[ Page 3853 ]

CONTENTS

Routine Proceedings

Committee of Supply: Ministry of Human Resources estimates. (Hon. Mrs. McCarthy)

Votes 125 to 133 inclusive approved –– 3853

Land Amendment Act, 1980 (Bill 13). Second reading.

Mr. Hanson –– 3853

Hon. Mr. Chabot –– 3853

Pension (College) Amendment Act, 1980 (Bill 26). Second reading.

Hon. Mr. Wolfe –– 3853

Mr. Hall –– 3854

Mr. Cocke –– 3855

Division on second reading –– 3857

Pension (Municipal) Amendment Act, 1980 (Bill 27). Second reading.

Hon. Mr. Wolfe –– 3857

Mr. Hall –– 3858

Mr. Cocke –– 3859

Hon. Mr. Vander Zalm –– 3860

Mr. Howard –– 3861

Division on second reading –– 3863

TUESDAY, AUGUST 12, 1980

The House met at 10 a.m.

[Mr. Davidson in the chair.]

Prayers.

MS. BROWN: Mr. Speaker, from time to time members of this House achieve international acclaim, and whenever that happens we should certainly take notice of it. So I'd like to draw the House's attention to the August 11 issue of Newsweek — a letter to the editor which reads as follows: "I'm very disappointed in Ronald Reagan's selection of limousine liberal George Bush as his vice-presidential running mate and heir-apparent. Someone like Jack Kempf would have been a lot better." Shall we pay tribute to Jack Kempf, Mr. Speaker, and tell him we're sorry that he didn't quite make it as vice-presidential candidate. We know he would have fitted into Reagan's campaign very well.

MR. RITCHIE: Mr. Speaker, with us this morning are all the players from the championship victory game of the British Columbia baseball league. Last night in a very lopsided match the Bennett Bombers thrashed the Gallery Gonzos. I would ask that all members join me in condolences to the losers.

Orders of the Day

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

ESTIMATES: MINISTRY OF
HUMAN RESOURCES

(continued)

Vote 125: minister's office, $212,051 — approved.

Vote 126: direct community services and administrative support, $73,634,680 — approved.

Vote 127: services for families and children, $87,159,254 — approved.

Vote 128: health services, $71,279,283 — approved.

Vote 129: community projects, $22,012,418 approved.

Vote 130: GAIN programs, $433,603,501 — approved.

Vote 131: special programs for the retarded, $52,111,454 — approved.

Vote 132: building occupancy charges, $17,569,000 approved.

Vote 133: computer and consulting charges, $5,364,000 — approved.

MR. CHAIRMAN: I will bring to the attention of the committee the fact that votes 125, 126 and 127 proceeded quite quickly, without the Chairman's ordering that they had proceeded. However, it is the opinion of the Chair that the members were affirmative on those votes. I make that statement for the record.

The House resumed; Mr. Davidson in the chair.

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

HON. MR. GARDOM: Mr. Speaker, I call second reading debate on Bill 13.

LAND AMENDMENT ACT, 1980

(continued)

MR. HANSON: Mr. Speaker, I am going to reserve most of my comments until committee stage. I would just like to serve notice to the minister that we would like some answers on section 5 of the bill. We would particularly like to know why it has to be retroactive and whether there was flooding on Crown land. Would you give us the details on that particular section?

HON. MR. CHABOT: I move the bill be now read a second time.

Motion approved.

Bill 13, Land Amendment Act, 1980, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

HON. MR. GARDOM: I call second reading of Bill 26, Mr. Speaker.

PENSION (COLLEGE)
AMENDMENT ACT, 1980

HON. MR. WOLFE: Mr. Speaker, this bill proposes to change the basis of determining and financing adjustments to pensions already granted in response to increases in the cost of living. In addition, a number of minor amendments are included to make the plan more equitable and to improve its administration.

The Pension (College) Act and the other pension acts of this province presently provide for unlimited quarterly cost-of-living indexing of pensions. The acts also make provision for contributions of up to 1 percent by each of the employees and the employer to finance this indexing on what I call a pay-after-you-go basis.

Mr. Speaker, the contributions which are collected to finance the indexing benefit do not even cover the past indexing payments which have been made. No funds have been set aside to support the future pension payments which must be made to retired employees in respect of indexing increases which were granted between 1974 and now. This is an intolerable situation and endangers the future security of past indexing increases.

The present indexing arrangements were enacted in 1974 apparently without due regard for the dangerous long-term consequences, which can be predicted. While the timing varies from plan to plan, before long it will be necessary to trigger the maximum permissible contributions of 1 percent by each of employees and government to finance the inde-

[ Page 3854 ]

xing which has taken place since 1974. It can be anticipated that eventually these contributions will not be sufficient to finance the present indexing. When that day is reached it will be necessary to either further increase contributions or to severely limit future indexing increases.

Confirmation of the fact that action is required comes from the independent plan actuary, who has advised that the present indexing system is not stable and needs to be revised.

In view of these predictable inadequacies it would be irresponsible to let the present indexing system continue unchanged. This is true from the point of view of both the employees and the employer, who will have to pay completely unknown and ever-increasing contributions in the future. Pensioners face the prospect of having the indexing arrangements suspended or drastically curtailed for the future, should the employees and employer ever decide to limit their contributions for indexing. This government has been wrestling for some time now with the difficult question of how to reform the present indexing basis. We're determined to ensure that pension adjustments, once granted to pensioners, will be secure. Accordingly, this bill amends the indexing provision of the Pension (College) Act as follows.

First of all, all pension indexing adjustments granted through to and including January 1981 will be guaranteed and form part of the basic obligations of the plan. Secondly, commencing October 1, 1980, employees and employers will each contribute 1 percent of their salary to a separate inflation adjustment account to finance future pension adjustments. In addition to these contributions the inflation adjustment account will accumulate interest and will also be credited with excess interest from the basic fund. The funds in the separate inflation adjustment account as at September 30 of each year will be used to provide fully funded pension adjustments as at the following January. The first annual pension adjustment will be granted under the new system in January 1982.

Mr. Speaker, similar amendments in indexing provisions are proposed in the public service and the municipal and teachers pension acts. Under the new system no unfunded liabilities will be created by the pension supplements which are granted each year. The supplements will be fully funded out of the separate account and supplements will only be granted to the extent that funds are available. Full cost-of-living increases will not automatically result every year, but the adjustments which are granted will be fully secure in the future. In the case of the relatively immature college plan, it is expected that the new system will give full protection against foreseeable levels of inflation.

Mr. Speaker, the new system will still provide employees under the college plan with one of the very best indexing arrangements in any pension plan in North America. Most other teacher pension plans in Canada place limits on the indexing of their pensions or provide no formal indexing at all. For example, Nova Scotia limits indexing to 4 percent per year, New Brunswick to 6 percent per year, Ontario and Prince Edward Island to 8 percent per year and Saskatchewan limits indexing to 80 percent of the cost of living. Manitoba uses a system like that proposed in Bill 29 and Alberta and Newfoundland have no automatic pension indexing provision at all. Of all of the provinces, only Quebec provides what is known as open pension indexing. Finally, Mr. Speaker, I am very hopeful that in moving to provide meaningful indexing on a financially responsible basis we will be making a contribution to the future development of pension plans across the country,

This bill also proposes a number of relatively minor amendments which are designed to make planned provisions more equitable and to improve planned administrations. The following specific changes are proposed in this bill. First of all, it will permit employees to qualify for a pension after 10 years of service, regardless of whether part-time or full-time teaching was involved. This change recognizes the growing significance of part-time employment in our society.

Then it will broaden the basis upon which the superannuation commissioner may enter reciprocal pension transfer agreements with other pension plans. It will permit eligible service with an approved employer to count for eligibility purposes under the plan for employees coming into the province in the same way as it now counts for employees who leave to work with an approved employer. It will eliminate limitations that now exist, which prohibit crediting of interest on employee contributions in certain cases. It will permit the Lieutenant-Governor-in-Council to provide for interest on regular employee contributions in the future, which is higher than the 4 percent now provided for in the act.

Mr. Speaker, those are the basic elements involved in the Pension (College) Amendment Act, 1980. I move second reading.

MR. HALL: I can't quite remember the adjective that the Provincial Secretary used to describe the indexing proposals that were introduced in 1974. It was, I think, designed to be insulting. If it wasn't, it failed only because the minister probably couldn't think of a better word. Nevertheless I want to remind you, Mr. Speaker, that that legislation went through the House unanimously in 1974. Every single member of this House voted for the legislation that we've just seen criticized by the Provincial Secretary. Incorporated in that legislation in 1974, which the minister seems to deride, was a very essential feature. When the cost of indexing reached a certain level of payroll, then more contributions would be made. When the administration that I happened to be a member of left in 1975 that commitment had been made by the active and retired members of all the plans that are under the trusteeship of that member at the time they got the benefit. Had that minister and his predecessors been on the ball and been negotiating with the members of the trade unions, teachers and everybody and he had been keeping up with the commitments and the benefits that were laid down in 1974, we wouldn't be faced with four bills today.

There is no doubt that there is no more difficult job on the face of this earth than dealing with inflation. It's also true to say there are no more willing participant at a bargaining table than those dedicated people in the public service, the teaching profession, in colleges and in the public service in our municipal halls, who are prepared to sit down and talk about their future. What we've had instead is the production of four bills, the backing off of one of them, work stoppages all across the province and the caving in of this government in the face of pressure by one group. So he can say all he likes about actuaries and what was happening in 1974, but this minister has caved in on one bill. The actuaries that designed the plan in 1974 are exactly the same people who are advising the minister today. The fact of the matter is that every single one of the groups that are involved in these pensions is prepared to make commitments when they receive benefits. Every one is prepared to see indexing paid for. Nobody wants a free lunch, Mr. Minister. What they do want are honest

[ Page 3855 ]

negotiations; they want to know how much take-home pay they've got; and they want to know that their future pension plan, which in effect is their take-home pay after retirement, is protected against the ravages of inflation. What they don't want to see is arbitrary, unilateral action that reduces their take-home pay and endangers their take-home pay following age 65. That's what this minister has done. He is the first Provincial Secretary ever to take pension plans in this province backwards. Every other Provincial Secretary since the beginning of time in this province has improved pension plans except this one. Yet we all know the pension plans across the whole North American continent — everywhere we can find — are moving towards indexed pensions. He finds a tame actuary to tell us the story. We can match actuary for actuary and learned article for learned article. The fact of the matter is that what is missing in all of this is the kind of negotiations that should have been taking place, not just at the last minute but throughout the whole piece.

The same speech can be made on all of the bills. The teachers have got a legitimate complaint. The CUPE members have got a legitimate complaint and so have the government employees. We can spend a great deal of time talking about the levels of investment; we probably will be doing that today and maybe even tomorrow.

On second reading of this bill I first of all want to nail down once and for all the kind of things that have been happening since 1974. In 1974 I chose to enter into what was a form of negotiations. We all know that pensions in this province — even those that the government holds as trustees by statutory obligation and right — will have to be bargained properly one day sooner or later. We'll be part of the bargaining process. I entered into the spirit of the bargaining, if not the letter of the law of the bargaining.

That was done in 1974 and we got those kinds of commitments. Those commitments, that agreement, that kind of contact and negotiation, were available to my successors starting in January 1976. What happened? Why haven't you kept up with those commitments? Why wasn't half a percent of each side put into the pension funds when the cost of indexing reached 1 percent of payroll? Why hasn't that commitment been kept up? Why are we in this position four years later when you talk about unfunded liabilities reaching millions and millions of dollars? Why are we scaring people when we talk about unfunded liabilities? We know what it would really mean if everybody packed up today and cashed in, or in effect claimed all the pensions they were entitled to.

The fact of the matter is we have had work stoppages, protests and a climate of confrontation on pensions for the first time in a long, long time. Instead of harmony, cooperation, commitment and negotiation of benefits, we've had the kind of proposal — if I may, Mr. Speaker, knowing we're now dealing with Bill 26 — where Bill 28 has been deep-sixed and Bill 43 is coming along in its place. Why shouldn't the others be treated the same way? How can you have one rule for one and another rule for the others? You have, in effect, de-indexed some and not others. You are worse off now than you were before. You've now got everybody mad at you. Maybe that's what you are aiming to do.

Mr. Speaker, we can't support this legislation. We'll be having a great deal more to say under the specific bills in terms of the teachers and Bill 29, and particularly Bill 43 when we get to it.

The main principle of the kinds of activity we've seen with this Provincial Secretary (Hon. Mr. Wolfe), after six or seven months in the portfolio, picking up what was obviously an idle section of that ministry in the preceding four years.... We've seen this kind of chaos develop in this most important part of our public endeavour. We've seen the transformation of what was happy, progressive, model legislation. The superannuation commissioner, Mr. Forrest Eckler, the government private actuary, and I toured and addressed pension conferences on the model legislation. We received inquiries about it from many, many jurisdictions. You're not going to receive many inquiries about this legislation. I think it is a sad day when we take a step backwards. You are the first Provincial Secretary in the history of this province to actually see pension legislation which is under your control deteriorate rather than improve.

There is no doubt that the minister can do what he wants in terms of writing legislation. He can introduce the bill. He has got the majority on his side. He can ram the statute through. He can de-index. He can double it. He can take away the number he first thought of. He can do whatever he wants. The fact of the matter is that we are dealing here with people's take-home pay and their future. That must be preceded by the correct and proper kinds of negotiations. I'm not talking about some of those meetings that have taken place once every six months, which the minister referred to in his press releases. I'm talking about meaningful negotiations where you tough it out around a table and get consensus opinion on the three public plans that you've got. Take them hand in hand on a broad front, together, knowing that there is going to be portability among those pensions, and work towards the full portability that the government was working towards from the late sixties; knowing how in government service we have to transfer from one skill to another, from one government to another, particularly as we get into the human resource field where we are sometimes releasing people from government service into municipal service and vice versa, where there has to be the full kind of portability. You're making a mockery of that. Mr. Speaker, that's why we can't support this bill, and I say I'm using Bill 26 as a vehicle, particularly to stress those principles until such time as we meet Bill 27 and Bill 28.

MR. COCKE: Mr. Speaker, I can't tell you what a joke it is when I sit and listen to the minister talking to us about providing some leadership in pensions across the country. First let me say I'd like to advise every jurisdiction in the country to ignore this anomalous situation. You see, what the minister has done in providing this kind of leadership, as he calls it, is become a handmaiden or servant of the insurance companies, the trust companies and all of the other pension carriers who have been fighting indexing for years. Now this minister isn't their only handmaiden, but he's an easy one to get, and I wasn't terribly surprised to see this very conservative move perpetrated in this House by this minister. Arbitrarily, without proper negotiation, consultation or discussion, he moved to rob those people.

MR. KEMPF: Garbage!

MR. COCKE: And if the member for Omineca thinks it's garbage, why doesn't he get up and debate me after I'm ready to sit down? He'll have nothing to say, Mr. Speaker, and I'll tell you why. He has no understanding at all of what he's talking about. Mr. Speaker, it's not a problem in his constituency. Obviously he has no one in his constituency who

[ Page 3856 ]

works for government, colleges or schools, because anybody who does work in those categories who's had an inflation buffer provided in 1974 that is now being taken away has been robbed — nothing short of that, indeed. One of our biggest fights is the fight on behalf of those people who are on fixed incomes. And who are the people on fixed incomes? Who are people who cannot negotiate wage increases? Those people are pensioners, Mr. Speaker. And of all people who should be giving leadership, certainly governments should be in that category. This government is the very reverse.

The leadership that they're giving is leadership that has been sponsored by those who have benefited from the declining value of the dollar — the trust companies and the insurance companies. Don't forget that I've spent 20 years in business, working for a major insurance company, so I know something about the product, and I know something about the investment procedures, and I know a lot about the hard dollars that they get in and the soft dollars that they pay out. Mr. Speaker, that's precisely why you build indexing in. My charge is as follows: that if the trust companies, the insurance companies et al. cannot provide that kind of an inflation buffer in their programs, then ultimately governments are going to have to do it. When they do, we may be able to repatriate our economy with those massive sums of money that are now being used against us — used against the repatriation of our economy because they help sell our economy out, and we all know the way. We have a tremendous reputation in Canada as being lenders. Why do we have this reputation? Why aren't we the great entrepreneurs? Because our investment vehicles have given that kind of leadership.

Where are my pension funds invested? They're loaned to Imperial Oil, General Motors and any multinational that can be put in the blue-chip category. I'm not talking about mine in my government's service; I'm talking about mine in my own pension plan with my old insurance company. I know that, Mr. Speaker. There is no gain, except the interest earned, in that kind of a proposition. There is no repatriation of our economy or buying into our economy. I'll tell you right now that it is good in this province that we do have the kinds of plans available to college teachers, teachers, municipal workers and government employees. It makes a massive sum available to governments to use for desirable growth and investment within our own province.

I heard tell that some teachers and others are dissatisfied with the fact that their pension plans were invested in B.C. Hydro at a rate somewhat lower than what would be paid elsewhere. Who cares? Providing you've got governments that will make sure that they keep their promises and that it will be a benefit that is guaranteed.... Part of that benefit, since 1974, has been an inflation-fighting indexing aspect. I suggest that this is a very retrograde step we're taking.

I saw the first move, as we all did. We all noted that the government ordered a little over two years ago, as I recall, that there would be no negotiations over pensions. Everything else was still in the pot, but pensions weren't. I kind of stroked my beard and said, "I wonder why," knowing full well that they had their eye on these pension plans.

They will appeal to some. There are those out there who are going to say: "Hooray! A conservative move." It's ultra-conservative to the extent of being reactionary. And who is it going to hurt in the long run? Everyone involved. Those people who are complacent now and will be suffering with inadequate income later are going to be a charge on the taxpayers of that day in any event. So why don't we just carry the can? As the member for Surrey said, if there is a need for more funding, negotiate it. Instead of that, you've arbitrarily wiped out the indexing or wiped it down to the extent that it's a joke, and a particularly bad one if you have double-digit inflation.

So, Mr. Speaker, we have the haves and the have nots, and all we do with a move like this is create more have nots. Many of the people involved — and this is the experience that I've had — don't really get all that upset because pension time seems so far away. The government were confident of that; they were confident that there wouldn't be that much reaction. The reaction comes from those within three, four or five years of pension time. They then realize that they've got possibly years to live and have to rely on an income from somewhere. For many, this is it: a house and a pension plan. I suppose you could sell your house and live in a tent.

I just think that this government not only should have taken a second look at the government employees' plan, but should have taken a second look at all those plans for which they provide legislation — the college plan, the teacher plan and the municipal employee plan. There is no excuse to go backwards. Here we are in 1980, about which some famous politician in Canada once said: "Welcome to the eighties." We don't want to have to say: "Welcome to the dark eighties and nineties and the year 2000, particularly for those people who have to rely on the services of their pension plan."

There is plenty of room for improvement in our pension plans. One of the things we could do, if we wished, particularly in the one that we are responsible for directly, is to quit encouraging voluntary contributions. It's the worst investment a person could make. It doesn't tie into anything. But in any event, I can possibly get into that more on Bill 43. For now, all I have to say is there's no possible way I could support this bill, or any bill which moves us backwards like this, or any bill that reaches into people's pockets in the future. That's what you're doing. You're picking their pockets now in the future, and that's why you're getting away with it to some extent: because it's not now.

If this government were dipping directly into those pockets at this moment — if, for an example, they went to their employees, teachers, or their colleges and said, "You're going to take a wage reduction now" — oh, the hue and cry. But the problem is, most people don't realize how badly they're being rooked by this government, by this minister, with this absolutely undesirable, objectionable piece of legislation.

HON. MR. WOLFE: Mr. Speaker, I never cease to be amazed at how distorted the views from across the way can become on a matter as important as this one. We're hearing nothing but basically untruths. Having been in this House for a number of years, I am disturbed by the degree of distortion which we find reflected by members opposite.

For instance, I would refer to this as selective memory. The member for Surrey, who was responsible for this portfolio not too many years ago, indicated that his party thought there should be bargaining for pensions. Mr. Speaker, he knows that's not true. He instigated the Higgins report, which recommended emphatically against bargaining for pensions, and it was signed by the head of the B.C. Government Employees Union, as a member of that commission.

One recommendation which arose from that commission was that we provide for a consultative process. We've done that. The former government didn't act on that recommenda-

[ Page 3857 ]

tion. We've done that. And listen to this: the member for Surrey said the Provincial Secretary is the first Provincial Secretary to reduce pensions. It's not true, Mr. Speaker. In no sense does this legislation reduce pensions. Its simple objective is to provide some responsible means to ensure that pensions, which people work for during their working career, are able to be paid during a person's retirement years and will not have to be removed by the government of the day. I say that's being responsible. It's the recommendation of responsible actuaries. They say they've got conflicting information; I'd like to see it.

I heard a statement that we're making neither fish nor fowl out of different pension plans; we've de-indexed some, and not de-indexed others — whatever that means, it's not true, Mr. Speaker. The whole principle of providing for a special fund to provide for future inflation adjustments to the extent that that fund will allow is simply ensuring that those inflation adjustments will be able to be paid in the future. We haven't deindexed or indexed any of those plans. There is a fund provided for the payment of all of those plans in terms of their inflation adjustment.

The member for Surrey called their indexing system, which he introduced, a happy progressive model. There's a lot of concern in this country at completely open, uncontrolled indexing today, and the fact that governments of the day are not going to be able to pay it. I'd call it more dangerous not to have some measure to control the extent which that indexing may take. It's tunnel vision, which I find to be so typical of the party opposite.

I could go on, Mr. Speaker. The member referred to this being done without proper negotiation — not true. He said that it moves us backwards — not true. He said that it was a move to rob these people — not true.

I call upon the opposition to try to address this legislation for what it really is instead of attempting to distort what is obviously a responsible measure. All of these bills, which address the same concern, were to a large degree arrived at through two years of consultation. They were presented as a package of benefits, including the controlled indexing. I call this responsible legislation which the people of this province would want us to adopt. I move second reading.

Motion approved on the following division:

YEAS — 28

NAYS — 25

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

Bill 26, Pension (College) Amendment Act, 1980, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

HON. MR. GARDOM: Mr. Speaker, I call second reading of Bill 27.

PENSION (MUNICIPAL)
AMENDMENT ACT, 1980

HON. MR. WOLFE: This bill proposes to increase the rates of employee and employer contributions to finance basic pension benefits under the act and to change the basis of pension indexing after retirement. Both of these changes are proposed to ensure that benefits provided under the municipal plan will be secure in the future. In addition a number of minor amendments are included which are intended to make the plan more equitable or to improve its administration.

With regard to the financing of basic benefits, the independent plan actuary has recommended that the level of contributions to finance basic pension benefits be increased. In accordance with that recommendation, and at the request of the Union of British Columbia Municipalities, this bill will increase total contributions to the recommended level. Under this bill employee contributions for basic benefits will increase by 0.27 percent of covered salary, and employer contributions will increase overall by 0.47 percent of covered salaries. I should point out that this basis of sharing in the extra cost between employees and employers was unanimously agreed upon by the Union of British Columbia Municipalities pension advisory committee, which includes employee representatives. In addition the separate employer rates of contribution for the various employee groups under the act have been modified in accordance with the actuary's recommendation.

The Pension (Municipal) Act and the other pension acts of this province presently provide for unlimited quarterly cost-of-living indexing of pensions. The acts also make provision for contributions of up to 1 percent by each of the employees or the employer to finance this indexing on what I call a pay-after-you-go basis. The contributions which are collected to finance the indexing benefit do not, however, even cover the past indexing payments which have been made.

[Mr. Strachan in the chair.]

No funds have been set aside to support the future pension payments which must be made to retired employees in respect of indexing increases granted between 1974 and now. This is an intolerable situation and endangers the future security of past indexing increases.

The present indexing arrangements were enacted in 1974 apparently without regard for the dangerous long-term consequences, which can be predicted. The superannuation commissioner predicts that by the end of 1981 he will have to

[ Page 3858 ]

trigger the maximum permissible contributions of 1 percent by each of employees and employer to finance the indexing which has taken place since 1974.

It is very likely that in the foreseeable future this 2 percent of salary will not be sufficient to finance the present indexing. At that time it will be necessary to either further increase contributions or severely limit future indexing increases.

Confirmation of the fact that action is required comes from the independent plan actuary, who has advised that the present indexing system is not stable and needs to be revised. It would be unacceptable to permit the present indexing system to continue unchanged from the point of view of both the employees and the employer, who will have to pay completely unknown and ever-increasing contributions in the future if open indexing is retained, and from the point of view of the pensioners, who face the prospect of having the indexing arrangement suspended or drastically curtailed in the future should the employees and employer ever decide to limit their contributions for indexing.

This government has been wrestling for some time now with the difficult question of how to reform the present indexing basis. We are determined to ensure that pension adjustments, once granted to pensioners, be secure. Accordingly, this bill amends the indexing provision of the Pension (Municipal) Act as follows: first, all pension indexing adjustments granted through to and including January 1981 will be guaranteed and form part of the basic obligations of the plan; secondly, commencing October 1, 1980, employees and employers will each contribute 1 percent of salary to a separate inflation-adjustment account to finance future pension adjustments. In addition to these contributions, the inflation-adjustment account will accumulate interest and will also be credited with excess interest from the basic fund. The funds in the separate inflation-adjustment account, as of September 30 of each year, will be used to provide fully funded pension adjustments as of the following January. The first annual pension adjustment will be granted under the new system in January 1982.

Similar amendments in indexing provisions are proposed in the public service, teacher and college pension acts. Under the new system no unfunded liabilities will be created by the pension supplements granted each year. The supplements will be fully funded out of the separate account, and supplements will only be granted to the extent funds are available. Full cost-of-living increases will not automatically result every year, but the adjustments which are granted will be fully secure in the future.

It is expected that the new system will give effective protection against foreseeable levels of inflation. The new system will give full protection, in fact, against annual cost-of-living increases of up to at least 8 percent or more. The new system will still provide employees, out of the municipal plan, with one of the very best indexing arrangements in any pension plan in North America. To the best of my knowledge, every other municipal pension plan in Canada limits the indexing of its pensions or provides no formal indexing at all.

Finally, I am very hopeful that in moving to provide meaningful indexing on a financially responsible basis, we will be making a contribution to the future development of pension plans across this country.

This bill also proposes a number of relatively minor amendments which are designed to make the plan more equitable or to improve its administration. Some of these are as follows. Employees will qualify for a pension after ten years of service, whether full- or part-time employment was involved. This change recognizes the growing significance of part-time employment in our society.

The reinstatement provision will be broadened by eliminating the maximum ten-year period that an employee can be out of service. This change will ensure that employees who've returned to work after extended periods of child-rearing will be able to reinstate previous periods of contributory service, provided a refund of contributions was not taken. It will eliminate limitations that now exist which prohibit crediting of interest on employee contributions in certain cases, and it will permit the Lieutenant-Governor-in-Council to provide for interest on regular employee contributions in the future, which is higher than the 4 percent presently provided for in the act.

Following the introduction of Bill 27, the Union of British Columbia Municipalities wrote me to officially request that the early retirement provisions of the municipal plan be amended to bring the age and service requirements into line with the retirement provisions which applied to teachers and public service employees in the province. These requested changes have been approved by the UBCM executive and by that body's joint employee/employer pension advisory committee. It has been agreed that employees and employers under the plan should share equally the extra cost of such a change.

Mr. Speaker, it is my intention, following second reading of Bill 27, to introduce the necessary amendment to the bill to give effect to the requested changes. Such an amendment will substantially improve the retirement provisions of the municipal superannuation plan and ensure that in future municipal employees have similar treatment to that of other public service employees.

Mr. Speaker, I move second reading.

MR. HALL: Mr. Speaker, a pension received by a retired worker is that retired worker's new wage. That, together with his or her old-age pension, is what is going to pay the rent, finish off paying the mortgage, buy the gasoline and heating oil and pay the electric bills and phone bills and all the other daily requirements of that person's life. If on January 1, 1981, that person is in receipt of a pension of $100, which they have earned by virtue of being in the public service of the province of British Columbia, through its municipalities, for 30 years.... If that pension is, say, $100 — and I know the figures are out of gear; I know it's considerably more than $100, but I don't want to stretch the brain power of anybody on the other side of the House too much — and at the end of the year the inflation has gone up 9 percent, to do the same job on January 1, 1982, they're going to need $109. This minister says he's only prepared to give them not more than $108. My colleague, the member for New Westminster (Mr. Cocke), therefore correctly accuses that minister of taking $1 out of that person's pocket. It can't be much simpler than that, Mr. Member. You can slice it whichever way you want and use whatever words you want about controlled indexing and meaningful pension levels. You can use all the gobbledegook words you want, but unless you're going to protect that pension against inflation, it is no pension at all.

These people pay 61/2 percent, 7 percent, and in cases they're now going to pay 71/4 percent contributory levels. The

[ Page 3859 ]

pension fund is increased every year by the effect of the wage increases of the active members. What you're telling us in these bills, Mr. Member, is that the very system which you believe in so strongly cannot function — that you can't take money out of my pocket, put it to work and give me a pension when I'm 65 that will generate enough money to meet the inflationary level. That's your system, and you're telling me it won't work. You should be ashamed of yourself. You're telling me that you can't look after my money for 35 years, match it with your own money for 35 years, and come up with a fund that will keep my pension protected. That's what you're telling me, Mr. Minister, and you're a failure. You're telling me that with all the skill, money, brains, experts and everything else, you can't do it — you can't make the money return enough money back into the fund to keep me protected against inflation. Your system — the system that you're so proud of.... You tell me that if we have an uncapped index, that's dangerous. My God, I thought that was private enterprise! The Rockefeller Foundation can do it. They found a way.

Let me go back to what the member said: he said that we were guilty of distortion. Mr. Speaker, it's not too long ago that a Chairman of this assembly ruled out of order and as unparliamentary the word "preposterous." I think that was preposterous, Mr. Speaker. I'm not going to ask for the word "distortion" to be ruled out of order, because I'm not very sensitive about those words; I think we're ruling far too many words out of order in this chamber. But if what I said regarding, for instance, the presence or absence of negotiating committees was distortion, how does the minister reply to Mr. Richards, the president of the B.C. Government Employees Union, who said that Mr. Wolfe's statement was outrageous, that there had been no consultations? Is he going to call Mr. Richards a liar? Here's the Province.

The second point he said in accusing me was that I was guilty of distortion because I had commissioned a report by a Mr. Higgins — one of the senior people in the Public Service Commission; then, I think, we made him a commissioner — because in the famous Higgins report which recommended the introduction of collective bargaining for the public service he had recommended against bargaining for public servants. What's that got to do with me? We didn't endorse the Higgins report; that's his opinion. We didn't put all Mr. Higgins' work into activity. Mr. Higgins' work isn't etched in stone, Mr. Member. There are a number of things Mr. Higgins said that weren't operated upon. If indeed commissioners' work should be acted upon and in that way, why didn't your party and your government do something about Mr. Carrothers' report 15 years ago and bring collective bargaining into the public service instead of hiding the report away in the then Provincial Secretary's garage in the wilds of Vic West? You talk about distortion!

I go back to my statement about a pension. You either protect that pension and somebody's take-home pay or you don't. If you don't protect it to the level of inflation, what are you faced with in the end? You are faced with what the Barrett New Democratic Party administration was faced with in 1972 — huge catch-up payments to bring the levels of pension payments up to something like parity with the other provinces of this country. You are faced with recalculation. You talk to the Minister of Education (Hon. Mr. Smith) about that. Eventually, as you know, they fall behind and fall behind, and when the newly retired people come on stream there is a gap. The new person who is enjoying a pension based on the average of his best five years comes on stream at a pension that has some relationship to the new soft dollars that my friend from New Westminster was talking about — about his colleague who had left the service ten years earlier and who had fallen behind by the missing percentage that this minister is so proud of. That's when you're going to have catch-up; that's when you're going to be in trouble; that's what we found when we became government in 1972. We had to have monstrous catch-ups in every one of the three plans. That's where you're headed.

All you have to do is to invest the money properly. All you have to do is to match the contributions. It wasn't until 1975 that we matched dollar-for-dollar the contributions by the teachers. It took us until 1975. All the Bennett years shortchanged the fund. Those are the facts. That's what's happening. We're going to be against this bill, even though the minister has indicated that it has received some approval by a joint committee. It's our belief that the vast majority of the working people in the municipal and city halls of this province don't like this measure any more than do the teachers, the college teachers or the B.C. Government Employees Union.

MR. COCKE: I listened to the minister's reply on the last bill. We know, of course, that this is a further group being scuttled, the municipal workers. I was very interested to hear the minister say that it was unanimously agreed upon — then in soft words, almost under his breath — by a joint committee. My colleague from Surrey says he is sure that there is a great deal of opposition. It's at every level in the municipal employees group. They feel, as the college teachers feel, that they have been robbed. I'm surprised to hear the minister talking — as he often does, in his holier-than-thou way — about basic untruths coming from the other side of the House, He has been around a long time. He is hooked up with the group that has committed more basic untruths in politics in this province than we have ever seen.

HON. MR. VANDER ZALM: Withdraw.

MR. COCKE: I won't withdraw.

The whole system has been an untruth. That minister is standing up and talking about basic untruths, of which he has no understanding or inside knowledge whatsoever, just because a report indicated something that our government didn't adopt. We obviously didn't, because those pensions were negotiated.

Somehow or other we hear the minister mincing around about setting funds aside, doing all that good work, keeping the plans secure, and meaningful indexing with sound financing. It's just a bunch of gobbledegook to a person who keeps getting further and further behind.

Governments must provide the leadership to protect retired people, but as long as you can guarantee — which you can with this plan now — that people will fall behind, how can we be proud in any way, shape or form? Those people who have a lot of muscle with the minister — the government employees, direct employees — are getting indexing. They're the only ones left with proper indexing; the rest of them are being denied what the government employees obviously negotiated. Why is that?

The four bills were brought in thoughtlessly in the first place, somehow trying to prove that we in this province have leadership conservative enough to take care of the taxpayers'

[ Page 3860 ]

dollars. You're not doing it, because if you impoverish people you're going to have to pick it up sooner or later. As far as I'm concerned, what we should be doing along the way is negotiating the necessary increases, if that's what's required, not making law state that people are going to fall behind. I've seen nothing in the wind so far that's telling me that inflation.... And the member for Surrey (Mr. Hall) gave the minister the benefit of the doubt by saying that this indexing could go as high as 8 percent. I don't see how it possibly can. Maybe it can, but I suspect it's going to be closer to 6 percent, tops. If you've got a 9 percent or 10 percent inflation factor, you're losing.

HON. MR. VANDER ZALM: Dennis knows it all.

MR. COCKE: The Minister of Municipal Affairs says I know it all. I know a hell of a lot more about this subject than he does.

HON. MR. WOLFE: You'd better start indicating it then.

MR. COCKE: The Provincial Secretary and member for the distorted riding obviously knows even less than the Minister of Municipal Affairs.

One of the things that I'd like to suggest here is what happens to portability in these areas which are so intertwined. Municipal workers move to government employ and government employees move into municipal jobs. They are now in two different pension plans with different objectives. So it's sure going to pay a guy to move out of municipal work just before retirement, if he can possibly do so. He's going to have a tough time getting a job in government service at that advanced age, but there is movement at that level.

I say it is another distortion. We are so terribly concerned with paying people what they are worth. We don't mind paying oil companies. I heard yesterday that the oil companies, which at one time earned 12 to 14 percent of the net profit in the United States, are now up to 40 percent. I don't notice a bunch of screaming and kicking about that. But if you give pensioners their just due, if you give them an opportunity to keep up to inflation, then you get all these screaming reactionaries going around saying: "Underfunded — we're in jeopardy."

What's going on in this country? I can't believe it. We deal with people in a different way than we deal with multinational, profit-hungry oil companies. There is no squawk across the globe about the massive earnings of the tax collectors for the ayatollah. No, we hear squawks about a decent pension with inflation-fighting factors within it. That's where we hear the squawks. I can't believe that anybody would be a party to this kind of leadership that takes us backwards. You talk about "pay as you go" and all these other little terms that the minister dreams up to make his argument sound pleasant and good.

You sound like you're really doing a thorough job. He's not doing a thorough job at all. He is renouncing his obligation to the municipal workers, teachers, college teachers and all those others affected by this regressive legislation. So don't talk to us about keeping plans secure; don't talk to us about those little pats you give yourself on the back. The only way we could be proud would be if we were telling the municipal workers that they had a hedge against inflation, and that hedge is proper indexing of your pension. Others can afford hedges. But many of the people who do public service all their lives are always in a position where they don't earn quite enough to do a magnificent job of investment.

They don't have daddy in Edmonton running Wolfe Motors and buying Sonny Wolfe Motors in Vancouver. That's the kind of backdrop to the thinking that does this sort of thing to ordinary people in this province. Millionaires don't need to worry, Mr. Speaker. The people who do have to worry are wage-earners who are wage-earners all their lives. That is who I stand for in this argument.

HON. MRS. JORDAN: You could do them greater credit than that.

MR. COCKE: If the Minister of Tourism (Hon. Mrs. Jordan), who has difficulty keeping staff, would like to get up here and argue, then why doesn't she get up and debate the issue. The only person on that side who has got up and debated this issue has been the minister himself. Why haven't the rest of them got up here? I'll tell you why, Mr. Speaker: they don't want to be on the record. They just make snarly remarks across the floor, but they don't want to get on the record. They don't want to get on the record, Mr. Speaker, because it might gain them a few more enemies in their municipalities.

HON. MR. VANDER ZALM: Sit down.

MR. COCKE: I'll sit down when I'm good and ready. I hope you're going to stand up and debate this issue.

DEPUTY SPEAKER: I ask all hon. members not to interrupt the member who has the floor.

MR. COCKE: I want to wind up by saying that we're not supporting this or any other retrogressive legislation that puts people last, not first, and caters to the insurance companies and trust companies who feel they are in jeopardy because it's difficult for them to put forward indexed pensions. Governments must provide the leadership and must eventually provide for indexed pensions for everyone. What have we got? A de-indexing government that should be ashamed of itself.

HON. MR. VANDER ZALM: Very briefly, Mr. Speaker, we have in British Columbia — I think we certainly compare well to the whole world — one of the finest pension plans for all public employees, regardless of what category they're in or where they work within the system. They are the envy of every nation, and certainly the hon. members opposite — if they've done their research and checked as to what's happening in the European countries or other places in North America — will see that our employees receive a good return from their pension program through the benefits provided them through their contributions and those matching contributions from the taxpayers of British Columbia. Fortunately those contributions are sufficient, in most instances, to keep the programs reasonably healthy and to provide some additional funds for indexing.

But none of these, as far as I'm aware — I think we can speak for the majority of people involved in those programs — is seeking a welfare program. They're not seeking some situation where the taxpayers are having to kick in more and

[ Page 3861 ]

more dollars in order to keep their program in tune with inflation. They are only asking that it be a healthy program to which there is a fair contribution, and which will provide for them a fair degree of protection. They are not seeking a welfare program. They are not coming to the taxpayers of British Columbia and saying: "Kick in more so as to give us a greater return from the program." I think that their programs compare favourably to the other programs within the province. They compare extremely well to other programs throughout the country, continent and world.

What the opposition is really suggesting is that these people are somehow seeking that the taxpayers of British Columbia would again come along and pour in whatever the shortfall — a welfare program of sorts. That's not what these people are seeking. Welfare programs certainly must be available to people who cannot provide for themselves, for whatever reason. But it is not intended, for those who are actively working and contributing to a pension program, to bail them out at some point in the future. They are not seeking that.

Mr. Speaker, I think we have an excellent program here. I think, for the most part, all British Columbians recognize it as an excellent program. We want to keep it as such: a healthy program that provides, through its various means, benefits to those participating in it; but not a program that requires the taxpayers to come along and shovel in more to keep it afloat,

MR. HOWARD: Mr. Speaker, I suppose that it is just impossible for the Minister of Municipal Affairs to think in any other terms but welfare. He harkens back to the time when he held that ministry. He got fired from it because of the bollix he made of the whole program.

DEPUTY SPEAKER: Hon. member, we are on Bill 27. Great latitude is allowed. Could you please stick to the bill?

MR. HOWARD: Yes, indeed. I wasn't the one who raised the question of welfare in the first place. The Minister of Municipal Affairs was talking in terms of money that public servants earned. They earn the money by working; they put it into a pension fund and expect a fair and proper return, and he calls it welfare.

Interjection.

DEPUTY SPEAKER: Order, please. Hon. minister, the Chair did hear that remark. It is most unparliamentary, and I will ask the hon. minister to withdraw.

HON. MR. VANDER ZALM: Mr. Speaker, all I said is that he is twisting and turning it. It is a phony argument. I take exception to that.

DEPUTY SPEAKER: Will the minister please withdraw, in deference to the parliamentary language of the House?

HON. MR. VANDER ZALM: Exactly what did you want me to withdraw, Mr. Speaker?

DEPUTY SPEAKER: The personal allusion to another member that I do find unparliamentary.

HON. MR. VANDER ZALM: That he was a phony?

DEPUTY SPEAKER: Yes. That is unparliamentary. Will the minister please withdraw?

HON. MR. VANDER ZALM: I withdraw.

MR. HOWARD: Mr. Speaker, it doesn't really matter to me personally what words the minister uses. That's beside the point. But his argument on this is rather specious and improperly founded. Let me just look at a brief reference that he made. The Minister of Municipal Affairs said that he wished that the opposition had done some research about this. Okay. Let me lay the case before the House about the attempt to do some research about the superannuation funds that have been either mismanaged, improperly managed or not managed at all by the government and by the minister, the Provincial Secretary.

I'll give you some dates. On March 26 of this year long before these bills were introduced into the House, long before they saw the light of day — we were desirous of doing some research about the investments held in the superannuation funds account. I phoned the department on that day and asked if we could have a list of the securities held by the fund, as to their maturity dates, the coupon rates and the like — a full breakdown of what is held in the superannuation fund.

For instance, it shows here that there are certain Government of Canada bonds held, but it doesn't identify what terms there are, what the coupon rate is, what the maturity date is, or anything — just the total amount of money. I asked if we could have that so that we could do an analysis of it — a proper analysis on the basis of what a competent manager of a pension fund would do. I was told on the telephone that, yes, that list would be prepared. I was told by the individual with whom I spoke that he hoped that the list would not be made available to investment dealers, because they would be plagued by investment dealers to make some changes in it, or words to that effect. I said I had no intention of making it available to anybody, that we wanted to do an analysis of it within our research department. I was told, "Fine. It will be prepared and proceed up the ladder within the public service," and that it would have to come to me from the minister.

I waited and waited, knowing that it would take some time to prepare the list, and then on June 24 I again telephoned the same individual in the public service to whom I had spoken. He said he had prepared the list, had submitted it to his superiors and it was somewhere in the system. He called me back to advise me that the original list that he had prepared at my request on March 26 had got lost somewhere, and that he would prepare another list and send it to me. That was on June 24. I have not seen that list.

[Mr. Davidson in the chair.]

So an attempt was made to find out where the government has got this money, what it is invested in. No response. I don't know if they're trying to hide or conceal something, prevent the opposition from knowing how badly the fund has been mismanaged, or what they're trying to do. But we made the attempt and got nowhere, and that — through you, Mr. Speaker, to the Minister of Municipal Affairs (Hon. Mr. Vander Zalm) — is the manner in which your colleagues have dealt with that particular request to find out what you're

[ Page 3862 ]

doing: no response, no list, no indication of anything at all, except that which is contained in Public Accounts — which is a total composite listing — and that which is contained in the report of the auditor-general for March 31, 1979, which I have with me and which I've looked at. That's all.

There are investments there — the province of Saskatchewan. But there is no indication what it is, what the bonds are, what the debt securities are with the province of Saskatchewan, whether they're 3 percent bonds or 7 percent bonds; how many millions there are of what issue. There is no indication of the maturity dates, nothing that would be required to make a proper analysis of the manner in which this fund has been administered — maladministered, improperly administered or carelessly administered.

What's the average yield? I realize you can work out yields as to the figure at the beginning of the year, the end of the year or as the assets increase and get slightly different percentage figures out of it. I did it simply on the basis of total cash and investments and income earned as a result of that.

For the fiscal year ending 1978, Mr. Chairman, that fund earned 5.94 percent. The following year ending March 31, 1979, that fund earned 6.64 percent. There are investments in this superannuation fund which are earning 2.5 percent or less on their current market value. Two and a half percent! You could do better sticking it in a calculator account with the Royal Bank. There are investments earning 3.3 percent, 3.5 percent, 4.7 percent — on current market value. This is as of March 24, when I calculated these figures.

A simple way to find out what they're earning today is to pick up the daily newspaper, look at the quotations for current market value and see what the dividend income is from those investments as a percentage yield. You'll find somewhat around the same figures.

That's a disgraceful way to handle the superannuation funds on behalf of workers and employees in this province to earn them 2.5 percent.

Interjection.

MR. HOWARD: The Minister of Forests (Hon. Mr. Waterland) giggles about that comment. I'm sure he wouldn't like to see his superannuation account earning 2.5 percent. Would he be happy if his superannuation account was earning 2.5 percent? No siree, he wouldn't.

Interjection.

MR. HOWARD: I understood him to say that that's an absolutely ignorant comment that I'm making. If the minister wants to make comments in this chamber that are to be heard and to which members should pay attention, he should have the sort of common decency that most members have of standing up in his place and speaking out, as the Minister of Municipal Affairs did.

Give us the pearls of wisdom — what two there are that you have. Give us one about your opinion as to what the Minister of Forests thinks about a superannuation fund investment that will earn two and a half percent for the employees. You can do better than that.

I took the liberty of looking up one bond fund that I know about. This particular fund is properly managed and carefully tended by its managers. They invest money in bonds and debentures, as does the superannuation fund which is administered by this government. But this particular fund is looked after; they keep a daily watch on what's happening in the marketplace with respect to price movement on the securities they hold. They don't just sock the money away in easily obtained B.C. Hydro bonds and leave it there year after year; they move it around. They adjust their investment strategy to meet the movement of interest rates in the marketplace.

Here is a properly managed bond fund account. As of December 31, 1979 — a few months later than the auditor-general's report with respect to the superannuation fund — it had net assets of $35.6 million. Income from those assets was $3.8 million — 10.81 percent yield. There is a properly, adequately and fully managed account. Compare that, Mr. Speaker, with the 6.6 percent earned by the mismanagement of this government. There are 4 percent points difference in yield. What does one percentage point mean in terms of $689 million, which is the amount the auditor-general shows as being in the superannuation fund account? Is it $6 million? If you managed the fund properly and it yielded an additional 4 percent, it could earn an additional $24 million or $25 million a year on income to go into the account to adequately cover pensions on an indexed basis to protect people's future incomes. That's a disgraceful record to have to lay before this House, as far as I'm concerned. It's a record available purely and simply as the result of absolute incompetency on the part of the minister himself. It can be looked at in no other way.

DEPUTY SPEAKER: The minister closes debate.

HON. MR. WOLFE: I was prepared to have the member go on in the usual tirade that he carries forward.

I'm glad to have him bring up the subject of the nature of investments in the pension plans which we administer through our government. I think it should be said that we're quite proud of the return on these investments. First of all, the investments that are made in the pension plans are all made at current market rates. Any intelligent person, in viewing pension plans, will appreciate that there are in the portfolio of the pension plan older investments and also newer investments. Take any pension plan which is before us and the current year's investments will have been placed at 11 percent or 111/2 percent in current year's terms. At the same time there will be, within the portfolio of that pension plan, older investments at a lower rate.

The member says: "Why not turn them over like any other portfolio might do?" Let's take a particular security that may be in that pension plan at 4 or 5 percent, a rate which prevailed ten years ago or at the time when the investment was secured. The simple fact is if you want to turn over a bond which pays 5 percent and replace it with one which pays 11 percent, you can do that, but you do it at a substantial discount, and therefore a substantial cost to the pension plan. Members, I think, all appreciate this fact, so that any pension plan before us has an adequate return. All of those investments were made at current market rates, and if the member cares to look at the annual reports which are before him for all of those plans he will notice that the annual report of the municipal plan — which is the bill we're debating now — shows the overall return from all of the investments in that plan was 9 percent for the year 1979, and the new investments for that year were placed at 10.4 percent.

Further, introduced by this government and ignored by the former government was a completely new disclosure of investment interest in transactions going back over a ten-year period. If the member will refer to page 21 of the annual

[ Page 3863 ]

report of the municipal superannuation, and to every other superannuation annual report tabled before this House, he'll see a complete disclosure of interest rates which prevail from year to year. Mr. Speaker, that's full disclosure in terms of the quality of investments in our pension plans.

Once again, in closing debate on second reading of this bill, we have the basic philosophy where the members opposite just have to seem to have some aversion to trying to be responsible — anything but suggest that we want to make the plan secure. For some reason or other they just don't like this. That's the party whose leader, when they were in office, proposed an interesting pension plan. Do you remember? He advocated free pensions for all housewives and he got himself into a peck of trouble because he didn't know how to pay for it. He was just dead wrong. So they would advocate that we should have unlimited pensions and unlimited increases, with no thought for how they might be paid for.

As the Minister of Municipal Affairs (Hon. Mr. Vander Zalm) said, we have some of the best pension benefits in Canada represented in these pension plans. The fact that every other province in Canada has addressed themselves to attempting to put some control over this indexing problem exemplifies the fact that it is required in British Columbia.

Mr. Speaker, I move second reading.

MR. HOWARD: I rise on a point of order relating to the remarks I made, and to make a correction with respect to them. What I referred to in the auditor-general's report was an investment that, at the acquisition price, when that invest ment is acquired.... The current market value, Mr. Minister, of that particular investment is now higher than it was when you acquired the investment in the first place, and you're only earning 3.3 percent on it. Don't shake your head.

The report of the auditor-general says so.

DEPUTY SPEAKER: Order, please. Hon. members, when we rise on a particular standing order it is incumbent on members to relate to that standing order.

Motion approved on the following division:

YEAS — 28

NAYS — 23

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

Bill 27, Pension (Municipal) Amendment Act, 1980, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

Hon. Mr. Gardom moved adjournment of the House.

Motion approved.

The House adjourned at 12:08 p.m.