[ Page 7865 ]

CONTENTS

Routine Proceedings

Oral Questions

Expenses of Minister of Consumer and Corporate Affairs. Mr. Macdonald –– 7865

Ministers' expenses. Mr. Macdonald –– 7866

Taxes and charges on business. Mr. Lea –– 7866

Finance Statutes Amendment Act, 1982 (Bill 36). Report. (Hon. Mr. Curtis)

Third reading –– 7868

Limitation Amendment Act, 1982 (Bill 48). Second reading, (Hon. Mr. Williams)

Hon. Mr. Williams –– 7868

Mr. Levi –– 7869

Hon. Mr. Williams –– 7869

Taxation (Rural Area) Amendment Act (No. 2), 1982 (Bill 34). (Hon. Mr. Curtis)

Hon. Mr. Curtis –– 7869

Mr. Stupich –– 7869

Hon. Mr. Curtis –– 7869

Ferry Corporation Amendment Act, 1982 (Bill 25). Second reading. (Hon. Mr. Fraser)

Hon. Mr. Fraser –– 7869

Mr. Lockstead –– 7870

Mr. Barber –– 7870

Mr. Stupich –– 7871

Mr. Hanson –– 7871

Mrs. Wallace –– 7872

Mr. Mussallem –– 7873

Mr. Cocke –– 7874

Hon. Mrs. Jordan –– 7875

Mr. Howard –– 7876

Mr. Mitchell –– 7877

Hon. Mr. Fraser –– 7878

Division –– 7878

Committee of Supply: Ministry of Agriculture and Food estimates. (Hon. Mr. Hewitt)

On vote 5: minister's office (continued) — 7879

Mr. Hall

Mrs, Dailly

Hon. Mr. McGeer

Erratum –– 7888

MONDAY, MAY 31, 1982

The House met at 2 p.m.

Prayers.

HON. MR. FRASER: Mr. Speaker, it's not very often that I have people from the Cariboo riding in the precincts. Today we have three citizens from the city of Williams Lake. I'd like the House to welcome Mr. Cliff Simmons, Mr. Doug Belsher and Mr. Hugo Stahl.

HON. MR. HEWITT: Mr. Speaker, in the gallery today we have Mr. Madison Morrell, and with him is a tour group from the Skagit Valley College of Mount Vernon, Washington that is here visiting Victoria. Some are visiting in the galleries now and the second half of the group will be here later on. I'd ask the House to bid them welcome.

HON. MR. McCLELLAND: Mr. Speaker, I rise on a matter of privilege.

MR. SPEAKER: Please state the matter briefly.

HON. MR. McCLELLAND: This morning, during a meeting of the Select Standing Committee on Public Accounts and Economic Affairs, which was open to the press and therefore subject to public comment, the first member for Victoria (Mr. Barber) and the member for Skeena (Mr. Howard) stated to that committee that the government was denying members of the committee access to ministerial expense vouchers. The fact is that the comptroller-general insists on the long-established practice of the committee that all vouchers be available for personal inspection by all members of the committee regardless of party affiliation. There has been some question about permission for agents to inspect vouchers, and copies have not always been permitted, again by long-established practice. The members I have referred to had been informed, I believe, of the....

MR. SPEAKER: Hon. members, matters which arise in committee cannot be brought before the House except by committee report. Unless I can be given assurance that this is a report of the committee, I cannot allow it to proceed.

HON. MR. McCLELLAND: Mr. Speaker, it's my understanding that under the standing orders of the House, the standing committees are not only creatures of the House but are also subject to the same rules as the House.

Interjections.

MR. SPEAKER: Hon. members, I think the precedent has been well established in this House: that is, matters which take place in committee are not of interest to the House except by way of report from the committee to the House. All matters which arise in committee must therefore be settled in committee.

HON. MR. McCLELLAND: On a point of order, Mr. Speaker, I wonder whether a committee with the long history of the public accounts committee is just an ordinary committee of the House. I draw to your attention the rule that matters of privilege must be brought at the earliest possible opportunity. My concern, Mr. Speaker, is that I do not want to lose the opportunity of raising this matter of privilege because I did not bring the matter before the appropriate body at the earliest possible opportunity. If the Speaker could advise me that some other time is the earliest possible opportunity, then I would be glad to raise this matter of privilege at that time.

MR. HALL: On the same point of order, Mr. Speaker, would the Speaker also advise, or take under advisement while he's thinking about the matter raised by the member for Langley, whether or not he could assist us all in dealing with the question if unparliamentary conduct and unparliamentary language, which was used by that member this morning.

MR. SPEAKER: Again, hon. members, if matters arise in committee, the committee indeed is a creature of the House, but the committee is also given a complete mandate to operate on its own. The only interest the House has in that committee is by way of report. I think I have said that three times: I hope it's clear, hon. members.

Oral Questions

EXPENSES OF MINISTER OF
CONSUMER AND CORPORATE AFFAIRS

MR. MACDONALD: Mr. Speaker, I ask the Minister of Consumer and Corporate Affairs whether he has been interviewed by the auditor-general concerning the matter of his expenses.

HON. MR. HYNDMAN: Relative to the inquiry of the auditor-general, my position throughout has been that I'll have no comment to make until that inquiry is concluded and the report of the auditor-general has been released.

MR. MACDONALD: There's a very strange silence. Has the minister written to the auditor-general regarding the matter of his expense accounts?

HON. MR. HYNDMAN: My answer is the same. It's my understanding that under the Auditor General Act the inquiry now underway is in the nature of a quasi-judicial process. I respect that, and in no way do I want to comment on the manner in which it's being conducted.

MR. MACDONALD: Has the minister written to any official of the provincial government with respect to the matter of his expense accounts?

HON. MR. HYNDMAN: I repeat my last answer. The matter of those expense accounts is under investigation by the auditor-general under the provisions of that statute. It is a quasi-judicial inquiry, according to my understanding. That being the case, I propose to make no comment until the report is down.

MR. MACDONALD: I can't accept that answer. but I ask the minister in any case: did he write not to the auditor-general, in this secret proceeding, but to the acting comptroller-general on May 13 concerning the matter of his expenses?

[ Page 7866 ]

HON. MR. HYNDMAN: Any matters relative to my expenses that are under review, as I've said before, I propose to comment on when the report is down. While that matter is under inquiry I do not propose to comment on the matter or the nature of any proceedings relative to the inquiry.

MR. MACDONALD: To jog the minister's memory, when the matter came out in the press saying all the questions were answerable, did he on May 13 write to the acting comptroller-general refunding, in respect to certain expenses and certain matters, the sum of $326?

HON. MR. HYNDMAN: I repeat my previous comments. When the report of the auditor-general is down, I'll be happy to deal with questions of that nature. Until the inquiry is completed, I do not propose to comment upon the inquiry or matters relative to it.

MR. MACDONALD: Didn't the minister comment to the acting comptroller-general when he made a refund of $326? I ask him, when he says we should not prejudge the issue, why he prejudged the issue with respect to certain of those expenses by making a refund, which he knows very well he made, on May 13 to the acting comptroller-general. Did you make that refund, and wasn't that prejudging some of the questions?

MR. SPEAKER: Order, please. The question itself is in order.

HON. MR. HYNDMAN: Mr. Speaker, I am quite happy to deal with questions of that nature following the release of the report of the auditor-general.

MINISTERS' EXPENSES

MR. MACDONALD: Mr. Speaker, I ask the Premier whether the hon. member for North Vancouver-Seymour (Mr. Davis) was permitted the opportunity of returning funds before the matter of his expense accounts was referred for criminal investigation and his office door locked.

HON. MR. BENNETT: Mr. Speaker, the member is drawing a parallel between situations which doesn't exist.

TAXES AND CHARGES ON BUSINESS

MR. LEA: I have a question to the Ministry of Industry and Small Business Development. Independent businesses in the province have been hit by numerous fees and licence charges imposed by the provincial government in the past six months; most recently commercial and industrial enterprises have been hit by property tax rates ranging from 25 percent to 55 percent as a result of the provincial government's decision to cut and withhold revenue-sharing grants. Could the minister tell us what action he and his government have taken to secure and to roll back these provincially imposed tax hikes to protect the jobs of people working for independent business?

Independent business, Mr. Speaker, employs something in the neighbourhood of 40 percent of our work force. Could the minister tell me what steps the government has already taken to ensure that the small businesses are not hit with these extraordinary tax and licence-fee hikes, in order to protect jobs and small business operators?

HON. MR. PHILLIPS: In answer to the member's question, I would like to remind the member, once again, that this government and ministry have had numerous policies in the past six years that have been of assistance to the small business community. We have also taken action to roll back some of the taxes imposed during the three years of the socialist regime which were punitive against the small business community.

AN HON. MEMBER: The Capital Tax Employment Act.

HON. MR. PHILLIPS: Yes, the Capital Tax Employment Act, which I remember speaking against, and saying that it was a punitive measure, when I was in opposition. We've rolled that back. We've lowered the income tax rate to the small business community, and we have other programs under consideration to assist the small business community. They will be deliberated on at greater length at a future time.

MR. SPEAKER: If it requires legislation it is not in order to comment on it now.

MR. LEA: To the same minister. Obviously the programs that the government has put in to assist small business have now gotten us to the place where business bankruptcies are up 50 percent. That is a result of programs that this government has brought in. I would like to ask the minister if the government has now decided — with the loss of employment, the loss of business, the bankruptcy rate up 50 percent — that they will put a program similar to Section 11 of the American bankruptcy code into effect, giving the small business people in this province the opportunity to have a court-appointed assessor look at the business, make an assessment and report back to the courts before that legal bankruptcy action is proceeded with.

HON. MR. PHILLIPS: First of all, I would like to state that I dispute the figure of 50 percent. I would also like to go on and inform the House that if the socialists were in power and if they did the things they are promoting during this period of this Legislature…. They are not behind us in cutbacks in government spending. Every time they stand in this Legislature they want us to spend more. The entire small business community of this province would be broke if we carried out the policy of the socialists opposite.

MR. LEA: I'd like to ask the minister: is it, then, the government's policy to continue taking away from the taxpayers of this province money coming into the treasury and being spent by the government? Has the government now decided that they're going to change their taxation policy and leave the money in the hands of the taxpayers to spend as they choose? The government's only program so far, Mr. Speaker, is to tax an existent economy to death. That's their only policy.

MR. SPEAKER: Order, please. Only the question is in order.

MR. LEA: That's right. It's just a bit of a preamble.

[ Page 7867 ]

I'd like to ask: do the minister and his government have any program whatsoever to meet the emergency needs of the small business community and the people who work for the small business people? Is there any program of an emergency nature whatsoever that the government has and plans to implement that saves jobs and saves businesses? Is there any emergency program that's needed now?

HON. MR. PHILLIPS: Mr. Speaker, I would like to state that the policies of this government have created an economic climate in this province such as exists in no other province in Canada, so that the small businessman can function and make a profit. I want also to state that they would close down every project that we have going in this province which creates an atmosphere and climate where the small businessman can do work, pay his employees and also pay his fair share, because that's the policy of this government. I want to reiterate that this government has reduced taxes on the small business community. It has policies which are better than those in any other province in Canada.

We're looking at the future. As I said the other day in this House, when we do something it will be the best program of any state in the Union or any province in Canada; it will be good for the small businessman; it will be done on an economic basis; it will be good for the community; and it won't be political, as they would do to try to say to the small businessman that they're protecting him, when they're really doing nothing but borrowing him into the future and borrowing him to bankruptcy, as they did with BCDC, when they shovelled money out of the back end of a truck and the majority of the businesses that they loaned money to went broke because they gave them too much and too easy, on a political basis.

MR. LEA: If the present government's policies are so good for the small business community, why is it that more small businesses are going broke now than at any time since the great depression of the 1930s?

HON. MR. PHILLIPS: Mr. Speaker, in answer to the member's question, I'm not sure whether the member is listening to Trudeau or Broadbent, but I shall certainly check on the number of bankruptcies.

For the edification of the House, we must not lose sight of the fact that in the last six years hundreds of thousands of small businesses have opened up in the province of British Columbia because of the climate we've created. Certainly some of them are going to go broke, but more businesses came flocking to this province, more small businesses opened up their doors as a percentage of the population than in any other jurisdiction in North America. Certainly some that came here are going to suffer some difficult times because they didn't have a chance to become established before we hit this levelling-off period. That is normal, Mr. Speaker. But the majority of them found a good business climate and are making a profit.

Mr. Speaker, if I wasn't tied up in this Legislature because of the socialists over there I could be out, practically on a daily basis, opening new businesses in this province. A lot of them are the new wave of high-technology industries being brought here by my colleague, the Minister of Universities, Science and Communications (Hon. Mr. McGeer). I wish I could get out and officiate at the openings of these new businesses that are coming to the province of British Columbia because of the policies of this government.

MR. LEA: As the last small business closes and leaves this province. would the minister ask it to please turn out the lights?

HON. MR. PHILLIPS: It's not like it was when they were government. You didn't dare be on the highways then because businesses were leaving the province of British Columbia so fast. As I've said in this House before, the member for Vancouver East should have worked for one of the movie companies, because there were never so many ghost towns created in this province as when he was Minister of Energy and that socialist government was in power.

Mr. Speaker, I ask leave of the House to correct a statement I made on the evening of May 27.

Leave granted.

HON. MR. PHILLIPS: On May 27, I made a statement in this Legislature with regard to the content of contracts awarded on the northeast coal development. I wish to correct that statement and apologize if I misled any members of this House.

I stated that the amount of contracts that had been let in B.C. was approximately $376 million. I said it was 85 percent. Actually, 85.45 percent worth of contracts have been let in the province of British Columbia. That is up to March 15, 1982. My figure with regard to the total contracts awarded does stand at $440 million. For the House, I want to say that this figure was arrived at by totalling the number of contracts awarded to firms located in British Columbia, but also to add to the estimated value of work to be performed by non-B.C. companies in the province. On that basis, the British Columbia Railway four-tunnel contracts spent in British Columbia will be $155,712,102, or 90 percent. In Canada, from those same contracts, there will be over $1 million spent, and only $16,301,234, or 10 percent, will go to the United States. That's out of a total of $173,012,336.

The other calculation made was with regard to the stacker-reclaimers and the car dumper at Ridley Island. I'd like to inform the House that even though we may be accused of being responsible for these contracts at Ridley Island, it's really under the jurisdiction of the federal government and the National Harbours Board. A total of $19,004,000 was awarded by Ridley contracting engineers as follows: 53 percent, or $10,072,120, in Canada, of which approximately 20 percent, or $3,800,800, will be performed in B.C.; approximately 33 percent, or $6,271,320, will be performed in other parts of Canada; and 47 percent, or $8,931,880, is for outside Canada.

The total contract figure of $7.2 million for the car dumper was apportioned as follows: 93 percent, or $6,696,000, in Canada, of which 80 percent, or $5,360,000, will be performed in the province of British Columbia; 20 percent of this amount, or $1,336,000, will be performed in other parts of Canada; and 7 percent, or $504,000, only on that contract, will be performed outside of Canada.

To the northeast coal development project's knowledge, contracts awarded to May 28, 1982, now amount — this is an increase — to $469 million. Of this, $406 million — not 85 percent, but 86 percent — has gone to companies located in

[ Page 7868 ]

British Columbia. This amount includes the piling pipe contract awarded by Ridley Terminals to Nissho Iwai of Japan. According to Ridley Terminals Inc., 25 percent of that work will be done in British Columbia. Therefore 25 percent of the total $7.1 million has been credited to British Columbia. I'd like to inform the House that this figure is expected to increase as a result of negotiation between Ridley Terminals and Mitsubishi Inc. I am not really, nor is the northeast coal office, responsible for contracts let by Ridley Island through the National Harbours Board of the federal government.

MR. SPEAKER: Order, please. Hon. members, in making correction of statements made in the House, the explanation of the correction should not exceed the area in which an inaccuracy or error was transmitted to the House. Certainly no new material should be introduced in those corrections.

MR. LEGGATT: On a point of order, what the minister has done today is not to correct the record but to introduce a ministerial statement into the House. Within the rules of the House, therefore, it is appropriate that a response be made when advantage is taken of the rules in this manner to introduce a ministerial statement.

MR. SPEAKER: Hon. member, order, please. When a member is in default according to the rules of the House, the proper course of action is for that member to be corrected, as he just was. It is not then in order to put the House still further in default by abusing still another rule.

MR. LEGGATT: On the same point of order, with the greatest respect to yourself, when corrections are made they should be made at the beginning of the statement and not at the end. When an attempt is made to correct the record, it seems to me that that is the point of intercession or of an attempt to dissuade the member from violating the rules. In this case, when the statement has continued, it seems to me only appropriate that it has become a ministerial statement. In other words, the statement of itself could only be interpreted as a ministerial statement since the minister went far beyond merely correcting the single figure. It seemed to me that it would be unfair — and I know Your Honour does not wish to be unfair — not to permit the opposition to answer a ministerial statement, which we have a perfect right to do in this House.

MR. SPEAKER: Of course. Hon. member, your point is well taken and I trust the members of the House will accept the caution that corrections should be limited to the area in which the error occurred. New information certainly should not be introduced. From this vantage point the Chair cannot determine whether or not another correction to an error is still forthcoming in a statement. Therefore the Chair could not intervene.

Hon. members, shall we proceed?

MR. LEGGATT: I therefore ask leave of the House to answer what became a ministerial statement this afternoon.

Leave not granted.

Orders of the Day

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

Leave granted.

HON. MR. GARDOM: Report on Bill 36, Mr. Speaker.

FINANCE STATUTES AMENDMENT ACT, 1982

Bill 36 read a third time and passed.

HON. MR. GARDOM: Second reading of Bill 48, Mr. Speaker.

LIMITATION AMENDMENT ACT, 1982

HON. MR. WILLIAMS: The Limitation Act in this province is designed to provide reasonable and appropriate times within which issues which are needed for the resolution of matters between citizens can be brought by action in our courts. A variety of limitation periods are permitted under that statute, but whether or not a particular issue falls within one limitation period or another is often a question requiring legal interpretation itself. The difficulty is that if one reaches the conclusion that a longer limitation period applies in respect to a particular issue, and the decision on the legal issue is that it is a shorter limitation that applies, then of course the proceedings brought to rectify matters between parties is thereby barred and the right of action lost.

In this province we have some 8,000 instances when urea formaldehyde foam was installed in dwellings for the purpose of insulation. This was done pursuant to encouragement by a federal government program which provided some financial assistance to persons who sought to use this insulating technique, particularly in older buildings. As members are aware, subsequent to the installation of this material serious questions were raised as to whether urea formaldehyde foam used in such circumstances created health hazards. The debate raged for some considerable period of time, and finally in December 1980 the use of urea formaldehyde foam for insulating purposes was banned by the federal government under the Hazardous Products Act. There is doubt as to whether the period limited for bringing any action that may have arisen by reason of the use of this product falls within the two-year limitation period or a longer period. In order that there be no doubt, we are proposing in Bill 48 to make certain that the limitation period which applies to any such action would be six years from December 1980, being the date when the ban of the use of the material was imposed. As a consequence, this bill provides that no action which is brought prior to December 1986 would be barred by reason of the operations of any of the provisions of our Limitation Act.

As I indicated, there have been some 8,000 potential lawsuits, and a great deal of time has already been spent in researching the complicated legal issues surrounding the use of urea formaldehyde and the prospect of rights to damages as a result thereof. In order that we are not faced with actions which are brought in a precipitous manner, this limitation period will extend the time for the orderly completion of that legal research, so that any action which is brought will have been properly considered. The members will be aware that

[ Page 7869 ]

this is a problem which faces the national government directly. The Ministry of Consumer and Corporate Affairs of this province has offered major assistance to the persons who have been allegedly damaged by the use of this insulating material, and we think that this limitation amendment provision will also be of assistance to those British Columbians who may have suffered loss or damage to their homes, and indeed to their health, as a result of a use of this substance. So we are extending the limitation period to December 1986, so there can be no question, Mr. Member, as to whether or not any action that may be brought will be properly brought within time.

Mr. Speaker, I move second reading of Bill 48.

MR. LEVI: Mr. Speaker, the legislation is welcome, of course, to the many people who have suffered from this. We have had an unusual number of people affected by this problem which came on them as a result of the urging of a government program. I think that many of us will have something else to say in respect to the bill when we get into the committee stage. However, it is welcome, and I'm sure will spell for more than 8,000 people out there the possibility of getting some remedy to what is an extremely difficult situation.

HON. MR. WILLIAMS: Mr. Speaker, I move second second reading of the bill.

Motion approved.

Bill 48, Limitation Amendment Act, 1982, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

HON. MR. CHABOT: Second reading of Bill 34, Mr. Speaker.

TAXATION (RURAL AREA)
AMENDMENT ACT (NO. 2), 1982

HON. MR. CURTIS: Mr. Speaker, I think this bill is virtually self-explanatory. It deals with a relatively narrow aspect of property taxation in the non-municipal areas of British Columbia. On behalf of the Minister of Lands, Parks and Housing, (Hon. Mr. Chabot), who is in the House as House Leader, I take pleasure in moving second reading of this bill, because the minister and I have cooperated with respect to this amending bill.

It has two or three specific principles. One is an amendment to section 38 of the Taxation (Rural Area) Act, required to more clearly state the time periods and procedures involved in forfeiture because of non-payment of real property taxes in unincorporated areas of the province of British Columbia. The revised wording of this section also brings into the act certain procedures that were previously covered by regulation. Officers of the Crown who have assisted us here believe these provisions should be covered by statute rather than by regulation.

In addition, Mr. Speaker, this bill will deal with a new section to be designated section 38.1, which would provide a method of returning forfeited property to the former owners where, in the opinion of the minister — and that would be the minister responsible for the administration of this act — it is just and equitable to do so. No statutory provision now exists for the recovery of such property, regardless of the circumstances or any compelling reason why property should be returned. A period of two years is allowed for the former owner to apply for the return of the property at the discretion of the minister. We also provide, through this amending bill, a period of time during which applications can be received covering properties that were forfeited before this section came into force; and of course, providing that the land is still available, it would be returned to the former owner.

I hope, Mr. Speaker, all members will welcome this reform, because it is just that. It is a reform of legislation that has been either inadequate or, where we have had silence on the matter, there has been an inability to deal with property forfeited to the Crown. Again I congratulate the Minister of Lands, Parks and Housing (Hon. Mr. Chabot) and his ministry for their identification of the problem and for their reference of it to the Ministry of Finance. Not many people in the course of a year or two or three would be in this position, relatively speaking. Nonetheless, Mr. Speaker, the impact on those relatively few families or individuals would clearly be devastating, and I am very happy that we are able to correct what has been. If not an oversight, certainly an inadequacy up to this point.

I therefore move second reading of Bill 34.

MR. STUPICH: Mr. Speaker. the only comment I would like to make at all is to congratulate the government on quite a different matter with respect to this bill now before us. That is, in almost every other bill before us in this session the government is taking powers away from the Legislature and giving them to cabinet by regulation. This is quite the contrary. They are taking something that used to be done by regulation and bringing it back into legislation. I think that's to be supported, as is the bill itself.

HON. MR. CURTIS: Mr. Speaker, I thank the hon. member for Nanaimo for his comment and his observation. There are other instances, I think, where we have returned from cabinet to legislation, and this is another one.

MR. STUPICH: Name one!

HON. MR. CURTIS: I've named one; we've both named one. This is the only bill before us at this time.

Motion approved.

Bill 34, Taxation (Rural Area) Amendment Act (No. 2), 1982, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after day.

HON. MR. CHABOT: Second reading of Bill 25, Mr. Speaker.

FERRY CORPORATION AMENDMENT ACT, 1982

HON. MR. FRASER: Mr. Speaker, there are just a couple of small amendments here, the first one having to do with the guarantee of lease payments. It wasn't clear that this is required. This amendment ensures the guarantee of lease payments, that the Ferry Corporation enter into the guarantee by the province of British Columbia.

The next section makes the calculation of the annual highway equivalent subsidy more flexible. In the prior legislation it was all spelled out: this makes it more flexible, and

[ Page 7870 ]

the government will decide what that amount will be. As I say, this is a fair change from what existed before this.

I now move second reading of Bill 25.

MR. LOCKSTEAD: Mr. Speaker, we do have a few comments to make on this bill. The minister is correct. It is quite a small bill, a two-section bill, that basically allows the corporation — I'm not sure if the minister mentioned this — first, to borrow money with government guarantees, and secondly, allows the government, through cabinet, to make payments in the form of subsidies to the B.C. Ferry Corporation. This is the first point I want to dwell on.

Before I get into that part of my presentation, Mr. Speaker, I want to take this opportunity to do something which I probably should have done under estimates: that is, to express thanks from me and some of the caucus members to the B.C. Ferry Corporation's chairman of the board, Mr. Stu Hodgson. In the last couple of years, the members on our side of the House have found that we are able to work with Mr. Hodgson. Any time I have phoned or asked for a meeting with Mr. Hodgson, he has been right there, and in fact he has travelled to a number of points on the coast of British Columbia to help solve problems as they arise. We do appreciate that.

The first thing I want to discuss on the second reading of this bill is the reduction in the subsidy to the B.C. Ferry Corporation. The minister is very much aware that that subsidy has been reduced by about 25 percent this year compared with last year. As a result, the B.C. Ferry Corporation has reduced and will be reducing service this summer. I saw and I'm aware of the corporation's press release indicating that capacity would be increased by, I believe, 6.5 percent — I'm not sure; I don't have the figure in front of me. The actual capacity would be increased. But the fact is that there are fewer sailings. There are fewer sailings in the summer.

If the Minister of Tourism's office is correct — I don't know if they are; I guess time will tell — we can expect more tourists in British Columbia this year than in any year in the past. I believe that's a statement I read from the minister's office. Part of the reason for that is the devalued Canadian dollar and American tourists. They're having an economic recession in the United States as well, so people will not be travelling so far afield and perhaps they'll take advantage of the reduced Canadian dollar and come to British Columbia. What this all means is that because of this reduction in service, in the number of sailings, once again we're going to be faced with long waits and overloads, particularly on busy weekends.

The first real indication we had was the Easter holiday weekend, when in Earls Cove, for example, they had four hour waits. On the Victoria Day weekend once again, at some terminals.... Departure Bay, I believe, was about the worst, plus the Gulf Islands, where there was quite a dislocation in traffic. All of this indicates a need for increased service. Those vessels are the economic lifeblood of the British Columbia coast. We should not be reducing that service. We should be increasing the capacity. We're talking about allowing the corporation to borrow moneys to maintain the present level of service, which has been reduced significantly over the past year.

So I would like to know from the minister, when he winds up debate on this bill, what, how much and when we can expect further fare increases. I'd like to know from the minister how they arrive at the subsidy that they pay the B.C. Ferry Corporation. I want to know from the minister what's going to happen to those 600 auxiliary employees who are currently not working because of the reduction and the reduced sailings. The reduced sailings are the net result of the corporation's inability, because of the subsidy reduction, to pay overtime in these cases. Perhaps the minister could explain that to us when he winds up second reading of this bill.

In view of the points I've made on this bill up to now, we over here will have no choice but to vote against it, unless the minister can justify his actions in reducing that subsidy to the corporation, reducing service to the people of the coast and the province of British Columbia.

MR. BARBER: This bill repudiates Social Credit policy. That policy was enunciated in the last amendment to this statute, wherein the former minister, Mr. Davis, enunciated a rather peculiar principle that attempted to compare the water distance, principally along Routes 1 and 2, to some stretch of highway between Vancouver and Kamloops. Everyone laughed at that at the time. It was bizarre; it was artificial; and it was the principle of the bill which the government is now abandoning. This bill is a repudiation of this government's policy. However, they propose to substitute a bad policy with a worse one. At least under the former policy, bizarre as it was, the revenues that would accrue to B.C. Ferries from year to year and the subsidy that would be available to them was predictable. The management and board of the British Columbia Ferry Authority at least had the benefit of knowing year to year what their income would be. The formula in the previous bill had that single virtue. Now the government has at least abandoned ship on the formerly and provably weird way they had of calculating a subsidy. They admit it's weird; they're abandoning it here in this bill, so they have to admit it. But they are not providing us with some other means of calculating in advance, and thereby some better means of planning in advance, the revenue picture that B.C. Ferries has to deal with.

This bill will lead to higher rates for individuals on the B.C. Ferries system. As my colleague has said, it will lead to greater delays at the terminals, especially on Routes 1 and 2. Any bill that causes longer waits and requires higher fares is not something that could ordinarily be supported by anyone, except perhaps a government desperate for revenue.

The previous bill at least had the merit of being able to allow the management of B.C. Ferries to predict its revenues. What the minister said in his opening remarks is that this new bill introduces the ancient principle of flexibility. Well, this year the practical consequence of that is that the subsidy to B.C. Ferries is down by 25 percent. That means longer waits, higher fares and when the new rate structure is announced in the fall — as it's now become the pattern to do so — we predict it will mean significantly higher fares, in the area of 20 to 30 percent in certain categories. That being the case, once again we see the hypocrisy of Social Credit's so-called restraint program. The consequence of this bill is that in the fall the management of the B.C. Ferry Authority will have no choice but to announce significantly higher fares on that system. There will be no restraint exercised at that time. There is no restraint exercised in this bill.

This bill fails on two counts. First, it will demonstrably lead to higher fares and longer waits. Secondly, and just as importantly from the point of view of the public policy being

[ Page 7871 ]

served by revenues being made predictable, this bill abandons that too, and it doesn't offer anything better in its place. What it does, simply, is give up a former arrangement that was at least predictable in its outcome, and has instead instituted the flexibility for government to cut and cut — here, as they're doing with B.C. Ferries and across the province, as they're doing with hospitals and so on.

If the minister cannot produce a formula that allows a predictable revenue statement, predictable subsidy and predictable income for the B.C. Ferry Corporation, they're going to fall further and further into the chaos of maladministration, which is the hallmark of Social Credit. On both counts this bill is a mistake, and we cannot support it.

MR. STUPICH: As my colleagues have pointed out, this bill fails to serve the people of B.C. on two counts. The first one is with respect to this guarantee of lease payments.

I can recall when the idea of contingent liability first came up; it was a long time ago. But at least the Legislature then had some control over this question of contingent liabilities. Even to this day there is still some legislation that comes before the House that increases the borrowing authority for Crown corporations. There is that opportunity in the Legislature to discuss the activities of these Crown corporations — to expect the minister who is speaking on behalf of a particular Crown corporation to justify what that Crown corporation is doing with its capital by coming before the Legislature to explain what is going on and why it needs that additional borrowing power at that time — thereby exercising some control over the total contingent liability of the province, the total debt load of the province of British Columbia.

This is not the first instance in this session of a minister coming before us with legislation which circumvents that legislative opportunity to control contingent liabilities by taking out of the hands of the Legislature and putting into the hands of cabinet the opportunity to guarantee debts — they don't call them debts; they call them leases — to guarantee lease payments, with no opportunity to consider the total outstanding lease obligation in any particular bill, any particular Crown corporation or in total.

Through this minister and through cabinet, the Ferry Corporation may decide to build more ferries when it becomes necessary at some time in the future. They could even decide to build wharves and do everything in the way of spending money in the B.C. Ferry Corporation. Instead of paying cash for these things or borrowing money for them, they'll enter into lease arrangements with somebody who is prepared to finance them. Without any legislative discussion at all, it's decided in cabinet to set up a contingent liability. We have no opportunity to discuss it or ask questions. There is no opportunity for us to raise a question as to just how far we are financially committed and how far we are in debt. The government is embarrassed by the current figure of some $10 billion of contingent liabilities — $10 billion of debt. They want to avoid that embarrassment in the future by saying: "No more will we talk about what the debt is. From now on we are going to enter into lease arrangements. There will be no upset figure. You won't know just what the commitments are. It will all be done in a cabinet meeting." On that basis alone we would have to oppose this legislation.

It is very interesting that the minister used the word "fair" with respect to the formula. The word "fair" could have at least a couple of meanings. One of the meanings may be that it is equitable among all people served or disserved by this particular amendment. The other meaning could be that it is reasonable or substantial. Certainly in this case what the minister is telling us is that it is a substantial change. Previously there was an explicit formula. Whether it was right or wrong, at least it was explicit. It was related to the cost of constructing highways. If we are going to be truly related to that, then the amount should be increased annually rather than experience a decrease as it has this year, as is the case with another bill before us. The government came in with a formula. This year they don't like the formula so they're taking the opportunity to discuss the formula out of the hands of the Legislature — in this instance the formula with respect to subsidizing the ferry corporation. They are saying: "We don't want to come in here and tell you what it is going to be. We don't want to be embarrassed by the changes we want to make. We may want to sweeten the pot in an election year. We want to be able to make those decisions and have those discussions behind the locked door of a cabinet room. We don't want to let the light shine in to that kind of discussion. We are taking the opportunity to review this formula and know how it is arrived at out of the hands of the Legislature, and we will make our own judgments as to whether or not it is fair — in the sense of not being unfair or in the sense of whether or not it is a large, substantial change." On both counts — the fact that it takes the opportunity to set limits to government borrowing and to discuss the formula that is going to be used out of our hands — the opposition must oppose this legislation.

[Mr. Davidson in the chair.]

MR. HANSON: I rise to oppose this bill, particularly section 2, which substantially alters the way the B.C. Ferry Corporation is to receive a subsidy for its operating costs. As you know, Mr. Speaker, the ferry system between the mainland and Vancouver Island is the highway system for Vancouver Island. My opposition is that it places the citizens of Vancouver Island as second-class citizens in terms of their access to a highway network.

Just recently the minister responsible for the B.C. Ferry Corporation, through the Minister of Finance, reduced the highway equivalent subsidy to the corporation from, I believe, $62 million to $47 million for this current year — roughly 25 percent. That has had an extremely negative impact on the ability of the corporation to provide the kind of service that Vancouver Islanders deserve. I have stood in my place in this House on a number of occasions and pointed out that the people on Vancouver Island — because we don't have an extensive network of highways and rely heavily on our ferry system — do not get our fair share of the highway and transportation budget for the province of British Columbia. When you look at the number of electoral districts on Vancouver Island and you break down the amount of money per electoral district, you see quite clearly that Vancouver Island gets short shrift in terms of the transportation budget. We ask for our own fair share. Our fair share is through the highway equivalent subsidy which allows the corporation to guarantee an adequate level of service to the people of the Island without placing an undue burden in the form of a toll. The trend with the change in this legislation will result in much higher ferry rates for the people on the Island. This will result in more bankruptcies for small businesses on the Island which are already having difficulty competing with their counterparts

[ Page 7872 ]

on the mainland. It is a hardship for the senior citizens on the Island and other citizens who want to travel back and forward. All the MLAs, by the way, have a pass to ride the ferry system. The citizens we represent do not. They enter past that toll booth at the B.C. Ferry Corporation and they pay — with children and other riders in addition to the car driver — a large amount of money to just pass between Vancouver Island and the mainland.

It is an onerous burden on the people of the Island. It has a negative impact on the tourist industry and small business on the Island. It makes it extremely difficult for all businesses to compete. I would prefer to see that ferry system as an extension of the highways system. We don't have tollbooths at Hope on the Trans-Canada Highway, or at Kamloops, at Prince George or on the Yellowhead. The people on Vancouver Island, through their provincial taxes, contribute to the maintenance and construction of highways throughout the province. There's no problem with that at all. It comes out of general revenue. We want to see a first-class highway system in the province, and we don't mind paying our tax dollars there. We contribute our tax dollars to snow removal all over the province. What we ask in exchange is our fair share. Our fair share is a highway system in the form of the B.C. Ferry Corporation at rates the public can afford. I'm afraid they're moving to a user-pay situation, where come November they'll be looking in the neighbourhood of $15 or $16 per car and driver, which will be a real economic hardship during a recessionary period.

Before the highway equivalent subsidy was reduced from $62 million to $47 million, the Minister of Finance (Hon. Mr. Curtis), in a money grab on the corporation, refused to make the quarterly payments on time, denying the corporation the interest they would have accrued on the basis of those quarterly payments of approximately $15 million. They lost revenue of approximately $7 million or $8 million in interest, which again has resulted in a curtailment in the number of sailings and the service in general.

The minister will argue that the ferries have been lifted and stretched for greater capacity. I don't deny that. There's an approximate increase of 10 percent in capacity. But there's more to it than that. The ferries rely on a quick turnaround time to avoid the long lineups. It's not just the number of cars that you can pack onto a ferry, but it's the rotation time in and out of the terminals. That's the thing that accounts for the long delays, makes it very difficult for the general citizenry to move back and forth, and dissuades tourists and other British Columbians and Canadians who would like to see this beautiful part of the world.

The removal of that supplementary vessel — the fifth vessel — on the Swartz Bay-Tsawwassen and Nanaimo-Departure Bay routes, routes 1 and 2, lengthened the turnaround time. During this recessionary period, initially there has been some decrease in traffic. But as the late spring and early summer progresses, as children get out of school and vacation time comes, the volume is going to be substantial. The tourist-related industry on Vancouver Island depends heavily in this recessionary period on having a good tourist season. I think the fact that the government, through the corporation, shortened the peak period by approximately six weeks for this year.... Last year I believe you started sometime in early June and finished in October, and this year you're going to be substantially decreasing that peak period. That peak period means the number of sailings per day, etc.That in itself, I believe, is having a negative impact on the economy of Vancouver Island.

In Washington state right now there is a program encouraging people all over the United States to come and visit the state. It's called "The Other Washington" program. Washington State Ferries is spending its own tax dollars to encourage people to come to Washington, and to take an additional leg of the journey to British Columbia. Washington seems to be more actively encouraging tourist traffic into British Columbia than our own government. The actions taken by the government to shrink the revenues available to the corporation, to curtail the frequency of services in terms of numbers of sailings and also to shrink that peak period is really a disservice to the people of Vancouver Island.

To reiterate, we're not getting our fair share of the transportation dollar. There is a negative impact on our economy that we can ill afford. I oppose this bill. It allows the cabinet to move from a financing formula which I would like to read into the record. The previous legislation stated that the cabinet would grant the corporation money which would be "substantially equivalent to the aggregate of the annual cost of maintaining and the annual amortization of the capital cost, of lengths and classes of highways in the Province which, in the opinion of the Lieutenant Governor in Council, are substantially equivalent to the ferry routes operated by the corporation...." What that says, Mr. Speaker, is that the cabinet would establish a formula whereby the citizens that use on-water highway links would be given the equivalent subsidy to those using asphalt on the mainland. We feel it's unfair to move to new language which repeals that section and in turn places the authority to set the financing subsidy to the corporation entirely at the discretion of the cabinet.

We know what that will mean. We've seen what happened in the cases of the hospitals and schools. We're going to have the annual highway equivalent subsidy reduced substantially from now on by the cabinet, and they're going to move to a user-pay situation where the citizens of Vancouver Island are going to have to pick up the costs of operating those ferries, and we're going to be faced with $16, $18, $20 or $25 ferry fares in the future.

It is unfair, Mr. Speaker, and the opposition unanimously will oppose this bill. But I believe that the minister, if he was to exercise his judgment and his fairness, could withdraw this bill and give the people on Vancouver Island their fare share of the highway and transportation budget for this province.

MRS. WALLACE: Mr. Speaker, it seems to me that in this bill we have another Social Credit rubber room. We have a flexible ceiling in terms of lease money that can be paid out for ferries, and on the other hand we have no floor on the subsidies that can be paid for the operation of a very necessary and essential service to Vancouver Island.

It seems to me to be a direct attack on Vancouver Island. Some of the people who live on this Island have to go to the mainland regularly on business, and not only are the costs going to increase but they're going to find that the lineups are worse than ever, and there's no provision for any reservations. Even at the peak tourist season, the local resident — the commuter, if you will — who goes back and forth regularly has to get in line along with the tourists, and it's a very great hardship. It's an expensive cost to firms that are using those ferries regularly.

Much has been said about the passenger service, but I would like the minister to consider what this does to freight

[ Page 7873 ]

costs as well. A great deal of freight is moved on those ferries. As the delays get longer and we find trucks having to sit and wait for one, two, three or more hours in order to get on board, and with the related costs and then the higher tariffs, it puts an unfair burden on producers such as agriculturalists, on manufacturers and on anyone who has business to do on Vancouver Island. It's a very unfair way to move.

It's interesting to note that the Minister of Finance (Hon. Mr. Curtis) and the Minister of Education (Hon. Mr. Smith), who are from Vancouver Island, are not in the House today. I think it's very interesting and pertinent to note that, because they must be very concerned about this bill. The two Social Credit members who sit for this island are, I'm sure, concerned about what their government is doing to Vancouver Island. And let me tell you that those of us on this side of the House from Vancouver Island are definitely opposed to this change in the legislation, because we are concerned about what happens to our constituents. It would appear that those two MLAs are not concerned that their constituents are going to face the same high costs and the same problems.

It means that things like the cost of food are going to go up. When you recognize the amount of freight traffic that comes across on those ferries, in the way of Washington alfalfa and feed grains and many, many products that go into producing foodstuffs for the people here on Vancouver Island, the cost of those inputs is going to increase. As a result, either the farmer's going to be caught even worse in the price squeeze, or if he has some mechanism such as the Milk Board where the cost of milk can reflect that, it's going to mean that people in an area tied basically to the forest industry, with a great deal of unemployment, are going to be forced to pay more for milk and foodstuffs at a time when they can very ill afford it.

This is just another example of the way this government moves in gathering money for itself, by decreasing the payments that are justly owed to a Crown corporation such as B.C. Ferries. It's just one more example of how these decisions are made in secret, behind closed doors, at the whim of cabinet for whatever political reason they may have. I would suggest that this is a political bill inasmuch as Vancouver Island has indicated time and time again that it is not particularly fond of the Social Credit government and has given a lot of support to the opposition. It seems to me that this is a slap in the face to Vancouver Island. It's a partisan political bill, and it's very unfair to the people who live on Vancouver Island.

MR. MUSSALLEM: It is certainly refreshing to hear hon. members of the opposition speak so glowingly about the ferry system. They forget that the ferry system was a Social Credit idea through and through, from start to finish. It was only a few years ago that the Canadian Pacific Railway decided to withdraw the one boat that was running to Victoria and have one crossing only to Nanaimo. They forget that this House sat still. It was the Social Credit government that decided: "If you boys aren't going to go to work, we're going to put a ferry system on the Island second to none." It is remarkable that as we stand here today and discuss this matter, these people on the Island do not pay tribute to and give approval of that great system.

It should be on the record that in all the world — and I don't exclude anywhere whether it be Great Britain, Ireland, Norway, France, England, Italy and the Messina Strait; no matter where — there is no ferry system that can even remotely compare with this system. We are not acknowledging this, or the Washington state ferries for that matter.

MR. BARBER: Socialism in action.

MR. MUSSALLEM: Well, indeed it was necessary. This system was necessary, and it was put in. It was a Social Credit idea, and it's working well.

It was only short while ago in question period in this House that I heard an hon. member from the opposition ask the Minister of Labour (Hon. Mr. Heinrich) why it was that a certain bread company had moved its operation from Victoria and is now producing all their bread in Langley and shipping it to Vancouver Island. They're asking why this is possible: "Why don't you do something, Mr. Minister, to stop it?" What I'm really saying is that the ferry system is so efficient that it was bringing goods and services to Vancouver Island until the prices here were the same as they are in Vancouver — the lowest in British Columbia. Competition was created because of the free movement of freight; they could supply goods and services here at the same price as they did in Vancouver. Why don't we hear about this? We don't hear a word about it. This is a great system. Washington state ferries has no subsidy. Theirs is user-pay all the way through. But here they have an excellent subsidy, and whose idea was that? Was that requested by the opposition? No. One day this government decided that it was only fair to have a system like highway transit, and that they would get an allowance. I think the allowance got too big and too magnanimous. There's a limit to what the public purse can pay. Vancouver Island is entitled to a lot of consideration, but not the whole thing. There has to be some judgment and some reason. I think that the government has got to come back and establish an equitable subsidy, because the principle has been established but the increases have been too fast. We are in a time of restraint; everybody must be restrained.

I was riding the ferry a short time ago, and I want to tell you that they are big ships. They can carry a lot of cars. There's always a line-up. Remember, the ferry is not a bridge system. There must be waits, You can't arrive there 20 minutes ahead and get on that ferry. To wait for an hour is not a hardship. It should be expected. Where else in the world can you have a sea voyage and entertainment and enjoyment in the course of two hours? It's a great system. Let's acknowledge that. Let the people of Vancouver Island acknowledge this great system. I think it's high time they did.

The principle of this bill says that we're going to be fair to Vancouver Island. There's no way that that can be changed, because this system was the creation of this government. It created what we have on the Island today. It's the same as the mainland, for all intents and purposes — except, as Vancouver Island people are known to say, it's a more beautiful place. Perhaps it may be, but it was the ferry system that created that aura and that feeling of being able to move from the mainland to the Island to enjoy the beauties of this province. We can't expect that system to be extended to the point where all British Columbia must pay for the services which mostly concern the lower mainland. I think that all of British Columbia should pay its share, but not all of it, and I think that the minister is quite correct that the highways subsidy has got a little too heavy. We have to look at it and we'll have to be able to adjust it, and this is what they're doing.

[ Page 7874 ]

I want to tell you that all these things put together simply come back to one point: it's a great system, and it is not and will not be user-pay. It is paid for greatly by the rest of British Columbia — by the people from Omineca, Prince George, Atlin....

SOME HON. MEMBERS: His is free.

Interjection.

MR. MUSSALLEM: The hon. member says: "His is free." He is referring to the fact that MLAs have passes.

SOME HON. MEMBERS: No, his ferry is free.

MR. MUSSALLEM: Well, the hon. member brings out this whole point, but all inland ferries are free. Does he know that? And that's another great service by the Minister of Highways: all the inland ferries transporting people across rivers and inlets are free of cost. That's a magnificent thing. Rather than pointing a finger they should say: "Isn't it wonderful that we can do this for the people of British Columbia?" You can't expect a free ferry across a body of water like these straits — it's too big and too much to expect — but the people of the interior have the right to travel across the inlets. There is a river in the way and there are ferries there, with the policy of this government, not the Social Credit government ever.... The ferry between Albion and Langley carries more cars than the Tsawwassen ferry. Do you know that, Mr. Speaker?

MRS. WALLACE: All for free.

MR. MUSSALLEM: More cars, all for free, but it's a service to people of the lower mainland. The minister, at the same time, is giving a subsidy to Vancouver Island. But it cannot all be free, my friends. Nothing is free. You have to be fair and right, and the user must pay his share. But Vancouver Island has been served a great deal by having all commodities and prices equal to the mainland, and that is because the ferries are there. I think it's a wonderful service and rather than be criticized it should be appreciated and the subsidy should be adjusted.

MR. COCKE: Mr. Speaker, often when I listen to the member for Dewdney, with a heart rather sympathetic toward the government — as sympathetic toward that government as I can be — I think: with friends like that, who could possibly need an enemy?

Mr. Speaker, I was interested in the fact that a number of my colleagues from Vancouver Island spoke in terms of what the potential is for here. I think they spoke eloquently, and I'm certainly not going to reiterate what they said; I believe that the bill is going to do precisely what they said. I'm going to take a little different tack, but first I would like to talk for a moment about the member for Dewdney and his praise of the old Socreds. He was here when the Black Ball Ferries were nationalized by the B.C. Social Credit government — nationalized! There are two cases of nationalized industry in this province. Two. One was B.C. Electric and the other was Black Ball Ferries.

HON. MR. CHABOT: Why?

MR. COCKE: Why is of no significance. But don't let those people sit over there and talk about socialized industry — socialized this, socialized that. You're the only people who have ever socialized anything in this province. Now getting away from that....

Interjection.

MR. COCKE: Certainly it was a good idea, and if W.A.C. Bennett were alive today and saw what they're doing with the ferry system in terms of keeping all the decision-making behind those closed doors, he would be very unhappy.

Mr. Speaker, we acknowledge the ferry system; we acknowledge it and suggest that it should not only be a service to the people but be open to the people's scrutiny. That's what I see wrong with this bill: it's another piece of legislation that takes away the decision-making from the Legislature itself and puts it strictly into the government's hands. Over the past six years I have been watching over the past six years bill after bill coming before this House to take away the power of the Legislature and put that power into the hands of the cabinet. Colleagues have said to me: "Why is it that we have had such a dearth of legislation before us this year, last year and the year before?" Let me tell the people of British Columbia that it's because everything is now enacted by order-in-council in this province, and it's an utter disgrace. Every time they get an opportunity to remove the decision-making from this public body, from the openness of the Legislature so that people can understand what's going on, they take that decision-making into that cabinet chamber where nobody knows what is said, nobody knows the debate, and everybody is on the same side. Even the member for Dewdney (Mr. Mussallem) understands that. This is a disgraceful situation, one that continues to come before us, bill after bill, enactment after enactment, taking the decision-making away from here. And why? Because this government acts like a corporation. They want to do everything in secret, make all their decisions in secret. Then the people wake up one day and say: "How come the opposition didn't argue?" The opposition can't argue over decisions that are not taken in this Legislature. I suggest to you that again we're looking at an untenable situation.

I'm interested that the member for North Vancouver–Seymour (Hon. Mr. Davis) isn't here debating this bill. This bill repudiates the position taken and the legislation put forward by that member, yet he's not here to debate it. I like the minister, but he's going to get up and do his duty for that treasury bench, who have decided they have more brains, more understanding of the needs of the people than the people do themselves. That's when the arrogance of government has gone too far. We see before us a government that deserves to be turfed out on their ear as quickly as possible. Do you know the first thing they're going to do when they are turfed out? Those remnants are going to stand up as the opposition members of the time and say: "Put the decision-making back in the hands of the Legislature." You watch; you listen to them whine. You won't be here, but there will be others. I would be delighted to suggest at that time that maybe they should show some repentance. They sure don't seem to have any signs of it now. Seeing the backbenchers, those freedom fighters, putting up with this is really gross.

[ Page 7875 ]

HON. MRS. JORDAN: Mr. Speaker, I don't intend to prolong the debate, but I'd like to make a couple of points as a result of some of the statements made.

The member for New Westminster made reference to what he called the takeovers of the B.C. Ferries and B.C. Hydro in relation to this bill. I'd just like to comment on that and remind the member that unlike the NDP, we're not in the hands or pockets of big business or big government, the federal government or the union bosses. When the private sector, as in the case of the ferries, failed to serve the public of British Columbia by putting its interest before their own, it was necessary to develop a ferry system, one which has become the envy of many parts of the world. It's not only a tourist attraction, it's also a great attraction for our own citizens. It's still viewed by people in other parts of the world as one of the most exciting and least expensive rides in the world. It is, by the nature of its rates, a very favourable rate to our own citizens. It is not, and the record should show it, subsidized by the federal government, as in the case of eastern Canada.

I did want to recall for the House a little incident that I enjoyed when the hon. member for New Westminster (Mr. Cocke) was himself in the cabinet during those dark days of 1972 and 1975 when he gave away the ferry service. We were invited down — it was almost a Dear Pat letter — to come in and join him in a discussion. That was when the socialists changed their leather jackets to pin-striped suits and double-breasted waistcoats. I walked into this room, and here was the member looking terribly elegant in his double-breasted waistcoat, pin-striped suit and old school tie. It was a socialist school, I have to admit. He was talking to us about the need for transportation for members of the House from Victoria to Vancouver.

[Mr. Strachan in the chair.]

His solution was that we should start a special short-hop government service to serve people such as himself and the public, in direct competition to a then existing airline and several others competing or trying to develop increased transportation opportunities from Vancouver to Victoria. Your position in relation to transportation in this province really depends not on the suit you wear but on which side of the House you sit. I don't think the record should go unclear in the fact that that member, charming though he was, was quite prepared to put a then existing business out of business with direct contribution and development of a line with taxpayers' dollars and increase the deficit they built up during that time. There is no way that the Social Credit government put any private business out of business with B.C. Ferries. The ferry service is the pride of the people of British Columbia and one of the prides of our tourist industry.

I would also like to refer back to the statements made by the first member for Victoria (Mr. Barber), the second member for Victoria (Mr. Hanson) and the member for Cowichan-Malahat (Mrs. Wallace). One of the members mentioned that Washington state, in his view, was spending more dollars in trying to attract visitors to the province of British Columbia than our own provincial government. I would like to enlighten him as to the facts of life, because I know he wouldn't want to intentionally mislead the public or our industry, because, Mr. Member, that simply is not true. Washington state has a very limited budget in terms of anything that state does to assist the tourism industry. In fact this year is the first time they've ever had any type of budget at all. We're very pleased that they have, because we look at those ads as being a great help to complement our own efforts in attracting people to the Pacific Northwest as a visitor destination area. We also work very closely with Seattle and Washington state to develop triangle tours which will help us and them, and be a boon to all of us because of their impact in attracting people to the Pacific Northwest.

The lack of understanding, if I may put it graciously, that that member shows is that the ads he sees in British Columbia about travel to British Columbia are designed solely to attract our own B.C. citizens to travel within the province. The majority of our budget and marketing is done outside the province of British Columbia. By running ads to visit B.C. inside B.C., we're not going to attract many people from outside B.C. to inside B.C. So our efforts are directed outside the province in neighbouring provinces such as Alberta, Manitoba and Ontario. We've launched a major ad and information campaign in Ontario in the last two years, and have increased this to the spring and fall as well as the summer to attract people to B.C. We also run promotional programs in Washington, Oregon, California, Arizona and the other neighbouring states. Many of these are done through the placement of ads in various magazines, but it's also done through our three sales offices. There's one in Seattle, one in San Francisco and one in Los Angeles. They're responsible for a major portion of the promotion in these areas for people coming to British Columbia. We also host many trade missions to British Columbia from those areas, all of which use the ferry service and which help promote our province. They certainly appreciate the ferry service the Minister of Highways makes available to our citizens and them.

Beautiful British Columbia magazine helps to attract people here. I wouldn't want that member to leave any impression in this debate about the ferries with either the public of British Columbia, whose tax dollars we spend, or visitors coming to British Columbia, that the ferry service isn't still a very exciting experience in itself. The service is excellent, more this year than last year, and the fare is very fair.

I would also like to comment in terms of their attitude towards the restraint program in discussing the ferries, This is quite a change, because all through the debate on the restraint program, which is trying to help cut the cost of government to our own citizens and thus the cost of doing business to various industries, as well as to our citizens, is a big help and a boon to the tourist industry in British Columbia. If the government, in either its action with regard to the ferries or in its other actions in regard to the statements made by the NDP on the restraint bill, were to follow the NDP's course, then the cost of doing business in British Columbia would soar, and that would be extremely harmful to our tourist industry.

As a government, we are endeavouring to control the increase in costs of government, which in turn helps to control the increase in costs of doing business, and that affects our tourism industry a great deal. Our industry is doing well. It's healthy. It's not without its sensitivities to international market and economic conditions. It's not helped when, in discussing our ferries, members of the opposition — I'm sure inadvertently — make irresponsible statements in order to try to garner headlines which in themselves could be very harmful to our industry.

I hope the hon. members will reflect upon the statements they've made. We've made it very clear that we have an excellent tourist situation in British Columbia. Our ferries are

[ Page 7876 ]

a major asset to that. The fares are very reasonable and the experience is excellent.

MR. HOWARD: Other members have outlined very ably the reasons for opposing this bill, dealing with the fact that it reflects the dictatorial attitude of a government doing more and more in the secrecy of the cabinet room and less and less openly, for public scrutiny. While we're on that subject, I'd like to discuss some of the things that have happened financially with B.C. Ferry Corporation, and show how a distorted picture has been presented. If it had not been, then perhaps we wouldn't have to be going through this process now of provincial government endorsements for lease payments.

In 1977, when the assets of what was then the Ferry Corporation within the Ministry of Highways existed, and they were transferred to and received by the B.C. Ferry Corporation, it was done at an assigned value of a dollar, even though the general rule — bookkeeping and accounting-wise — upon the transfer of assets is to record them on the balance sheet at either their market value or their depreciated value, whichever is the lower.

After the Ferry Corporation got the assets, they determined that it was necessary to give some balance-sheet figure to what it was that the Ferry Corporation owned. So they determined that there would be an estimated replacement figure of $250 million. There seems to be no evidence whatever anywhere that an attempt was made to use the standard, normal accounting practice of trying to establish a market value. The Crown corporations committee — with which, Mr. Speaker, you are thoroughly familiar, and with which the member for Dewdney (Mr. Mussallem) who spoke earlier is thoroughly familiar, because he also is a member of that committee — which is dominated by Socreds, determined that the value of assets which the B.C. Ferry Corporation had was $140 million, not the $250 million assigned to it for balance-sheet purposes.

Now you could say: "Well, so what? It's merely an entry. It's merely a figure in a book." But it's significantly important, because asset value is what you start from in determining depreciation. In the keeping of books, usually it's necessary to have income sufficient to cover depreciation. Usually it's necessary to ensure that funds coming in cover what is being wasted — not in the wasteful sense, but wasted in an accounting sense of depreciating over time. It's losing its value. At some point in time — I don't know what it is for a ferry or a ship; it might be 20 or 30 years — it becomes worn out or obsolete and needs replacing. The result of having a higher-than-actual asset value is that you get a distorted picture with respect to depreciation and operating expenses and the general public is misled by the bookkeeping arrangement of the Ferry Corporation. If you have a higher asset value than is actually the case and have to base your performance on the depreciation of that asset value, then you could report higher-than-actual operating expenses and use that a the foundation to increase fares accordingly. You could us the higher evaluation and the higher operating expenses to cover the depreciation as the rationale for increasing fares — in other words, to give the general public a picture that is no in accordance with the facts. You could use it as a rationalization for soaking the public more on this so-called user-pay basis. That was the unanimous opinion of the Crown corporations committee, and it was reported to this House. It's not exclusively my own view. I'm just simply saying what each of the 15 members on that committee, nine of whom were Social Crediters, said in passing judgment on the bookkeeping practices of the Ferry Corporation.

Secondly, in one of this government's moves to take further control and domination over the affairs of this province, last year it brought through an amendment to the Ferry Corporation Act which said that any surplus money that the B.C. Ferry Corporation had in sinking funds to retire debt would belong to consolidated revenue. The B.C. Ferry Corporation annual report for the year 1980-81 indicated that some of the B.C. Ferry debt is coming due this fall: a payment is due on October 15 in Canadian funds and a maturing debenture is coming along on November 1 in U.S. funds. Using the exchange rate that was prevalent on March 31, 1981, which was the end of the Ferry Corporation's fiscal year, it was determined that there was $3,014,117 surplus money on the books. It is surplus money that the Minister of Finance will reach out and take. I'm not sure whether he has already done it, whether he is going to wait until October 15 when that $10 million Canadian bond or debenture matures or whether he'll wait for the $3,730,000 U.S. borrowing that will mature November 1 and then take the excess money. If he waits until that time, it may not be $3,014,117 precisely, because the exchange rate may be different than it was on March 31.

The essence of it is that the Ferry Corporation had surplus money in its possession to the extent of more than $3 million. The government — of which the Minister of Transportation and Highways is a member and who undoubtedly supports this contention — sought to reach out and grab for this money itself. It would have been wiser and better for the B.C. Ferry Corporation to have left that $3 million in its possession, so that it would have extra money around. Perhaps we wouldn't be faced with increasing fares in order to find that $3 million or we wouldn't have to enter into some not very valuable lease-back arrangement. Either way, the juggling of the books of the B.C. Ferry Corporation has gone on. The Crown corporations committee expressed a unanimous view on it. The government ignored it completely. We are now in the position of the government saying: "We don't care what the Crown corporation said, what its views were, what it examined, what evidence it developed or what its report is; we're going to go in this direction and take further and further control of the authority over the Crown corporation, of the annual highway subsidy and everything else of that nature." What it will mean in a local sense — and I must express this, because for a number of years there has been a desire expressed in Kitimat to establish a ferry terminal, so that, apart from Prince Rupert, the only other seaport on the north coast accessible by rail and road will have a ferry terminal and an opportunity for people to move in and out of that port via ferry, whether for the travelling arrangements of residents of the north country, for tourist traffic, or for a combination of both.

I submit to you that the grabbing of that $3 million by the Department of Finance out of the funds of the B.C. Ferry Corporation, the alteration of the annual highway subsidy, and the reduction in funds available to the Ferry Corporation will put the corporation this coming winter into a virtually impossible task of trying to make ends meet once the summer season is over and the ferry traffic drops off. It will put them in the position of having to scramble to make ends meet, and it will also have effectively postponed almost indefinitely, so long as this government remains in office, the possibility of

[ Page 7877 ]

people in Kitimat seeing the day when a ferry terminal will be there. That's a sad note to have to end these comments on, because hopes had been held out to people in Kitimat by this government. In fact at one stage, Mr. Speaker, the cabinet a few years back made a favourable decision to move into Kitimat and establish that as a ferry terminal port. They didn't do it by way of an order- in-council setting up machinery to do it, designating it as a route, or taking any other steps, but the cabinet made the decision internally that it was a favourable thing and that they would seek to move towards that. That has all been destroyed now. The hopes that the people of Kitimat had of having a ferry terminal there have been scuttled, dashed and gone. I submit to you, Mr. Speaker, that so long as this crowd of Socreds run this government that prospect and hope will never be be able to be revived again, What we need is a change in government, thereby establishing some hope in the minds and hearts of the people that they will be treated decently in the future.

MR. MITCHELL: Mr. Speaker, I too would like to join this side of the House in opposing this bill for simple reasons: it's going to cost the people of my riding more money. I find it quite shocking that the Minister of Transportation, who is also the Minister of Highways, by bringing in this piece of legislation is deliberately failing to do the job that he has been appointed to do by the people of British Columbia, and that is to give fair transportation to every British Columbian equally.

When it comes to transportation, as the previous speakers have mentioned, there was a formula on which the government or the corporation could base the money that they could depend on to move people from Vancouver Island to the mainland or from the mainland back to Vancouver Island. In spite of what some people may think, Vancouver Island is still part of British Columbia. A transportation link throughout British Columbia is a right, not a privilege — not something that the government in their wisdom and generosity can give or take away. This is what this bill is doing, Mr. Speaker. It is taking away something that members of the Island have established — that we are part of British Columbia, and that we must have a type of transportation by which we can move freely back and forth.

There was a subsidy, and when the budget came down it was quite evident that the Minister of Finance (Hon. Mr. Curtis), the MLA for Saanich, had decided to cut back on that subsidy to the people of Vancouver Island. I would have thought that the Minister of Transportation and Highways would have been fighting and shouting, when he knows that the job that he was elected to do was to provide transportation that that minister was cutting back his ability to provide. But instead he brings in a bill. Not only does it legalize — as he calls it — making the subsidy more flexible. There should be something in that subsidy like the gas tax. As the cost of living goes up, that subsidy should go up. When costs go up, the Minister of Finance writes into the gas legislation that for every few percentage points it goes up, he is going to grasp another few nickels from the people who buy gas — the motorists of this province. The Minister of Transportation and Highways should have been demanding a fair share and an equal assessment on the subsidy, but instead he rolled over and was trampled on and denied that the job that he was there to do was to provide transportation.

We all know what's going to happen. It's going to increase the cost of ferries, the cost of food, and the cost of Vancouver Island people to travel back and forth to do business or for recreation. because they'll have to pay more and more. They'll have to pay more for gas, because the Minister of Finance is going to get more from the tax revenues and take more out of the pockets of the people on Vancouver Island. We are going to have to pay more on the Island.

The only thing is that I can see that it follows the record of the incompetence of that particular ministry. A few years ago, when they had assets — when they had three ferries that were built and paid for by the people of British Columbia — they turned around and sold them for $35 million. And now we who ride on the ferries, the people of this Island, have to buy back these same ferries that they once owned at a cost of $89 million. This was a direct debt that was put onto the Ferry Corporation and instead of building up assets that are paid for and developing a program that is going to reduce car fares and passenger fares, this government has deliberately embarked on a program to increase them, which will cause the people at this end of the province of British Columbia to have a higher cost — and a lower standard — of living. Because every time you suck out something from the family paycheque for transportation or it is added onto the cost of food, you are raising the cost of living in this part of the province.

This minister and this government have gone out of their, way to add those costs on. But, really, what else have they done? What have they done to protect their own ability to travel back and forth? As cabinet ministers they have had the use of the government airplanes to fly them back to their ridings, be it daily, weekly or monthly. They don't stand in long lineups out at Tsawwassen or Swartz Bay; they're flown back and forth at government expense — taxpayers' expense. In fact. because they know that there are going to be increased lineups, they've taken off some of the government airplanes that were going to do the mapping for the various departments, so they can have more planes available for ministers and government executives travelling back and forth. They're looking after their own ability to fly around — to travel back and forth in British Columbia. But they are deliberately embarking on a program that is going to increase fares in British Columbia, especially to those who live on the Island, because they're cutting back on the subsidies. They're cutting back on our share of the revenues that go into highways: it's being cut back on that link from Vancouver Island to the mainland.

Mr. Speaker, I can't understand why the two Social Credit MLAs from the Island are not pointing this out in the cabinet. and why they are not fighting harder for it — why they are not fighting to protect and make equal.... All that the people on the Island are asking for is a fair share of the money that goes into the highway network, and the ferries are part of that highway network. This is why each one of us on the Island must oppose this particular bill: it's going to add additional costs, it's going to cut services, and subsidies are not going to be given out fairly. The ministers, the cabinet, can fly back and forth to the mainland in their government planes. They don't stand in lineups. It's the people who are paying the bill, the taxpayers of this province. the taxpayers of Vancouver Island. and especially, the taxpayers of Esquimalt–Port Renfrew, who are demanding that we have the ability to travel freely in British Columbia. They look towards having ferry rates conic down, not continually go up and up. Every time the Minister of Finance wants some more money for something he brings in a new bill. He brings in something that cuts off revenue to the Ferry Corporation and increases the fares,

[ Page 7878 ]

the taxes, for those of us who have to work. I think it can be stated quite openly that this particular legislation will be unanimously opposed on this side of the House.

[Mr. Speaker in the chair.]

HON. MR. FRASER: Mr. Speaker, I'm shocked, to say the least, that all the negative Nellies on the other side are against the finest ferry fleet in the world, the B.C. Ferries. It's really surprising to find that they will even oppose that fine transportation system.

In the last few years the Ferry Corporation has built new docks and new ships, it has stretched and lifted the existing ships, and consequently has immeasurably increased the service to the travelling public of British Columbia and to tourists, whether on Vancouver Island or in other parts of the province. I also would like to point out that a larger vessel has been put on the route to Prince Rupert. For the first time ever, passenger service was extended from Prince Rupert to the Queen Charlotte Islands in 1980. I'm quite surprised that they are against this fine transportation system.

I want to comment on the remarks made by some of the members. I refer to the member for Mackenzie (Mr. Lockstead), who said he appreciated the new chairman of the B.C. Ferries. I acknowledge that. He thanked him and said he's doing an excellent job, but from there on we sure went downhill fast.

MR. LOCKSTEAD: We sure did.

HON. MR. FRASER: We sure did; not one good thing was said about the ferry system from that point on.

Regarding the bill in front of us, yes, it reduces the subsidy, but from what to what? There is still an annual $47 million subsidy allowed here, almost $4 million a month. The way you people talk over there, you'd think we're eliminating it. That's still a lot of money.

We don't intend to let the service go down. We always have our problems on the long weekends; we continue to try to grapple with them, and they are a little better than they used to be. I don't think we're ever going to eliminate some of the lineups that occur. People don't tell us if they're going to travel on a Thursday or a Friday going one way or the other, and the same thing on Sunday and Monday of long weekends. One long weekend they'll hit on Sunday, another long weekend it will be Monday, and it's always an operational problem. I think it's better than it was and they're continually working on it, but I really don't think we're going to eliminate that completely on long weekends.

Regarding fare increases, I've stated before, and I'll repeat it now, that if fare increases are required they will be instituted around November 1. There was a lot of criticism when the fares were increased before in the midst of the tourist season around July 1. Last year we didn't do anything with the fares until November 1; that's when fares would increase again, if required.

The member for Nanaimo (Mr. Stupich) referred to the borrowing power of B.C. Ferries and that this bill somehow made the cabinet able to borrow in its secret confines. Well, Mr. Speaker, what I want to tell the Legislature is that the original Ferry Corporation Act provides and allows for a $250 million line of credit for B.C. Ferries. I couldn't quite get the member for Nanaimo's line of thinking and discussion in view of that. That has existed there all the time. Unless some government wants to change it, it is there, and it has been ever since the Ferry Corporation came into existence, which I believe was in 1977, with the Ferry Corporation Act.

I'd like to point out to some of the members who are worrying about costs and so on that I feel that it is a very economical service, a great service and a bargain service. Regarding our fares, nobody mentions the fact that if you compare them with other fares and other transportation systems, there really is no comparison at all. I refer to commercial airlines and so on. I think that we get carried away a little bit. It's still very economical and an excellent service almost a bargain service in view of all the money that has been spent on B.C. Ferries: I think around $100 million in upgrading that service in the last five years, trying to keep up. It all has to be paid for somewhere or other. I think the $47 million this year is certainly going to be adequate. That's still in addition to the cost of supplying....

MR. MITCHELL: What does it cost to drive to Hope?

HON. MR. FRASER: The member says: "What does it cost to drive to Hope?" We're hauling the vehicles from Swartz Bay to Tsawwassen, and they couldn't drive them for what we charge. I think somebody should sit down and figure that out. We're talking about bargains. Try to drive the same distance and you'll find that there's very little difference, if any, if you operated on a blacktop road.

The second member for Victoria (Mr. Hanson) makes the point — I think he's actually starting to believe it himself — that Vancouver Island doesn't get its share of the transportation dollar. I think that should more properly be discussed in the estimates of this ministry, but if you include the ferry subsidy which we're discussing here today, there seems to be a disproportion the other way, by the information I have.

The member for Cowichan-Malahat (Mrs. Wallace) makes a good point regarding freight charges. It is my information that our rates, freight-wise, are cheaper than CP marine. So I feel that we're certainly competitive. I also understand they're just waiting to raise theirs again and widen the gap further. It's cheaper to ship a tonne of freight on B.C. Ferries than it is on CP, our competitors.

Mr. Speaker, I take pleasure in moving that this good bill be read a second time.

Motion approved on the following division:

YEAS — 30

[ Page 7879 ]

NAYS — 23

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

Bill 25, Ferry Corporation Amendment Act, 1982, referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

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

ESTIMATES: MINISTRY OF
AGRICULTURE AND FOOD

(continued)

On vote 5: minister's office, $164,608.

MR. HALL: Now that we've had a little while to debate the administrative responsibilities of this minister as far as his direct involvement with agriculture is concerned, I think this is the time that we might turn ourselves to his direct involvement in one of the Crown corporations, namely the Insurance Corporation of British Columbia. While we don't have a resolution on record from the Insurance Corporation of British Columbia — as we do in the case of the agriculturists in the province — calling for his resignation, we do have the question of the corporation's activities last year to examine. If one is to look at the general view of the corporation, one could only come to the same conclusion. Those of us who might be the shareholders of that corporation could only call for the same treatment the farmers would like to see the Premier mete out to this minister.

As the member of cabinet on the board of directors, the minister has supervised the greatest amount of premium income over the past 12 months, the greatest number of registrations and the greatest drop in public confidence in that corporation since the corporation's inception. I don't like to say that, because while I don't hold any brief for the minister at all, I have a great deal of hope and some pride in the corporation. I think this minister, in his stewardship, is not doing that corporation any good whatsoever.

We turn now to the image of ICBC. Any of us at all who are involved as MLAs, not necessarily specializing in dealing with the subject, can see by our correspondence, our phone calls and by observing the kinds of things going on in the territory that the ICBC image is in a mess. We've seen the headlines to that effect: "For lawyers, the Insurance Corporation of B.C. Settlement Process is a Gold Mine," is one headline; "Nobody is in Love With the Corporation," is another; and "The Claims Procedure is Mad Hatter's Tea Party," is another — headline after headline pointing out the public's gradual, escalating discomfiture with the corporation.

I don't know whether the minister wants to finish this corporation off or whether he wants to make a go of it. That's why I called the division the other day and tried to express that all of us in this House support ICBC by having a unanimous motion that we stood by ICBC on the bill the other day. Part of the problem is that the party the minister represents so frequently deals with the question of dismantling ICBC. The Socred president, Mr. Smith, has asked for its phase-out. A couple of backbenchers have asked for the corporation to be dismantled. I don' t know how you can expect a corporation to carry on and provide the level of service that it should do when it's continually under attack by people whose first duty and job should be to support it.

If I was on the board and saw the president of a political party that is currently represented by those who sit on the treasury benches call for the dismantling of the corporation of which I was a director. I would feel discomfited. I'd wonder what kind of advice I was getting from the cabinet member who was sitting on my board. I'd wonder where his real loyalties would lie, when you see the continual catalogue being built of the kind of complaints, worries and concerns that were not only being brought to this House in ever-increasing numbers. but were a feature of some of the criticism of the Crown corporations committee hearings in Vancouver. It was February. Wasn't it, Mr. Chairman, that saw these kinds of headlines I've read out, where people have been outraged by the abuse they have received from the corporation on their claims. There is no wonder that we must feel very concerned about the current image, stance and activities of the corporation. Let me say now, before it goes much further, that this is not the corporation that we designed, that we envisaged and that was put into effect. I don't think this corporation subscribes to the standards and practices that a monopoly insurance corporation should practise in this province at this time.

Mr. Smith — as I mentioned before — said in an interview with Mr. McEachern of the Sun that the party is finding ways of phasing out both the ICBC and the agricultural land reserve. How interesting that the same minister is in charge of both. We know he is phasing out the agricultural land reserve. He said so on Friday. Now it is obvious to me that some of his activities would appear to be leaning towards phasing out ICBC.

I'll just pick one letter out of several to give you some idea of what is going on: "Dear Mr. Hall: I have spent countless hours trying to phone ICBC. They have owed me the difference between insuring the new car I bought versus the one I sold since last September." This is dated April 26. "Every time I've managed to get through they've had some useless excuse why it hasn't been sent, and that it will be in the mail tomorrow." Those expressions — "it's in the mail" and "I gave at the office" — have to be the two most used and abused statements of untruth I've ever heard in my life. If anybody says — I gave at the office" or "it’s in the mail" to me, I am automatically suspicious of the person I am talking to. There are other expressions which would occur to you and I, Mr. Chairman. which may be used just as often, but we'll deal with those in another debate.

Here's another letter: "My car was stolen and, a month later, recovered. It then took three weeks of constant phoning and negotiating just to replace the windshield, door locks, and repair a seat and the front burnper," etc, This is the kind of frustration that goes on. I replied to this gentleman, Mr. Harvey.

[ Page 7880 ]

"Thank you for your letter dated April 23, 1982, regarding ICBC and the difficulties you have encountered in receiving your rebate. I can offer little help at this end other than advise you to stick to it and make them provide what should rightfully be yours. In addition, let me say that this is not the corporation that we built, not the corporation that we designed. We do not believe the corporation conforms to the practices and policies that we think a government monopoly insurance company should subscribe to.

"Lastly, if you have not received any better news or treatment, please advise me. This will mean that I should have your licence plate number and your driving licence number in order to make enquiries for you."

That is the kind of letter we are getting by the dozen, Mr. Chairman. You yourself know that, as an MLA. That is just one that deals with the image of the corporation. There are hundreds. We could go to the file of any backbencher, government member or opposition member and get that kind of letter. That kind of complaint, that kind of observation about the unthinking bureaucracy — the unmoving, stilted kind of reaction you get from that corporation — is now echoed by none other than the ombudsman. Mr. Friedmann claims that ICBC is obstructing the investigations of his office. That adds spice and flavouring to the 12-month picture that's taken place since we were last here discussing this estimate with this minister.

What does this particular article say?

"Ombudsman Dr. Karl Friedmann is prepared to take legal action against ICBC officials, who, he charges, have been obstructing his investigations. The ombudsman said: 'ICBC has, in typically bureaucratic fashion, set out to try and contain or control the ombudsman. I know the public is most disturbed about ICBC's practices and procedures, and I would fail the public and the Legislature if I allowed ICBC to continue its efforts to keep the ombudsman at bay.'"

What an incredible indictment against a Crown corporation and against this minister who sits on the treasury bench, if that's the best he can do. The ombudsman. An all-party committee and a first-class piece of legislation picks a firs-tclass person who works on this. He produced a report saying that a Crown corporation has refused to provide investigators with information when contacted directly. Mr. Chairman, you'd be interested to know that he's categorized this as a serious form of obstruction and added that he's not prepared to tolerate this situation. I ask the minister what he'd like to say about that, together with any general comments he may have about the general image of the corporation.

While we're looking at that, the president, Mr. Holmes, conjectures that the Insurance Corporation of B.C. is considering wiping out a person's right to use a lawyer and his right to sue when making a claim. These changes would come if the ICBC moved to a no-fault system of handling claims as in Quebec and moved to operating in much the same way as the Workers' Compensation Board. Mr. Holmes says: "Leave the lawyers right out of it." You cannot sue. You would just automatically get paid according to the schedule: one thumb, so much; one finger, so much; one eye, so much; one thumb, one leg, one eye, so much. One thumb, one leg, one eye, one knee, so much, etc. That's the way they do it, Mr. Minister, in case you didn't know. You wouldn't be allowed to hire a lawyer in a property damage suit or other claim either. Any disagreement between you and ICBC would be resolved through arbitration or an ICBC appeal system.

I have a letter here from a lawyer who points out: "Such a suggestion is totally contrary to our concept of individual freedom, and the division of power is between the government and the judiciary to have a person's right to seek legal redress against tort teasers, and where necessary the Insurance Corporation of British Columbia, through the courts rather than having to submit to arbitrary powers on the part of the Insurance Corporation. You know, political parties the length and breadth of this country have fought to remove barriers for people to get to the courts. We've fought for a long time, for instance, Mr. Chairman, to remove the practice of the government having to issue a fiat for a person to sue the government. I see no difference in the principle of individuals having the right to sue the Crown corporations, especially in matters which are more serious than some of the other matters which come up as ordinary suits against the government.

This whole question of how the public perceives this major corporation that affects every single household in this province is of major importance. I don't suppose there is a household in the province that does not have some direct connection with the Insurance Corporation of British Columbia. As I said to this minister a couple of years ago and as I've said to his predecessors and to members of the cabinet when I sat over there, there is no way that you can escape the political consequences of this Crown corporation. You may as well face up to it. There's no way that you can have a Crown corporation that enters into your house in some way every year — with this corporation twice a year in a great number of cases — and set the fees by cabinet order every November.... The Premier can stand up if he likes and get into this debate. I'd enjoy that. There is no way you can avoid the political consequences, so you may as well make it work correctly, get into it and try to do some of the things that Sherrell tried to do. They criticized some of the things that Sherrell tried to do. One thing he did try to do was improve the customer relations and customer service. All that is gone you know where in a handbasket, since his departure.

In this last 12 months we've seen the abandonment of the accident penalties and the abandonment of the FAIR program. We've heard the minister saying that he's in favour of crash premiums. For instance, in April of this year he said that he's in favour of driver-accident premiums. He said that because good drivers are recognized by the safe-driver discount, it seems fair to penalize with driver-accident premiums.

That's not what the FAIR program did. The FAIR program did not have safe-driver discounts. It only had, in effect, a penalty for bad drivers. You see how careless those kinds of statements are, how you can confuse people. You can shake your head and say no, but the fact of the matter is that you can't run up one side of the street and not expect somebody on the other side of the street to say: "Wait a minute. That's not what your program did." You can't settle a premium which is the going rate for the car, apply a 20, 30 or 35 percent reduction to it and call it a safe driver's discount, and on top of that have a crash premium as well. I must ask the minister to be more specific in some of his activities when he is talking about the corporation.

What about the corporation's labour relations? We know the sad story of last year's strike. The interesting thing is that on November 20, 1981, the Insurance Corporation sent out a

[ Page 7881 ]

letter to every employee, signed by Mr. Holmes. The fourth paragraph of this letter said: "What I can do is to take the lead in establishing a climate in our company where relations with the employees are based on mutual trust, and where each employee feels a strong sense of self-worth, is proud of the corporation, and is committed to doing a good job in support of our corporate objectives." An estimable objective — one with which I can certainly find no fault. He goes on to say: "I do not have a magical formula for success. The more I look into it, the more I have to find that most companies are searching for ways to achieve a more motivated, energized, cooperative, trusting workforce. Success does not come easy. The attached article which appeared in the September-October edition of the Harvard Business Review makes this point."

I read the Harvard Business Review, and it says that you should build up, in your own corporation, the best team of labour-management experts you can get: people who will sit down and negotiate a contract and live with the consequences of that contract that they work out across a table. Did ICBC do that last year? No, sir. They appointed a hired gun. As usual, they imported a hired negotiator who does not have to live with the consequences of those activities. They do not produce the kind of energetic, creative people who were referred to in the article in the Harvard Business Review. That's sheer puffery that goes around from the president to the employees. I wrote to the president on February 3 of this year because the president wrote to me. Mr. Chairman, about the time of the beginnings of the Crown corporations committee examination of this corporation, I said some of the things that I've said to you today. Mr. Holmes wrote back to me and said: "In light of your recent comments concerning conditions at the Insurance Corporation, I would hope that you could find a moment to read the current issue of our employees' biweekly newspaper." And he goes on to extol the virtues of this newspaper. So I read the newspaper, which I happen to get, as a matter of fact — every publication. I wrote back to Mr. Holmes and said:

"Thank you for your letter, which arrived while I was enjoying a short break away from my duties. I am a regular reader of the company's broadsheet, People, and I'm on the mailing list of a number of other newsletters from union suppliers, the ARA and others. Read together, and in conjunction with the hundreds of complaints that our MLAs receive, you would, I am sure, come to hold the same view as myself. The article you referred to, by the way, extols the virtues of the new bodily injury centre in Surrey, and yet dismisses the major complaint on the possible cause of its eventual failure in one small paragraph."

You will be interested to know, because this covers your area, Mr. Chairman. I quote from this newsletter which is extolling the virtues of the new Surrey bodily injury centre: "The only difficulty with the new system is that claimants still call adjustments in the other centre. In short, the staff like it — especially those who escape from doing claims — but the public doesn't."

The fact is that nobody knows where to call in Surrey for which service, whether the ordinary claim or the bodily injury claim. That problem is dismissed just in one sentence in this whole article. The very complaint that is mounting in Surrey, White Rock and North Delta is dismissed in one paragraph. Even the one sentence and the one paragraph refer to what some of the staff are concerned about.

Mr. Chairman, when we were last here a year ago discussing the corporation, the minister said: "Everything is fine; the second member for Surrey doesn't know what he's talking about. We've got a great group of people doing marvellous work." He rejected all of the things we've warned him about, all of the things I've said: yet the corporation, on January 23 of this year, engaged the services of a polling company, Delphi Consultative Surveys and Research Ltd., Winnipeg, Canada, who locally use Jacqueline Burns Marketing, for a survey of public opinion. He said everything was fine, we didn't know what we were talking about; yet I notice there are questions about all the complaints we raised last year, all the areas of tribulation and concern. Done by a firm from Winnipeg, east of here, it asked whether the average policy-holder gets a generous settlement, a stingy settlement, or is just about right. It asked what percentage the person would guess was paid unjustly to people who were ripping off the company; it asked about the appeals procedure and whether or not the people questioned had dealt with the claims people. In addition to that, they asked the political questions. Let's start with these:

"We're interested in people's opinions about auto insurance in B.C. and how well or poorly people think ICBC is handling B.C.ers' auto insurance needs these days. Purely as a practical matter, to what extent would you say that government ownership of ICBC helps or harms the true interests of ICBC, the true interests of the government of British Columbia, the true financial interest of the average British Columbian, the true interests of democracy in Canada? Compared with ICBC's premium rates during the past three years, would you guess that ICBC's rates for the average B.C. driver would increase faster, more slowly or about the same during the next three to five years with a Social Credit government, an NDP government. a Conservative government, a Liberal government?"

It asks political questions, questions about drugs, questions that I think are completely beyond the scope and requirements of any business, any Crown corporation.

We asked questions about that, as you know, Mr. Chairman, and we got some fatuous answers from the minister. He said public money wasn't involved. Nobody said it was. We said that premium money was involved. Whose money is it, anyway? The Crown wanted to know to what extent government ownership helps or harms the true interests of democracy in Canada. What a fatuous question!

"Improper Suggestion" was the editorial in the Vancouver Sun, which said: "The ICBC has been asking some strange questions. In a recent public survey, ICBC wanted to know if respondents thought off-track betting and the sale of marijuana will become legal within the next five years. Another question was whether B.C. was about to be plunged into a severe 1930s-style depression." We know we've got one of those, right? We've got a 1930s-style depression; we've got lotteries to pay for government megaprojects. We must wait for the estimates of the Attorney-General to ask about the third one, I suppose.

But that's abuse by a Crown corporation of its income; there is no doubt about that. I'd like the minister to explain that away and to tell us the costs. Surely by now he knows how much that survey cost.

Mr. Chairman, much was made last year of the question of safety, and the minister said we spend a lot of money on

[ Page 7882 ]

safety. I didn't know just how much, and I wasn't sure that they spent any money at all on safety, directly affecting what I consider to be the true safety program that should be going on in this province at the time. I'm told it's $2 million, of which $400,000 probably goes to the attack program. There are eight people on staff and it's probably another $350,000 or $400,000 by the time they've got all the expenses and the costs associated with that. They've produced a lot of material that they advertise in the annual report on safety, but I'd like to ask the minister to break down for us, in his answer in this committee, exactly what is being paid out of that huge amount of money that the minister referred to last year — I'm not sure that $2 million out of a total of hundreds of millions is huge — for a realistic safety program.

In the annual report, the safety study on page 4 has a lot of excellent pictures showing young people in kindergarten and similar grades being instructed about road safety. I'm not decrying any of that, but I'd like to know more about that safety program. While I'm on that, can I say that I don't know whether the Minister of Education (Hon. Mr. Smith) has read the annual report, but I wonder if he would be as disappointed as I am when I see the excerpts from the comments by the children that intersperse this annual report. In every single comment — pages 4 through to 8 inclusive — there is a gross spelling error that's supposed to be cute. I wonder if the minister thinks it's serving the cause of safety or education when the words safety, eternal, were, much, pounds and so on are misspelled. I wonder if the minister can say what he thinks of that. I have more for the minister later on.

HON. MR. HEWITT: Mr. Chairman, I'll try to cover some of the questions that are raised. I'm sure the member can appreciate that in questions where he has asked for dollar figures, they will be coming to him as the detail is obtained from the corporation. I can advise the member that rather than bring a staff member or senior management member over from the corporation, the staff in my office are in communication by telephone, getting these figures as quickly as possible to enable me to respond to the members opposite.

The second member for Surrey (Mr. Hall) dealt with the drop in public confidence in 1981 and the period of time following that into 1982. It's fair to say that we went through a five-month management-labour dispute. Any corporation the size of ICBC that gets involved in a work stoppage....

You can see that with the volume of work they handle, once the wheels are put into motion again it takes a considerable length of time to catch up with the backlog and to be up to date. I'm pleased to say that we are now, for all intents and purposes, up to date in the corporation. We had some difficulties, as members would know, with regard to time payment plans for premiums. We took into consideration some of the problems caused by the backlog of work in ICBC and in some instances paid interest on refunds that had not gone back to the motorists in a reasonable length of time.

When the member says public confidence is down, I can only say that after a strike such as we went through it takes time to gear up that corporation. Maybe that's one of the problems with the monopoly in the sense that when it does shut down for any reason, it's 100 percent shut down, whereas if you were competing in the marketplace and you had a number of companies where one may be on strike or locked out, others would be continuing to function.

The member mentioned the ombudsman's office. There is some difficulty in communication with the ombudsman's office. ICBC, in attempting to deal with the ombudsman and his staff, determined that there should be an office for information so that the staff of the ombudsman's office — it is not the ombudsman himself but, in many cases, his staff — would be able to go to that office, make the request and thereby not disrupt service to the customer of ICBC by having the ombudsman's staff appear on the scene in a claim centre or in offices but have them deal with one particular office in ICBC. I can only say to you that ICBC has given — and will continue to give — full cooperation in providing information to the ombudsman if, for the sake of efficiency, they attempt to use the information office. I think communication is usually the biggest problem in such instances. I'm sure that had the problem with the ombudsman been properly discussed by both parties, some of the comments that were made would not have taken place.

(Mr. Strachan in the chair.]

In regard to complaints of people who are not satisfied with the corporation, to us, as MLAs, they may be substantial in numbers, but when you compare them with the total activity of the corporation you may find that percentage-wise they are quite small. For example, we have three million policy transactions in a year. We have half a million claims a year. Many of those are settled to the satisfaction of the individual involved; therefore we don't hear from that person. The ones we do hear from are the ones who feel that it wasn't a 75-25 collision where fault is assessed by 75 percent to one driver and 25 percent to another. The person may feel it should be 100 percent on the other person and is therefore upset and concerned because of having, you might say, a mark against his or her driving record. You can see that complaints such as that will go to the corporation and be dealt with by the corporation, and a decision will be made — in some cases against the individual driver. Their next step is to go to their MLA or go to the minister responsible, because it is a Crown corporation. There is where we have a problem with this corporation that was set up. I think that even the second member for Surrey (Mr. Hall) acknowledged that in the opening of his remarks today. Percentage-wise to the total activity of the corporation, our complaints are not that many, although I will admit that, after the strike and with the amount of backlog material that had to be dealt with, I am sure the percentage increased. I am hopeful now, in 1982, that we are up to date and we will see those complaints reduced in number and be operating in a most efficient manner.

The member talked about the discount for good drivers, and I believe he said that was not the FAIR program. I don't disagree with his comment. The FAIR program really was in response to a piece of legislation that was passed in this House, which I believe was the Automobile Insurance Nondiscrimination Act, which took the matter of age, sex and marital status out of the rating for insurance and said, basically, that all good drivers would be treated equally and those drivers who had a bad driving record or a history of accidents would lose their good driver discount or, in a sense, would be assessed a premium. The method, of course, was under what was called the driver accident premium. As the member knows, that part of the FAIR program is not being proceeded with, but we are still addressing the question of

[ Page 7883 ]

having an assessment on those people who have bad driving records.

Delphi Research, which the member mentioned, carried out in the early part of this year a survey of public opinion. The attempt there, again to quote the second member for Surrey's remarks, "dealt with public image." It was an attempt to have an outside body evaluate what the people thought of the Insurance Corporation. As a result, this survey was carried out. We wanted to know what they thought about our service and what they thought about the programs that were in place. Did they understand them? Did they know what they meant? That is no different from any corporation that deals with the public. From time to time they want to evaluate their current activities and also get some guidelines as to what changes they wish to make in the future. That was the purpose of the Delphi Research report. I can tell the member, as I did publicly at the time the issue was raised in the news media: no, I was not enthusiastic, nor was I in favour of the type of questions put in the questionnaire, which the member refers to as political. I didn't feel that those questions related to insurance. But at the same time, in a meeting with the representative of the Delphi consultant group, he explained to me the strategy they use in attempting to get an in-depth answer from the people who answer the questions. When they finished their presentation, I still maintained that they hadn't proved to me that those questions were needed in their survey.

You asked what the survey cost, Mr. Member. As I mentioned earlier in my remarks, those figures will come to me during my estimates, and I will advise you of them.

You also asked me about the total amount spent on safety programs. That will be forthcoming.

I would like to take a minute to comment on the safety programs that we get involved in. When compared to other insurance companies across Canada and other parts of the world, I think ICBC rates high on the list, if not the highest, with regard to the efforts they make in educating the public concerning safe driving habits. We're involved in the Counterattack program, as the member knows; we're involved in the buckle-up program, the seatbelt Convincer. The latest effort is, I guess, the items which are included in the ninth annual report: the program dealing with the very young people in the public schools. The Captain Click program impresses on the young people how important it is to have seatbelts done up in a car, and what can happen in an accident if you are not buckled in. I believe there was a very good, comprehensive news article in the newspaper this past weekend about the Convincer program at one of the schools. ICBC is involved in those things in its attempt to educate the public in good driving habits; not to drink when you drive; and regarding young people. Beyond that, we have the FAIR program, which treats all good drivers equally. We will be addressing the question of the penalizing, if you will, of the driver with the bad driving record.

As to the spelling mistakes in the annual report, which you raised as an issue, Mr. Member, I guess the Minister of Education (Hon. Mr. Smith) could comment, and ask why you would have errors in spelling in an annual report. I myself — for the record — questioned that. However, from a public relations approach, the reason they are highlighted and left the way they were spelled when the young people responded to the questions was to put more emphasis on the fact that those young people, after seeing the Captain Click presentation or the seat-belt presentation, got the message that it is important to be buckled in when you're driving in a car, that it is important that you understand that the vehicle can become a lethal weapon, if you will, if it's not driven with due care and attention. In the one article in the annual report, which deals with young minds and young lives, the spelling mistakes were left in order to bring emphasis to the message contained in the particular article.

Mr. Chairman, that is the extent of the notes I have here. If I've missed anything, I'm sure the member will remind me. I look forward to any further comments he might have.

MR. HALL: I'm not making a large issue of the inserts in the annual report. It's only a question of style. In the main, I don't think the report goes out to light-hearted people. I just don't think it's good style: that's a judgment.

The minister was also going to get some information for us. I don't need to remind him about the handling of the Traffic Victims Indemnity Fund.

Just to recap a couple of things that the minister said about the survey. In your discussions with Mr. Gelman of Delphi that you say you had, did you eventually come to a decision that you would not use the political material that was obtained in the survey? In other words, once that material goes into the computer, the benefit of that material politically is that you can use the cross tabulations and get all sorts of political information from it. It's all right for the minister to say that he was against it. It's all right for the minister to say that he too feels like the second member for Surrey (Mr. Hall), that this was wrong. He didn't like that. But the point is that it happened. Now you've got the information and it's in the computer. I'd like the minister to tell me that that political information has been expunged from the computer, that he's not going to use those cross tabulations for any political purposes. But I don't think the minister is going to do that. You see, the minister thinks I'm just a nice guy asking nice questions. Well, you're dead wrong.

HON. MR. HEWITT: No way. I lost that impression a year ago.

MR. HALL: You see, I happen to know Mr. Gelman.

HON. MR. HEWITT: I see. Let me make a note of that.

MR. HALL: Yes. make a note of that. Write that down. Arthur Gelman.

HON. MR. HEWITT: Yes. I've met him.

MR. HALL: I happen to know him, and I know the methodology behind Delphi Research. I'd like to ask you another question about it: isn't ICBC already spending $20,000 per year with Decima Research for four reports on exactly the things that you said you wanted to get from this other research company? That's just by way of recap.

Turning now to the corporation, he says that they had three million transactions — an awful lot. The member for Surrey has got a few on his desk. That's not very important. There are only half a million claims. So we get from three million straight away to 500,000. How many do the MLAs have all together? I don't care if they've only got 10,000. How many people don't bother complaining because they're sick and tired of the corporation? How many people don't

[ Page 7884 ]

bother to complain because they just don't know where to complain to? So don't give me the old numbers business.

Let me give you an example of where somebody did bother to complain. It's not whether anybody is 100 percent to blame. I'm not talking about those kinds of issues. I'm talking about people complaining about the corporation, not about the accident and whether somebody was hit on the lefthand side or the righthand side. I'm talking about people talking about the corporation.

Here's an accident that occurred in Surrey on December 4.

HON. MR. HEWITT: What were you doing on December 4?

MR. HALL: Whatever was happening in Surrey in 1979, my friend, they got wise to you halfway through it by electing me and that guy over there (Hon. Mr. Vander Zalm).

Mr. Chairman, on December 4 there was an accident in Surrey. Seven days later the man who was responsible for the accident went to the claim centre in Surrey to admit fault. He'd been contacted by the person he hit. It was not a serious accident. He went to the claim centre to admit fault and to say, in effect, to the corporation: "Hey, you've got a man who has registered a claim here. I'm the fellow who hit him. We exchanged names and numbers and so on. I want to come in here and admit fault. It was all my fault. Give me a piece of paper to sign and I'll get out of here," and so on.

Do you know what he was told? "You can't do it." He was told he'd have to make an appointment to sign that piece of paper. The first appointment he could make to sign the piece of paper was December 21. That's 17 days after the accident and 10 days after he went into the claim centre. The person who was damaged in the accident had to wait all that length of time before he could start the whole process. That's the kind of stupidity that I'm talking about, not the 60-40, not the 50-50.... We've got shoals of those papers, if you want to discuss those. I'm talking about the operation of the corporation. I'm talking about tow trucks and body shops. I'm talking about the complaints about the actual commercial and administrative practices of this huge corporation.

Interjection.

MR. HALL: There you are, you see. One of your own members wants to wind it down. Safety again. You're the only insurance corporation in this country of ours that still doesn't support the driver training school. We had that discussion last year. You still don't do it. Yet you receive statistic after statistic showing that you're using the wrong figures, that all the other private-sector corporations in Ontario, Quebec and other places support these kinds of things. You are flying in the face of your own information. If you read the report you had from G.T. Woods Associates, which is called "Reducing New-Driver Accidents: A Report to ICBC, September 1981," it raises more questions on safety than it answers. All this report asks for is more and more studies. It doesn't grasp the situation at all.

What are the problems of the corporation? I have a list of some eight right now — simple administrative problems of the corporation. Let's deal with a couple of them. This isn't to do with 60-40. This isn't to do with whether I was hit on the right side or up the rear end or anything else. "ICBC To Replace Misleading Form" — that kind of thing, right?

HON. MR. HEWITT: There's no such breakdown as 60-40. You should know that. You were a director.

MR. HALL: I know how many people on both sides of a claim are losing their deductible: I know that, Mr. Minister.

"ICBC To Replace Misleading Form. The Insurance Corporation of B.C. will stop asking injured motorists to sign a four-part medical authorization form after a lawyer blasted its use as improper and misleading."

Those are the kinds of image problems you've got. Those are the things that get the claimants uptight. Those are the kinds of problems, letters and phone calls we're getting. I'm not talking about who did what, with what, and to whom. I'm talking about the very problem you put your own finger on: why we are still having problems with bank transfers. Why are we still having problems with ICBC trying to get money out of bank accounts?

HON. MR. HEWITT: With what?

MR. HALL: "With what," he says. If you don't know that the corporation is still having a great deal of difficulty with the pre-authorized cheque system, then you don't know anything. If you don't have a fileful of letters of complaint from people who are fed up with getting wrong information from ICBC about whether or not they owe money or whether or not there was money in the bank at the time, you don't know what's going on. I really mean that. I don't believe everything that everybody tells me when they come into my office, but you don't know the kind of headache that ICBC has with some of the incorrect information it's working with. Get it fixed up. Don't tell me about the three million transactions and the 500,000 claims. We're not talking about that. We're talking about the rubbish information that they're dealing with. The ICBC computer is still at it. When do you think you will have all the errors out of the computer for the licence year we are currently working on? There is a question.

The next question I have is this: how many senior members of staff have been dismissed from the corporation? Perhaps the minister could write this down instead of listening to the member for Kamloops (Mr. Richmond). How many senior members of staff have been dismissed and awarded either, following court action, amounts of money in compensation for lack of notice or severance pay in excess of the normal kinds of allowances that are made in these cases, particularly from the legal department? Could the minister tell us what the corporation's track record is on dismissal of senior staff?

The question of the corporation's image — that is what we are really dealing with — is whether or not the corporation is going to behave as a good corporate citizen and deal with its policy-holders in an even-handed and fair administrative way when it comes to the question of settling claims, or whether it's going to maintain this incredible attitude of being the boss, the taskmaster, in all of these cases.

According to the predictions of your corporation, during the strike, Mr. Minister, 50,000 claims appear not to have been reported. Could you tell the committee if those claims have now been established as being looked after and are no longer likely to appear on the books of the corporation? The particular reference is that starting on August 28, after the strike was over, 65,000 appointment cards were received, but according to the normal statistics for that period of time there should have been well over 100,000 claims. With the kind of

[ Page 7885 ]

backlog problems we've already had, if the idea is that there are another 50,000 claims still outstanding even at this late date, I wonder if you could advise the committee where we are with that particular problem.

The last series of questions deals with actual cases themselves. Mr. Chairman, I'd like the minister to explain to me what the ground rules are, if any, about the use of private investigators by the corporation. I don't know whether or not the minister shares my ambivalence about this. I think that there are some cases where investigation of an accident and a claim is obviously necessary, but there are cases where minors are injured, and investigators are being sent out to that child's school to quiz that child's friends, to quiz the teachers, to quiz their associates after school, to sit in a car outside the child's house, with all of what that entails. I just wonder whether the minister can share with us as a committee some kind of standards by which he expects those people working on behalf of the corporation should operate.

Let me give you a "for instance." It's a case in my colleague's riding of Mackenzie. In this particular case — I think you know the case; you had correspondence. There was an original complaint which went to you concerning the fact that the corporation saw fit to have a tail, or a private investigator, put on a 16-year-old youth who had suffered a fractured neck. Even though hospital records and everything else were supplied to the corporation, a tail — a private investigator — was still put on that case.

By the rules of court, the corporation has the right of access to hospital records in the course of litigation, and to an independent medical examination by a qualified neurosurgeon of their own choosing. At least two weeks before a trial they must be given full detail of all medical reports and information that the defence, or the injured party, would be using at the trial, etc. Yet during this whole case there was a reluctance on the part of the corporation to deal upfront, and in fact they put an investigator onto the case. I wonder if the minister can comment on the use of investigators.

I wonder if the minister could also comment on the current state of wisdom, the state of the art, in the corporation about hit-and-run. On December 16, here in the city of Victoria at approximately 2 a.m., these correspondents were awakened by a large crash, which turned out to be a driver smashing into their car, resulting in the car being written off by ICBC. The car was seven years old and had been taken care of. They were penalized $300 for not making a claim on a hit-and-run sideswipe and on vandalism which had occurred on another occasion. They were given $2,000, even though the car had only been driven 25,000 miles. On top of that they were given the runaround by the corporation here in Victoria. They waited from December 16 to December 29 for any response at all from the corporation, although I do admit they took into account the Christmas period.

I don't think the corporation publishes enough details on steps to be followed in a hit-and-run accident. Every one of us has, I think, files which are unfortunate.... . I'm not going to lambaste the minister, or criticize the minister, but I'm just going to point out to him what happened because of something he and the corporation did a year ago. When the corporation and the minister said a year ago, in effect, that the good-driver discount was going to follow the driver's licence and not the car, and then changed horses after that, I don't think the minister realized just exactly what was going to follow for the next two years. I think the minister would agree with me that there are a number of people who feel correctly aggrieved out there at having been told that the safe-driving discount was going to follow the driver's licence. They were then quite happy to lend their car to a third member of the family, to a neighbour in an emergency or to a visiting fireman from Saskatchewan, etc. As a result of this, if an accident transpired, they have lost their safe-driver's discount. Instead of....

Interjection.

MR. HALL: A fireman from Saskatchewan. Yes, that may not have been a good choice, Jack, but it's one that came to mind.

I think the minister would agree that that has been a most unfortunate happening and one which, again, has added weight to the general feeling of distress and disturbance towards this corporation by the public. They say: "Oh, well, if they don't have it that way, then, by goodness, they'll just change the rules anyway." That's the kind of impression that's left. You know, this corporation has to be squeaky clean. Don't misunderstand me. I'm not suggesting that they're taking money under false pretences, but everything they do has to be 101 percent, not 99 percent.

I can go over the next three or four letters, which all deal with claims on the car instead of on the driver, or deal instead with the sort of time-wasting tactics of ICBC that are now becoming absolutely classic — especially in my area; I've dealt with one of them already — such as answering the phones, setting up appointments, time-wasting investigation and cutting off benefits.

In fact, one of the classic ways ICBC behaves these days is to cut off benefits to get doctors to answer mail. Do you think that's fair for the corporation to cut off a medical benefit that is guaranteed by law to get a doctor to answer the mail? The answer is no.

Lastly, Mr. Chairman, because you've got a particular item in your estimates that deals with old-age pensioners, let me ask you if you've yet made up your mind whether you're going to give the old-age pension discount to old-age-pensioner motorcycle drivers. I have a good friend called Margaret Mitchell, the MP for Vancouver East, and her husband is a tear-away on a motorbike. Maybe I shouldn't have mentioned that Claude is....

HON. MR. HEWITT: I told him if he was over 65 and driving a motorcycle, he should get it.

MR. HALL: Do you want to tell him that? You'd better take your crash helmet. I don't think Claude would hurt a hair on your head.

That is a serious question. I have the senior citizen's automobile grant that he filled in on May 1, and he has yet to hear from you. I'd like to know whether or not you are going to give this old-age pensioner part of the $6 million you've got in your waistcoat pocket this year. When it comes to that vote, I will get Margaret Mitchell to write the speeches for me if you like, but it is most important. We've got a new constitution here. You can't discriminate like this, can you?

That will do for this second round, Mr. Chairman. Thank you very much.

HON. MR. HEWITT: I will try to answer the questions as they were asked. First, how many senior citizens of staff have we dismissed and how many settlements have been

[ Page 7886 ]

made over and above the normal amounts? I think you can appreciate that that is a pretty technical, administrative question. The member nods his head. I think he recognizes that I can respond to that, given the time to obtain the information from the corporation.

With regard to the 50,000 claims which appeared not to be reported, again we were dealing with the strike situation. Many claims are small in nature and, because the vehicle, although perhaps scratched or dented, could be driven at the particular time you mention, many people had not come into the claim centres because of the backlog. As a result, those claims were not shown.

As I mentioned earlier in my remarks, we are basically up to date, which means we now feel that claims that have been incurred have been reported and recorded; so we are, to all intents and purposes, up to date. The member might be aware that our unpaid-claims figures in the statements indicate there was a substantial increase in what was set aside — you might say in reserve — for claims incurred and not reported and claims not settled as of December 31, 1981, as opposed to December 31, 1980. The reason for that increase was, to a great extent, because of the backlog that still remains from the time the strike was settled.

The member asked about adjusting standards for insurance adjusters. I can only say to the member that the practice of the corporation is the same as that of any other insurance corporation. Normal adjusting standards are maintained. We consider the fact that an adjuster should investigate the claim but should not use any techniques that do not meet the standards set by his association or institute of adjusters.

As the member knows, there's a $150 deductible on hit and run. People who suffer damage through hit and run, where they can't identify the driver of the other vehicle, can claim against the corporation.

The safe driver discount or the driver accident premium. We attempted to put the cost on the driver by looking at an assessment of that driver. The member himself somewhat answered the question as to the person — I think he called him the visiting fireman from Saskatchewan — who might be visiting, borrows your car, takes it out and is in an accident, and thereby you lose your good driver or good vehicle discount. How do we assess that visiting individual when he's not here? The better method of identifying the vehicle or the person that caused the accident is with the vehicle. It's very difficult to identify and obtain a penalty payment or assessment from the driver. The concept was good, but at the same time the administration costs were deemed to be excessive, and as a result, we — like the other insurance companies across Canada and other jurisdictions — are looking at maintaining the identification with the vehicle. If somebody borrows a car and uses it and causes an accident whereby the discount is lost, then of course the individual responsible for the accident should certainly look to paying the owner of the car the amount of discount that was lost.

The last item dealt with the senior citizen discount and the comment about the citizen over age 65 still driving a motorcycle: why didn't he qualify for the senior citizen discount? Primarily because the program deals with automobiles and drivers over 65. It does not deal with motorcycles that are kept in a separate class for insurance rating. My observation, in reading the article, was that if the gentleman was over 65 and still able to sit on a motorcycle, it would appear to me that we should look to providing him with that senior citizen's discount. I have had discussions with the corporation and I think there has to be some change in their program and regulation. We are looking at that at the present time.

MRS. DAILLY: I found this a very interesting debate, probably because I happen to sit on the Crown Corporations subcommittee of ICBC. The more you sit on it, the more involved you become with this particular subject. Then, of course, almost every day we all deal with constituents in our offices who are coming in with complaints about ICBC. That is why I want to reaffirm the position that our critic has taken and which the NDP takes. The ICBC is our baby. We created it, and it was maligned and abused by the Social Credit government. Child abuse was prevalent with the ICBC. It was a battered baby, and yet it is surviving. You know, Mr. Chairman, it is surviving because it is basically an excellent program. It is one that the people of B.C. have endorsed. However, their endorsement has become somewhat strained over the last few years, principally because of the way it has been handled, unfortunately, by management. I don't know whether we should place all the blame on the ICBC management. Perhaps we should really look at the government, because we are quite aware that there are members of the Social Credit Party and Social Credit government who have never believed in the principle or the philosophy of government auto insurance. I think that as time goes along we'll find that perhaps the majority do not believe in government auto insurance. This is really pretty sad, because it is an excellent program, but the Social Credit government have done their best — I want to repeat — to try to turn it into a program that will cause the citizens of British Columbia to turn their backs upon it. I don't think we can place the blame entirely on management. We are going to have to look at the minister in charge, the Premier and the government. I think it is about time that we had a basic statement from the government on where they stand with ICBC. Their attempt to discredit us with that phony $187,000 — $187 million, rather — transfer....

[Mr. Davidson in the chair.)

HON. MR. BENNETT: Oh, well, what's a few zeros?

MRS. DAILLY: Yes, what's a few million here and there? The attempt by that minister and that government to discredit that $187 million so-called debt is no longer credible, even with the public. They have seen that the Social Credit government will do anything possible to discredit ICBC and government insurance.

HON. MR. McGEER: Twenty-five dollar automobile insurance.

MRS. DAILLY: If I were the minister who was first put in charge of ICBC by the Social Credit government, I wouldn't open my mouth. That minister completely lost his credibility with his harsh, cold statements to the people of British Columbia on what they should do with their cars. Then, of course, the Premier realized that the people of British Columbia were turning on the minister, and this was a mistake, because he wanted them to turn on the principle of ICBC and government auto insurance. The problem is that we're quite serious when we say that we believe the people of B.C. now endorse government auto insurance. Again, they're having that endorsement strained by the actions of that government.

[ Page 7887 ]

I'd like to move to the other point that was brought up by our critic for ICBC: the matter of the survey. For those of you who perhaps weren't in the House when the critic was speaking, I would like to repeat his main concern on behalf of our party: that this government would condone, through that minister, a political survey to be done by a Crown corporation. A political survey! We have listened to the minister trying to explain it away and excuse it, but as our critic, the member for Surrey (Mr. Hall), pointed out, the minister's excuses don't wash. There is no excuse for ICBC being allowed to do any kind of a political survey. Can you imagine the question that was actually asked? I want to repeat it to the members of the House who may not be aware of how political this survey was. Here is the question: "Would you guess that ICBC rates for the average B.C. driver would increase faster or more slowly or about the same during the next three to five years with a Social Credit government in power in Victoria, an NDP government, a Conservative government or a Liberal government?"

SOME HON. MEMBERS: What was the answer?

MRS. DAILLY: The Socreds are only interested in knowing what the answer was. Again, they're showing no sense of ethics or political morality. They can sit there and actually condone the use of a Crown corporation for their own political polling.

Interjection.

MRS. DAILLY: That's what it is. Maybe you can answer this better than the minister can. He was not able to answer it.

I want to bring up an area that was also brought up by our critic. It has to do with the problems ICBC is facing because of what he said seemed to be some almost stupid orders or directions from above. Let me give you an example of the stupidity of some of the directives which recently came right into my office.

A constituent of mine was going on holiday for several months. He went to ICBC to express his concern that while he was on holidays — it was going to be an extended holiday — his insurance would come up for renewal. He said to ICBC: "Could I please pay for it now so that I can go away and not worry about this?" Do you know that ICBC said no? They said: "We haven't any way that you can pay for that insurance ahead of time." The man said: "Here was I, not complaining about not getting money from ICBC for a claim; I wanted to give them money, and they refused to take it." It is this kind of what we must call an almost stupid decision that must be looked into. It makes you wonder if the ICBC management has been told to go purposely out of its way to do these stupid things so that it can discredit the whole principle of government auto insurance.

I want to ask the minister what he does when he receives these complaints. As the minister in charge of ICBC, I'm sure he does receive them. I would also like the minister to answer a specific question about the survey. What were the specific terms of reference given to the firm that was hired by ICBC to do that recent survey?

I want to end with one final question and give the minister a chance to answer before the time of adjournment. It is something I'm most concerned about, Mr. Chairman, and that's ICBC's policy of making moral judgments the basis for their granting of house insurance. As the members of the ICBC committee know, we discussed this with the board of directors. I was not satisfied with the answer we received from them, so I said I would perhaps find it necessary to bring it up on the floor to get a reaction not only from the minister but maybe from some other members. I am not saying the minister is responsible for this, but I would certainly like to hear his reaction. Here is my question, Mr. Chairman.

I don't know if the members of the House are aware that anyone who has been even charged with the smoking of marijuana cannot receive house or fire insurance. I don't know if the House is aware that a prostitute cannot receive fire insurance from ICBC. I am bringing this up because I do not think the basis for granting house or fire insurance in this province by the Crown corporation should be based on moral judgments by the board of directors. Surely you would think it would be based on risk only

When I questioned the board of directors, I said: "What about a smoker, a heavy, ordinary smoker? Let's not say marijuana. Is he not more of a risk perhaps, or the same risk anyway, as a marijuana smoker?" I ask the minister, is that fair? As the minister in charge of a Crown corporation that is ultimately responsible to this Legislature, I would hope, and to the government: do you condone moral judgments of a board of directors as the basis for the granting of house insurance in this province? I noticed that part of the survey, the poll, apparently went along with this.

There were also questions on this ICBC survey — can you imagine? — about the legality of marijuana and gambling. They were asked: "Why are you asking questions about marijuana and gambling in the survey on ICBC?' You know what they said? They said the idea was to measure attitudes toward taking risks. They apparently want to know what the public's morals are today. I find this whole thing unbelievable. I couldn't get anywhere with the board of directors, Mr. Chairman. so I'm going to take it to where I should — to the floor of the House. I want to ask the minister to respond.

HON. MR. McGEER: Mr. Chairman, it's interesting to listen to the questions of the New Democratic Party with respect to one of the corporations which they themselves started. The one factor which that party ignored during the time they were in office, to the dismay of British Columbians, who had to fork out $187 million losses to indulge their political judgments.... The one thing an insurance corporation should be based upon is evaluation of risk; that's the one thing that is incompatible with New Democratic Party politics. So they came forward with the notion of $25 insurance, and before the public realized what had happened they'd been skinned of $187 million. Mr. Chairman, have we any evidence at all that the New Democratic Party has learned their lesson from that awful experience? They started a corporation which, instead of being based upon sound principles. was based upon political judgments, and lost more money in its two years under the New Democratic Party than any corporation in Canadian history, private or public.

AN HON. MEMBER: And that was with a monopoly.

HON. MR. McGEER: Yes, with a monopoly. We know from the former Minister of Human Resources over there that a $100 million clerical error was nothing to the New Democratic Party, and perhaps blowing $187 million on a corporation was routine. I can tell you: it may be routine for the New

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Democratic Party of British Columbia, but it certainly is not routine for corporate history in this country. There for everyone to see was an all-time record established by the New Democratic Party, because they insisted upon placing political judgments ahead of normal insurance practice.

When the time comes, after a year of careful thought and research on the part of the opposition, to provide some stimulation in debate and to criticize — if that's possible — the minister in charge of ICBC at the present time, what do we have — sound, reasoned points of view; intelligent criticism; contrition for their performance during the years they held office? No, none of those things. The only complaint was that the Insurance Corporation of British Columbia had attempted to obtain some information to help them evaluate insurance risks, which is all legitimate research for a corporation. But because it didn't happen to agree with the political values of the New Democratic Party, that becomes the focus of their criticism in the House.

No wonder they are in opposition, Mr. Chairman; no wonder they were rejected in 1933.... [Laughter.]

SOME HON. MEMBERS: What other years?

HON. MR. McGEER: Mr. Chairman, because there isn't time to go through recent history, I move the committee rise, report great progress and ask leave to sit again.

Motion approved.

The House resumed; Mr. Speaker in the chair.

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

Hon. Mr. Williams moved adjournment of the House.

Motion approved.

The House adjourned at 6:01 p.m.

ERRATUM

Tuesday, May 18, 1982, morning sitting

At page 7633, right-hand column, line 12, the words "....to 95 cents per litre from 66 cents per litre...." were transcribed in error and should be corrected to read "…to 0.95 cents per litre from 0.66 cents per litre...."