) first asked again about Saltspring Island. I was correctly quoted in the press as saying that I was very concerned about it and I was prepared, if provided with a letter, if provided with documentation of complaints, because I really do not intend to deal with first one person and then another person and then another person on an issue which has sharply divided the community as this.... If I am presented with allegations, if you wish, or simply an outline of the complaints, then I will invite to my office all the principals involved.

I've already had a very pleasant letter from the chairman of the Capital Regional District, Mr. Jim Campbell, offering full co-operation in that respect. The regional director for Saltspring, Mr. Heinekey, would be most welcome. The complainant's representative from the community of Ganges and anyone else, along with people in the ministry, whom I feel could assist in overcoming what is a very unfortunate dispute in a delightful island, would be welcome.

A number of things have been said with respect to the regional district board and staff and other employees. I think that if someone is prepared to outline the complaints, to categorize them, -then I would have a duty to attempt to use my good offices to see that a meeting was held if the matter couldn't be resolved. I don't think it's something that requires the kind of formal inquiry which we spoke of earlier this evening with respect to the inspector of municipalities. But someone needs to say: "Okay. Let's sit down for an hour or two or whatever and see if we can't resolve this. Who said what? What has disturbed you? What is the solution?" I would be quite prepared to do that.

The second member for Vancouver-Burrard (Mr. Levi) spoke about Quesnel Green, and then about the fact that construction money is moving out of British Columbia. You wouldn't even help me on that, would you? You wouldn't help me out.

MR. LEVI: I thought you knew - all-knowing.

HON. MR. CURTIS: No, no, no. That's your impression of me. That's your problem; that's not my problem.

Regarding Quesnel Green, we're looking at rental possibilities. There's no question about it. We're looking at the possibility of making some of the units available for rental purposes, so we have not said no. We don't have anything further to say to the committee on that matter this evening, but we certainly don't rule it out. I'm sure that the member did not intend to make it sound quite that way, but we know - and knew earlier on - that really a very large majority of people in British Columbia seek to own their own home, and, indeed, in a co-op you own something.

We have not acted at any time to suggest that because you cannot own or choose to own, the programmes of this ministry and of this government are not available or are non-existent for you. Therefore we've had, in the case of Quesnel Green, the matter before the courts. As I outlined for your colleague from Victoria, we've had quite a dramatic turnaround in market. We've had a lot of complications, and we do not rule out rentals. Indeed, it's quite the reverse. If we see the opportunity to offer some sort of rental accommodation at that particular building or at that particular project, then we shall do so.

Regarding money moving out of British Columbia, we had a record number of starts last year and so far this year. There may be some money moving out of British Columbia; I'm not an economist. You referred

[ Page 3612 ]

to a document dated, I believe, April of '77. What we know is that we have, under the assisted rental programme in British Columbia, as of April 30-May 1, record numbers of units starting. That's either in the approval process or actually underway, with a total value of $164,242, 672 - that's 5,319 units. In earlier discussion today I broke down how many were bachelor units, one-bedroom, two-bedroom, and so on. In AHOP we see a great deal of interest, with construction taking place. The municipal incentive grants are also attracting a lot of interest. If the very large companies opt to undertake certain activities south of the line in Washington state or Oregon, then so be it.

The important point is that we see a great deal of activity in British Columbia. I referred earlier to the family allowance statistics that suggest that we have a net increase in population starting again in the province. The vacancy rate is in a healthy state. Frankly, I feel quite optimistic in terms of construction, and in terms of people to occupy the construction, be it rental or ownership accommodation.

MR. LEVI: Just to go back to Quesnel Green for a minute, the minister keeps referring to the problem that they were in court and they couldn't really do anything. I asked him the reason for the policy of owning the home. He said that people would prefer to own rather than rent. There are some people who want to do that. However, the minister reads the surveys and the projections on what is happening. He must have known in January or February, because it was not something that was a great surprise. I was aware in my riding that the condominium people were already in trouble; they're still in trouble. So this is not something that is new. This is something that everybody was aware of even before the end of last year. It's true that we had a large number of housing starts. The projections, even as late as February, in terms of where the housing starts were going to go in B.C., indicated that there was going to be a reduction of something like 18 or 20 per cent.

I can't be optimistic, Mr. Chairman, like the minister, when he keeps talking about the vacancy rate, because the vacancy rate doesn't help those people who can't afford to get into housing, other than what is characterized as affordable housing. We still have the problem in this province of large numbers of people, particularly over the age of 65, who are spending incredible amounts of their income.

When the reports were done in 1974, we were looking at 45 per cent of their income going on rent. Then by 1975, it was something like 55 to 58 per cent. All right, we have SAFER. We'll see what SAFER does in terms of this kind of assistance to people. There are no indications, when you really look very closely at the SAFER allotments, that the percentage of what they pay in their rent is going to go down to what the objective used to be of 25 per cent of their income. You're still going to get 30 and 35 per cent of their income going on rent with SAFER.

So while it's very nice to be able to say that the vacancy rate is slightly up, it is by no means that universal. I think my colleague, the first member for Burrard (Ms. Brown) , referred to it, and I've referred to it in other places, that our vacancy rate in the riding is not high. We have less than 0.7 per cent in the riding. Around the Granville area - 16th and Granville - where apartments are a little more expensive and people have a little more income, the vacancy rate is tight and people are locked in.

I wonder, because I asked the minister about the investment capital going over the border, whether there is, in fact, a government policy - an approach to this. Of course, if it's a policy and you haven't announced it, you're not going to be able to tell me because you're going to tell me it's policy. But has there been a meeting between cabinet ministers and leaders in the housing development industry -particularly those people who are going over the border - in terms of what the best interests are for this province? We know that people go over the border because they can make a better profit down there, but we have to remember that they got their start in this province, a lot of them, and they did very well.

So I would like to hear from the minister whether there have been discussions with the leaders of the industry - whether formally or informally - about their obligations in terms of this province rather than the United States. I know it's not a B.C. problem. This is a problem that exists all across the country, where people are going down to the United States. It doesn't augur well for us. Sure, we may very well feel that because we have population problems in the Victoria and Vancouver area where there is a drop. There are many reasons for that drop. Many of the people are prepared now to reach out and go more to the Fraser Valley or more to the interior. After all, there is the issue now that they have to go where the jobs are, and that's important too.

The thing is, we are going to need these people. We never pretended even when we were government -nor would anybody pretend - that anybody but the private sector can produce 80 to 90 per cent of the housing that's required. But we have a very serious problem in this province. The major developers seem to have given up on us. That augurs very badly for us, It's a very serious problem.

Perhaps before the minister gets up to answer -just to go back to Quesnel Place for a minute - could he tell me whether there has been any pressure on him from CMHC? After all, they have a fairly large investment in this place. In respect to his policy, is

[ Page 3613 ]

that, for instance, a policy that is shared by CMHC -that "we'll sell rather than rent"? Then when they see that the place is sitting empty and they're racking up incredible losses because interest payments have to be met, what have they said?

We haven't heard from them publicly, but we certainly know what they said in April, 1977. To me, it was a clear message that the only way you're going to get rid of condominia is to rent them. You're certainly not going to be able to sell them, because that has been the trend in this province for several months. Now what kind of pressure has the minister had? I know he has got good working relations with Mr. Quellet. That's very nice too, but they have to pay their bills as well. Perhaps he would come clean and tell us whether he's had any pressure about this. Is that a policy that they share? After all, they are the major investors in this.

Just to recap, I would appreciate the minister commenting on that because I think it is important for us to know just what kinds of relationships exist in that area.

HON. MR. CURTIS: Mr. Chairman, with respect to Quesnel Green, no, we've had no pressure from Central Mortgage and Housing. As the other partner in this, certainly we've had discussions. Most of them were initiated provincially - that is, province to CMHC - to keep them informed and to review with them the situation, but there has been no pressure saying: "You have to do something. We need an answer by next week, or a week Monday."

[Mr. Schroeder in the chair.]

The hon. member, Mr. Chairman, elaborated on his earlier comments with regard to discussions with the shelter construction industry and the degree to which they are moving out of the province.

First of all, I don't share the member's pessimism. Events may prove him right and prove me wrong, or events may prove that I'm right and he was unnecessarily pessimistic.

The fact of the matter is that no, I've not had discussions with the industry specifically relating to their moving out or what they are doing in Washington state or Oregon or Alberta or wherever it may be, and what they should be doing in British Columbia. The fact of the matter is that we've got a very active market in British Columbia now. We have Daon at Burrard and Pacific with what is the largest assisted-rental programme in Canada. It is the largest single ARP in Canada being undertaken by Daon in the inner part of the city of Vancouver.

What I do try to do, Mr. Chairman, is meet fairly regularly with all those who have some role to play in the shelter construction business, whether they are the very large or representatives of the very small. As recently as a couple of weeks ago, I note that I had a complaint from a small builder. I think he produces four or five homes a year. He was unhappy about one of our programmes. An official of the ministry spoke with him and straightened the problem out by explaining the programme, and it was cleared very nicely.

My contacts with the industry, large or small, or with associations and organizations for the small builders are an ongoing thing, really, involving senior people in the ministry and at all times trying to keep on top of the entire situation. But we do not specifically ask: "Why are you doing something in Washington state when it is felt by some that you should be doing it in British Columbia?"

The fact is that when you look at the stats, a great deal is being done in British Columbia. If they want to export their expertise and their talent, as with engineering, to Washington state for a while, then it's fair enough.

MR. LEVI: And their money,

HON. MR. CURTIS: And their money, Mr. Member, but I think we see a great deal happening here. As the population stats change - which we've spoken about repeatedly over the last several days -then we will see that they are prepared to come back and participate in further projects.

MR. C. D'ARCY (Rossland-Trail): Mr. Chairman, I am going to make a few comments to the minister. He will be the third minister with whom I will briefly discuss the problem of property taxes in my particular constituency. I'm going to brush over it fairly quickly because I've mentioned this before, Mr. Chairman, initially under the Minister of Finance's estimates and after that under the Ministry of Energy, Transport and Communications.

As the member for Victoria (Mr. Barber) has ably demonstrated to us on several occasions during these estimates and before, the government of B.C. should be paying $1.4 million more to the city of Victoria than it actually is. If we went around the province and added up all the other government-owned property that is not paying its full share of taxes, the figure would be considerably higher than $1.4 million.

However, in my particular constituency we have one Crown corporation, as the minister well knows, which avoids each year not only $1.4 million but roughly $1.6 million of property taxes. That is B.C. Hydro. I'm not going to belabour the point, Mr. Chairman, except to note that what is particularly infuriating about this is that the policy is discriminatory. At least the province stays at 15 mills consistently around the province. In other words, it consistently nails everybody equally.

[ Page 3614 ]

My complaint about British Columbia Hydro is that it discriminates against those areas which have had power projects built since 1964. The projects built before that under British Columbia Electric and the B.C. Power Commission pay taxes, as do transmission lines, substations and, indeed, the Hydro building in Vancouver and Victoria and all of the property owned by B.C. Hydro, with the exception of the post-1964 power developments. 1 would note that if we are going to take major initiatives for economic development in greater Victoria, in which the minister represents a riding, or in my area and any other part of the province, a good way to start would be to see that Crown corporations in the provincial government begin injecting their fair share of tax money into those areas, 1 think it would save the other departments of government a great deal of trouble and money.

Certainly just looking at the capital region, Mr. Chairman, if the province of B.C. paid its adequate amount of taxes, we can see that this would be an immediate subsidy to the economy here. It could be reflected in greater retail spending because of lower taxes on residential property. It would be reflected in a more attractive business climate for retail businesses. Since their costs would be lower they could lower their prices at the retail level. Of course, for manufacturing industries, which this area desperately needs, they would see themselves in a more competitive position relative to other parts of the province and the country.

MR. CHAIRMAN: Could the member please show how this relates to this minister's administrative responsibility?

MR. D'ARCY: Mr. Chairman, we have found under the minister's discussion and under the discussions by members on this side of the House as well that the question of property taxes in greater Victoria has been apparently in order up to this point. 1 appreciate that you are a reasonable man, Mr. Chairman. You shake your head but 1 know you are reasonable. You are also relatively consistent.

MR. CHAIRMAN: Yes. However, 1 must remind the Hon. member that if this matter was discussed under the Minister of Finance, then certainly it's not in order under this minister.

MR. D'ARCY: Thank you, Mr. Chairman. Moving right along, since the minister is not in the House, 1 will hope that his very able senior officials over there are noting my remarks and will brief the minister on his return.

I'd like to discuss briefly the question of water assistance. Now I'm sure that we have had considerable input in terms of the city of Castlegar's problems regarding....

There are not many members in the House, but a few that are close to the treasury benches seem to be conducting a little caterwauling in the corner. I'm wondering if you could bring them to order.

MR. CHAIRMAN: Would all hon. members not interrupt the member who now has. the floor?

MR. D'ARCY: I've been somewhat concerned, Mr. Chairman, ever since I saw the resource study or the feasibility study commissioned by the city of Castlegar regarding the cost of the water supply which it proposes to deliver to the city and the surrounding areas. Quite frankly, it boggles the mind. The costs are substantially higher than those envisaged by the water investigations branch report of three years ago. Even when those are projected into 1980 dollars, it would seem to me that either that report done by the water investigations branch in 1974 at no cost to the local area sadly underestimated the escalation of costs, or the terms of reference are somewhat different now when given to the private consultants.

I would hope that the Ministry of Municipal A f f airs, in consultation, hopefully, with the Environment ministry's water rights branch and water investigations branch, will rationalize these costs and reports extremely carefully. I think we could fulfil the water-supply needs both in quantity and quality for the city of Castlegar in a much better way.

Even though I must concede that resolution of this problem is very near and dear to my heart, the problem has existed going back at least until the construction of the Keenleyside Dam, beginning in 1965-1966. We have an ongoing problem here.

The member for Capilano (Mr. Gibson) talked earlier about the government having less concern when it was dealing with 50-cent dollars than when it was dealing with 100-cent dollars. I think what we're looking at here is a case, due to the water facilities assistance policy initially started by the former government and carried on, thankfully, by the present minister, that very often when it comes to water facilities local governments are looking at 25-cent dollars. In fact, if they hope to get money from the federal government, they may be looking at 5- or 10-cent dollars.

As we all know, in this and every other field, the most expensive is not necessarily the best but we may find that a much cheaper system actually does the job a whole lot better.

What I'm asking here is that the ministry consult closely with those people most qualified in government to advise them on this matter - which I feel are the people under the comptroller of water rights in their department; they have been dealing with water systems for a great many years - before

[ Page 3615 ]

they make any sudden decision on this. However, I would hope that an early resolution is resolved, because the problem is acute.

I would note that the kind of problems of funding that you can get into can be exemplified by the fact that on your vote, which we will be getting to - vote 197 - we see that the funds provided under the Sewerage Facilities Assistance Act are going up by some 40 per cent this year, 1977. This is an outlay which, unless the Act is repealed or changed, the government has very little control over; it's a statutory requirement. To see one vote of government that little or no provincial control is exercised over increase by 40 per cent in one year is, I think, indicative to me of the kind of costs that we can get into in these areas.

I'm certainly not suggesting, Mr. Chairman, that the government back off from its commitment to assist local government in either water facilities or sewage-treatment facilities, but there is certainly a most rapid escalation of costs going on here and I would hope the government is paying very close attention to it.

One last item is regarding the Castlegar water situation. As I'm sure the minister is aware, we have had some absolutely colossal daily demands on water supply there. In fact, there have been peak demands of close to 7,000 gallons for residential property on some days. I'm not suggesting that the system be downgraded because of that demand - there are some very large lots there that are very well kept and there are some strange soil conditions, as well as days that get up to 40 or 45 degrees Celsius. However, I think it should be noted that some metering of water above a certain average amount of consumption may be in order in that particular system. This would be an average amount of consumption based on consumption over a number of years in Castlegar, not based on consumption in some other community. An average consumption figure in that area would perhaps be in order to control the amount of water which is being used.

Moving beyond that into the area of transit, I have some short remarks to make involving transit in the lower mainland-Victoria area. I listened with interest to the remarks made about light rapid transit, presumably meaning some kind of railway system, or street railway system, or some modification of the old inter-urban system. I would note, and I would hope the minister is aware, that the existing rights-of-way are sometimes not adequate at all to meet our present needs. Certainly when the freight line was designed to serve the superport running from Mission to Roberts Bank, some existing rights-of-way were used, some abandoned rights-of-way were used, and some totally new rights-of-way were used, depending on what was needed. In a great many discussions around this matter I see people projecting on existing or abandoned rights-of-way which may or may not be appropriate to the needs. I would also point out that simply because a railway exists does not mean it's adequate. Certainly to take people out of a bus which is likely to move at 40 miles an hour and put them on some kind of a rail contrivance which is going to be moving at 35 or 40 miles an hour is not a solution, Mr. Chairman, to any transportation problems. The railway thing only becomes viable if we can move people at an average speed, I would suggest - a minimum speed, including turnaround time, loading and unloading - of 50 miles an hour, which means that we must have rail systems which are considerably improved over even the existing mainline facilities that CN and CP have in the lower mainland.

I would also hope the minister would be looking at some of the major transportation corridors. One in particular that already exists in terms of a known use and known demand for public transit is the corridor between Vancouver and Victoria, with particular reference to areas such as Richmond and Ladner as well as the Saanich Peninsula. We know there is a great demand on this route from the patronage of the Pacific Stage Lines buses and the AirWest facilities. So apart from those who travel on their own on the ferries in their own automobiles, there is already an existing demand for rapid transit which could be met. In other words, the ministry would not have to develop a market or provide a rapid transit system which it hoped people would use. There is an existing, known market here.

I have two minor points. Coach lines buses -government-owned under this minister - don't like to stop at the main passenger transport point in Victoria, which is Yates and Douglas. I have remarked on that before. If we are to encourage the public who use one bus system owned by the government to patronize another bus system owned by the government and subsidized by the local taxpayer, we could at least allow people to depart and alight from those buses at the main transfer point in a particular city. In Victoria, that is not the bus depot down on Belleville Street, Mr. Chairman; that is Yates and Douglas. There are many coach lines drivers who say: "We're not supposed to stop there. We'll stop in front of the Hotel Douglas or we'll go down to the bus depot, but we don't like to stop at Yates and Douglas." It's a minor point, but many people have said: "My gosh, doesn't the right hand of the government bus system know what the left hand is doing?" It's a well-taken point.

Another relatively minor point indicates some degree of mismanagement. I don't think this is on the part of the minister, but is really a breakdown of communication. A parent with two children came to me a year ago and said: "You know, I have a complaint. It was a cold February day and I called

[ Page 3616 ]

Pacific Stages Lines in Vancouver, asked what their pick-up points were for buses coming to Victoria, and was given those pick-up points." This person said: "Well, 1 would like to get on the bus at Broadway and Cambie, just down the street from city hall in Vancouver." They said: "Yes, there is a procedure. You phone in, you give your name and your description, and the bus driver will pick you up if you're there at the right time in the right place.---This person did that in due course and not one, not two, but three buses, Mr. Chairman, one of them full, one of them partly full and one of them deadheading to Victoria, came up the hill and went by in the middle lane. They came up the hill off the Cambie Bridge, went by in the middle lane, and made no attempt whatsoever even to get in the curb lane or to stop.

The individual then rode a city bus down to the bus depot, inquired for the records of people who'd asked to be picked up and discovered that yes, there was a slip there; yes, it had been given to one of the drivers; yes, they were very sorry. Unfortunately they had somehow neglected to pick these individuals up. It was no major inconvenience to them, so they took the next bus an hour later. The fact is, though, that if we are to encourage people to use the public transport system, this is not a very good recommendation.

By the way, the individual noted that Stage Lines staff and the drivers that eventually did take them were extremely courteous and extremely apologetic. However, the fact is that it was still rather embarrassing for the cause of public transit in British Columbia.

1 raise this point because a number of senior citizens have also said to me: "Yes, the only way you can be sure a Stage Lines bus is going to stop is to take a bus or a cab to the bus depot." The only way to be sure to get on the bus to Victoria is to take a bus or a cab to the bus depot rather than taking a chance that you won't be picked up at 41st or wherever it is that they want to be picked up.

Mr. Chairman, 1 make my annual plea once again for the minister to consider restoring the disparity fund. 1 realize that this may not do the city of Victoria or the district of Saanich or the city of Vancouver much good. However, 1 would say to the committee again that 1 have four small, relatively financially insecure municipalities in my constituency that have no industrial tax base whatsoever and a very limited commercial tax base. The disparity funds as they existed in 1975 resulted in a payment of an amount equivalent to these four small municipalities, all with less than 4,000 people and all with peculiar problems. of $17 per capita.

1 know we're getting away from the concept of per capita payments. 1 only use it to show that if they were equivalent to $17 per capita, that was approximately $50 that each homeowner had to pay in taxes - either that or $50 worth of value that they did not receive from their municipal government. I don't know how much money the disparity fund represented on a province-wide basis, Mr. Chairman, but for those small municipalities with peculiar wintertime problems, with peculiar topographical problems and with no industrial tax base and very little commercial tax base, yet which attempt to provide all those services which we expect a small municipality to provide if it's going to call itself a community, particularly in terms of recreation and parks and snow clearance and so on, I would hope the minister would reconsider that.

Mr. Chairman, I have one last point regarding public transit in the Kootenays. I'm sure the minister is aware that the city of Trail bus system which was inaugurated by his department last year - and I commend him for that inauguration - has been successful beyond anybody's imagination, even transit buffs. However, it was conceded at the time it was worked up and has been conceded all the way through that the real need for transportation in our area is not inner-city transit but really inter-city transit, particularly with view to the Rossland to Fruitvale corridor, which is a route really of only 16 miles in length. I'm just wondering if the minister can advise the committee what the transit bureau's plans are to expand the city of Trail bus system to serve the communities of Rossland, Warfield, Montrose, Fruitvale and Beaver Valley, because I gather that a survey was recently done by the transit authority and that it showed good support,

I would hope that as early as this fall the four municipalities involved and the electoral area A and B of Kootenay-Boundary Regional District could get a referendum prepared in order to cover the operating deficit of such a system. I'm sure the minister is aware that when the city of Trail prepared a similar operating deficit, even though the costs of what any deficit might be were not really known, the electorate there supported it nearly four to one. So we can see that the need and desire for a transit system in the area is there and certainly the taxpayers of that area are prepared to pay their share.

HON. MR. CURTIS: Mr. Chairman, I thank the member for Rossland-Trail for a number of observations. He covered several points which are obviously of interest to him. I apologize for leaving the chamber for just a few moments while he was speaking, However, the Deputy Minister of Municipal Affairs kept good notes while I was gone.

I met with Mayor Moore of Castlegar some weeks ago and was accompanied at that time by the Minister of Economic Development (Hon. Mr. Phillips) and a couple of staff people from the two ministries.

We have the feasibility study. We have the report now. We've been unable to give Mayor Moore the

[ Page 3617 ]

kind of speedy analysis and prompt response which she understandably wants. She wants action and she wants it yesterday. I don't fault her for that. It's a very detailed study, as you know, Mr. Member, and we are actively looking at it in the ministry. As a matter of fact, my colleague, the Minister of Economic Development and I spoke about it again just a few days ago. So I cannot indicate that the matter will be resolved quickly.

The costs are mind-boggling. They really are. And we have turned to other branches of government in our review and will continue to have contact. We will talk to the water investigations branch, Economic Development, as I indicated, water resources, and Municipal Affairs, of course. We want to look at the report extremely carefully to avoid the kind of problem which the member spoke of in his analysis of the situation. I just can't tack a date to when we might be able to respond to Castlegar council, but we will do so as soon as we have all of the information.

You spoke about transit, Mr. Member. You cited a couple of instances, one with respect to Vancouver Island Coach Lines, which is a responsibility of this ministry. You said it was a detail but it's kind of an annoying thing for a passenger. Why will the bus not stop at, say, Yates and Douglas in downtown Victoria instead of carrying on?

One point could be made. This is an inter-city service and it's designed to move people from Victoria to Duncan to Nanaimo, et cetera, and to bring them back to a central point - central in terms of a terminal in Victoria. I will instruct people in the ministry to look at that and see if there cannot be at least one uptown stop. It seems to me that it could be arranged. There would be a little bit of a problem in terms of removing baggage, but if the passenger indicated, "I don't want to go all the way to the terminal. I want to get out at Yates and Douglas or city hall, " or whatever, then hopefully that can be arranged.

You spoke about Pacific Stage Lines and difficulties experienced by individuals who contacted you concerning being picked up at a particular location. Well, Mr. Member, this again, I think, points out the very urgent need for rationalization of all transit systems in British Columbia, because Pacific Stage Lines is not under this ministry. It is a branch, if you will, of British Columbia Hydro. Other than by communicating with the minister responsible for Hydro, as you or any other member would, it has no bearing on this vote or on the responsibilities of my ministry.

But it does point out the fact that for too long we've had someone else looking after this part. My colleague, the member for Esquimalt (Mr. Kahl) , talked about the inability to transfer from the western sector into the B.C. Hydro system. It's similarly foolish and we intend to take steps to correct that kind of thing.

You also spoke about restoration of the disparity fund. Well, I don't really want to hide behind legislation which is before the House, but the Revenue-Sharing bill - Bill 58 - would permit that member and others to get into the merits or otherwise of the programme we propose. However, philosophically there was a problem with the disparity fund because there was a great deal of ad hoe decision-making taking place. I don't think that the province entering into a revenue-transfer arrangement with local government should respond on the~ basis of how well a mayor or an alderman or a council presents a case to the minister of the day or how well they lobby other members of the executive council. That was one of the pitfalls of the disparity fund. If someone came down with a well-documented case and said, "Look, this is our situation; we had a mud slide, " or, "we have to have a new fire truck, " and if they had supporting information, well, they probably had a better chance than under another circumstance where someone dropped in and said: "Oh, we've got a problem. Do you think you can help us with a little extra assistance this year? We need it." I don't like that kind of ad hoc; I want to formalize our transfer payments.

I should point out - and I think the member will know, Mr. Chairman - there's very strong financial assistance built into the revenue-sharing programme which is to be debated later on in this session. He can agree or disagree with it at that particular point.

Back to transit again: you spoke of expansion of the bus service in Trail. Incidentally, I'm also aware that the passenger numbers are very good there and that is encouraging. Obviously, I can't make a commitment, but when we see a transit service being put to good use, then there's a very strong case for expansion of the service, if not in routes then certainly in equipment. We have no plans at this point in the greater Trail area for expansion into Rossland and Fruitvale, although I recognize that requests have been made. But no such plans exist and there's no funding allocated in this year's budget for that. But I can assure you, through you, Mr. Chairman, that heavy usage of a system is just about the best lobby that any community can have going for it in terms of improving the system.

MR. D'ARCY: Mr. Chairman, I have just a note regarding the water system. I appreciate very much the minister's remarks. I just note that the main thrust of my remarks was that dollars by themselves were not the answer. Really, what we wanted to be sure of was getting an adequate water supply, both in quantity and quality, that would provide for the area's needs for some time. I prefer to believe that there is a much cheaper way of doing it than the proposal that we have right now. I would hope that

[ Page 3618 ]

your ministry, with the assistance of the water investigations branch and possibly of Economic Development, will find that adequate road.

One minor point on the coach lines to the minister. The buses do stop uptown. You say: "At least one uptown stop." They stop at a number of points, starting with Town and Country, Victoria Press and including, as I said, the Douglas Hotel, which is at the corner of Pandora. I don't care if they stop at every stop, if they want. The point is that the major passenger pickup point in the city of Victoria is, as it has been going back probably to the 1890s in the era of the streetcars, Yates and Douglas. Every city bus in the capital region, except possibly the Crosstown bus, leaves from Yates and Douglas. It is absurd that the intercity buses don't stop there. If they want to go on to the bus depot or stop anywhere else, that's fine.

HON. MR. CURTIS: Do you remember streetcars here? Are you old enough to remember streetcars here?

MR. D'ARCY: Yes, the minister will remember that I'm almost as old as he is. So if he remembers them, I will too.

MR. G.S. WALLACE (Oak Bay): You're both ageing fast.

MR. D'ARCY: So much for Municipal Affairs, Mr. Chairman. I have a few remarks regarding the Housing aspect of this ministry. In the past year or so we have had the completion of 90 units in my constituency -approximately 50 in the city of Trail and the remaining 40 in the city of Castlegar. I have been critical of the filling of these units, particularly in the city of Castlegar, Mr. Chairman.

I gathered that the basic federal-provincial agreement as administered by the B.C. Housing Management Commission was that the target figure of 25 per cent of these units would be filled by low-income people - that is, people whose incomes did not allow them to meet the basic economic or market rent on those particular units, market rent possibly being lower than the economic rent in the initial stages of renting at least. That 25 per cent minimum would not necessarily be people on social assistance but hopefully would be persons who are euphemistically called the "working poor." I prefer to call them low-income earners because low-income earners in my riding, as I think in almost every other riding, are some of the most fiercely independent and prideful people that I know. They work very hard for their income and probably pay a much greater percentage of it in taxes and for essential services than most of us in this House do.

We discovered that one of the units in Castlegar, a 14-unit operation, had not 25 per cent, Mr. Chairman, low-income people, but had 100 per cent low-income people, and that zero per cent of those low-income people were self-earners. That is, you had a housing development that was populated entirely by people on social assistance.

Mr. Chairman, I object to this. I think that we have created here an instant low-income ghetto. My objection to it is not that people on social assistance should not have the opportunity to live in these new quality housing units, but rather the fact that the low-income earners who are getting by on their own, paying taxes, not requiring anything from society if they can avoid it, saw themselves in lower-quality housing. They saw people on social assistance -perhaps there through no fault of their own -nonetheless vaulting over them, shall we say, in the quality of the housing that they were in.

This situation is being corrected. In defence of B.C. Housing Management, I would say that they did not approve of this situation transpiring, but rather they accepted, against their better judgment, the opinion of the local real estate management that they had contracted out to in terms of recommendations of who should fill these units. It was the opinion of this local real estate firm that these units should be filled by people on social assistance.

It was against the better judgment of B.C. Housing Management, but I would think that this is a bad policy to follow, Mr. Chairman. I would hope that it's not being followed around the province. I would hope that the 25 per cent target of low-income people is being attempted, at least, to be adhered to, and I would hope that an even smaller percentage of people are those on social assistance.

Again I want to stress that I'm not suggesting that we discriminate against people on social assistance. I'm just saying that low-income earners and moderate-income earners should have the same opportunity to be placed in these units as people who are on social assistance.

Perhaps it's superfluous to note, Mr. Chairman, that a housing unit is a housing unit in any community. When these units are brought on the market, or senior citizens' housing units are brought on the market, or private developments are brought on the market, they create opportunities for mobility within the community. If more low- or middle-income residents moved into these quality established rental units that have been built in my area, I would note that they must be vacating other units elsewhere in the community which will then become available for other individuals.

MR. WALLACE: Mr. Chairman, I just want to follow on the comments of the member for Rossland-Trail (Mr. D'Arcy) . I'll be very quick.

I'd like to ask questions about Blanshard Court,

[ Page 3619 ]

because it is subsidized housing and there have been a lot of questions asked publicly. The question which arises in particular is the deficit which has increased quite abruptly and for this year is reckoned to be $428,879 for 184 units, which means a subsidy of $250 per month per unit. I am aware of the fact that the minister has agreed to write off or meet 12.5 per cent of the deficit faced by the city of Victoria. But I would really like to know, if it's possible in a very quick way to'determine, what review the minister's department is doing in this whole area of subsidized housing which was embarked upon some years ago when perhaps the thinking was a little different. The idea was to subsidize the units rather than provide income assistance to the tenant, such as the minister has stressed very clearly and reasonably in the SAFER legislation.

I'm thinking, for example, of the fact that when the minister answered the questions from the city of Victoria and I appreciate having a copy of his answers it's mentioned that the original thinking was that the rent policy should help low-income tenants. In January, 1975, a new policy was implemented to try and bring up the rents to be 25 per cent of the income of the tenant. But in the minister's answer to the city of Victoria, dated January 20, the letter mentions that two years later there are still many tenants paying a great deal less than 25 per cent of their income. That's one question. Does he have some idea how many are in that situation and what percentage they are paying, in ballpark figures? I'm not asking for specifics.

Then on the other side of the coin, Mr. Chairman, there are, apparently as a result of the policy to have a variety of tenants and not all low-income tenants, others who are paying, regardless of income, what the minister describes in his letter as the market rental. This again, I gather, was decided in 1975. For example: one bedroom, $130 per month; two bedrooms, $160 per month; three bedrooms, $225; and four bedrooms, $250. Could I quickly ask: were these figures determined in 1975? If so, has there been any review to bring them up, in view of inflation, to a more realistic market value?

The point I'm trying to get at very quickly is that it doesn't really matter who finally pays the subsidy if the subsidy is $428,000. Whether it comes out of the city of Victoria or the minister's budget or somebody else, the taxpayer is paying a subsidy. While I'm all in favour of helping low-income people to find reasonable accommodation at reasonable rates, are we in fact keeping a sufficiently recurring review of the situation? The policies that were implemented when Blanshard Court was first built may not really be realistic and up-to-date today. From the document I have here, which the minister sent to the city of Victoria, it would appear that the last real policy decision regarding rent subsidies and other important factors in the financing of Blanshard Court is already two years old.

Thirdly, I wonder if the minister could tell us, since this decision presumably has to be applied right across the board provincially and there are other complexes similar to Blanshard Court, what total sum of money would be involved for having written off the 12.5 per cent municipal deficit sharing. I see your deputy wincing. I'm not trying to be awkward at 10:50 at night, Mr. Chairman, but suppose, for the sake of argument, it's $1 million. Is that something again which will be reviewed annually or perhaps every six months? I would like to know to what degree the Ministry of Housing is committing itself to an escalating increase in subsidy year by year, having written off, in the case of Blanshard Court, 12.5 per cent of $428,000, which is, in itself, an increase of about 15 per cent over last year, Now if the deficit's going to increase another 15 per cent next year and the year after that, what kind of commitment has the ministry put itself into by at least freeing the municipalities of this particular debt?

My last question, relating to Blanshard Court: since the minister has made it plain.... I really wish I had time to precisely quote the answer because it relates to the fact that the minister's department would prefer to see a spectrum or a cross-section of society housed in such a facility - a mix, if I could use that word. I really wonder, first of all, if tenants with a moderate income, let us say, are to be accommodated, what the waiting list is, if any, of those applicants who are in a low-income group and for whom the project was originally designed. In other words, although the idea of a mix of tenants is socially desirable, is there any chance that that is being done by lengthening the waiting time for low-income applicants?

HON. MR. CURTIS: Mr. Chairman, the approximately $428,700 on Blanshard Court referred to by the member for Oak Bay as an operating subsidy includes this year rather extensive repairs and improvement of design problems,

Could you call the committee to order, Mr. Chairman? I had trouble hearing the member. If I've missed some points I apologize for that.

The 12.5 per cent local share, in our view, was grossly unfair because it was selective. Some communities had entered into it and others had not. Therefore the province undertook to absorb the 12.5 per cent. We're looking at $850,000 to $870,000 for this fiscal year - that's what the 12.5 per cent represents. It points up the very large sums which are involved in the provision of a variety of public housing.

I might say, with respect to Blanshard Court, that I watched as an interested neighbour, as it were, in another community when it was designed. I did not

[ Page 3620 ]

like it when it was first designed. It is too large, in my view. I've seen others which are too large which were built a number of years ago. This one didn't work.

This is an opportunity for me to say that 1 absolutely deplore the local government politicking that went on in the past winter with respect to tenants there who were put to considerable grief and embarrassment and were identified as living in a ghetto. I dissociate myself from any of those remarks which were made by one member of the city council of Victoria, who since has been surprisingly silent. Perhaps someone knocked him - if not literally, at least figuratively - over the head.

So there are some design problems.

Forty to 45 per cent of the tenants are paying less than 25 per cent of their income. We want to see that raised. Market rents are reviewed in all these projects on an annual basis. We want to see it raised not in terms of a shock but raised gradually to try to build some equity into it.

Our waiting list is declining, Mr. Member. We note quite a significant decline. You may have heard the earlier remarks about the general waiting list for B.C. Housing Management Commission projects. In this particular case it's carrying through as well. The waiting list for Blanshard Court is declining.

MR. BARBER: Mr. Chairman, if 1 may inform the government House Leader, the official opposition would be happy to have all of the minister's votes pass this evening. Unfortunately, we're running very short of time. 1 did promise to raise two further constituency matters, and I'll be as quick as 1 can. They're both on the lower mainland.

One of them is on behalf of the Strathcona Property Owners and Tenants Association. SPOTA is one of the most respected and most effective community organizations in the province. They were very successful in beating down an idiot proposal for the proposed Georgia Street freeway which would have destroyed their neighbourhood, and congratulations to them.

In good faith, Mr. Chairman, they entered into an agreement regarding phase four of the infill housing programme with the provincial government some time ago. After eight months, SPOTA has finally received the builder's lease for signature regarding the infill programme. The Deputy Minister of Housing nods his head and I'm sure is familiar with the problem.

What they're asking, Mr. Chairman, and what 1 on their behalf ask tonight, is if the minister will finally tell them they may proceed with this, that the agreement entered into in, 1 believe, March, 1976, will be honoured; that the good faith they extended will not be denied; and that SPOTA will be permitted to continue with its voluntary work on behalf of its own property owners and tenants in the area serving an

English, Chinese, and Italian-speaking community with an extremely important community housing project. , They've done everything as well as they possibly could and I would appreciate the minister's assurance of that tonight.

The second and final matter that I would like to raise, Mr. Chairman, is on behalf of some people with whom the member for Burnaby North (Mrs. Dailly) and I met some while ago. I would be happy later on to provide the details to the minister but it concerns section 478 of the Municipal Act and the powers of expropriation that lie therein. I wonder if the minister might care to comment tonight or at some later date by way of a statement, or whether he is satisfied that in every instance - and especially in regard to this particular case, with which we hope to familiarize the minister shortly - the Act has been fairly handled by, in particular, regional districts.

I am referring to a problem of those people who see their properties expropriated - in this case for park purposes - and who, in the usual conflict that centres around an expropriation, find themselves stuck on the short end of the proverbial stick. In this particular instance, they later found out that the municipality or the regional district finally decided not to proceed with the park after all and they were doubly stuck. They agreed to go into an expropriation; they agreed that that proceeding should take place. Sure enough, they find that at the present time they don't intend to pursue the park. I wonder if the minister might be willing at some future time to make a statement privately or on the floor in regard to policy concerning that obviously mishandled expropriation formula.

About SPOTA, will you honour the agreement of March, 1976, and let them know they can proceed with the infill housing? Would you be prepared to tell us a little later on about your position regarding expropriation, section 478 of the Act, and the problems in which a perfectly innocent couple has found themselves in dealings with the regional district?

HON. MR. CURTIS: Mr. Chairman, with respect to the expropriation matter, I would undertake to deal with that at the member's convenience. If he wishes to come to the office tomorrow or the following day, we can get into it. At this particular point, I have no answer for him. It's not that I decline to answer, I just can't comment. But you said "privately or on the floor of the House." I would opt for getting together and discussing it with you and seeing if we can't resolve the matter.

SPOTA - the March, 1976, agreement would need a review. We think that all that remains to be settled, MR. Chairman, are some mechanics. SPOTA should be in touch with Ray Skelly of the Vancouver office.

We had some problem with respect to the size of

[ Page 3621 ]

the units and the number of persons to occupy those units. But it now appears to be strictly mechanics. If we can help you on that; we would be happy to do so. But I think that SPOTA could talk to the Vancouver office just as soon as they wish.

MR. BARBER: As of June 28, they weren't aware of it.

HON. MR. CURTIS: Well, if they were not aware of that as of June 28, then we can follow up on that. But there doesn't seem to be a major problem. It's just a question of dotting some i's and crossing some t's.

Vote 195 approved.

Vote 196: office of the deputy minister, Municipal Affairs, $6,861, 776 - approved.

Vote 197: grants, contributions, and subsidies, Municipal Affairs, $140,677, 000 - approved.

Vote 198: office of the deputy minister, Housing, $3,051, 234 - approved.

Vote 199: housing and development, $71,770, 500 - approved,

Vote 200: central ministry services, $361,115 -approved,

Vote 201: building occupancy charges, $542,638 - approved.

Vote 202: computer and consulting charges, $255,000 - approved.

The House resumed; Mr. Speaker in the chair.

The committee, having reported resolutions, was granted leave to sit again.

Hon. Mr. Gardom moves adjournment of the House.

Motion approved.

The House adjourned at 11:03 p.m.

[ Page 3622 ]

APPENDIX

83 Mr. Stupich asked the Hon. the Minister of Finance the following questions:

With reference to the third quarterly report for 1976/77-

1. What are the specific vote numbers and amounts that are underspent in the $50 million under-expenditure in the Department of Human Resources?

2. What are the specific vote numbers and amounts that are underspent in the $30 million under-expenditure in the Department of Finance?

3. What are the specific vote numbers and amounts that are underspent in the $29 million under-expenditure in the Departments of Health; Housing; Energy, Transport and Communications; and Forests?

The Hon. E. M. Wolfe replied as follows:

"For the purposes of the fiscal year 1976/77 Quarterly Financial Reports, the Ministry of Finance made an independent estimate of the monthly cash flow of the 1976/77 budget appropriation for each Ministry, except for the salary contingencies, interest on public debt and natural gas producers deemed income Federal income tax liability expenditures in the Ministry of Finance. The unique nature of these expenditures required their separation from the Ministry of Finance total budget for cash flow analysis. The forecasts of the monthly cash flows of the 1976/77 budget appropriations for each Ministry were based essentially on recent and anticipated expenditure experience.

"1. The information on under-expenditure by vote in relation to the third quarterly report is not available for the Ministry of Human Resources as the original budget forecast was prepared on a monthly basis for total expenditures for the Ministry.

"2. As explained above, certain under-expenditures by vote in the Ministry of Finance are available as follows: Vote 69-$11,200, 000; Vote 73-$15,600, 000; all other Votes-$3,300, 000.

"3. Under-expenditures by vote are not available as the original budget forecasts were prepared on a monthly basis for total expenditures by Ministry. Underexpenditures by Ministry were: Health, $17,400, 000; Housing, $14,300, 000; Energy, Transport and Communications, $11,200, 000; and Forests, $10,500, 000. The above amounts do not total $29,000, 000 as there were under-expenditures and over-expenditures in other Ministries which are included in the net amount."

95 Mr. Wallace asked the Hon. the Minister of Finance the following questions:

With regard to Mr. Bill McMinn of Woods Gordon Ltd., who has been retained as consultant to the Government for the purpose of rationalizing computer operations in British Columbia-

1. On what date did Mr. McMinn commence his consulting work with the Ministry of Finance?

2. On what basis was Mr. McMinn chosen to undertake this work?

3. What daily fee is Mr. McMinn receiving?

4. What is the total sum which has been received to date by Mr. McMinn from the Government of British Columbia on this computer study?

5. What has been the total cost of providing staff for Mr. McMinn, in addition to regular Finance departmental staff?

6. Does Mr. McMinn operate on the basis of a written contract and, if so, when does it expire?

7. What is the purchase value of the computer machinery ordered so far by Mr. McMinn, and from what firm or firms was it purchased?

8. Before the purchase of this equipment, were tenders invited from suppliers of computer equipment and, if so, which firms submitted bids?

9. What were the amounts of these bids?

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The Hon. E. M. Wolfe replied as follows:

"(1) April 29,1976.

"(2) Technical experience and knowledge of government procedures.

"(3) Woods, Gordon & Co. received $400 per day for Mr. McMinn's services; $384 per day since April 1,1977.

"(4) Woods, Gordon & Co. have billed for Mr. McMinn's services:

"(5) $761,048 to May 31,1977.

"(6) Yes. When British Columbia Systems Corporation is operational.

"(7) $60,590. Computex Computing ($47,240, drum plotter) . IBM Corporation ($13,350, remote job entry station) .

Most data-processing equipment is on a lease basis. Following are the leases:

"(8) Honeywell Upgrade: No, upgrade. 3 Scopes for dec upgrade: No, upgrade. Viewcom TV system: Yes, three local suppliers. RJE Station Data 100: No, previously committed. PDP 11/34 Digital Equipment Ltd.: No, direct order based on police requirement for investigative software, free from other jurisdictions but only operational on PDP 11/34. Data Entry Cluster: Yes, four local suppliers. Plotter: Yes, two local suppliers. RJE Remote Terminal: No, economic conversion from rental to purchase, IBM 370/158: No, direct order to consolidate three other installations without delay or conversion costs (fourth installation at Health converts to Honeywell at estimated cost of $3,000, 000) .

"(9) Responses were not bids because the machines proposed have different configurations and different capabilities and speed. Negotiations determined the best fit between the machine and the data processing load. Other variables often influenced the selection, such as resident maintenance staff, growth potential and compatibility with the rest of the hardware."