[ Page 5405 ]

CONTENTS

Routine Proceedings

Oral Questions

Hospital bed shortage. Mr. Cocke –– 5405

Mr. Hanson –– 5405

Mr. Lauk –– 5405

Mr. Stupich –– 5406

Committee of Supply: Ministry of Consumer and Corporate Affairs estimates. (Hon. Mr.

Hyndman)

On vote 44: minister's office –– 5408

Hon. Mr. Hyndman

Division on vote 44

On vote 45: executive and administration –– 5410

Mr. Levi

On the amendment to vote 45 –– 5410

Mr. Levi

Division on vote 45

On vote 46: consumer affairs –– 5411

Ms. Brown

Mrs. Wallace

Mr. Levi

Mr. Mitchell

On the amendment to vote 46 –– 5415

Mr. Levi

Division on the amendment

On vote 46: consumer affairs –– 5416

Mr. Howard

On vote 47: corporate affairs –– 5416

Mr. Levi

Mr. Passarell

Mr. Mitchell

On the amendment to vote 47 –– 5427

Mr. Levi

Division on the amendment

TUESDAY, MAY 5, 1981

The House met at 2 p.m.

Prayers.

MR. HOWARD: Visiting us in the gallery are a number of students from Mount Elizabeth Secondary School in Kitimat. Michelle Reguish, Marta Furtado, Sheila Monti, Sharon Urbanowski, David Powell, Jenny Godfrey, Janine Monti, John Froess and Michelle Marlowe are here along with the president of the student council of which they are members, Kim Meyer, and Mr. Gary Maitland, their chaperone and teacher. I'd like the House to join me in welcoming them.

In addition, we have visiting us today, as we had yesterday, three members of the district municipality of Kitimat, aldermen Joanne Monaghan, Ramon Brady and Hans Brown. They are in the precincts, and I would ask the House to join me in welcoming them.

MR. BARNES: In the gallery this afternoon is Mr. Paul Gill, first vice-president of the B.C. Young New Democrats. Accompanying him is a student at the University of Washington and a member of the Socialist Party of the United States, Mr. Dave Fathi.

There are also students from Mount Pleasant Elementary School, along with their principal, Mrs. Lee Hasfft and two instructors, John Zappavigna and Ectore Rossi. I'd like to ask the House to make them welcome.

MR. NICOLSON: I notice that we have in the public gallery the driving force behind the Valhalla Park proposal. On behalf of myself and the Minister of Lands, Parks and Housing (Hon. Mr. Chabot), I wish to welcome Colleen McCrory to the House.

Oral Questions

HOSPITAL BED SHORTAGE

MR. COCKE: Mr. Speaker, I have a question for the Minister of Health. Can he confirm that in March of this year 64 hospitals in B.C. had over 1,200 long-term care patients occupying acute-care beds?

HON. MR. NIELSEN: No, I can't confirm that. The number may be correct, but I don't have the precise figures.

MR. HANSON: Yesterday the Minister of Health brilliantly deduced that the hospital crisis in Victoria was created by too many patients and too little accommodation. I want to point out to the Minister of Health that urgent surgery is being cancelled in Victoria, and that more urgent cases have been cancelled in the last four months than in the previous 12. What emergency action has the minister decided to take to alleviate this crisis?

HON. MR. NIELSEN: I'm pleased to advise members of the House that representatives of the two major hospitals and the regional district hospital board agreed today in a meeting that indeed the problem is precisely as I stated yesterday. The answers to the problem are much more complicated. The administrators, members of the hospital boards and representatives of the regional district met in my office about noon today. The technical people from the ministry, along with people from the hospitals or boards, are probably continuing with their meeting now to discuss the precise details of several aspects of delivery service within the hospital program to see if they can alleviate some of the problems which have been identified. The representatives from the hospitals offered their appreciation that the problem cannot be precisely identified, that a great deal more information must be known, and that the cost implications cannot be precisely identified — although they had a reasonable estimate in a couple of areas.

The representatives agreed as well that simple expansion of facilities by way of new beds on stream may not alleviate the problem they have identified. The approach being taken by the ministry staff and the staff from the hospitals and the regional district will basically focus upon admission and discharge procedures, some of the geriatric activation programs, rehabilitation and home support services as perhaps areas in which immediate relief or almost immediate relief could be achieved. The new beds which are on stream or in the planning stages probably would offer some relief, but very likely not in the proportion one would anticipate simply by substituting a different type of bed for those who are now in the acute hospital service.

So the meeting today was most productive. The representatives explained their position in quite precise terms to the best of their ability; the ministry staff received the information and are now working with them to determine if there can be any immediate relief given to the two major hospitals in the Victoria area in an attempt to reduce the waiting list for those who fall into the category particularly of urgent surgery. That matter is being investigated at this moment, Mr. Speaker.

MR. HANSON: On a supplementary, Mr. Speaker, the crisis we're living with daily in Victoria is that long-term care patients are occupying acute-care beds. There are beds scheduled to come on line, but they're inadequate in number. Knowing that this critical situation was coming up through his ministry — that it has taken two years to bring the Oak Bay Manor renovations for 150 additional beds on line — will the minister meet with the contractors and renegotiate an earlier completion date to help alleviate the situation?

MR. SPEAKER: If the question was, "Has the minister met...?", it's in order.

MR. HANSON: My question is: has the minister decided to meet with the contractor?

MR. SPEAKER: That question is in order.

HON. MR. NIELSEN: No, I haven't, Mr. Speaker.

MR. HANSON: Why not, Mr. Minister?

HON. MR. NIELSEN: Mr. Speaker, the reason I haven't is because we have very competent people within the ministry who, I'm sure, would be able to meet with the contractor, and that's what their occupation demands.

MR. LAUK: I have a question to the Minister of Health, Mr. Speaker. Can the minister confirm that in March there

[ Page 5406 ]

were 1,890 people on the waiting list for surgery at Vancouver General Hospital, approximately 200 of them waiting for open-heart surgery?

HON. MR. NIELSEN: Mr. Speaker, no, I can't confirm those figures. As I said previously, they may be correct, but I don't have the file before me. I can certainly find out.

MR. LAUK: I take it that the minister has undertaken to provide the answers to those questions. Is that what the minister has done?

HON. MR. NIELSEN: Is that your question?

MR. LAUK: I didn't understand the answer, Mr. Speaker. Did the minister say that he would bring the information to the Legislature?

HON. MR. NIELSEN: I'll speak when you sit.

MR. LAUK: Has the minister decided to take that question as notice and bring the information to the House?

HON. MR. NIELSEN: Mr. Speaker, I will attempt to determine those figures as of March 1981, and when I get the information I'll be pleased to share it with the House.

MR. STUPICH: Mr. Speaker, can the Minister of Health confirm that in the month of March there was a three-month waiting list at the Nanaimo Regional General Hospital for emergency surgery?

HON. MR. NIELSEN: Mr. Speaker, no, I cannot confirm that, although the figure may be correct. I'd be pleased to look into it.

MR. STUPICH: Mr. Speaker, I just want to be clear that the Minister of Health has taken the question as notice.

HON. MR. NIELSEN: Yes, Mr. Speaker, I'd be pleased to investigate the circumstances, as the member for Nanaimo has requested. When the information is available I'll be pleased to share it with the House.

MR. COCKE: Mr. Speaker, can the Minister of Health confirm that in March there were 1,406 people on the waiting list at the Royal Inland Hospital in Kamloops?

HON. MR. NIELSEN: Mr. Speaker, I can't confirm those numbers, but the member could be correct. I'd be pleased to look into it, and when I get that information I will be most happy to share it with the members of the House.

I might add that the facilities available to a member in the House are inadequate to have all one's files available at all times.

MR. COCKE: Mr. Speaker, we've been doing a good deal of work in terms of finding out, just for the minister, so that he knows what's going on in his ministry.

I'd like to go on and ask whether the minister can confirm that in March there were 1,400 patients on the waiting list for elective surgery at the Surrey Memorial Hospital.

Mr. Speaker, I gather the minister isn't going to answer that question. I have one more question for him. In view of the fact that the bed shortage for acute care has reached the point of being a provincial emergency, can the minister advise the House as to what immediate emergency action he has decided to take to alleviate this crisis?

HON. MR. NIELSEN: I'm not quite prepared to accept the phraseology of the member for New Westminster that it's a provincial emergency. The waiting list situation is not new to the province of British Columbia or any other jurisdiction which has a reasonable health program. We have been advised by specific regional districts, their hospital component, specific municipalities and hospitals as to what they consider to be their urgent requirements and needs.

I'm sure the member for New Westminster will find this provincial emergency may be somewhat of an overstatement. It is not considered lightly by the responsible people in the Ministry of Health. To call it a provincial emergency.... I suppose that terminology could be used, depending on what you're attempting to prove at the moment.

I can tell you that the people responsible in the Ministry of Health are well aware of any waiting lists for elective or urgent surgery. Attempts are being made to alleviate this problem on a hospital-by-hospital basis or a regional basis.

As the members would know, there's been an accelerated program in the province over the last number of years for new facilities, additions to existing facilities and new hospitals. There's been a major expansion — intermediate care — to alleviate beds within the acute-care system. We have a large inventory of beds available to patients in the province. We are receiving an increased population of 1,000 people a week on the average. Those who are responsible for health-delivery care through hospital programs are attempting to meet the situation by increasing budget and by responding to local needs.

It's certainly an important area and one of grave concern. As the member for New Westminster said, today suddenly it's a provincial emergency, because of some compilation of figures that the NDP have put together. I would say that today's situation is as it has been for quite a period of time in this province. There are a large number of programs which are active at the present time in an attempt to alleviate it.

I might remind the members, Mr. Speaker, that you do not build a hospital overnight, obviously. You do not resolve those problems overnight. It takes a great deal of long-term planning.

Interjections.

HON. MR. NIELSEN: Members on the other side are yelling " six years." I wonder what their hospital construction program was in the three years prior to the six years.

AN HON. MEMBER: It was better than yours.

HON. MR. NIELSEN: Oh, better. I see. We'll see. That's a matter of record. How many long-term care facilities were introduced during your time in office and how many beds were put on stream — not taken over and given a new name, but actually constructed to alleviate this problem? A smirk is hardly the way you respond to these situations in our province.

MR. SPEAKER: I remind the hon. minister that the purpose of question period is, first of all, to seek information

[ Page 5407 ]

via a question, and then to give the answer as precisely and briefly as possible. It is not the purpose of question period to enter into debate or argument.

MR. COCKE: In his own area, I would like to point out that there was an increase....

AN HON. MEMBER: State your question.

MR. COCKE: Question, my foot! Now they don't want to be embarrassed. My preamble is as follows: the university, 300 beds; Queens Park, 300 beds. There has been a net loss during this government's period in office because of the closure of private hospitals. What is that minister going to do about it?

MR. LAUK: I have a question for the Minister of Health. The Minister of Health took exception to the hon. member for New Westminster's (Mr. Cocke's) use of the phrase "provincial emergency." I ask the minister this: in view of the fact that there are 1,400 patients on the waiting list for elective surgery in Surrey Memorial Hospital, 1,890 at Vancouver General Hospital, 1,406 at Royal Inland Hospital in Kamloops and 433 waiting for urgent surgery at Royal Jubilee Hospital, what would the minister call a provincial emergency in health care in this province?

HON. MR. NIELSEN: By way of preamble, which apparently is permitted, an emergency, within the context of the medical services programs, has a very specific meaning, I think.

Those who would prey upon the fears of people awaiting elective surgery for purposes of by-elections, or whatever....

Interjections.

HON. MR. NIELSEN: Mr. Speaker, I think the members should appreciate that those who are engaged in the delivery of health services in this province are generally very professional in their attitudes, whether they be at the hospital level, the regional district level or within the ministry. These problems which are identified have been under consideration for a very long period of time.

MR. KING: Too long.

HON. MR. NIELSEN: Too long, sure.

To suggest that suddenly there is a provincial emergency is ridiculous, because a great deal has been done. As the members may or may not know, the hospitals have a very important role in all of these aspects, as do the regional districts. We have member after member today coincidentally asking the same question, yet we have not had this type of urgency expressed by people who are responsible for the delivery of health in the province.

MR. BARBER: Ask the doctors here.

HON. MR. NIELSEN: Well, Charlie obviously wasn't in the House when I answered the question with respect to the Victoria situation — which is not unusual. As I explained earlier, the Victoria situation has been considered in some detail today, and I believe officials within the ministry and the hospitals are still discussing it at this moment.

MR. BARRETT: It's a stall.

HON. MR. NIELSEN: It's not a stall! Don't point your finger at me.

The problems which have been specifically identified by representatives of the Royal Jubilee Hospital and Victoria General Hospital have been taken into consideration by representatives within the ministry's hospital programs division. What I guess the members are unaware of today — and there is no way they could be aware — is that the meeting we had in my office was very productive. Those who were in attendance today felt that some of the suggestions put forward could go a long way to alleviating the immediate problem which has been identified. The long-term solutions are quite different, and will require a considerable amount of study, as they agree. The member for Victoria earlier spoke about possibly accelerating the Oak Bay Manor, and 150 beds. We have 336 intermediate-care beds, I believe, which are coming on stream this year, along with approximately 200 on stream for early spring next year. In addition, there are a couple of hundred extended-care beds which are on stream in the greater Victoria area....

MR. HANSON: It doesn't meet the need.

HON. MR. NIELSEN: To meet the need, Mr. Speaker, is an entirely different question, because we have not been able to have any of these officials agree as to what that precise need is in numbers of beds. Whether the problem can be alleviated simply by producing more intermediate-care or extended-care beds is not agreed to by the officials who are responsible in that area. It's a very complicated situation, I'll agree, and a great deal of effort, work and money is being spent in an attempt to alleviate the problem. But that will not eliminate the problem of waiting lists for elective surgery, nor do I believe that anyone in the health profession believes that indeed it will eliminate the elective surgery lists.

MR. SPEAKER: Hon. members, perhaps a guideline which could be considered by the members for question period would be that if a question is of a nature which inquires into the past action of a minister and would require longer than a minute or a minute-and-a-half to disclose, perhaps that question would be better put on the order paper and filed as an answer.

HON. MR. CURTIS: Mr. Speaker, I ask leave to make introductions.

Leave granted.

HON. MR. CURTIS: Mr. Speaker, as members will know, a one-day meeting commenced this morning of western Finance ministers. Seated on the floor of the House at this time are two of my three colleagues from the western provinces: Hon. Lou Hyndman, Provincial Treasurer for the province of Alberta, and Hon. Brian Ransom, Minister of Finance for the province of Manitoba.

It is to be regretted, Mr. Speaker, that Hon. Ed Tchorzewski, the Minister of Finance for Saskatchewan, has had to leave the city in order to keep an appointment in his home province. However, he participated in our discussions this morning and through lunch. If I may mention it briefly, a rather unusual circumstance in a Canadian legislative assem-

[ Page 5408 ]

bly is seen today, with a minister of the Crown in British Columbia and a minister of the Crown in Alberta who are brothers, and that must be a very proud moment for the two members.

MR. COCKE: Mr. Speaker, under the circumstances, I rise under the provisions of standing order 35 to request leave to move adjournment of the House to debate a matter of urgent public importance.

There is an atmosphere of crisis throughout the healthcare system of B.C. today. Nowhere is this more obvious than in our hospital system. It has taken many years of neglect, failure to plan adequately and outright refusal to provide assistance, but the government has now created a situation in which people with urgent medical problems stand a chance of not having hospital facilities at their disposal. The situation in B.C. today is completely unprecedented since the introduction of modern medicine in the province. Certainly there is no precedent to the present situation, in the period since the establishment of universal medicare and hospital insurance in the late sixties.

The situation in B.C. is clearly out of hand. Throughout the province we have long-term care patients improperly occupying acute-care beds. We have extensive waiting lists for surgery of all kinds, and we have a growing number of incidents where urgent or emergency cases are turned away from our hospitals because of lack of availability of beds. Incredibly, the Minister of Health (Hon. Mr. Nielsen) is quoted in the media today as having said: "I have no idea whether the situation in the two Victoria hospitals is as bad as described by hospital officials." The minister has no idea what goes on in his portfolio.

The official opposition does have an idea of what's going on in the hospital system. I'd like to give the minister a few steps which can be considered by Mr. Speaker in assessing the urgency of the debate. In March of this year 1,400 patients were on the waiting list for elective surgery at Surrey. The wait can be up to seven months in duration. At St. Mary's in New Westminster there are 700 to 800 on the waiting list for surgery. At Vancouver General there are 1,890 patients awaiting elective surgery. Of these, more than 200 are openheart surgery cases. In Kamloops there are 1,406 patients; 800 of these requiring hospitalization are forced to wait 9 to 12 months for surgery.

Perhaps the worst situation of all is presented here in Victoria, where emergency cases have been turned away on account of a lack of hospital beds. The two Victoria hospitals report more than 2,000 patients on their waiting lists for surgery. Every doctor in town tells stories of persons who travel for definite surgical appointments, taking time off from work, and arrive to find there are no beds.

Mr. Speaker, with that I request leave to move that the House do now adjourn to debate the urgent public matter of unacceptably long and growing waiting lists for treatment in British Columbia hospitals, and the failure of the Minister of Health to take urgent action to resolve this situation.

MR. SPEAKER: Thank you, hon. member. There is a rather lengthy statement which is the preamble to the motion. I will take the matter under advisement and seek to bring an opinion back to the House shortly as to whether or not the criteria are met — rather stringent criteria, by the way — which determine whether this motion qualifies under the standing orders.

Orders of the Day

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

ESTIMATES: MINISTRY OF
CONSUMER AND CORPORATE AFFAIRS

(continued)

On vote 44: minister's office, $147,465.

HON. MR. HYNDMAN: This afternoon I'd like to respond to some of the comments made late this morning by the member for Maillardville-Coquitlam (Mr. Levi) and the second member for Vancouver Centre (Mr. Barnes). First of all, I was intrigued to listen carefully to the suggestions of the member for Maillardville-Coquitlam as to what the policy in British Columbia, relative to rent control, should be, as he saw it. If I heard him correctly, I believe he made reference to the fact that you could put rent controls on and take them off. I believe there was the inference that there should be some on-again, off-again approach to the application of rent controls as circumstances required. It would seem to me to be a call for what could be described as an on-again, off-again policy with respect to rent controls. Perhaps a little later this afternoon he could clarify that. If indeed he is saying that as a matter of policy rent controls should be utilized on an on-again, off-again basis, then his suggestion would pose yet further difficulties in any effort to increase the supply of investment for rental accommodation. Of course it is, I think, fundamental that investors want some certainty and some predictability as to what the state of the investment climate will be. To the degree a policy is going to be on-again, off again, unpredictable, very ad hockish and irregular, I think it's fair to say that investors are going to prefer to turn their potential housing and rental accommodation investment to other jurisdictions where there is greater certainty and stability in the policy and the program. For my part, I would appreciate some further comments on this suggestion of controls perhaps going on and off and back and forth quite quickly.

The member also fell short of specifying the degree to which he felt rent controls should be expanded. I think it was implicit in his remarks that he was calling for a reduction, if not abolition, of rent review and a substantial expansion of rent control. If that be a correct analysis of his views, I think it should be a set of views which are completed with some specific numbers, so that the public and the analysts are fully familiar with precisely what the member is advocating. I wonder if perhaps later in the day he might spell out the precise dollar levels and size of unit levels to which rent controls should be expanded and for how long.

As I say, our view is that the goal of rental policy in this province should be supply, supply and more supply. To the degree policies come forward which will encourage supply, we think they are to be pursued. To the degree policies come forward which will discourage the supply of rental accommodation, we think they should be looked at very cautiously.

The member made some reference to the recent home financing conference sponsored by the ministry. By his comments, I can only assume he's not fully familiar with what we tried to do. I should tell him that the 65 or 70 people who were there were all senior and experienced in the field of accommodation development or lending. We had a good cross-

[ Page 5409 ]

section of people from the credit union movement, the trust companies, the banks, and the housing industry large and small. One of the points they stressed in the course of the discussion on rental accommodation was the need for certainty and consistency. They specifically made the point of telling government that one of the things that all governments in the last decade had been doing wrong with respect to housing and rental policy was to change the rules constantly. Their view would certainly be that if policies were to be on-again, off-again, that would be further inducement for their investments and construction activities to be used in other jurisdictions.

Perhaps the member doesn't appreciate that the techniques in accommodation financing we looked at, including share depreciation mortgages, were techniques which were applicable not just to housing but to rental accommodation as well. I think the member would probably agree that the cost of money is one of the very key factors that a potential builder faces, and that clearly the cost of money is reflected in market rents. To the degree to which we can effectively lower the cost of money to the builder and to the developer, we can try to make new rental accommodation cheaper. For that reason I think the conference was a very useful step forward.

The member was concerned, and properly so. He said: "Well, apart from prospective accommodation, what is the government doing immediately to assist tenants who are very concerned about their economic predicament in a very difficult rental market?" I want to outline for him the things we are doing that are immediate and flexible and provide response on the economic side to those groups the member mentioned — people of low income, people on fixed but modest income, and senior citizens. What we are doing, of course, is to place great stress at a time like this on the three economic programs offered by this government to assist those facing severe economic difficulty in meeting rental payments. I refer to the SAFER program, to the GAIN for seniors program and to the Rentaid program. These are three very specific, direct programs of this government that are available to those who, as a consequence of a rent increase, find their household budget in a state of crisis. Those people can look to these programs.

The member says: "What can happen immediately to assist these people?" If, for example, a senior finds as a result of a rent increase that for the first time more than 30 percent of that senior's annual budget is going to be required for rent, the provisions of the SAFER program automatically come into play. Similarly, for the lower income groups, the Rentaid provisions by way of tax credit assistance automatically come into play. There is also the GAIN program for seniors. So in addition to the basic rent control mechanism in place, to the companion piece of rent review and to the efforts that we re making to maintain British Columbia's record level of production of housing and rental accommodation, we have these three — if you like — financial assistance programs to assist people in need.

Further to the point of what the government is doing to assist tenants during this difficult period, the fact of the matter is that in the last several weeks we have been mailing to every tenant registered in a multi-unit tenanted building in British Columbia a very useful guide called "Renting? Renting? Renting? — Guide to Landlord Tenant Relations Under the Residential Tenancy Act." The purpose of that initiative is very simple. We are trying to put into the hands of British Columbia's tenants, during a period of rental shortages and very great concern on their part, a simple, easy-to-read guidebook which will outline to them their rights and the remedies. If you open this newly produced guidebook, the first topics discussed inside the front cover are those three financial programs to which I have referred — financial assistance to tenants by way of SAFER, GAIN for seniors and Rentaid. That's the first thing the tenant finds in opening this book.

MR. LAUK: What's the second thing? Your photograph?

HON. MR. HYNDMAN: There's no photograph there, Mr. Member. In going through the book, there is a very useful summary of the rights and remedies of tenants in British Columbia. We think that's a very timely thing to be doing in his very difficult rental market. It is certainly not fair to suggest that the government does not have programs. on the financial side to assist tenants put into a position of severe economic difficulty as a result of rent increases.

I'd like to review the figures I quoted showing British Columbia's continuing record level of housing starts. In British Columbia in 1980 it is now projected that housing starts will reach the level of 45,000. At least for the first three months of this year, that's more than in the provinces of Quebec and Ontario combined. There is a record pace of accommodation construction, but the member says that that is not really immediate help and relief to tenants.

MR. LEVI: Who's going to buy them?

HON. MR. HYNDMAN: The answer is this, gentlemen. First of all, every tenant who is able to leave a rented premises, purchase a home and become a homeowner is freeing a tenancy for some other tenant to move into. There's a correlation between housing production and sales, and the pressure on the rental market. To a degree, through the production of housing we can develop a greater capacity for tenants and renters to become homeowners. We'll be freeing available rental stock for new tenants to move in and enjoy. We think t's very important to be concerned with housing production and to be encouraging housing production.

The interesting thing, now that we've had about three or four hours of discussion on rent control, is that as I've listened, the opposition has yet to utter a phrase of encouragement or incentive to the suppliers and builders in this province. I hope in the course of these estimates the opposition will have a shopping list of incentives from their side of he House to encourage people to come in and build housing and rental accommodation. Let's hear their formulas and suggestions as to how we can better achieve a mix of permitted income levels in new rental developments. That would be very useful contribution to this debate.

I listened to the remarks of the second member for Vancouver Centre (Mr. Barnes) with care. I want to comment in particular on one aspect of his remarks relative to — as I understood his remarks — the long-time residents of the Vancouver Centre area who are now being forced to sell their homes to permit apartment development or construction. He referred to high taxes as being a factor which forced long-time residents to sell their homes and leave the area. The member may be aware that there's a program offered by this government to assist senior citizens facing that high property ax situation who want, however, to stay in their traditional family home. They can defer that tax payment under the

[ Page 5410 ]

provisions of the program and have the taxes accumulate at a very modest interest rate against the property. Certainly if the second member for Vancouver Centre has constituents who want to stay in their homes of some years in that area and high taxes are the problem, we'd be happy to give him particulars of that program.

Interjection.

HON. MR. HYNDMAN: I know. If a person wants to sell their home, it's a two-way street. There's got to be a buyer and a seller. I think some of those people are enjoying prices for properties....

Interjection.

HON. MR. HYNDMAN: Mr. Chairman, I have an excellent little sign here for my friend across the aisle, which I'll send over in a few moments. He might care to read it from where he sits, if his glasses will permit.

In any event, I think those persons who are selling in this market are probably achieving a fairly substantial price for their property. I hope I didn't hear the member say that he was totally against any redevelopment in greater Vancouver even if that would mean an increase in the number of accommodation units. I hope I didn't hear him argue for a massive expansion in the rent control program. Perhaps he, could clarify that in his remarks. I look forward to those further comments.

Vote 44 approved on the following division:

YEAS — 26

NAYS 25

An hon. member requested that leave be asked to record the division in the Journals of the House.

On vote 45: executive and administration, $1,313,577.

MR. LEVI: I've just one question of the minister. At the moment he's got an acting deputy minister. What is the procedure he's using to secure himself a full-time deputy minister? Just exactly how is he going about it?

HON. MR. HYNDMAN: I think that's a very important question. The approach I've taken is that, first of all, being new to not just this ministry but to cabinet, I want to get some feeling for and handle on the operations of the ministry before settling and assessing in my own mind the type of person I want and the approach I want to take to recruitment. I've pretty much settled that in my mind now and am in the process of getting underway the search end of the operation. I've had discussion with Mr. Cantell, my acting deputy, to indicate to him the stage I'm at. I do want to say that I've had splendid cooperation from Mr. Cantell and his senior level of managers in the ministry, who've been very understanding of my need to develop a feet for the way in which I want to go. As I say, the search and selection process is now just beginning.

MR. LEVI: Would the minister tell us whether he first of all goes inside his department? Does he look at the people he's got? Does he establish who are the comers, the people who could do a job like this? Has he any idea who he has in his department who is a potential deputy minister — apart, of course, from Mr. Cantell, who is the acting deputy minister? Where is he looking, or is he going across Canada? And, while you're up, you might also tell us what the salary is.

HON. MR. HYNDMAN: I understand the salary is $61,000.

What I've done in my own assessment and analysis is begin with a look here in British Columbia. Frankly, I have not given much thought past British Columbia at this point, although I do intend to look fully at the question before making any decisions. Most certainly, there are some very able people in this ministry and in the public service of British Columbia outside this ministry.

MR. LEVI: In respect to the vote itself, as you know, we have been examining all votes very carefully and we've examined this one. I am going to move an amendment which will indicate that there should be a saving, and I would like to move that vote 45 be reduced by the amount of $2, 209.

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

On the amendment.

MR. LEVI: The important thing about this vote, which is the executive and administration vote, is that obviously some slight changes are taking place. We have within it a very large vote of the order of $449,000, which is "policy, legislation and programming." We've looked at that, and I understand that is what concerns the minister in terms of the continuing development of his department.

The reason we are reducing the travel expense vote is that we feel it is an addition which is not necessarily something that should be done. That's why we've actually moved this amendment. There are, of course, other areas that we've also looked at. But the amazing thing is, Mr. Chairman, that there has been a general theme throughout the votes we've dealt with up to now, which is the heavy increase in the expenses. There appears to be no attempt on the part of the government to curb its expenditures, particularly in the area of travel expenses, office expenditures and furniture. With this one we have an attempt to reduce; however, in this one there is no

[ Page 5411 ]

attempt at all, just for an inflation over last year of some $2,200.

Amendment negated.

Vote 45 approved on the following division:

YEAS — 26

NAYS — 23

An hon. member requested that leave be asked to record the division in the Journals of the House.

AN HON. MEMBER: Mr. Chairman, there's an amendment.

MR. CHAIRMAN: Hon. members, just to make things perfectly clear — possibly this may go some length to explain the situation — there was an amendment before the House which was defeated on a voice vote. Then we called for vote 45 itself to pass. On that vote the division was called, The Chair regrets not pointing that out, but it tried to do that for the benefit of all members in the House. The question now before us is the passage of vote 45, which has been passed.

On vote 46: consumer affairs, $2,850,988.

MS. BROWN: Mr. Chairman, I really wish the House would come to some semblance of order. The whole point is that there wasn't a House Leader in here. That's why all the confusion started. All of the government members were away. I had to call vote 45, because there was no one over there to do it. We're tired of the incompetence of this government — ineptitude too.

I want to make a couple of comments on this brochure put out by the ministry — "The B.C. Trade Practices Act" — which I think for the most part is a pretty good brochure. What it's trying to do is use cartoons to get certain messages across to consumers. The one criticism I have about the brochure is the way in which women are used in the cartoons. There are about six cartoons in the book, I think. Two of these cartoons use women instead of men. I notice the minister is quite amused by what I'm about to say. I have received a number of phone calls about this brochure. That's the reason I'm raising the question. It was actually brought to my attention, because I did not get a copy of the brochure myself.

The first cartoon ridicules the fact that a woman had a clock that didn't work. The whole point of the cartoon is that she has a face that would stop a clock. That's a very old and a very tired cliché. It's not necessary for that to be included in a government document at this time. Certainly people are offended by this. I don't think either a woman or a man should have been used to get this kind of message across. It's not funny, and it certainly does not add anything to what is for the most part quite a good brochure. The only other cartoon in the book which uses women has to do with ridiculing the helplessness of women. It's the final cartoon, in which she says: "I need help." He smirks and says: "You can say that again."

I think it's unfortunate that a document which is going out from the ministry with a very important message, into the school system where it is going to be used by a number of people, should have seen fit to use women in a ridiculous way in its cartoons. I hope that when the minister responds to this very serious issue which I'm raising I won't get a facetious reply. I hope he will recognize that women are offended by it and that it defeats the whole purpose of the brochure itself.

No one objects to humour. We use it as a form of teaching, learning and remembering. I certainly like this particular comic strip which we see. called B.C., which appears in the Province. I follow it regularly. As I said, it's unfortunate that the only two cartoons in the book that use women had to take this opportunity to ridicule them. I'm very sad about that.

HON. MR. HYNDMAN: This is an important topic to me, and therefore I want to say a few words. I want to thank the member for Burnaby-Edmonds for her comments. I want to assure her that I take her comments and the issue seriously. I want to say to her, in all sincerity, that I look toward to her comments on the same topic a year from now. I hope that I will be able to demonstrate over the next 12 months an attention to her concerns that will earn some positive words from her.

Most certainly, in the ministry itself we're making a very solid effort to acknowledge the importance and contribution that women have to make. For example, I look around the province at our consumer centre in Kamloops where Mrs. Margaret Spina is our manager; she very effectively manages a very substantial place of operations. In our legislation and planning branch we have several women who make a very substantial contribution to the policy planning of this ministry. With respect to the educational games that we're developing on the consumer side of the ministry, I think it's fair to say that we've been careful to treat both boys and girls equally in that context.

I most certainly regret that from some points of view an otherwise excellent pamphlet to which the member has referred may suffer from the concerns she raises. I can assure her that I take those comments seriously. We'll do our best over the next year to address those concerns in a better way.

MRS. WALLACE: I note that the prime purpose of this vote is to promote fairness and knowledgeability in the marketplace relative to consumer affairs. I have some very grave concerns relative to what's happening in the food industry in British Columbia. I have attempted to raise this with this minister's counterpart who is responsible for food, without any great degree of success, because he has indicated that his

[ Page 5412 ]

interests in food relate basically to some marketing promotion for B.C. products.

My concerns go a bit further than that. As a wife, mother and consumer, I have some very grave concerns about what is happening in the area of food, particularly as it relates to children. I have raised the matter of the Coke promotion, in which another colleague of this minister has been involved in assisting one company over another in the Coke wars that are besetting us on every form of media that we care to turn to today. That product certainly has little or no nutrition. It's full of sugar and caffeine. It's definitely a harmful product that's being pushed at young people in an attempt at addiction, it would appear.

I'm also concerned about the degree of concentration that's occurring in our food outlets, where we find a continuing trend to more and more of the consumer's dollar being spent in fewer and fewer stores. When I recognize the kinds of dollars that are paid to those stores for promotion of product in the form of shelf-talkers, eye-level display space or other forms of gimmickry — advertising techniques that are aimed at influencing the consumer — I recognize that the poor consumer really doesn't have very much chance of combatting those kinds of organized corporate dollars that go into promoting products. It's not based at all on their nutritive or food value, but entirely on the amount of profit that a company can make from a particular product.

I believe this minister, as the Minister of Consumer and Corporate Affairs, has a very definite responsibility to take some action. I note that in Quebec, for example, there is a limit to the kind of advertising that can appear on television relative to food products during certain hours when children are watching those programs. We don't have anything like that in British Columbia, Mr. Chairman. I think it's time that this minister moved into looking at that particular aspect very firmly. If he can do it in conjunction with the Minister of Agriculture and Food (Hon. Mr. Hewitt), so much the better. What I don't want to see happening is this continued passing of the buck. I've raised this business of nutrition with the Minister of Agriculture and Food, because that seems to be where it lies, but I suggest that the minister now responsible for food and the Minister of Consumer and Corporate Affairs have some very definite responsibilities to ensure that at least there is, as this vote says, fair and knowledgeable perception on the part of the consumer, and not that high-pressure salesmanship and advertising that the consumer is continually finding herself or himself subject to, particularly in the area of food.

We have a lot of complaints about the high cost of food. So let's ensure that when we spend a dollar for food, we get nutrition for that dollar, that we're not spending that dollar for six or seven fancy packages to include one product; that we're not spending it to allow that manufacturer to pay huge sums of money to retail supermarkets to ensure that his product is displayed in a prominent place on the shelves of that store. That's what's happening, Mr. Chairman. It's not fair to the consumer and it's not fair to the children of this province, who, in many instances, are not getting a nutritionally adequate and nutritive diet because of this pushing of junk food by the corporate sector on the consuming sector in this province.

HON. MR. HYNDMAN: Mr. Chairman, as a father of four young children may I say I can associate myself with some of the concerns that the member for Cowichan-Malahat has outlined relative to the food industry. I know of her interest in agricultural matters, so she may be interested to know that this coming Saturday I'm going to spend the afternoon on a panel with, I think, my friend from Maillardville-Coquitlam (Mr. Levi) at the B.C. Marketing Board. While that's always a challenging topic for a Consumer Affairs minister, I think it's one I should be getting involved in and familiar with; it certainly relates in part to the question of food pricing.

Speaking of corporate concentration, I'm happy to tell the member that I've just received from my federal counterpart, the Hon. André Ouellet, a copy of his most recent remarks relative to proposed changes in federal competition policy. I've not yet digested those, but I certainly am on record as stressing the desire of this ministry to promote competition in the marketplace. I think that's a very important part of our policy approach.

Regarding the question of advertising on television relative to children — TV commercials for kids — I've got no specific comment today, other than to say that, philosophically, the route I'd prefer to see government go in the area of consumer education and protection is not the route of government, in effect, taking consumers by the hand and every time they're in the store, helping them around the aisles and through the shelves. Rather, I think, the better approach is to devote our resources to equipping and educating consumers — young or small — so they are able to, on their own, once they're well equipped, take their place in the marketplace and compete effectively and get the most for their dollar. But I've made note of those comments and I find them helpful.

[Mr. Strachan in the chair.]

MR. LEVI: Mr. Chairman, I have a couple of questions for the minister, and then I want to just deal with two matters relating to the Motor Dealer Act. One of the questions is: how is the cemetery thing going? Maybe you could tell us what you've got in mind. I don't want to mention legislation, but you must have something in mind.

I want to deal with one case that comes under the Motor Dealer Act, dealing particularly with regulation 23. I want to tell the minister a short story and then get his comments about it. You're a young man and you want to buy a car; you go to a dealer. You buy the car and you pay cash for it. It's a new car. You take the car out, and you decide to go on a weekend trip with your family. The day after you buy the car, when you're getting the gasoline tank filled up you notice the car wash next door. You go over to the car wash and say to the fellow: "Can you wash up the car? We've just done a couple of hundred miles and it's a new car." During the course of the washing, the man says: "If this is a new car, you've got a pretty bad problem on one panel; it looks like it's been banged up. If we continue to wash the car, the paint will peel off." So the young man takes a look at it, and he's a little bit horrified. The next day he goes back home. On Monday he goes in to see the salesman and he says: "Look, you told me this was a new car. I paid for a new car, and here I have a problem with the paint peeling." He couldn't find the salesman who sold it to him. Nevertheless, he said he'd come back. He took it to another garage to somebody he knew. The mechanic said to him: "This car was damaged. It's been pounded out and it's been painted." So he went back to the place where he bought it. He could get no satisfaction. He simply left the car and the keys there and went home.

[ Page 5413 ]

I refer the minister to section 23 of the regulations of the Motor Dealer Act, which says: "A motor dealer shall ensure that in every written representational form of sale or purchase agreement respecting his offering for sale or selling a motor vehicle, he discloses to the best of his knowledge whether the motor vehicle has, (1) in the case of a new motor vehicle sustained damage or required repairs costing more than 20 percent of the asking price of the motor vehicle...." The man paid $7,000 for this motor vehicle. The second obligation of the dealer relates to "in the case of a used motor vehicle sustained damage requiring repairs costing more than $1,000." We are clearly in the first case. The individual bought what he supposed was a new car. He paid almost $7,000 for it. Because he left the car there, a few weeks later he received a notice from a lawyer saying that he owed $1,600. The $1,600 related to the repairs that had to be done, plus the loss of profit.

Let's suppose a person paid $30,000 for a brand new Rolls Royce. That car could have something less than $5,999 worth of damage on it, with no obligation on the part of the seller of the car to declare that this car had been damaged to that extent. That may be extending the point a little bit, but this is what happened to this individual. He bought a new car. The person who sold it to him did not in any way contravene the regulation. Yet there was almost $1,500 worth of damage to that car. He took it back because he did not get what he had paid for in terms of a new car, and he's on the hook for....

I don't want to go into it any further. As a matter of fact it's under appeal before the courts. He lost the case against the $1,500 charge. Basically we have a regulation here which allows a fair amount of latitude for motor dealers, particularly in relation to damage. After all, as the obligation states, there is no regulation. I'm fairly sure that that is not what we had in mind when we did the bill. We did not have in mind that people could wiggle away under the act by virtue of a regulation which says if it's a new car and it's less than 20 percent there's no obligation to tell the individual. We have a live case of an individual who got caught in that particular predicament. There are probably other cases.

Basically we should examine the functionability of such a regulation, because it's not in the best interests of any consumer. We're dealing with the exotica now, because we're dealing with the regulations. Very many people out there look at the act and never think about all the regulations going with the act — they never know about that. They presume what they're going to get is a straightforward commitment. I'm not suggesting this is done by every car dealer, but it has happened on at least one occasion, and it's open to some kind of abuse. If you have a very hard-nosed dealer who wants to sell a car, he's quite within the law to sell a car, and if it has damage of less than 20 percent of the purchase price he doesn't have to say a thing. I hope your policy and legal people will look at this. It's a very serious problem.

I want to move to a second matter. I'd like the minister to tell us what kind of relationships his department has established with the large automobile manufacturers. I have in mind General Motors, Ford and the rest of them. I'm aware of a particular case of a young man who bought a truck which he used as a tow-truck. In less than a year the repairs were between $8,000 and $10,000, and there was at least $12,000 of lost time because of the constant repair.

There's a very serious problem here. The problem first of all is what the minister's department is doing through the Motor Dealer Act. This young man dealt with them. It was a long, difficult proceeding, and really nothing happened. In going back on the matter with the department it's still difficult. I think part of the problem relates to the fact that the people who operate the Motor Dealer Act — the ministry, in fact — need an intervention by the minister in the sense of sitting down with these people and relating this kind of problem, which goes on all the time. As a matter of fact, this particular model of truck was subsequently recalled after the young man had disposed of it. We dealt with Mr. Edmonston in Montreal, who assisted us in finding some of this information. It seems to me that if the minister is serious about doing something about the Motor Dealer Act he might well lay out enough money to bring Mr. Edmonston out here to give him some advice. As you know, he is probably the Ralph Nader of the car industry in Canada.

I say this because this year the official spokesperson for the ministry announced in the Times-Colonist on May 1: "The Provincial Consumer and Corporate Affairs ministry is to beef up its motor dealer regulations to reduce the price guessing game facing people buying cars." That's a move. I don't know whether that's going to cover the first case I gave you, but at least I've brought it to your attention and you're aware of the case. "A spokesman said that on Thursday it will be made mandatory for dealers to 'display price stickers on all cars." That was rather a surprise to me. I thought we debated this three years ago and that's really what we agreed would happen. However, that's apparently not the case. "The current regulations say only used cars which dealers advertise or post signs on such as 'Sale' or 'Today's Special' must bear a price sticker. For other cars it's left to the dealer to decide whether to put the price on the sticker." When the minister is looking at that I hope he will look at regulation 23 under the Motor Dealer Act.

Specifically to the second case I related. About three years ago his immediate predecessor had to take on General Motors in relation to a car which had an engine in it that they had advertised as being something else. The amount of $200 changed hands, which was rather an inadequate amount considering what engine should have been there versus what they put in. However. the door was open to negotiate with these corporations. One of the most serious problems we have in the automobile industry — we can deal with trucks or with cars — is the whole question of performance. We live in an era where nine million cars to be recalled in a couple of years doesn't seem to shock anybody anymore. I can recall a few years ago when they started.to recall cars as a result of the work that Nader did years ago. Now you pick up the paper and you find that of nine million cars over the past two years four million are about to be recalled. There is one figure of 29 million cars recalled in the space of seven years. We get there to the issue of consumer protection in terms of: what are these people selling? Then there's the other area, the matter of safety.

Your department is basically a complaint department. You're not in the design business. That's pretty much in the jurisdiction of the federal Department of Transport. They seem to do some of that kind of thing. Talking to branch managers of large corporations is not very effective. If you talk to the Pacific representative, he's under the gun; he's part of the pecking order. All they want from him is an increase in sales volume. "Don't say anything about the complaints, because if you commit us, we're in trouble. We'll have to go to court." Basically, the approach to a lot of people who make complaints is that they never commit themselves to anything.

[ Page 5414 ]

They don't admit anything. It's practically like talking to the wall.

The motor dealer section of your ministry has got a function to play only on the street level, as it were, trying to deal with individual problems. Some of that happens. It's happening under the Trade Practice Act. Sometime later — because I don't know whether it's proper to do it in the House — I will talk to the minister, hopefully in his office, about the number of people who are repeaters under the Trade Practice Act. There are certain people who have become repeaters. That's a problem. You get through one and then there's another thing happening. In terms of the whole business of the enormous amount of money that's spent on trucks and cars — the young man who lost a large amount of money and got absolutely no satisfaction whatsoever.... After all, taking on General Motors is the last thing in the world that most people even dream of doing. However, there needs to be something beyond the motor dealers division. It's something that I suppose the minister has to deal with with his federal and provincial colleagues. It's a very serious problem. It has to be highlighted. I don't know how you bring large corporations to the point where you say to them: "You have an obligation to produce a product for the consumer that he or she has a reasonable expectation will function." If it doesn't, is it a question of replacing it or compensating? How does the young man I have in mind get compensated for all the money he has lost? It's almost that you have to embark on a class action.

This one is a particularly good subject and is well documented — all the bills that were paid and the little discounts they gave him, because he kept insisting on going back because the brakes were faulty. It was eventually recalled on that basis. It was a long, miserable tragedy for that young man. Yet there is no redress unless you go to court. It's the kind of thing that's not possible for the average working man to do; it's too difficult.

The minister is new. He's looking at a lot of things. I'd like to get his views on this. His predecessor did take on General Motors in the sense of these people getting some kind of compensation. I'm sure he was joined by some of his colleagues across the country, because it happened in every province. There is a need to look at the regulations under the Motor Dealer Act. Federally and provincially, the issue of an adequate product and compensation if the product is not adequate has got to be looked at. It's a very serious matter, and I would appreciate the minister's views on it.

HON. MR. HYNDMAN: Perhaps I can preface my remarks with a brief comment on the cemeteries issue, which the member raised, and let him know that I'm very hopeful that in next spring's session we'll be introducing the new cemeteries legislation — the package result of several years of very intensive work and research following upon Professor Neilson's and Professor Gosse's earlier work. I'm hopeful that sometime in advance of next spring, if we have the opportunity in the fall, we can perhaps table what we hope to bring in in the spring.

With respect to the Motor Dealer Act and the several questions raised, I'll deal first with the regulations. I think the member coined a useful term — the "functionability" of those regulations. I want him to know that we studied with care his late February column on the topic from, I think, the Coquitlam Herald. Ministry staff are now looking at that very question as to whether the percentage limits should be changed, given that in this day and age of rising vehicle prices — both new and used — those percentage limits can result in the exclusion of what nonetheless to a working person is a very sizeable dollar cost of an improvement or repair. Those are being reviewed as to their functionability.

It would follow from the example given that in any event, as an alternative remedy, the Trade Practice Act could be looked to. Within that framework, may I say to the member that one of the areas where I hope over the next year the ministry will take a somewhat more aggressive posture which may be of some assistance in cases like this is the area of substitute actions. If we find a repeating class or type of problem with, say, motor dealers, where the law is either vague or not established, and if we see the benefit to a broad group or class of consumers of establishing a principle in one substitute action, thereby having a guidepost for the future, we're prepared to look at that.

Relative to the large automobile manufacturers, I will think pretty carefully on the suggestion; in fact, I will sit down with our motor dealer people in some detail. There's no question, as the member knows, that motor vehicle complaints are the highest percentage compartment of the complaints that we're getting around the province. In my experience, a lot of dealers do try to do a pretty good job of after sales service, making sure the warranty is properly observed and so forth. Notwithstanding that, we always have these series of very unfortunate cases, particularly in terms of downtime with vehicles that are used in whole or part for a business or occupation. So I will certainly be prepared and I will sit down with our Motor Dealer Act staff.

I'm intrigued by the suggestion of bringing Mr. Edmonston out. He certainly has earned a very prominent and productive place in the consumer movement, relative to automobiles. I think that in spite of the energy crunch, the automobile is still very much with us in the reasonable future. Today, when we find the price of an average North American sedan, modestly equipped, approaching the $10,000 level, we're not talking about small dollars. I am certainly not frightened by the fact of size of the large auto makers. The more aggressive use of the substitute action might be the avenue that this ministry takes if we see a problem emerging that needs redress on behalf of a group or class of consumers.

I'd also hope, of course, that on the product quality side the recent concern of the North American auto industry, relative to imported competition, will lead internally in the North American industry to a greater attention to detail, product finish and so forth.

I certainly acknowledge that the problem is there. I suppose it's the nature of a mass-produced, highly complicated, mechanical item that there will be a percentage of problems and those, because of the cost of the item, are going to be expensive, both in terms of dollar cost and the frustration to the human beings involved. If the vehicle is used in whole or part for business purposes, the frustration is much greater. I certainly acknowledge that the marketplace, in terms of the feed-in we're getting, has automobile concerns ranking well up there.

I certainly will undertake to sit down with our Motor Dealer Act staff and officials. I went to a couple of our interior offices, and the member will appreciate that those were the people on the road with whom I spent some time. They have a very large territory to cover. On the one hand, one is never anxious to expand staff in this age, but I think that in the interior of the province there is a very real need for

[ Page 5415 ]

beefing up our motor vehicle people to let them cover the territory more thoroughly. They're doing a very good job now, given the territory that they have to cover. I'm certainly not unaware of those problems and concerns. Hopefully, in a year's time we can report some very real progress.

MR. MITCHELL: I'd like to bring to the minister's attention the problem that I had dealt with at length in the vote of the Minister of Municipal Affairs (Hon. Mr. Vander Zalm). This particular item goes into both ministries. It is the problems of the farmers who purchase large, steel-corrugated buildings for the farms. I won't belabour it and go into the problem in the detail that I did in the Minister of Municipal Affairs' vote. Basically, it deals with the Aztec miracle steel buildings. Over the last number of years there have been about 300 or more erected in British Columbia. There has been a record of 24 that have been recorded with the Ministry of Municipal Affairs and that have collapsed under snow.

When the association of professional engineers and some of the farmers privately visited the consumer affairs branch, they were advised that because they were farmers — they were entrepreneurs — they did not come under the protection of the consumer affairs branch, and one of the things which I find very strange is in the agreement of sale for these buildings. There is a section which says: "This contract is subject to the provisions of the Consumer Protection Act, SBC 1977, c. 6, and amendments thereto, and may be cancelled by the buyer in the manner set out in the statutory notice on the reverse side. This contract is subject to the terms and conditions on the face and the reverse side hereto."

Now this is the question which has arisen, and I would like an answer from the minister: do farmers, in the purchase of manufactured steel buildings and things like cars, which are not cheap — they vary anywhere from $8,000 to $80,000 in cost...? They are a large investment for a lot of farmers, a lot of people who have purchased these buildings as storehouses, or workshops for machine repair, etc. But when they approach the Ministry of Consumer and Corporate Affairs — it doesn't matter that the contract led the buyer to believe he was receiving certain protection under this act — they are just told that the consumer affairs department is not interested. They are not covered, because they were in business.

There was a section in the regulations, which was part of this agreement; it said that the buyer is responsible for snow removal. This in itself is completely in violation of the National Building Code. The National Building Code, section 20, definitely states that any building that is sold or erected must conform to the building requirements of that particular area. So if a person buys a type of steel building to be erected in different parts of British Columbia, and he is in business, and has signed a contract which states that he is covered by the consumer affairs branch, when there is a collapse — it isn't only an individual involved, but the Association of Professional Engineers and other consulting engineers which called upon the consumer affairs branch they got no help or direction.

I feel that if we are going to have companies come into British Columbia to deal with the business community, or the farm community, or the communities who use these buildings for ice-rinks and various other types of construction, they should have some guarantee that (1) the building does come up to the National Building Code, and (2) if the construction — and it's been proven from engineering reports and studies done by Dr. R.F. Hooley, P. Eng., who was hired by the Association of Professional Engineers of British Columbia, and after checking all the figures, materials, standards, calculations, etc., provided by the company that this building would not carry the load that the specifications claimed it would do....

This in itself I can accept as bordering on fraud, maybe, or a mistake, or something like that; but the fact that the consumer affairs department gave no leadership, no help or assistance to either take action on behalf of the individual farmers, or to bring in legislation to cover this type of situation.... Now I don't know if it should come under a type of class action, but I feel that the minister, through you, Mr. Chairman, should look into it, and when there are problems like this, the minister or the department should give leadership and not wait for the opposition to continue to bring it up.

The leadership is needed, and I feel the people I mentioned should be given protection under the act. Their own contract states and leaves the impression that they do come under the consumer affairs legislation, but everyone from the ministry has advised them that they do not. Has the minister any thoughts on it?

HON. MR. HYNDMAN: First of all, I am always distressed to have reports wherein the ministry apparently has not responded promptly and with concern to a very real problem, even though, being a Consumer Affairs ministry, our policy has to be that our resources first must go to traditional or normal consumer concerns and then to concerns that come forward which might be more of a business nature. I think on a limited resource base the business type of concern must rank second to the traditional consumer concern. However, having said that, I suspect many of those buildings are used not directly for business purposes, but may have to do with the enjoyment of the farm or the homestead by the farmer for residential purposes, and most certainly I will look into it; I give that undertaking. It may be, in terms of the apparent confusion, that it stems from the face of the contract, wherein the vendor is required, really, to point out to the purchaser that the rescission provisions of the act do apply.

But the member is quite right, Mr. Chairman. When those kinds of words appear on a commercial document, I think the public is reasonably entitled to conclude that all of the provisions of the act would apply. Most certainly our offices around the province have become involved in consumer complaints concerning mobile homes, for example, which are of a nature somewhat approaching these kinds of buildings. I will certainly look into it, and I must confess I was not in the chamber, Mr. Chairman, when the member for Esquimalt–Port Renfrew (Mr. Mitchell) spoke in some earlier estimates on the same topic. If he might furnish me with a summary or a copy of this material, I will certainly be very pleased to look into the matter, and if he has some constituents with the problem, we'll give them all the help we can. I thank you very much for drawing that to my attention; I'd not been aware of the problem.

MR. LEVI: I have a motion I wish to move, Mr. Chairman: that vote 46 be reduced by the amount of $22,588.

MR. CHAIRMAN: The motion is all right. Please proceed.

On the amendment.

[ Page 5416 ]

MR. LEVI: Earlier in the debate on this vote we were talking about the motor dealer branch, and the minister said that if he had more staff, they might be able to do a better job. In this particular series of votes we again look at the business of travel expense and office expense. This is the continuing and general theme that we've been using about the inappropriate expenditure of more money in these votes than we think is required, and we've arrived at some $22,588. Interestingly enough the proper allocation of that $22,588 in some other way could have provided them with another individual who could have done the very meaningful service work in terms of the Motor Dealer Act, which he mentioned; he said that he would like to have more people. The key thing is that it's what you spend the money on, and these are the kind of frills that money gets spent on. People are always asking for more office equipment and travel allowances, but we're more interested in the service aspect. That's why we have moved, Mr. Chairman, to reduce this vote by $22,588.

[Mr. Davidson in the chair.]

Amendment negatived on the following division:

YEAS — 25

NAYS — 27

An hon. member requested that leave be asked to record the division in the Journals of the House.

MR. HOWARD: Very briefly, before the question is put, I'd like to raise with the minister, in this formal way, the communication directed to him, dated April 28, from the Terrace Community Services, relating particularly to the office of debt counselling and consumer complaint service in Terrace. Without going into the details of the financial arrangements and funding of this particular office, I should point out that over the past few years the funds available to the debt counselling service in Terrace — covering Terrace, Kitimat and the surrounding area — have been reduced. At one point, as a result of representations made, the reduction was increased again and additional funding was available. But it still puts the office of debt counselling and consumer complaint services in Terrace at a financial disadvantage relative to the debt counselling services in the other 14 centres in the province. Roughly speaking, the calculation shows that the funding is about $14,000 in the other centres, compared to roughly $9,000 for the debt counselling service in Terrace. The community services board pointed this out in the letter to the minister. As a result of an internal examination of their activities they were able to pare down their budget to about $13,800 to provide this service, which is almost in balance with the $14,000 average given to other centres in the area. They have felt for some time that $13,000 or $14,000 is not really a very significant amount to provide a service to the area affected. The debt counsellor, who operates on a part time basis, basically has nothing in the budget for transportation. All his travel, activities and so on come out of the $9,000, which is rather an insignificant amount related to the area he has to cover and the service he has to provide.

I want to raise this in a formal way with the minister: please, there is the necessity to give more favourable consideration to this service which is so greatly needed in that area; there is a transiency of population there, and there are a number of other factors that entice people to get into debt over their heads who can find no way out of it. The advice which the counsellor can provide is invaluable to those individuals who are not able to manage their own funds. It's a very worthwhile service and a very worthwhile facility. I don't expect the minister to jump up now and say: "Yes, we'll do that immediately." Certainly the case has been put to the minister, and it's been put to his predecessors. I raise it with him now in this formal way, to say that here's something really worthwhile that the minister can accomplish by looking at the debt counselling service funding in an equitable way and on a basis similar to other centres. If the minister would make some commitment even to look at it and examine it, and perhaps get back to me privately about it, without taking up the time of the committee, it would be greatly appreciated.

HON. MR. HYNDMAN: Very briefly, Mr. Chairman, it's an important topic, and while the member for Maillardville-Coquitlam (Mr. Levi) is here I just want to go on record and say I have some considerable sympathy with the views expressed by the member for Skeena (Mr. Howard) relative to the northwest. The member for North Peace River (Mr. Brummet) has expressed very serious concerns about the need in that developing area for some of the services which we almost take for granted in the lower mainland. We have, not yet, made no final decisions on funding for the various regions.

I do want members to know that I am sympathetic to the northern concerns. It's my personal view that in the lower mainland and up the valley, while we have a lot more of the population, access to the facilities offered in greater Vancouver is more convenient. If, in the result, the policy shift is to those more rural and remote regions, I hope members from those areas, on both sides, will support me if there is some shooting from the lower mainland, because to achieve those results some of the granting in the lower mainland may be reduced. So I very much value those comments from the member for Skeena.

Vote 46 approved.

On vote 47: corporate affairs, $5,865,797.

[ Page 5417 ]

MR. LEVI: This is the heavyweight vote where a lot of the real action takes place in this department, and I want to cover a number of things with the ministry. I think I'll start with the stock market and try to stay with that, and then sit down and get the minister to respond. Then I'll get up and talk about real estate, sit down and let him get up. Then maybe I'll talk about the first member for Vancouver–Point Grey (Hon. Mr. McGeer), sit down and you can get up.

Since I've been critic of this department I've always taken the position that I want to stay away from one-liners in relation to the stock market. We've heard them all: whatever it is, floating crap game, the biggest casino in town. Over the years I've looked for some kind of resolution for some problems, but that really hasn't happened. I understand from "Provincial Affairs" — I may be wrong; I may have the wrong place where he said it — that the minister is going to make an attempt to meet with the governors of the stock exchange on a fairly regular basis. I think that's on the right track.

About three years ago I had the opportunity to meet with the governors on a couple of occasions, and one of the things I said to them was that I thought their sense of PR was terrible. I hadn't changed my mind up to yesterday — I haven't read the paper today. Their sense of PR is terrible. I wrote a letter to the president of the stock exchange at the beginning of 1979, at the time when the BCRIC share issue was being talked about and we were getting ready to do it. I said to the president: "I'm not suggesting for one minute that you should comment on BCRIC, but what I am saying is that we have a number of people who are talking about a BCRIC share issue. The Premier said that everyone should get into the market and get into some kind of share position. He was saying that; a number of people were saying it. "Why do you not take the opportunity to come forward to the public? Leave aside BCRIC, don't comment on BCRIC, but tell the public what they can expect in going into the market. What does the stock exchange do, what kind of protection do they have and what kind of surveillance goes on?" After all, the whole campaign around BCRIC was in the business of bringing to the market literally hundreds of thousands of investors, most of them not knowing which end was up or even where the stock exchange was. I asked him to do that. I didn't get a letter, so I phoned him. He wrote me back and said: "I'll put it before the board of governors." Nothing happened.

I'll give you another example. Just about every group that we deal with in this province that has some concern about the government takes the trouble to send us an annual report or information on what they're doing. Three years ago I said to them: "At least send us the annual report. Come and see us; go see the government caucus; come see us, and tell us what you're doing." Because if there's ever an operation that's constantly in the public's mind today it's the stock market. Every time we have a debate about BCRIC you're talking about the stock market.

We had a very large shareholders' meeting yesterday. It was a very positive thing in the sense of getting that many shareholders to come out to attend a meeting. Sometimes you can go to a shareholders' meeting in the Hotel Vancouver and you can't find the meeting, because there are only about six people there and three of them are sitting up on the platform.

In respect to the stock exchange, which, very frankly, Mr. Chairman, up to about five years ago this party didn't spend more than 10 minutes thinking about, it now is in a position where some of the ambitions that have been exhibited by a number of people in the brokerage houses — we can mention Peter Brown, who was a great advocate of having an international junior company stock-market operation.... I spoke to him about it, he told me what he wanted to do and what a number of other people wanted to do, and it appears that that has come to fruition. One just has to look at the volume of shares, the number of companies and the incredible increase in capital in respect to that junior market. Mr. Brown has come pretty close to getting what he set out to do in terms of expanding that market and moving it more specifically to a junior mining company operation.

Not everything is well down there, obviously, when you've got so many new companies coming on the market. We still live to some extent with the reputation that this market had many years ago. There has been a lot of effort put into surveillance — almost $6 million. If you calculate all of the expenditures, it's probably even more than that. You have what your ministry puts in and what the RCMP put in, because they spend a large amount of money. The last time I spoke with superintendent Mullock in 1979 — he's now moving on to Manitoba — we came up with a figure of almost $7 million of public money being spent on the whole question of surveillance.

You'd think that with the expenditure of all that money which we approve here and in Ottawa they'd even send us an annual report, but they don't do that. They don't tell us anything. We are the people that they will come to if the act is amended, but they don't tell us anything. One of the things that's sadly missing, and which has always been missing from the debate which we have around the stock market, is: what do we have to turn to in terms of any valuable studies that have been done on stock markets other than what's taking place everywhere else, including this place? We've never released anything.

I know the minister knows that I'm going to bang away again for a plea that the government release the Schroeder report, into which $125,000 of public money went. In 1979, I think, his predecessor released a White Paper on the stockmarket in which he was getting the views of a number of people on some proposals for future legislation. I wrote him a letter. I said: "Look, your White Paper contains some interesting information, except that most of the observations and footnotes make reference to reports that are outside of this province." They talk constantly about Ontario, which has got one of the major operations, and they've done a great deal of work in terms of setting their own house in order. That goes back a long time — we're talking about the mid-sixties during the windfall days. The Ontario Securities Commission has sponsored a lot of work. We've spent $125,000 to look at the capital markets of this province, and one can only conclude that either the capital markets are so bad that nobody wants to talk about them or the report was so bad that nobody wants to release it.

But I tell you this, Mr. Chairman: if we're going to have in the future a sensible debate around the changes in the Securities Act, which no doubt will come, we are not going to be able to do it based on the information that we get from other provinces. We have done the work here. We did it with the J. Henry Schroeder report: we've done it with the Brown, Jefferson, Farris report — two of them for another $60,000, which were never released. Let me add a third one, which the minister may have some influence in getting released. Talking about capital markets and the investment area, there was the joint credit union-government report on the savings and

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trust bank during the latter days of the NDP government. That's a valuable study. There are four studies, three of them done within the last two and a half to three years, and the other one now six years old.

But we do not have the kind of background information that is really crucial for any reasonable debate or even the formulation of legislation. I don't suppose that the government has released the J. Henry Schroeder report to anybody. When I wrote to the minister's predecessor and said, as I said in the House two years ago, "If you're that uptight about the stock market part of the report, leave it and just release that part that deals with the capital market — exclude the stock market," he thought it wasn't a bad idea. But he didn't do anything. When I wrote him and said, "Release the report...." You know, when he wrote me back, I just about fell over. He wrote me back one year after he had received the report and he indicated in the letter that there was no point in releasing the report because it was out of date. They received the report in August 1978, and in October 1979 he's telling me that it's out of date! Well, he's now out of date too. He's gone.

But I do ask the minister to be serious about things. He's got this serious demeanour about him. If he's that serious, we're going to need some information. I know — and he probably knows too, if he looks through the mail in his department — that there have been requests from the industry itself to have the report released. I've heard all sorts of stories about the size of this thing. Somebody suggested to me once that it was 1,100 pages. Well, I don't know what the size is. The first time the minister who is now a hotliner mentioned that he'd got it, he kind of shook us up by saying, "Well, we want to really look at it," implying, we think, that he was going to edit it.

That report is invaluable for some real consideration of the stock exchange. Whether the stock exchange itself has authorized or commissioned any reports on their operation, I don't know. There's very little information in terms of reports which are available to us from the stock exchange. What you mainly have to rely upon are the sometimes lengthy articles by various writers who specialize in finance and the stock market and that kind of thing. But they usually deal with very current events. If the minister is going to see the governors, then I would say to him: ask them if they want to do some reports. Work together. But I'm sure they would ask him, if they haven't already done so: what about the J. Henry Schroeder report? It can't do you any harm, and probably would do you a lot of good.

Now I want to ask the minister a specific question about BCRIC with respect to the insider trading which took place. I am under the impression that our superintendent of brokers was very slow off the mark to institute an inquiry, and I want to know why. The basic impetus for the inquiry came out of Ontario. Now that's an extremely serious matter. The whole question of insider trading is a serious matter. I was quite surprised that we were that slow off the mark. We seemed to go lock-step with everything Ontario was doing, but we didn't initiate anything. That is the impression I get from reading very closely not only the Getz report, but also the report from the Ontario Securities Commission, in which they talk about how they did their report. The thing is: why was he so slow off the mark? There was a serious problem there, and perhaps the minister will be able to give us some observations about this.

Then I want to ask him this. About three years ago the procedures for the vetting of statements of material fact were really placed squarely in the hands of the department. I'd like the minister to comment about what kind of staff he has to do this. At one time it was very small. The increase in volume over the last year is quite dramatic. Then there's the other question which attaches to this particular problem. I've always been completely confounded by the failure of our legal system to move far more quickly than it does in terms of investigations and subsequent prosecutions around cases which come out of the stock market. Now I realize that there is a case before the court at the moment in which charges have been laid. I understand there is a former employee who has been charged, and there are extradition proceedings, and that's about as much as we can say about that.

But over the years, when one looks at the various cases involving stock market frauds, if you like, sometimes you can actually find that six years have elapsed from the time the first charge was laid until the time the case was completed in the courts. That's an incredible amount of time, in which God knows what happens. Lawyers go there, make agreements about adjournments.... I remember discussing with the commercial crime people this very issue of why it takes so long to get these cases to court. They told me at the time that in most cases they deal with they can complete investigations in between 6 and 18 months. The major problem is getting them on the calendar or whatever. Mr. Minister, there are long delays in these cases. Meanwhile, of course, people who have been badly hurt by this simply get no satisfaction whatsoever. The delay in itself loses any impact that it might have on anybody else who wants to pull the same kind of scam. It goes on. There is no deterrent effect. I'm not a great believer in deterrence. I don't think the deterrent principle as enunciated in law really works. Deterrence is always good for people who never break the law. It doesn't do anything for the people who set out to break the law. It doesn't deter them one bit.

There is the question of this long delay in prosecuting these cases. I know that there is a problem. I had it explained to me by the Deputy Attorney-General in a letter. He told me that these cases are so complicated — I appreciate that they are — that in terms of the accounting aspect you need very special accountants. His department has to stand in line like everybody else to get hold of ten or fewer accountants who are available to do all this work. This is not directly in the minister's area; but the whole business of surveillance and initiating a prosecution is certainly within his area. The Securities Act is clearly within his area.

In terms of the surveillance aspect, what we intend to do — it's an opinion I have.... We have the RCMP commercial crime squad. We also have the investigators within the minister's own section. But investigation really isn't enough. We are not going to be able to find a speedup within the commercial crime section. After all, every time you talk about expanding the RCMP commercial crime section, it's all part of that contract problem we have with how much we are going to pay the RCMP in the first place. The impetus has got to come from the minister. You're not preempting their role. It's a very specialized investigatory role. It needs to be done and done a lot quicker than it is now, because at the moment, in my opinion, it's a bit of a joke how long it takes people to get to court. Surely that's not in keeping with the good administration of justice or, for that matter, enabling the minister to conduct his department with any degree of cred-

[ Page 5419 ]

ibility when it takes years to get a case completed. It's very damaging to the system. It's extremely unfortunate that more is not done. Something has to be done about this. I'd be interested in the minister's observations on this.

I think what I'll do at the moment is sit down. I have a number of things I want to pursue, if the minister would like to reply.

HON. MR. HYNDMAN: I've certainly indicated to the governors of the stock exchange that I would like to have some regular opportunity to stay in touch with them. I think one of the reasons why, for example, in the area of public relations and public information the stock market might not be up to the mark the member has suggested is that the governors and the people in the investment community don't pretend to be either politicians or knowledgeable in the area of public information. They're over doing their thing as they see it. I hope that some more regular opportunity to meet with the minister responsible will assist them in better understanding ways in which they can let the public know where they've come from, where they're at and where they're going.

Frankly, I would agree with the member that the Vancouver Stock Exchange has not done as much as it might in telling its story, particularly because there's a very good story there to be told, in terms of the internal improvements made over the last several years. As the member probably knows, the exchange is moving to spanking new quarters in the fall. I think there's a very exciting story to be told as to the move and the reason for it. I was interested by the member's remarks, because I've suggested recently to the governors that the exchange could usefully do for all members what a number of groups do once a year while we're in session: take an evening, have us over together, offer us dinner and give us a little presentation as to what's happening at the exchange — a useful question-and-answer session and so forth. The governors I've talked to most certainly indicate not only a willingness, but a keen desire to upgrade their public-information processing. I think it's a good and timely suggestion by the member. I think the exchange is going to be moving in that direction of its own volition.

Certainly, in terms of the development of a unique venture capital market based in Vancouver, that's a very obvious goal of the Vancouver Stock Exchange and its leading members. One of the reasons why I think we're all concerned about efforts to, for example, speed up the processing time for statements of material facts and prospectuses is that there is competition from other geographic areas to be the home for this kind of unique venture capital market. My impression is that the province of Ontario now realizes that it missed the boat somewhat several years ago. It is about to launch a major new initiative to bring back to the Toronto exchange some of the quite legitimate junior resource or venture capital business which has been lured here. That, I think, means that the exchange, the securities industry in B.C. and this ministry have to gird their competitive loins and see that things are happening here in a prompt and efficient way, so that people are going to stay and choose to do legitimate business here.

In terms of surveillance, frankly, my view is that Rupert Bullock moved with considerable dispatch on the BCRIC matter. I think that the appointment of Leon Getz speaks volumes for the obvious concern the government had in having a first rate report done by a person with impeccable credentials who is also one of the senior specialists in the country in this area. I think that the appointment of Leon Getz reflects the importance attached to the inquiry by the government. In my experience, Rupert Bullock comes from a very experienced and senior police background. He's very independent, as he should be, in his approach. I think he is conscientious to a T, and very mindful of the down side of delay. For that reason, my view is that he moved with dispatch on the BCRIC matter and will move as rapidly as practical on any investigations he undertakes.

Certainly there is a time lag between the commencement of an inquiry and the matter ultimately being heard in court, if it goes that far. I think it's not the case that on average it is a six-year time-frame. It is doubtless the case that in these matters, particularly if there are so-called bad guys out there and they have tried consciously to cover their tracks and do things with an end run.... In those situations it probably is a 6- to 18-month time-frame in terms of the research and investigation, where you have to thread back and fill in blanks, very often working in other parts of the country. Once that year or year-and-a-half process is done and the legal opinions are obtained, I think on average we're faced with a court calendar wait somewhere in the neighbourhood of a year. So I think a two- to three-year time-frame is more practical. It seems to be a fact of life. Although there may not be the immediate salutary effect of an investigation started on day one and a conviction on day three, nonetheless, for whoever is around listening and watching when a conviction comes through, I think there is a very salutary effect.

In terms of statements of material facts, we have a hardworking staff. The volume is up incredibly. That's the reason why we haven't been able to shorten that time-frame. We're working now on efforts to make that time-frame shorter. Mr. Chairman, you're well aware of the concern of many of our MLAs to have those prospectuses and SMFs vetted and approved in a shorter time.

I think that touches the major items raised. Regarding the various reports which for years, recent and before, have not been released, I'm aware of the member's concern. I have not read all the reports. I'm through most of them now. I'm aware of his concern, but I can’t give any commitments today.

MR. LEVI: I'm devastated. I know that if the first member for Surrey (Hon. Mr. Vander Zalm) was in that department, he'd release the report. My gosh, we're not going to get to look at the report.

Now we're going to talk about staff, statements of material fact and what the heck is going on down there.

Don't give Mr. Bullock a hard time, because I'm going to quote you from the Province of March 18, 1981. It says:

"The provincial budget for 1981-82 provides for an increase in personnel in the office of the superintendent of brokers. Insurance and real estate to 82 from the previous year's 64. The increase is more apparent than real, however. Superintendent Rupert Bullock's staff already totals approximately 80"— because they have auxiliaries — "and the authorized increase simply means that personnel employed on an auxiliary basis will be taken onto permanent staff."

Here's a quote from the superintendent: "We are in serious need of more staff, and I will be drawing the attention of the ministry" — Consumer and Corporate Affairs — "to the drastic situation."

"There is a particular need for accountants in the securities side of his office, he said." As a matter of fact, he recently made a statement which was almost in the frame-

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work of a warning to accountants, that they better get on the ball about what they're doing when they're working for some of these companies, because some of the stuff that's coming down the pipe is not very satisfactory. One might give the same warning to some of the lawyers who are involved too. There is a particular need for accountants in the security side of his office, he said.

"'I'm not just talking about one or two people. We need between 10 and 20 more. My staff is processing up to 250 prospectuses, statements of material facts and other documents at a time, and it takes about three months to get one processed. That is totally unacceptable when we're aiming for a turnaround time of ten working days.'

"Each accountant in the superintendent's office works on about 25 documents at a time. Their counterparts in the Ontario and Alberta securities commissions have to handle about eight at a time, Bullock said.

"A sharply increased volume of new listings and financings on the Vancouver Stock Exchange has contributed largely to the growing workload in the superintendent's office. A recently implemented policy which broadens the number of offerings that may be exempted from registration under section 55 of the Securities Act has helped in eliminating some work, Bullock said."

Then he talks about the estimates.

The minister has made mention of the impact in the province of the expansion in the operations of the stock market. Those people who have a major concern about the market have seen a dramatic increase. The market, in terms of volume, sits second to Toronto; and if Toronto doesn't get moving, it's going to be second and Vancouver is going to be first. But there is an inherent danger in this kind of progress. I think it's implicit in what the superintendent is talking about. They urgently need accountants. Somebody has to vet these statements of material fact and the prospectuses. It's important. We've seen what has happened in the past. If ever there was fertile territory for people to come in and do a ripoff scam it's here, because of the rapid expansion and the failure to increase the staff of the very surveillance group that is the first line of defence. If they miss something and it gets out to the market, they're in trouble and the investors are also in trouble.

I've been watching the performance — that's what I think you might call it — of what's going on in relation to that company, New Cinch. I'm still not sure where we are with that. I'm always at a loss to understand.... I don't want to get into the business of upsetting investors. There are certain specific unanswered questions in that particular case. For some reason it's still trading. There are all sorts of suggestions.

The point is: what can you do about that? You're always going to get companies that get into trouble. I'm not suggesting that all companies set out to rip people off. Occasionally some get into trouble very legitimately. The object of the surveillance section that the minister has is to spot some of these things in terms of the way that the statement of material fact is drawn and the way the accounting is set up. They have to deal with this all the time, but they're under a great deal of pressure. The turnaround time is bad, and of course the turnaround time directly affects the capability of more investment. If it takes too long, people are going to say: "My God, this is worse than dealing with the municipality that I'm taking on." And, of course, you're under the gun; there is a great deal of competition.

Under vote 47 that department has a budget of $5,865,797. I want to ask the minister a question specifically related to the item in the budget under code 40, advertising and publications. That has gone from $106,400 to $215,982. What does it all mean? On the one hand, you have the man in charge of a very busy division of Corporate Affairs, the superintendent of brokers, insurance and real estate, who can't get enough money to get staff. And here we have a budget item which represents an increase of $109,000. What is it used for?

I think I should sit down so that the minister can answer some of the questions I've asked him. Then we can wind up with this one.

MR. STRACHAN: I wonder if I might have leave to make an introduction.

Leave granted.

MR. STRACHAN: Mr. Chairman and Members of the Legislative Assembly, I am pleased to announce that in the galleries today and visiting the precincts this afternoon are students from the Beaverly elementary school in Prince George. They are chaperoned by Irene Peters, Joanne Haggstrom, Barb Temoin, Cheryl Hughes and Dale Andrews. I'd ask the members to give them a nice, warm Victoria welcome.

HON. MR. HYNDMAN: Vote (40) and its increase are again a consequence of the highly increased volume of commercial activity in the province and the consequent high increase in the volume of incorporations, corporate resolution passages, statements of material facts, prospectuses and so forth. There are two main elements to this vote, and the vote doesn't really deal with advertising and publications in the normal sense.

First under this vote, the weekly summary put out by the superintendent of brokers, insurance and real estate is produced. As the content of that weekly summary has increased through the rapidly escalating pace of economic activity in B.C., and as the demand for the publication has increased, costs have risen, and of the $109,582 increase about $21,000 is on account of increased production costs of that weekly summary. The balance represents the costs of gazetting in the British Columbia Gazette as well as related Queen's Printer fees, again relative to the kinds of things which the ministry must publish in connection with incorporations, capital reorganizations, statements of material facts, investment processing and so forth. Owing to an increased volume of gazetting requirements and increased fees charged by the Queen's Printer for those, the increase is expected to be $88,582. Those are the two elements of that vote and the reasons for the two projected increases.

[Mr. Strachan in the chair.)

MR. LEVI: In November 1979 there was a commercial crime seminar in Vancouver, and Mr. Scott, the president of the Vancouver stock exchange, made a presentation. He said, in part, that if there ever was an opportunity for organized crime to enter into a field it was in the stock market. After all,

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their greatest need is to launder money. There are figures published by the Solicitor-General's department which relate to the amount of ripoff that exists in these various stock markets. For instance, it was estimated in 1977-78 that some $50 million was ripped out of the markets because of a variety of scams or whatever.

Let me ask the minister — without revealing too many state secrets — because it probably is a major preoccupation or one of the preoccupations of CLEU.... I ask this question because we have, and have had for years, the largest drug operations in Canada. The figure is way up from $250 million now; it's much further up than that. Then there's the whole question of where the money goes. I have tried on a number of occasions, with one of the minister's colleagues, to get him to have some real concern about exactly what goes on with his money. The Montreal people examined this question. The Quebec Crime Commission examined it. They even went to the stage of publishing a report and making a series of recommendations about how one might curb this or at least take notice of what's going on and utilize the federal revenue department to do something about it.

What I'm saying to the minister is this: we have a very large operation in the stock market at the moment. It's just ballooned into an incredibly large operation. One of the major concerns has to be: who are the people coming into the market, and what kind of money is coming into the market? I gather from a recent article that we get about 40 to 45 percent of the new investment coming from Europe — Germany, Great Britain. But we also have investment coming from places like Panama, the Bahamas, you name it — places that have chequing accounts with strange numbers, which will only give cash to people who know the numbers.

This particular problem, which is a continuing problem, has to reinforce the argument I made earlier and which the superintendent made, about having enough people to do the checking. If that isn't provided now, sooner or later we could head for one great big scandal here. It can happen. Frankly, I am not happy with the position the government takes on organized crime. The former Attorney-General, who is now Minister of Intergovernmental Relations (Hon Mr. Gardom), said: "Well, things aren't bad enough to have a real inquiry." That's what he implied in this House in 1978. Well, that's very nice. You wait for the brick to fall on you to find out whether the mortar's loose. It's a serious problem. You have your senior official saying he needs more staff in just the general run of the business, plus the fact that if you're going to do a real job of surveillance and understanding in that market you've got to go further and be concerned about where the money comes from. It's the same in the real estate business.

With all the constant debate we have, particularly about rents and who owns the buildings and who owns the land, we have yet to get any definitive statements from anybody on just how much foreign investment there is in real estate, for instance; or how much investment there is and where it comes from. These things have to concern somebody. It's something about which generally no concern at all has been expressed by the government. No answers have been given. I know that sometimes one answer given is: "We are looking at it, be assured. Now go away and leave us alone." But it's much more serious than that. We've had a bit of a history of it in the real estate business and the stock market.

One of your officials is in a continuing hot-spot situation: he's on the griddle every day. He has 400 to 500 companies trading on the market, and he doesn't know what's going to blow up next. If he hasn't got the correct number of staff, he's going to have trouble, investors are going to have trouble, and the whole industry is going to have a black eye. Black eyes are not new to the industry.

The president of the stock exchange made a very interesting observation when he talked about the cooperation between his division and the RCMP. He said: "Of course there will always be occasions where an attempt is made to give false or misleading information even in writing. We cannot stop all these, but with the advice of our professional staff and outside experts available to us, we can and do sometimes require that the company statement be verified from an outside expert." At about the same time he wrote that, this exchange took on a mining engineer. That was one positive addition. "In conjunction with the forces available to us, through the cooperation of the RCM Police and the superintendent of brokers' office, it works reasonably well."

A lot of money is spent on surveillance. However, there are still problems. The basic problem appears to be the staff. The minister hasn't really addressed that question. I've asked him before. Mr. Bullock has expressed very serious concerns about this. In my opinion. the market is going to continue to blossom, unless the Ontario people can turn everything around. I don't know whether that can happen. After all, now we've got four western provinces that would prefer to operate out of the west rather than the east. Maybe that's very valuable for us in terms of that market. But it's a problem, and I can't say it too strongly. I haven't heard from the minister about the business of staff and his concern about surveillance.

I want to move on to one other area. About four years ago we had a White Paper on co-ops, which went the way of all White Papers: we never saw it again. It was distributed. There was some suggestion that we might get some legislation, but we didn't get any. Let's leave out the legislation for a moment. There are an increasing number of co-ops. I've had quite a bit to do with two or three co-ops in and around my riding, one of which is the largest housing co-op west of Toronto; it has five buildings, made up of about 260 units. From an educational point of view there hasn't ever been any focus on co-ops, as far as I know. Part of the minister's other responsibilities, and one which we dealt with earlier about housing and rentals.... We haven't actually debated affordable housing, but one of the mechanisms, obviously, is co-op housing, and this is a valuable mechanism. The general thing is that this knowledge is somewhat specialized, and relates only to a rather interesting group of people who I might characterize like this: they are usually middle-class, very bright, community-conscious people. What I'm saying is that the concept of co-op housing doesn't reach the average Joe.

It's a question of whether you want to expand co-ops in general, whether you're talking about user co-ops for food, co-op stores, co-op housing or co-op mobile homes. The government has yet to express any philosophy or policy on this. We have some idea of the importance they attached to it up until about a year ago, because the White Paper was never proceeded with. We have in this province a large number of people who I believe would respond to the idea of the co-op movement, if that's what the government policy is. We have a large number of people who are from the Prairies, who have been exposed to all types of co-ops, and yet in the one area that the minister and his colleague the Minister of Housing

[ Page 5422 ]

(Hon. Mr. Chabot) have to do with, there is some small, important work going on, but it's not going on under the aegis of the government. Neither is there enough money for those people who are doing it now.

Where is the government in terms of co-op philosophy? What have they in mind? What are the minister's views on this? One of the very serious areas in terms of affordable housing relates to mobile homes, and some of those people are in co-ops. The question is: how does the minister view this? How does he see the function of his superintendent of co-ops and trust companies? That's an interesting combination — co-ops and trust companies. That's like putting J.P. Morgan with a piggy-bank — anyway, he's responsible for those two areas. What's the minister got in mind? One of the things which is a major concern to him is affordable accommodation. One aspect of this is co-op housing. What are they prepared to do about it? I don't think they've done anything. Nothing has happened. You have a superintendent of co-ops who's a member with very broad experience in other countries in terms of organizing, but we don't have any focus at all at the moment in respect to co-ops.

I want to deal for a moment with two things in relation to real estate. If we ever had an exposure of the real estate industry, it has been in the last year, with the incredible increase in the price of housing. A number of remarks have been made. I received a copy of a letter the other day from one individual who is a real estate man who said that today, if you want to function as a real estate licensed person, and you can't sell three houses that will gain you commissions of $20,000, it's darned difficult to be in the industry. Yet the industry, in terms of the number of agents, just grows and grows and grows. It's free enterprise gone mad. Everybody can get into the industry.

Some years ago there was a report, the Rosenbluth report, which made a number of recommendations. That one might be out of date, as it's six years old, but that industry needs to be looked at. It's got to be looked at for two reasons. One is that we have a different kind of housing market out there. I don't know whether the housing market will settle back into the staid old ways we knew. I doubt it very much. I think that we're always going to have an incredible amount of pressure on that industry. That's the general pressure — the business of finding houses, or the business of competing to get houses from a large number of agents. They have an issue around the commissions. But then there's another group out there looming quite large, some of them very legitimate in their aspirations, some of them quite illegitimate in their aspirations. I have in mind the option people. There appear to be some people who are very serious about offering this as a legitimate alternative given that it can fit into some realistic legal framework, and there are other people who are really going around piggybacking on what is a very volatile real estate market. Some people are getting hurt.

It's not a question of government involvement or regulation in the first instance. I personally believe — I said this at the time they brought the Motor Dealer Act and Travel Agents Act in — that if those industries would have regulated themselves in the proper way, they wouldn't be in the position of having the government do it for them and then constantly complaining about the fact that the government is up to its hips in their industry. Just about every citizen in this province at one time or another is going to be touched by the real estate industry. If we take the national figures, somebody's moving every five years. It's a very volatile industry in terms of the price of housing and the availability of accommodation, but it's becoming more volatile because they've been offered some competition. Whether the competition is legitimate or not, we don't know. Somebody has to look to see whether the game that's being played there by the option people is fair. At the same time they have to look at whether the real estate industry itself, in terms of the large number of people who want to get into it and are in it.... People queued all night to get 200 positions at UBC. I think there were 900 people that applied.

In the interests of the consumers — the citizens — somebody has to say to the industry: "This thing cannot get out of hand. You have an industry that has to function. People are making a career out of it." We now often hear the somewhat euphemistic reference to the "neighbourhood professional." We have neighbourhood professionals all over the place now. Even the chimney sweep is a neighbourhood professional.

It's been a long time since a good look has been taken at the real estate industry. I'm not going to go off the top of my head and make a large number of accusations. They have some very serious problems. There are many people who have worked in the industry for years who have had to do a lot of travelling. Because of the volatility of the whole industry, some of them are not able to keep up. Some people are leaving the industry because they can't compete. One will say: "Well, if they can't compete, they better get out of it." In my opinion the industry is far too volatile. We need the minister or people to sit down with the real estate people and talk about it — not to say "everything is fine; nothing is wrong," because things are not all fine. We can expect a continuation of the present conditions for quite some time.

I think I'll sit down now and see if we can get the minister to respond on these points.

HON. MR. HYNDMAN: Mr. Chairman, let me go back and open my remarks with an observation on the quotation from the article quoting Mr. Bullock on the question of staff and so forth. What I think is very important, and I share the member's concern, is that in a rapidly growing and so-called "hot" market, which is normally the ideal climate for so-called scams and the bad operators to do their thing, the government must be particularly vigilant at that time. I want to assure the member that there are going to be no reductions in the standards required of prospectuses and SMFs. That's the reason why, with the increased volume and notwithstanding increased resources, the time-frame isn't shrinking rapidly for processing of SMFs and prospectuses. Certainly one relatively easy solution to make government look good would be to internally somehow relax the requirements, relax the vigilance, and be less picky in vetting these documents. The time-frame for processing would then be decreased, as you loosened the standards. Of course that would be the wrong thing to do because you would be greatly increasing the risk and likelihood of something slipping through. So the reason that the time-frame for processing is not shrinking rapidly, notwithstanding the application of increased human resources, is that standards are being maintained.

It is important to note that a very large number of auxiliaries have been rolled into permanent positions because it does provide this very beneficial result. Auxiliary staff have the benefit of flexibility in budgeting. When times are hot and heavy, you can bring on more auxiliary staff. You aren't, so to speak, stuck with them permanently if business tapers off. You're not stuck with a heavy overhead. On the other hand,

[ Page 5423 ]

flexible in budgeting as that approach of auxiliaries may be, the difficulty in a very technical field such as we're discussing here — the vetting of SMFs and prospectuses — is that you have to train your auxiliary people. If they're coming and going, turning over, just learning the process and going off to another job, the amount of time spent in training is very largely wasted, whereas when you make the auxiliary positions permanent, you are doing the permanent training only once. The permanent training is there permanently with the trained person. As they stay and as time passes, they get ever more efficient at what they do. The increase in staff from 64 to 82 will, we think, enable the division to do a markedly more substantial job of processing. However, we have to realize that with the escalating pace of activity in the B.C. economy and in the B.C. securities industry, it's still a question of keeping pace with growing demand. I want to assure the member that we're not about to relax those standards; we're going to go on trying to find additional ways to shorten that time-frame. We're going to try and find ways to get further staff to Mr. Bullock and his division.

Certainly, as I say, I share the member's concern that there be vigilance over the process and that concern be shown as to the source of funds coming into the British Columbia securities market. The member is quite right. The studies clearly show that the high percentage of the so-called new money coming into the British Columbia securities market is from Europe or from the United States. Canarim Investment Corp., for example, who have been perhaps the leading investment house in British Columbia in working for the development and expansion of Vancouver as the home of a unique venture capital market, I'm told will be opening one office in London, England, and another in Geneva this year. I think that reflects the increasing European source of funds into this market, as well, as I say, from the United States and from the province of Ontario. I am certainly not aware and have not been alerted to evidence of money entering our market from illicit origins, However, I shall be concerned on an ongoing basis to be alerted to any evidence we might receive suggesting that that has taken place.

The other thing that we're doing in the area of surveillance that I think is very important is that senior staff are staying very closely in touch with their counterpart regulatory authorities in the other provinces of Canada. There's a good deal of exchange between the securities commissions and the investigatory and processing staffs of the various provinces. We deem this to be important. This kind of industry — the investment business — crosses borders very readily. Capital is extremely mobile. It's important that our people stay in touch with their counterparts in other jurisdictions. Certainly a coordinated and concerted team effort across the country between the various provinces in surveillance and administration pays dividends for all. I think that is very important in our approach.

Dealing with co-ops, I want to tell the member for Maillardville-Coquitlam (Mr. Levi) that I have a particular personal interest in co-ops and, related to them, the credit union movement. I individually hope to spend a fair amount of time with Henry Thomas, who's our superintendent. On the general issue of credit unions, I am now on record in this House as saying — 1 believe it very strongly — that the credit unions have a largely unrecognized potential for benefit in this province. I am much concerned to see what we can do with the credit union movement. It seems to me that in many respects the co-ops share a common philosophical base with the credit union movement. I certainly think in the area of affordable housing the co-op movement is well worth paying attention to. One of the particular ideas that I have is that through either credit unions or co-ops we're going to be able to develop policies to encourage particularly tenant groups to do for themselves what developers are otherwise doing. It seems to me that in many cases in the province we have developers coming in, acquiring an existing rental building, and over time converting it to strata title units and selling it. I'm personally interested in programs whereby government can provide to people who want to form a co-op the technical expertise — the accounting, legal and financial expertise — to give them some guidance and planning to enable them as a group to go out and perhaps acquire a building and convert it. I think there's a good deal of potential there. It's certainly one of the areas which interests me.

In terms of the real estate industry, let me comment first on option dealers. They're very much a concern to me for the reasons the member has indicated. In a legitimate sense option dealers may offer to the public of B.C. some benefit. But there is a very broad scope for non-legitimate or illegitimate operation in this field. The member probably knows, Mr. Chairman, that the ministry is currently prosecuting in the criminal courts certain parties in this field on the basis of what we deem to be a conspiracy to evade and breach the provisions of the Real Estate Act. We're certainly pursuing that. We're going to go on monitoring the activities of other option dealers across the province. We're going to monitor that one very carefully.

Looking at the real estate industry generally, the member suggests the need for an ongoing or at least a fresh look at the industry. I think that's a fair comment, particularly in this volatile market. He's quite right, the nature of what realtors do is going to change as time goes by. He perhaps has followed some of my comments on the topic of the flipping of residential houses. Even though the evidence may suggest that the percentage involvement by licensed realtors is small, and even though it may have been okay in earlier times, I, for example, am of the view that if an individual citizen of B.C. wants to engage in the business of flipping residential housing, that person is free to do so as an individual. But if that person wants to use a residential real estate licence, which is a privilege and a right, as a method of getting an inside track on information in order to spend his time merely flipping residential houses for his own profit, not being prepared to engage in the normal brokerage practice of enabling vendors and purchasers to get together, then I think that person should not be able to hang that residential real estate licence. As the member may know, I've been engaged in some fairly lively correspondence in the newspapers with some realtors over that topic.

I also think that in the area of disclosures in terms of the need for a fresh look at the industry, there is a need to make stronger and more complete the kind of disclosures which have to be made to a vendor of property in British Columbia when the purchaser, directly or indirectly, is going to be a licensed realtor. We have some provisions now, but frankly, in view of the changing market, I think they have to be expanded.

Those comments, hopefully will give the member some indication of the interest I'm taking in the state of organized real estate. I'm going to the BCREA meeting in Harrison on Monday and speaking to the industry, and I've asked particularly for the chance to sit down with the BCREA execu-

[ Page 5424 ]

tive before that meeting and exchange some views as to where the industry is at and where it is going. Mr. Dermot Murphy and the Real Estate Council are doing, in my view, their continuing able job as an interface between government and the industry. Our new deputy superintendent, Mr. Tim Hammill, brings to the post very substantial experience in real estate. I think Mr. Hammill is going to add greatly to the work we can do as we monitor the real estate sector on an ongoing basis.

MR. PASSARELL: This is the first opportunity I've had to address my previous seatmate, and I've got two quick questions I hope the minister can help with.

The first one is the issue of companies who are presently selling earth receiver television equipment, and the pricing schemes that are being worked out between some of these companies across the province and into the Yukon. I'm wondering if your ministry covers any kind of pricing agreements that are worked out with Yukon businesses coming into British Columbia. Specifically, the issue is outside of highway maintenance camps not receiving television. In the corporate affairs section, residents are finding the marketplace presently being inundated with a lot of hardware from these companies, and many times the consumer is being ripped off by unscrupulous companies. One of the easiest solutions to this is if the government could investigate and spend a few extra thousand dollars on some of the present equipment set up in highway maintenance camps that could provide television for communities in the area around, instead of the consumer going out and buying some of this equipment without having any knowledge of exactly what it has to do. Most consumers really do not have any understanding when it comes to the technical background that many of these outfits are costing. One specific issue is the Good Hope Lake area, where residents along Highway 37 are finding themselves in a dire strait of trying to receive television and going to companies, specifically in the Yukon, and picking up equipment because of the freight cost.

The other issue I'd like to raise with the minister is: what research has taken place on northern food costs and gasoline prices? In this area, specifically in corporate affairs, we find that one reason why northern residents pay so much is freight costs, and some of the licensing going on between trucking companies in jacking up the prices of freight. In conclusion, I would hope that the minister could look into some of these trucking companies and the price scheming that is going on when it comes to food costs and gasoline prices.

HON. MR. HYNDMAN: Mr. Chairman, I want to acknowledge the kind words of the member for Atlin. I must say I miss fondly that fine corner of the chamber — whence, I want to observe, probably the highest quality of debate continues to come.

Interjection.

HON. MR. HYNDMAN: Madam Member, that comer includes your seat and on down. I don't want you to feel left out of that comment.

With respect to the first question, we don't have a jurisdiction with respect to cross-border pricing agreements on the receivers. But I think the member for Atlin has made one very useful suggestion as to what the consumer side of the ministry might do; that is, to give consumers some assistance with respect to this broad variety of technological equipment. It's very hard to understand what's good and what's poor. I'll get back to you, Mr. Member, to see if we can't come up with some useful information or guidance to assist northern constituents in sorting out in the marketplace what's worthwhile and what's not.

In terms of the potential for the upgrading of facilities near highway camps for the benefit of all, the Minister of Transportation and Highways (Hon. Mr. Fraser) or the Minister of Universities, Science and Communications (Hon. Mr. McGeer) might be the people to speak to, privately, with a suggestion there.

MR. PASSARELL: The second question I had that the minister maybe just forgot was concerning the northern food costs and gasoline prices. I asked if the minister could look into some of the licensing that is going on between freight companies in the northern part of the province and the price scheming that is going on. Many residents find that they are paying high costs on food and gasoline, and the two or three companies that service the north say it's because of the freight costs. I was wondering if the minister has done, or is planning to do, any research.

HON. MR. HYNDMAN: Mr. Chairman, our look at competition policy in the province might very well include a look at that particular type of situation where in a remote region you have just a few suppliers, with the consumer feeling that there really can't be very much price competition in that situation. We'll certainly take a look.

MR. MITCHELL: I'd like to bring to the minister's attention a problem that has arisen in my particular riding. I imagine it's part of what the member for Maillardville-Coquitlam was saying. It's the lack of personnel to do a proper ongoing inspection of problems that come up within the ministry. The particular issue that I would like to bring to his attention is the lack of policing, for lack of a better word, of the prospectuses that are filed by real estate and land developers to the ministry, and what is happening when the prospectus is filed but is not enforced by the ministry. I won't go into the names of the individuals or companies concerned. If the minister would like to see them, I have a copy of it all here.

This is a prospectus that was filed in 1977 for a land development program in the Metchosin district. Section 12 of the prospectus, under "Deposits," says: "All deposits and other moneys received shall be paid in a trust fund of the vendor, the selling agent, the conveyance solicitor or the conveying notary public until such time as the title, or other interests contracted for, is conveyed and assured to the purchaser, or is otherwise paid out by operation of law." This particular constituent of mine purchased a lot and, as I said, the prospectus was filed in 1977. In section 13, "Utilities," under "Electricity" it says: "Electricity will be available and supplied to each individual lot in the subdivision. Installation costs will be borne by the utility company involved, save and except normal hookup charges, which will be the responsibility of the purchaser. The proposed availability date for electricity is August 1, 1977."

My particular constituent, with an agreement from the real estate firm dated December 6, 1979, purchased a lot. Part of the agreement with the real estate company was that "the vendor guarantees in writing that power on lot 8 of Cherrytree

[ Page 5425 ]

Bend will be available within six months of acceptance of the offer." That was dated December 6, 1979. Also accompanying that particular agreement was another letter signed and provided by the developer, dated January 7, 1980, which says: "This will serve to confirm that the developing company will guarantee that power will be available to lot 8 on Wild Cherry Drive for construction of a residential dwelling on July 1, 1980."

My problem is that the requirements of the Real Estate Act in the ministry require a developer to submit a prospectus. Real estate people, many of whom have come to me on this problem, sell lots and feel they have a certain moral responsibility to their clients to whom they are selling a lot, because the ministry has accepted a prospectus and has given the developer the go-ahead to sell lots. But there is no enforcing, policing or checking that the promises in writing will be carried out.

In this particular case, Mr. Minister, I talked to the developer and his lawyer. I never got into the problem until September 1980. I wrote many letters, I had many phone calls and I have a letter here from Mr. Tim Hammill, the deputy superintendent of insurance and real estate in your ministry. The issue is that the two particular clients — and I have all the documents here to support it — purchased lots and built, with all the guarantees of the prospectus, guarantees of letters from the developing company and agreements of sale to purchase from the real estate people, and to this date they haven't got the power in. I think the closest one is about 12 hydro poles away from the lot. In the meantime they have purchased, drilled wells, and they've had to survive by providing a generator — with the cost and the noise of the generator. There doesn't seem to be any enforcement or follow-up of prospectuses that are filed. The various groups, between the time that it is filed with your ministry....

The real estate people, the lawyers and the purchaser are not protected.

The letter I have received from your ministry says:

"We have contacted the developer on this matter, and he advised that all the lots in this particular subdivision had been sold. The superintendent's jurisdiction under the Real Estate Act is limited to ordering a cessation of selling where it is considered to be in the public interest. As all the lots are sold, I regret to advise that this office has no authority to take further action."

This is the problem, Mr. Chairman. If you are going to have a department within your ministry that is going to demand this prospectus, there must be a moral obligation to the public that the requirements as filed in August 1977 are going to be lived up to. It is not up to the purchaser to continually fight, badger and sit in the dark without some assistance, direction, enforcement or policing from your ministry. I feel that there has to be a change in policy. There has to be some different approach. If you are going to have regulations for the protection of the consumer, they must be enforced.

I ask the minister what particular plans they have to upgrade the protection of the consumer, the purchaser of real estate and the real estate people who are selling lots. Many have told me they feel morally responsible, and in many cases promises they have been given in writing from lawyers have not been lived up to, and all the money collected — this is really what bothers me — that according to section 12 of the prospectus should have gone into a trust fund....

Somewhere down the line, the legal profession, the real estate people or the developer have misused or not used the money in the manner in which it should have been used.

When you've gone this long I feel that there must be some continuing follow-up of what is actually happening in the real estate business. As I say, this one particular subdivision is a sample of many that I have been led to believe do exist. I feel there should be some follow-up, some policing or some continuity of what is filed and what the results are as far as the consumer is concerned.

HON. MR. HYNDMAN: On the question of the requirements of real estate prospectuses relative to what are called raw land or bare land subdivisions, the member for Esquimalt–Port Renfrew suggests that we might have some form of follow-through, inspection or policing to ensure that what is stated in a prospectus is carried out. In a moment I'll refer to the existing provisions which attempt to achieve that result without the need for a vast army of inspectors.

The basic provision of a real estate prospectus is as follows. If you have a bare piece of land and wish to subdivide it and then present it to the marketplace, you are required under the Real Estate Act to have a prospectus. The policy of the government is not to guarantee, oversee and supervise that the power lines will be laid, the services put in and so forth, as represented. Rather, as a developer you are required to set forth what the characteristics of that subdivision will be relative to the basic requirements of roads, power and so forth.

For example, developer might say in his prospectus: "I'm offering the following subdivision. It is being presented in completed form: the roads are done; the power is in; the water is in; the school is nearby; the lots are for sale." In category B a developer might come to the real estate branch and say: "I'm in the process of developing a subdivision. Here is where I'm at: in six months I hope to have the storm sewers done, in nine months the roads, and in 12 months the power lines. May I go ahead and offer the lots on that basis?" The policy of the government presently is that first of all you as a developer must provide comment on, and you must guarantee to provide, a certain basic level of services: roads, sewers, power and so forth. But certainly we are allowing developers to say: "I undertake — and as part of the prospectus I'm going to present to a buyer I'm telling them — that the following things remain to be done in the following timeframes."

The question you really raise is: what happens if the developer fails to follow through on those commitments? There are several remedies. First of all there is the remedy of complete recision. If. for example, you've bought the lot and you decide to wait and make sure that the lot is fully serviced before you build, to guarantee that it's done, and if the developer fails to complete within the time stipulated, you have the right of recision. At your option you can tear up the deal, walk away from it and go somewhere else. That's the first line of defence that you have. Secondly, if you start to build and the developer doesn't keep his word, you of course have a legal remedy and damages against the developer for failing to keep his or her word. That' usually a fairly effective remedy. In this case — perhaps the member and I can discuss it in more detail — I have a couple of observations.

Anybody who wishes to buy a raw lot from a developer with a prospectus indicating services yet to be done, but is so anxious to get building that they want to start, is never in as

[ Page 5426 ]

guaranteed and safe a position as the person who wants to wait until all the servicing is done. Who can predict what manner of problems that developer might run into to cause delay? If you choose to go ahead in any event and the developer hasn't kept his word, that developer is in breach of his contractual commitment to the buyer. In that case there is normally a legal remedy through damages. So I'm a little puzzled as to why that wouldn't be pursued in this case.

Most certainly, the present policy of the government is not to have a sort of army of inspectors out there looking at all the subdivisions. That would be very costly, very expensive, would increase the time-frame for lot development and would increase the price of lots. We're in a situation in which we're trying to hold the price of lots down and speed up the timeframe for the processing of subdivisions. That is the background. I think, perhaps once my estimates are finished, I'd be happy to sit down with the member and look at the file in some detail. It just sounds to me from what he said that there should be some legal remedies available there. Perhaps they've not been pursued.

MR. MITCHELL: It's easy to say that a person has remedies or that they shouldn't build, but with this shortage of homes today, people are buying lots to build on and to live in. They have families and commitments. To wipe it under the carpet by saying that we're not going to create a vast army of inspectors.... There's no need for a vast army of inspectors. The amount of inspection needed to cover 100 subdivisions on lower Vancouver Island or even all of Vancouver would be negligible. No one is asking that we have this police state that he is kind of intimating. What I'm saying is that there have to be some ground rules laid down; that maybe, because of the immensity of the particular subdivision, it should be developed in stages; that before a certain stage of that subdivision went on the market, the facilities would be in place and there would be some guarantee.

I know there is a need for subdivisions. I know some of the problems of subdividing raw, rocky land. I agree that this is the type of land that we should be subdividing, instead of the flat agricultural land. I feel that if someone is offered a beautiful view and a choice location, as a purchaser I know from the legal profession or even from my old profession.... I've had a certain amount of experience with the law, and I do know of certain legal rights. I'm familiar with enough lawyers that I may have some clout or I may have someone who would jump to my defence if I could pay for it, but the average homeowner who is buying a lot....

[Mr. Davidson in the chair.]

HON. MR. GARDOM: You were looking at Lorimer when you said that.

MR. MITCHELL: No, I was looking at you. There is nothing free in this world. When a purchaser goes out there and he's got that type of investment and everything he owns tied up in that lot, in that building and in that 400-foot hole that he's built into the rocks for water, and then you say: "It's too bad — run out and sue somebody...." You and I know that there are many developing companies that are just one step above being bankrupt all the time. This is the problem. I feel that you're trying to sweep it under the carpet when you say: "It's not our problem. It's buyer beware." I feel that in this real estate market today and because of the need for development, there should be some protection to the consumer. Because of the shortage of homes, the consumer is forced into something that maybe if he had two years to look back on it and go back he would have made a different move. Today there's a shortage of homes. There's a need for development, but there should be some protection to go along with it. I feel that there is no need for a vast army of inspectors, but I do believe that within the CRD, within the building inspectors and within the real estate people there is a way that this can be monitored without running the cost up with a lot of inspectors. I feel that is a problem that your ministry should face and not try to hide from.

HON. MR. HYNDMAN: I appreciate the member's comments. I am intrigued. Do you know the reason why the power lines never did go as far as that lot? That might be an answer of some interest.

MR. MITCHELL: Mr. Minister, the reason why the power line was not carried on is that the developer did not put the money he received for the lots into the fund to pay Hydro. Hydro will not build one line until they have a dollar in their coffers, and they're not going to put the utilities in until the deposit's down. And in this particular case $50,000 was needed to finish off the development, and that's where it lay.

MR. LEVI: There was one thing that I did want to go back on, just to see if I could get the minister's rapt attention. I've tried all afternoon to get him to agree that he's going to table this report and that report. Now I just want to refer to one little old report and see whether we can get you to think about tabling it.

In this article in Canadian Business for September 1979, which was actually an article on Peter the Rabbit — you know, Peter Brown — they make reference to the report I mentioned earlier, the Brown, Farris and Jefferson report. That was a smaller effort at two things, and I'll just read from it:

"Michael Brown, who is no relation to Peter, is a partner of Brown, Farris and Jefferson Ltd., a firm of financial consultants affiliated with the Canada Development Corporation. Last year he was commissioned by the B.C. department of economic development to study the rate of return to the public on the money invested in listed and unlisted B.C. stocks."

It was actually a joint request. It came from the former minister and the then Minister of Economic Development (Hon. Mr. Phillips).

"He spent six months on the project working with a sophisticated computer program, and submitted his report to the government early this year."

That would be some time in January or February of 1979.

"At this writing it has not been made public, and Brown is not at liberty to divulge its contents. Nevertheless, according to rumour, the report concludes that Vancouver Stock Exchange investors could have a better chance for profit if they dumped their money into Burrard Inlet."

Was he shocked at the low rate of return that his study reportedly revealed? "I was appalled, " said Michael Brown. In fairness to Mr. Brown, I should say that I phoned him. I read him the statement, and I said: "Did you say that?" He said: "Well, not quite." So I put that down to the poetic licence of Alexander Ross, who wrote the article.

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I want to ask the minister again.... They went to a great deal of trouble to complete that report. I had an opportunity to talk to somebody who had something to do with it. They did use a lot of computer time. It was a very exacting report. The report the government commissioned is very likely one that you can be very proud of. I don't know why you don't release it. After all, you can always use the excuse that it's out of date — it's two years old. But you can't use the excuse that it was out of date and not worth it, It was part of two reports. You spent $60,000 on that report.

Altogether this afternoon I have pointed out that as a government you have blown over $200,000 on reports on the stock exchange and the capital markets. You've failed to release one of them. You have no right whatsoever to do that, There is no report paid for by taxpayers' money that should not be released. I ask the minister to ask the new Minister of Industry and Small Business Development whether he would agree to have this thing released. If we're going to get into an intelligent debate sometime in the future in terms of the Securities Act, we're going to need that kind of information.

I move that vote 47 be reduced by the amount of $242,513.

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

On the amendment.

MR. LEVI: It's appropriate that we move a motion like this, because I just got through dealing with the minister on the incredible waste of money on reports that they never tabled.

The two votes that we're particularly targeting are the office expenses, which have ballooned to some $98,800, and the second vote, which is one we debated. I was not satisfied with the minister's explanation. Although he talked about the amount of publishing and notices, they were doing that last year. The volume has not increased to the extent that a 102 percent increase in that particular vote is required — not given the fact we have discussed other urgent service needs that that department has had.

Amendment negatived on the following division:

YEAS — 23

NAYS — 27

An hon. member requested that leave be asked to record the division in the Journals of the House.

The House resumed; Mr. Speaker in the chair.

Divisions in committee ordered to be recorded in the Journals of the House,

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

MR. SPEAKER: Just before we adjourn, hon. members, today the member for New Westminster (Mr. Cocke) sought to move adjournment of the House under standing order 35 to discuss a definite matter of urgent public importance — namely, space in acute-care hospital facilities. In considering whether the matter qualifies to set aside the regular business of the House, I have perused the statement presented to the Chair in support of the application. The statement contains detailed argument which in itself would be sufficient to set the application outside the scope of standing order 35. In addition, however, the statement claims that the matter is one of long standing. May, sixteenth edition, page 370, points out that the fact that a grievance is continuing is not sufficient if it is not of recent occurrence. Finally, the estimates of the Minister of Health (Hon. Mr. Nielsen) have yet to be considered in Committee of Supply. Therefore the application must be refused, as an ordinary parliamentary opportunity will occur when the matter may be discussed — May, sixteenth edition, page 371.

HON. Mr. Gardom moved adjournment of the House.

Motion approved.

The House adjourned at 6 p.m.