[ Page 8117 ]

CONTENTS

Routine Proceedings

Oral Questions

Foreclosure writs. Mr. Lea –– 8117

Expenses of Premier. Mr. King –– 8118

Committee of Supply: Ministry of Municipal Affairs estimates. (Hon. Mr. Vander Zalm)

On vote 63: minister's office (continued) –– 8119

Mr. Levi

Mr. Leggatt

Mr. Mitchell

Mr. Macdonald

Mr. Barber

Mr. Davis

Hon. Mr. Nielsen

On the amendment to vote 63 –– 8142

Mr. Segarty

Mr. Barber

Division

On vote 64: operations and administration –– 8143

Mr. Barber

Division

Presenting Petitions

Mr. Ree: Seaboard Assurance Company Act, 1953, Amendment Act, 1982 –– 8143

THURSDAY, JUNE 10, 1982

The House met at 2 p.m.

Prayers.

HON. MR. BENNETT: It's a pleasure to introduce the top five high-school athletes in our province, who are in the gallery today. They have won this year's Premier's Athletic Award Scholarships, worth $2,500 each, to continue their post-secondary education. With us today are: Rod Corriveau, a speed skater from Fort St. John, with his mother, Wilma: Derek James, a wrestler from Burnaby, with his mother and father, Evelyn and Allan, and his grandfather Ed; Erminia Russo, a volleyball and basketball player from Kelowna, with her mother, Amerinda; Diego Marchese, a basketball player from Vancouver, with his mother, Victoria; and Patricia Wellmann, a track-and-field athlete from Victoria, with her mother and father, Alida and Gunther. These talented athletes, who were chosen from more than 350 students applying for the Nancy Greene awards, represent a combination of athletic achievement, scholastic ability and leadership.

I would ask the House to join with me in congratulating these outstanding young British Columbians and in welcoming them and their parents to the Legislature today.

MR. BARRETT: May I add my words of congratulations to those of the Premier, particularly to the parents. Parents today deserve all of the public recognition possible from legislators. I would like to say to the parents that we admire and respect what you've done. May your achievements with your children be a model for all parents in the province.

MR. RITCHIE: It's my pleasure indeed to introduce to the House today my constituency secretary, Chris Haley. With Chris is another constituent and good supporter, Glenora Braun. They are both in your gallery, Mr. Speaker, and I would ask the House to welcome them.

MR. BARBER: Ken and Beryl Arnott are in the gallery today. They are active supporters of the New Democratic Party, residents of Saanich, and I ask the House to make them welcome.

HON. MR. WOLFE: I ask the House to welcome 22 very well-behaved school children from York House School in Vancouver, together with their teacher, Beatrice Reed.

MR. LOCKSTEAD: We have in the gallery today two visitors from Powell River, Mr. Tony Hannon, chairman of the Powell River Teachers Association, and vice-chairman Mr. John Andrews. I ask the House to join me in welcoming them.

HON. MR. ROGERS: Three visitors and a personalized tour guide: Nancy Heywood and Ilene Stern from Los Angeles, and Barbara Roberts from Vancouver. Mrs. Judy Strongman, who is well known to many of the members of this House, is acting as their personal guide in their tour of the buildings today.

HON. MR. NIELSEN: I'd like the House to acknowledge and welcome 40 youngsters from Acton, Ontario, who are here as part of an exchange program with students from the J.N. Burnett School in Richmond.

MR. RICHMOND: In the gallery today are three gentlemen who are engaged in the agriculture business in the constituency of Kamloops: Mr. Wes Barron, Mr. Bill Hadath and Mr. Wayne Johnson. I would like the House to make them welcome.

MR. DAVIDSON: Visiting us this afternoon is my sister, Mrs. Donna Mackey. I ask the House to make her very welcome.

MR. STRACHAN: Visiting in the precincts today because of a Bar Association gathering in Victoria are friends of mine and of the Minister of Labour (Hon. Mr. Heinrich), Mr. and Mrs. Grant Hughes.

MR. HOWARD: I'd like the House to join me in welcoming a former member of this illustrious chamber, now a member of the bar in Vancouver, Tony Gargrave. He was the MLA for Mackenzie some time ago.

Oral Questions

FORECLOSURE WRITS

MR. LEA: I have a question for the Minister of Lands, Parks and Housing. Records at the Vancouver courthouse show that foreclosure writs were issued at the rate of three per working day — or every 20 minutes for every hour of every working day — in the first six working days in June. In view of the fact that this matter has been raised with the minister on two previous occasions in question period, has the minister now taken steps to determine the extent of the foreclosure epidemic facing British Columbians?

HON. MR. CHABOT: The question was asked by the member for North Island (Mr. Gabelmann), who is absent today, and was taken as notice. I'm in the process of attempting to get as accurate an assessment of this issue as I possibly can. It’s a very serious problem not only in British Columbia but in other provinces as well. In fact, in Manitoba foreclosures are three times what they are here.

Interjection.

HON. MR. CHABOT: In socialist Manitoba, yes. I will bring the information back to the House as soon as I possibly can, but I just wanted to apprise you of the fact that in socialist Manitoba foreclosures are three times what they are in British Columbia,

MR. LEA: Has the minister developed a program of mortgage assistance to assist people who are losing their life savings as a result of this fantastic foreclosure rate"

HON. MR. CHABOT: That's an ongoing policy issue. It's one which is being examined, and in due course we'll have some material on our housing policy.

MR. LEA: Let's hope they show more concern in socialist Manitoba than they do here.

[ Page 8118 ]

Has the government decided to bring in a mortgage moratorium for dwelling foreclosures in the province of British Columbia — the same as socialist Saskatchewan brought in before they were chucked out?

HON. MR. CHABOT: Mr. Speaker, it wasn't that successful in former socialist Saskatchewan. I want to say that we don't have such a policy in this province at this time.

MR. LEA: In previous question periods, the minister stated that he didn't see that there was any problem, and that nobody brought it to his attention that there was any problem. Is the minister now saying that he does see it as a serious problem in British Columbia?

HON. MR. CHABOT: Well, as I said before, I'm getting the information, which I will put together to determine whether it is a problem or not. As soon as I have that information compiled, I'll be glad to bring it back to the House. I appreciate very much the substitute critic for the Ministry of Housing bringing this issue to my attention now. I'll bring the matter back to the officials of my ministry to make sure that I get the information as quickly as possible. I know there are people out there who don't want to see the degree of foreclosures that are taking place in Manitoba reaching British Columbia, so I'm concerned too. Even though they are substantially less in British Columbia than they are in socialist Manitoba, we're concerned, and we're going to be examining the issue.

EXPENSES OF PREMIER

MR. KING: Mr. Speaker, I have a question for the Premier. Can the Premier explain why two bottles of Johnny Walker Black Label Scotch whisky were bought for the "Premier's entertainment" on December 12, 1980, at the taxpayers' expense?

HON. MR. BENNETT: I think the member is incorrect in the question. I think he's referring to an expense which was brought to my attention as one incurred by the press officer for the Premier's office. It had nothing to do with my own expense. Therefore I would like to caution the member in making those sorts of statements that would attribute it to myself. I'm now looking into the matter to see how the press office in the Premier's office works with the press gallery and the press in British Columbia.

MR. KING: Mr. Speaker, I appreciate the Premier's caution. I have had occasion and opportunity to investigate and personally view the voucher, which I have copied. The voucher number is listed as A498985. It is noted to code "reciprocal entertainment, H. Leiren, Premier's Office, Buildings," and on the actual receipt it says "Premier's entertainment."

All I have to go by is the voucher and the cancelled cheque. I wonder if the Premier can explain to the House precisely what reciprocal entertainment means.

HON. MR. BENNETT: Mr. Speaker, from my preliminary investigation of this voucher, which is over a year old, I found that it has to do with the press officer reciprocating to the press gallery or members of the press. Although it is incurred by Mr. Leiren, the press officer for the Premier's office, I'm assured that it is to do with events which the Premier does not attend. However, I would say that, quite clearly, if it's to deal with the press gallery trying to improve the Premier's image with the press gallery, it obviously hasn't worked.

MR. KING: Mr. Speaker, I, my colleagues and, I'm sure, the public are sympathetic to the need to improve the Premier's image. I think we just wish that the Premier would do it at his own expense rather than the taxpayers'.

Can the Premier tell us where this party took place?

HON. MR. BENNETT: I'm certainly attempting to find out the way in which the press office deals with the press gallery, both on a daily basis and on a regular basis, and whether they have copied procedures from the past. I certainly would hope that any vouchers from the year 1980-81 that the members would wish to question...and let them know that my deputy minister would be pleased to appear before public accounts and go through all the procedures that they administer in my office over the people that work in the Premier's office, whether it's the press officer or anyone else, and deal with both the items and the manner in which they're dealt with. I'm certain that then he would be able to bring a statement from Mr. Leiren, the press officer, on how these things are carried out, recognizing that it is an important function as an extension of the Legislative Assembly itself that the public accounts committee be given an opportunity to review, on behalf of the government, the expenditures incurred not only by the government side but also MLAs in their constituency expenses. I would expect that all those undertakings will take place in that committee. I want to make sure that my deputy minister gets a chance to appear, although the deputy minister of that day, Lawrie Wallace, was a distinguished public servant who set up and administered the office procedures.

MR. KING: The receipt attached to the voucher does not mention Lawrie Wallace. It shows that a public servant, who is paid around $45,000 a year, I think, was dispatched from the Premier's office to buy these two bottles of Johnny Walker Black Label.

AN HON. MEMBER: Two-bottle Bill.

MR. KING: Well, it may have been for two-bottle Bill, or it may have been for someone else. I don't know.

MR. SPEAKER: Order, please, hon. member. Debate is not permitted in question period. Please proceed.

AN HON. MEMBER: Who ordered the corn flakes?

MR. KING: I don't know that either.

I would like to ask the Premier if he has read the Treasury Board directive which was over the signature of the Minister of Finance and directed to all ministers and deputy ministers, giving specific instructions on expenditures for entertainment — specifically for liquor — and how they were to be handled.

HON. MR. BENNETT: Let me again correct a statement that the member for Shuswap-Revelstoke made in his zeal to probe. He said: "The press secretary was dispatched from the

[ Page 8119 ]

Premier's office. It was an expense he would have incurred of his own volition." The press secretary may have felt that within the nature of his job it would be an expenditure that he would not normally make. I don't know if the press secretary would normally entertain the press at his own expense or feel that it was an important part of press and media relations that he is bound to do in his role of government.

I do know that those things are administered in my office by the deputy minister, and I would be pleased to have him appear before the public accounts committee to deal with any and all vouchers, even those vouchers that are turned in by myself as expenses on my behalf. He can also explain vouchers turned in as expenses on behalf of the various people who work in the Premier's office.

MR. KING: Is the Premier now suggesting that his press secretary is answerable to the Legislature and the people of the province of British Columbia? The cheque and the voucher are clearly identified "Premier's office." There used to be a doctrine of ministerial responsibility, Mr. Speaker, where ministers of the Crown did not attempt to slough off their responsibility onto underlings.

MR. SPEAKER: Order, please.

MR. KING: Does the Premier accept, on sober reflection, that this was an inappropriate expenditure?

HON. MR. BENNETT: Mr. Speaker, I can't comment on the different types of reflection the member for Shuswap-Revelstoke may have. But I do say that in the final analysis, if during the perusal of public accounts and vouchers relating to members of my office who have been given tremendous responsibility, these are proven to be excessive, then, of course, the office will make those changes, because those people work for me. I will accept the fact that they work within the Premier's office.

I am advising the member very clearly, though, that the people in my office, although few, are given great responsibility, and when the member asks me to rationalize in this very important part of our legislative day, which allows for questions of urgency and public importance to deal with matters of today.... Under his definition of "urgency" are matters that can be dealt with inPublic Accounts on accounts that are over a year old. I would be pleased, day after day, to bring these matters back to the House. But perhaps the public would be better served having us discuss, during question period, the economy and the difficulties faced in British Columbia — perhaps the restraint program, which will save the public hundreds of millions of dollars. As for those areas where there are vouchers, deal with them in the extension of this chamber, in Public Accounts. I want to say they'll get every cooperation from my office, because we want to improve the system if it needs improving, and we want to see the public gets full value. I intend to do that, and I hope the opposition will assist me.

HON. MR. CURTIS: I ask leave to table a photocopy of a document to which I referred earlier this week.

Leave granted.

Orders of the Day

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

ESTIMATES: MINISTRY OF MUNICIPAL AFFAIRS

(continued)

On vote 63: ministers office, $205,621.

MR. LEVI: I want to ask the minister whether he's had an opportunity to consider a policy matter that I brought to his attention some weeks ago concerning what I characterized as discrimination in respect to a certain group in our community. The minister will recall that I wrote him a letter about an aspect of the homeowner grant that excludes some people over 65. These people, although they served in the war as merchant seamen, do not qualify for that section of the homeowner grant, while other people over the age of 65, or people who are in receipt of war veterans' allowances, do qualify for it. I wrote to the minister and asked him to consider that matter, and in his letter he said he would have his staff deal with it. It's a gross piece of discrimination, one that has existed in this country for many years. It has been settled in some jurisdictions, but it has not been settled here. I hope the minister recalls what I wrote to him about and what I'm dealing with. It's the only exception in this province. Veterans who served in the merchant navy do not qualify under the section that deals with the war veteran's allowance; obviously they're not in receipt of that kind of allowance. You need to include in that the civilian war veteran's allowance.

Several months ago I suggested to the minister that that policy should be remedied, and I want to know whether he intends to do anything about it. Several hundreds of people over the age of 65 who made an excellent contribution in the Second World War are being discriminated against because of the category they were quite wrongly placed in by the national government more than 35 years ago.

HON. MR. VANDER ZALM: The availability of the homeowner grant to various groups in our communities who are perhaps more in need has been very well addressed by this government. We extended it not only to those who are 65 years and older but also to the handicapped, and to people living in accommodations that were previously not eligible, such as various rental accommodation. The program is continuously under consideration. Our record of having addressed requests from various segments is excellent. As I mentioned to the member in my response to his letter, we will definitely consider suggestions from the members opposite, or otherwise.

MR. LEGGATT: I'd like to ask the minister a couple of questions. One concerns referendum by municipal councils on the subject of disarmament or nuclear weapons. The minister has taken a very forthright stand at this point and has suggested it's illegal. I think he has also suggested that he's against it, whether legal or illegal, and that it's improper and a waste of municipal taxpayers money. That is the position he has taken.

My first question is this: if in fact he receives a legal opinion that it is legal for municipalities to do this, is he still opposed to their using their authority under the Municipal

[ Page 8120 ]

Act to question the residents of their communities on the subject of disarmament and nuclear weapons?

HON. MR. VANDER ZALM: The Municipal Act and its provisions are very clear. It states, in short, that a municipal council may, by bylaw, call for a referendum at the time of elections on those matters over which it has some jurisdiction or about which it can do something. As I pointed out publicly, we do not intend to stop municipalities from putting forth such a referendum. We felt it only fair to advise councils and regional districts — particularly councils, of course — that they could be challenged by anyone in the community. If someone deemed it to be an expenditure which was not provided for in the Municipal Act or if someone deemed it to be a waste, he could challenge, whatever the grounds, the municipal council for having called such a referendum and expended moneys on it, at which time the judge would decide exactly where it stood legally and what, if any, the penalty might be for having done something contrary to what may be provided for in the Municipal Act.

MR. LEGGATT: Mr. Chairman, I'd be a lot happier with that answer if the minister would just come out and say that he doesn't want the question because he's afraid of the answer. That's one of the reasons he doesn't want the question.

The fact is that every municipality has a responsibility in terms of evacuation and emergency measures. There's nothing that more intimately concerns municipalities than the whole question of disarmament, peace and nuclear weapons. They are the most immediate victims of the arms race. For the minister to sit here and, in public, say that it's inappropriate or wrong that this question should be asked is the same kind of provincial, centralist arrogance we've been getting from this minister ever since he became minister. These people are elected to do a job. They have a responsibility to save the people in their community. They have a responsibility in terms of evacuation. The minister knows there are emergency procedures in every community. There are emergency evacuation procedures in the one he was mayor of. That's intimately and directly connected with this question.

It boggles my mind that the minister would take a position which says that you cannot ask the people of your community about nuclear weapons or disarmament. That is wrong, and the minister knows it. What he's doing is inflicting his own biases on the municipalities — in fact, using a big provincial stick. He's already scared North Vancouver out of it. I hope the rest of the communities have enough sense not to listen to the minister, and proceed to ask people in their communities about this vital and serious question. There are communities all across this country who are now asking this question. Thank God someone is asking this question. Thank God someone is dealing with the question of disarmament and peace. This is a movement that's growing all around the world. It's growing in North America. No matter what the Minister of Municipal Affairs thinks about it, and no matter how much he tries to interfere with the due democratic process at the municipal level, those questions are going to be asked; those answers are going to be given; and this province is going to make a contribution in terms of a movement which tries to control the craziness of the world arms race, which is leading us on to destruction.

There's another question I want to ask the minister, a little less excitedly perhaps. It's the question of the commuter rail running up the valley in my constituency. The latest press release the minister issued on the subject indicated that he had found a new way to bring negotiations on with the Canadian Pacific Railway over that subject. I'm pleased to see that there's some effort, because my reading of this is that the intransigence continues to be with the CPR in terms of movement forward in completing the commuter rail service. I presume the completion date is now being moved ahead.

One of the key questions in solving the lower mainland's commuter problem has to be the use of existing rail arteries for the movement of people to and from Vancouver. I haven't heard any political opposition at all to the provision of the Budd car system on the CP track. The idea is one that has absolutely unanimous support throughout the valley and the lower mainland. I would appreciate it very much if the minister would bring the House up to date on the status of the present negotiations with Canadian Pacific Railway and provide us with a completion date — if he has anything in his schedule for the commuter car system, which is completely vital for those people who live outside the Vancouver area, particularly on the north side of the Fraser River, who have been desperately looking for a way to stop driving burnper-to-burnper to Vancouver. Over the last ten years, an hour or more out of every person's day has been consumed behind the wheel of their car. The buses are completely loaded in the lower mainland during those busy hours, and it's still a long way off before the ALRT is in place. The commuter rail system is inexpensive, practical and can carry a very large number of people. I know the minister supports the concept. I would appreciate it very much if the minister could bring the House up to date on where we are and perhaps give us a target date or something up to date in terms of a completion date for this service. Perhaps he could advise us of the CPR's position. Are they now ready to cooperate in terms of the upgrading procedure so that we can get on with the job?

HON. MR. VANDER ZALM: When the member was speaking about the nuclear arms race, I am sure that for a moment he felt he was back in the House in Ottawa. However, I certainly agree that perhaps there, and anywhere and everywhere, it is our place to express our concern about the question. Frankly, being a father of four children, I can understand. Furthermore, I have been there before. I was in Holland during the Second World War, so I know the damage and tremendous destruction it leaves. On the other hand, as Minister of Municipal Affairs, I am sure the member would agree that I do have a responsibility to tell the municipal councils what the act provides for. Once we've advised the councils that they are expending public moneys on a matter which no doubt will be debated far and wide and once they know what the consequence of their doing it may be if they were challenged, then they can decide. I think I have that responsibility. On the basis of that I felt it my duty to advise them.

With respect to the commuter rail line, I am very pleased to announce that while there was some considerable delay for a while because of the position that had been initially taken by CPR, negotiations are extremely fruitful and progressing very well. As a matter of fact, we expect to have a draft agreement available next week and we look toward a target date of June 1, 1983, for the commuter train to be running.

MR. LEGGATT: I would like to thank the minister for his last answer. June 1983 is better than nothing at all. June 1983 is a year away. We had an earlier date, as I recall, of the

[ Page 8121 ]

fall of 1982, so it has gone forward a little bit, but I appreciate that the minister is trying on the subject. If the minister wants any help from anybody at the municipal or political level to put pressure on to move those negotiations forward, I want to tell you that he's got the cooperation of everyone on the commuter rail question. There is unanimity on the question of getting that commuter rail on. It is obviously going to come on stream before ALRT. We would like to see it work. We would like to demonstrate that local people can organize, promote and support relatively inexpensive commuter travel. A lot of people in our area are looking forward to the challenge of ways to promote this new commuting system.

That is only one thing, of course, that the minister has to consider. One thing that is outside his jurisdiction, but which I hope he is pressing for, is changes to the 401. We have to look at changing the commuter lane system on the 401. We have to look at the Seattle experiment, which has worked extremely well in reversing lanes during the day so that in the morning commuter hours we add lanes going into Vancouver and in the evening hours we add lanes coming out.

MR. BARBER: Like the Lions Gate Bridge.

MR. LEGGATT: Yes, exactly the same thing. For a relatively modest expense you can do it with the existing lanes that are there. With a fair expense there will have to be some reconstruction of overpasses. We should really add at least two more lanes on the 401 so that we can start moving commuter traffic.

The traffic situation on the lower mainland is such that I wish there was a single solution like ALRT to solve our problems, but the ALRT is only going to barely scratch the surface on the major commuting problem in the unique kind of geography we have on the lower mainland. We are probably, from a geographical configuration, the worst area in North America to provide commuter service because of the way we're squeezed between the U.S. border and the mountains. That being the case, we don't have corridors that we can acquire. They're too expensive. There's no point in acquiring new rights-of-way; we've got to use the rights-of-way we have intensively. Therefore we start with looking at the 401 in terms of traffic patterns. We move into CP commuter-rail service, which will make a dent in the problem. The Barnet Highway has to be reclassified and expanded into four lanes. That is a very quick and good way to move people from the north side of the Fraser River into Vancouver.

Those are only three things we can do, along with ALRT, which, frankly, from the point of view of the north side of the Fraser River is not going to add too much for a long time — it's only substantially down the line that there will be new stations for people in my area. Therefore we feel there must also be emphasis from the Minister of Highways (Hon. Mr. Fraser) in terms of lane changing, additional lanes and reversing lanes. The increase of travel lanes on the Barnet Highway is absolutely vital. Last but not least we would be delighted to see the commuter service begin, so the local community can demonstrate its support and so the local chambers of commerce and everyone in our community can get together and sell annual passes and do what we can to promote what should be one of the more successful systems for moving people.

MR. MITCHELL: Mr. Chairman, I have a couple of short questions, and I would like some answers and maybe some ideas from the minister about what particular plans he may have for the Western Community. Before I get into that, I would like to join with my colleague from Maillardville-Coquitlam (Mr. Levi) in bringing to the minister's attention the issue of the need for some additional reviewing of those who qualify for the senior citizens' type of homeowner grant. There is a growing number of people in the community who, because of illness and the stress of our growing government, etc., have to take an early retirement. They are just like those on an old-age pension; they are on a very fixed income that is being eroded day after day by inflation, by the increase in the cost of living and by the increased taxes that this government is foisting on the homeowner. They should qualify for the additional benefits that are given to those who are taking an old-age pension.

The pension for those over 65 is not based on income. It is not based on the minimum amount that a person may get either through GAIN or through the federal government's Canada Pension Plan, but is based on a person's age. It's believed that at the age of 65 people are retired and are on a fixed income. I think the same need is there for those who are on a fixed income for health reasons, and I ask the minister to give that serious consideration. I know that he too is getting a lot of requests for assistance so people can remain in their own homes when, at the present time, they are being priced out of them.

But what I would like to bring to the minister's attention.... The large part of my riding that is commonly and affectionately known as the Western Community — View Royal, Colwood, Langford, Metchosin and Sooke — is believed to be the largest unorganized area in Canada, and I believe that the type of development that is taking place there needs some firm guidance from the department of municipalities. As I said, it is unorganized, and I know there is a large group of people there who would like to participate in democratic municipal elections. They feel that they have a responsibility to make decisions affecting themselves, but because of the lack of information, the lack of leadership or the lack of direction by the government, they're not sure where they will go.

Over the years a number of committees have got together and have pioneered. They have made a lot of amateur studies, in cooperation with the Ministry of Municipal Affairs, of what it would cost, what particular grants they would receive and what money they should be getting back in the tax bases. Because of the last 20 years' developments in that area, a lot of the problems that any municipality would be facing if incorporation took place are the problems that were left by the present government and the past Social Credit government, because of the large number of subdivisions that have been allowed to develop that are not connected with the community. If someone happened to buy a farm and that farm was flat, the subdivision went through and homes were built on it.

Because of all this development there are major problems with the north-south roads going through that community. In some cases the Highways ministry has required that certain developers dedicate areas for future roads. Other subdivisions have been allowed to go ahead with no dedication for future north-south roads. Not only that, Mr. Chairman, these subdivisions have created a major flooding problem each winter. The three flood areas — Bilston Creek, Craigflower Creek and Millstream Creek — that are draining the subdivisions that have been allowed to go through have not been

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developed as a proper solution to the floods that are taking place. If any future policy of the government is going to insist that a municipality be incorporated in that area, the citizens of that area should have some firm commitments as to what responsibilities and what grants this government is prepared to make to cure some of the policies that they have allowed to develop — what input for roads, what input for future town centres, and what money is available, especially to cover the problem of flooding that has taken place which I have brought up each year since I've been here. I normally bring it up in the Highways ministry estimates. The government must be prepared to take partial responsibility for those problems and, if there is any incorporation, to pick up some of the cost.

I believe the government has purchased the property commonly known as the E&N right-of-way. It was interesting this morning, Mr. Chairman, when we were discussing transit, to hear the problems of acquiring the right-of-way for a transit system in the greater Vancouver-lower mainland area. We must look ahead in the Western Community, because that same problem will develop as people are going to move to that part of the community. Transit problems and planning must be looked at today. There must be some firm commitment that that particular should be maintained. It should not be chopped up, destroyed or ever be allowed to slip off so that the cost of purchasing it back would be unavailable to the future communities.

I would like the minister, if he could, to give some idea of what proposals the government may have. We both know that there presently is another committee. This time I believe it is being sponsored indirectly through the Western Community Chamber of Commerce. They, like the majority of the citizens out there, would like to know if there are going to be changes, what programs the government has on tap right now. What assistance are they prepared to give, and in what time-frame would they like this particular development or this possible incorporation to take place?

HON. MR. VANDER ZALM: Mr. Chairman, very briefly.... I thought perhaps I could save it, but certainly I can answer the questions which have been posed by the member for Esquimalt.

The Western Community group has established a committee. I'm not sure just how formalized it has become. When they left my office after the last meeting, they certainly promised that they would get as broad a base as possible by drawing in people from all sectors of the community, and electing from amongst their group an executive with which we in the ministry could deal and which could make decisions with respect to the bringing in of a consultant, to see what would be the pros and cons of seeking incorporation for the Western Community. I believe it's progressing, but just exactly where it is at I can't say now. I think it's probably changing by the day, but it is proceeding.

Secondly, the inspector met last week with the four electoral area directors for the western sector. They are looking to develop a drainage plan for the area, because it does involve more than just the one electoral area, as you are aware. It's for the whole area, and they are looking for a means of bringing about a resolution which we could begin working towards.

Finally, the government is working towards acquiring rights-of-way. I understand that recently we did acquire some of the rights-of-way, but perhaps the Minister of Lands, Parks and Housing (Hon. Mr. Chabot) can best answer that under his estimates.

MR. MITCHELL: I'm aware that there is a committee being formed. This is the third, if not the fourth, committee. It's not so much that we form another committee, but it's.... Some of these major costs that the Western Community is facing are because of the development that is being allowed to take place under the auspices of 30 years of Social Credit. What is the government prepared to put into this program for flooding? I believe there is a possibility of a referendum, but before a referendum goes to the people, it is important that we know that the provincial government is prepared to put some bucks into that particular proposal. This is what people want. They want answers, and they want some leadership or positive solutions from the government. I can predict right now that if it goes to a referendum without a firm commitment from the government, the referendum for incorporation — or maybe a referendum for flood controls — will be defeated. I say this is wrong. I think the answers should be given now: what kind of money the government is prepared to put into it and why they feel that they have a responsibility to clear up some of the messes that they have allowed to develop.

Maybe there should have been a policy 20 or 30 years ago that when an area becomes so concentrated or has a certain density, then it's automatically incorporated. We just can't allow this to develop, to go from one committee to another. There has to be some positive progress, and up until now we haven't had it. Whenever we have problems with planning or when subdivisions are turned down, there is a certain amount of static. We all blame the Minister of Municipal Affairs; if we can't blame him we blame the Highways department. There's always somebody that we blame.

Still, there has to be some other method of getting people to take their responsibilities — how they are going to develop the area. The area has been allowed to drift. The government has created problems, and I think the government, before they expect someone else to pick the chestnuts out of the fire, must be prepared to say, look, maybe we were partially to blame; we are going to assist, to the extent of X number of dollars. This is the kind of leadership, the kind of answers people are demanding. They are demanding them now, before any referendum. People don't understand; they don't know what the costs are. It will be defeated because of fear.

MR. MACDONALD: I have just a short question to the minister, who keeps filibustering his estimates. I don't know whether he's listening, but Lovat Corporation in Toronto has developed the super mole....

AN HON. MEMBER: Mole?

MR. MACDONALD: Yes — not one that spies out the secrets of government, not a member of the CIA or the OGPU. There's no political complexion to the mole. There's no expense account involved. But it tunnels underground with a wide tunnel, as I think the minister may know, 670 metres in four days. With the problem in Vancouver with ALRT, particularly on Commercial Drive, and further south in terms of residents and commercial enterprise, has the minister investigated the possibility of using this mole? I understand there may be some federal financing to help with the cost.

HON. MR. VANDER ZALM: For our type of operation in Vancouver it would need to be a cut-and-cover. Therefore the use of the mole, however exciting it may be for other

[ Page 8123 ]

projects and prospects elsewhere in the province or country, doesn't appear to apply in Vancouver. If they want to make a presentation to us, we would certainly be most willing and happy to receive the information.

MR. BARBER: When my colleague the former Attorney-General was recounting the strange coincidences involving the purchase of magically sited properties along the ALRT right-of-way, the minister indicated a couple of times that he thought it was perfectly reasonable for someone like Docksteader to make a profit of well in excess of a million bucks in just nine days work for doing nothing.

[Mr. Richmond in the chair.]

That marks a major philosophic difference between this side and that. New Democrats believe in profit. They believe profit should be earned, not ripped off. They believe profit should be earned by labour, by imagination and by actual work. What work did Mr. Docksteader do to earn this profit of more than a million dollars in just nine days? Did he improve the property? No. Did he put buildings on it of any sort at all? No. Did he tear down unsightly old buildings? No. Did he begin construction on anything? No. Did he improve public access for any public purpose? No. Did he do anything at all? Nothing. However, apparently under the capitalist creed of the Minister of Municipal Affairs, it is acceptable for this man to earn a million dollars for doing nothing. He did absolutely nothing, except buy a piece of property at the right time and sell it to the right guys for what has obviously turned out to be the right purpose, at least from the point of view of making unearned profit.

If I were Minister of Municipal Affairs, I would hope to be able to develop a way to tax back, to the benefit of all the people,100 percent of that unearned profit. As far as I'm concerned, that kind of profiteering, because it is unearned, is undeserved. Profit is okay as long as you work for it. Profit is okay as long as it's honestly earned. Profit is okay as long as you don't mislead, exploit or deceive the people you are taking it from.

When the people of British Columbia are concerned about the rising cost of land for housing, commercial or other purposes, they have to be concerned about who profits. I have no objection to someone profiting when they redevelop land for a good purpose, when they do it within the law and when they do not deceive their customers. If they work for the profit, they're entitled to the profit. They have earned it when they have worked for it. What kind of work did Docksteader do? What sort of work did he do; what improvements did he make; what value did he add to that land? The answer, perfectly and provably, is zero. If I had my way, I would tax back that utterly unearned profit and would use it to build a park. We might even call it Docksteader park in honour of the man who paid for it.

If ever a government is going to take initiatives to control the cost of land so it remains affordable for homes, and for commercial and industrial purposes, then it's clear that that government is not going to be a Social Credit government. In other enlightened jurisdictions — I think of two of the Australian states — they have a 100 percent tax on the unearned and windfall profits that are gained in speculation in land. Land speculators are a curse in British Columbia. They are a curse in any jurisdiction that must suffer their diseased view of private enterprise. They are a curse in this and every other province that has to put up with their activities.

They are, in fact, fundamentally lazy because they do work that is no real work at all. The so-called work consists of buying something one day, selling it a few days later, having done nothing to improve its value and thinking that they are entitled to some vast profit. The consequence of that is that people have to pay more for other commercial, industrial or residential properties. The consequence of that speculation is that all the values of land — if value is the word — are artificially increased. Is this government ever going to make a move to kill speculation in land and return the value of land to those areas of real improvement, real benefit and real work done to earn a real profit?

The minister may think, gosh, I wish it was me — for all we know maybe it was, through some front, but I doubt it — who knew about this; I wish it was me who could pick up a million bucks for doing nothing, for owning a piece of land for nine days. There are probably certain greedy people around who think they are entitled, having done no work, to make a big profit. But I don't think they are, because on this side of the House we have a different view about how you control speculation in land. You don't do it simply by making speeches, which occasionally Socreds do, about how terrible it is that people speculate in land, that they flip property and that they boost up real estate prices in an unearned and artificial way. Occasionally the old Socreds will stand up and give speeches about the money-lenders, the speculators and the land-flippers. The old Socreds apparently still believe in that, but the new Socreds, who used to be Liberals mostly, have a very different and a fundamentally selfish view about the uses of land. They appear to care not at all that speculators continue to drive it up so that other people can afford it less and less and so that those who end up having to rent, lease or purchase those properties will pay far more than they should have and may well have no choice for reasons of local economy and local location.

Mr. Chairman, if someone owns a piece of land, as Ocean Cement owned it, then they turn around and sell it to a guy like Docksteader, and then Docksteader turns it around and sells it to Socreds like the Olma brothers, and in the meantime the land has not been improved — no value has been added, no work has been done, nothing has been done but to exploit, speculate and flip the property — it's clear that there is something wrong with that system of speculation in land. Greedy people may think it's okay to make a profit that they haven't earned by their own labours; greedy people may think it's okay to take a profit that they have not earned by their own sweat, by their own imagination and by their own building. Greedy people may think it's okay to take a profit that they are not entitled to. But most of the people in British Columbia find speculation in real estate, the flipping of land, to be a sickening spectacle of which they are the victims.

Every time a real-estate flipper in the housing market takes a piece of land at a lucky location at a lucky moment in the real estate market, turns around and sells it again for 100 percent above the value he paid for it and has not improved the value of that land, all he is doing is adding to the cost of everyone else's land. Specifically, he is adding to the cost of the land for the people who have to buy his house because maybe they didn't have a lot of choice in today's market. He's certainly doing nothing whatever to break the back of the cycle of the artificial evaluation and the artificial inflation of the value of land. Now if you believe in speculating in land,

[ Page 8124 ]

then I suppose you can accept what this government has done to stop it, which, of course, is nothing. They've done nothing whatever to stop speculation in land; they've done nothing whatever to stop flipping in land.

I do recall the Minister of Consumer and Corporate Affairs (Hon. Mr. Hyndman) making a speech about it once. It was a good speech. He sounded like an old Socred who really believed that you can earn a profit if you work for it. I believe that too. I believe profit is just fine if you earn it.

AN HON. MEMBER: How would you know?

MR. BARBER: Do you have proposals to stop speculation in land?

AN HON. MEMBER: Do you?

MR. BARBER: Yes, I've made the first one. You do what two Australian states have done and you tax the daylights out of it. You describe it as a capital gain and you set that tax rate at 100 percent.

AN HON. MEMBER: Sure, that's what they did in Poland.

MR. BARBER: Are you out of your mind? Poland?

MR. SEGARTY: You've no idea what you're talking about. You want everyone to be socialists.

MR. BARBER: No, not at all. I want everyone to have an opportunity to own their own home and their own land.

Interjections.

MR. CHAIRMAN: Order, please. The House will please come to order and will the speaker please address the Chair.

MR. BARBER: Yes. Claude, I want everyone to have an opportunity to own their own land and their own home, and to do it I want to help establish the kind of market in the Canadian mixed economy which at best stops the profit taking that speculators, flippers and people who engage in the sale of land, having added nothing to its value, would otherwise denigrate, diminish and kill altogether.

The Socreds don't like to be confronted with the prospect of really having to work for their keep. Socred speculators especially don't like it. They don't like it because it is in fact an admission that the Protestant work ethic is something they wish to impose on other people but are not prepared to follow themselves. What work went into Mr. Docksteader's property, by way of illustration? Can any of the guys opposite answer that?

AN HON. MEMBER: What work are you doing on the Nanaimo Hilton?

MR. BARBER: They are building a hotel; they're improving the value of the land.

When people take land, raw or previously developed, and invest in it and convert it to some higher purpose within the laws and bylaws of the province and offer a service that people want and they make a profit, that is fine by me — be it CCF in Nanaimo, the Empress in Victoria or the Hotel Vancouver in that city. They have improved the value of the land and they are entitled to benefit from it. However, when you see a guy like Docksteader — and all the other Socreds — pick up a piece of land, do nothing whatever to improve its value and turn around and sell it nine days later, making a profit of more than a million bucks, these guys are clearly no better than speculators. They are speculators in land.

MR. KEMPF: What about Andy Schuck?

MR. BARBER: He will pay his income taxes. I hope the same can be said for you.

MR. CHAIRMAN: Order, please. Would the member please address the Chair?

MR. BARBER: Sure. When a guy like Docksteader, speculating in land, turns around and in nine days — having done no work, having contributed no value, having added no worth to that land — thinks he is entitled to a profit of in excess of a million bucks, we describe that as a ripoff. That is a kind of theft which, although legal, is not moral. Although it may be lawful, it is not right. Although it is permitted under the current tax system, it is not permitted in some other jurisdictions.

I would advise the government that for some time in two of the states in Australia they have had a 100 percent tax on unearned profits in the speculation of land. They exclude residential land; they include commercial and industrial property and they have, with apparent success, begun to dampen the inflationary fires that have forced the cost of commercial and industrial land in those states upward, with no end otherwise in sight.

Do you stand idly by and allow land speculation to continue with no controls, no restrictions and no abatement? If you do you are probably a Socred, because it's in your interest and the interest of your friends to allow that kind of unearned and unworked-for profit to be made. It is unearned and therefore undeserved, in my view. But in other democratic jurisdictions they have decided to try to wrestle with the problem of speculation in land. The first way they have found to do that is to establish a 100 percent tax on that unearned value.

How can value be earned on land? Clearly it can be earned by providing access to it for some designated public purpose, by improving services on it — be they sewers, transmission lines or some other function — or by building on it according to the bylaws and the zoning requirements in that particular area. In that system these improvements justify the profit because real work has been done and therefore a real profit can be earned on that particular land. When someone simply purchases land, adds nothing to its value and that land is not residential, then in these other jurisdictions they have to pay a 100 percent tax.

Speaking for people who care about the devastating impact of speculation on the real estate markets, speaking on behalf of people who care about the tragic consequences of land-flipping in the real estate economy of British Columbia, and speaking for people who are concerned about the human and market impact of unearned and vast profits in real estate, I ask the minister to tell us whether he has commissioned studies of any order along those or any other lines to try to bring the vicious results of speculating and flipping under control in the real estate market. I am sure that even the

[ Page 8125 ]

minister will acknowledge that it is a real problem, especially in the built-up urban areas of this province. Even the minister will acknowledge what, for instance, the B.C. Real Estate Association has acknowledged in a paper they published in the middle of last year, as I recall. They said very plainly and forthrightly that flipping and speculation in land was doing injury to the real estate market. It was adding value that was not earned and inflating values that could not be met. It was adding to the costs in a way that did damage to the whole economy.

I'm very pleased that real estate boards in British Columbia, as represented by that organization, took that position. That was a responsible position, because they too felt some responsibility to identify and deal with the problem of the dislocation of the real estate market that inevitably occurs with flipping and speculation, especially in a time of low vacancy rates in certain sectors of that real estate economy and high costs associated with a general cycle of inflation, which must inevitably be borne by people who frequently cannot afford it at all.

I ask the minister to tell us whether or not his department has commissioned a study along the lines of the Australian model or along the lines of some other model which we on this side might not be familiar with.

Interjection.

MR. BARBER: We're not interested in the Russian model any more than you are. We don't live in Russia and neither do you. We don't live in Chile and neither do you. I presume that you are as interested in living under fascists as we are interested in living under communists, which is to say that neither of us are. Will you not concede for once that as legislators we actually care about this province? We live here by choice and we want to build it our way. I'm not interested in Russia, I'm sure, any more than you're interested in Argentina. We don't say that you are all supporters of the fascists in Argentina. Why on earth do you try to mislead people into thinking that we believe in some communist system? It's equally nonsensical.

MR. CHAIRMAN: Order, please. Could we address vote 63, please.

MR. BARBER: Yes. And I know you will call to order the member for North Peace River, because you are supposed to be fair, Mr. Chairman.

MR. CHAIRMAN: I'm calling everyone to order, and I would ask the member to address the Chair and address his remarks to vote 63.

MR. BARBER: Which is the office of the minister and that area of policy-making that I am now concerned with.

Once again, that area of policy-making is trying to address the question of whether or not this government has taken any steps at all to follow along the remarks of the real estate association and the remarks of the Minister of Consumer and Corporate Affairs (Hon. Mr. Hyndman) in a speech last year, in which he identified as a problem that issue of speculation and flipping. If this government's position is that a 100 percent tax is not an appropriate remedy, that's fine, if they can come up with another remedy that works.

In our system, apparently the only remedies that work in regard to such unearned profits can be found in the tax system of British Columbia as it is administered here and, of course, to some extent in Ottawa. If there are no tax remedies that you are prepared to consider, are there some others? For instance, is there a system of zoning sufficiently detailed to suit the purpose that would make it impossible for people to benefit in a speculative and land-flipping way, should they propose to? If you're not prepared to consider a tax mechanism for ending speculation or at least bringing it under real control, are you prepared to consider some other means? Those are the only two that appear to be practical at all.

The member for North Vancouver–Seymour will get up in a moment and talk about the horrors of confiscation and 100 percent taxes. I hope he reminds us that he was a member of the federal government that brought in the capital gains tax. The capital gains tax is, of course, one means of distinguishing profit and one means of retrieving some of it for public benefit. The capital gains tax was introduced by the Liberal government when Mr. Davis was a member of it, and I hope he won't omit to mention that in his remarks in a moment, because to do so would be to omit a very consequential argument in favour of those means whereby in Canada we can establish some sort of control over speculation and flipping.

If the government has not examined the capital gains tax, the income tax or such a system of bylaw and regulation that could control flipping and speculating in land, then I wonder if he could tell us whether or not he's got any other approach to consider. We on this side are not prepared to allow individual homeowners and individual businessmen to continue to fall victim to the artificial increase in real estate values that we've seen in this province in the last several years.

MR. BRUMMET: Are you going to regulate the buyers?

MR. BARBER: No. There may be ways to regulate the sellers.

MR. BRUMMET: There are no sellers without buyers.

MR. BARBER: The member for North Peace River says that there are no sellers without buyers. The irony of it is that in the restricted conditions of today's market in real estate that's not always the way it works. Let me illustrate. For instance, if persons are forced, by way of job relocation, to move to a community that has a zero vacancy rate in apartments and are forced to seek accommodation on some other basis, they may end up purchasing a strata title unit, a duplex, a single-family dwelling or a mobile home. In that sense they have no choice, because their job has forced them to relocate. That being the case, is it not a reasonable question of public policy to ask whether or not those persons who have to move, through no choice of their own, should have to fall victim to the local real estate pressures in that area?

Interjection.

MR. BARBER: No one is saying you're not allowed to buy. What we're trying to do is make it easier, more affordable and practical to buy. We're trying to make home ownership more accessible to more people, and we're trying to keep the costs of land down for business and industry. One of the

[ Page 8126 ]

ways you do that is by stopping speculation, by ending flipping in real estate and by trying to control speculation as best you can. We believe in home ownership. We believe businessmen should be able to pay the least possible price in order to assemble land for industrial and commercial purposes. We want commercial and industrial enterprise to succeed. One of the problems they have to bear is the problem of the cost of land. The cost of land is increased artificially when guys like Docksteader make a profit of a million bucks in nine days for doing nothing.

How do you break the cycle? What proposals do you have? What studies have you examined? What studies have you commissioned? What, if anything, does Social Credit propose to do to act on the advice of the Minister of Consumer and Corporate Affairs (Hon. Mr. Hyndman), who said that flipping in real estate was a real problem and something had to be done to stop it? I wonder if the government has done anything at all to end speculation in real estate. If so, we'd like to hear what it is.

MR. DAVIS: The hon. member for Victoria has raised an important subject. It's important, I know, because many people are concerned about exceptional increases in real estate values from time to time. What they tend to forget is that there are also recessions and declines in real estate values. So one can't automatically assume that when someone pays a large amount for a particular property he is in fact going to get his money back. I realize that Mr. Docksteader did very well out of the transaction which several members have referred to, including the second member for Vancouver East (Mr. Macdonald), but there's no assurance that O&K Tract, who bought from Docksteader, will get the money back that they paid for that property. There's no mechanism which will pass any part of that increase in value along to UTA or the rapid transit system.

When the hon. member for Victoria — who I assume was not only speaking seriously about a subject which he may or may not fully understand, but was also speaking for his party — advocated a 100 percent capital gains tax on properties within any distance of a public investment like light rapid transit or, conceivably, a highway or public work of any kind, he was really saying that this Legislature and provincial government should unilaterally, without regard, for example, to the sensibilities, powers and zoning jurisdictions of the municipalities, move in on real estate developments fringing on any provincial public work. If a 100 percent capital gains tax is the policy of his party, he's suggesting that it use a sledgehammer to kill the equivalent of a fly. There is a problem with flipping, but it's nothing like as horrendous as the problems we would face if there was a 100 percent provincial capital gains tax. Would he allow for inflation? Can you get anything back for inflation, or is it 100 percent? Does he qualify his 100 percent?

A few years ago in the United Kingdom, the Labour Party brought in a 100 percent capital gains tax in relation to public transportation. It killed any development whatsoever along those corridors, and as a result there was no improvement in ridership on those systems. They abandoned it. It had to be abandoned. It was obviously a scourge to any kind of development fringing on those new arteries.

They've had no substantial increase in real estate development around the principal BART stations in San Francisco. Why? Because they didn't allow rezoning. It's within the power of the municipality. The municipality can control the value of the lands around the stations. If you talk to the academics who've written on this subject, there are just as many saying there's no enhancement of land value around an urban transit station as those who say there is an enhancement. They've looked at the scene right across this continent and western Europe. It depends on the zoning, as the hon. member suggested. If the municipality is not prepared to rezone that land, that land has no enhanced value.

O&K Tract obviously thought there would be a rezoning. They're counting on a rezoning. They're counting on Vancouver to rezone the land around that particular station site. Unless they get a rezoning, they've been taken by Don Docksteader. They only have industrial land in an inappropriate place for industry with a two-storey maximum, and it will just sit idle. The city of Vancouver, in its wisdom, may decide to allow much higher structures to be built there. In that act they do construe a value on that land. It is not a value construed on that land by rapid transit by itself or by the location of a station there. It is construed by the upzoning.

As someone who would like to see the ridership improved in rapid transit, I would like to see an upzoning at every station and around every station so that we eventually have developments like those in Toronto where there has been a development in the last quarter of a century of highrises, condominiums, rentals and so on around the stations where people can conveniently get into rapid transportation because they live right above or right beside the station or within a few minutes' walk of the station. We will see this kind of thing develop in Vancouver around the station sites.

[Mr. Strachan in the chair.]

The question the hon. member is begging is whether the province, through an agency of the province, should get into the land development business around stations. It must also, in some way, be able to control, encourage or affect the upzoning or it isn't going to be a very profitable land business. You will acquire the land to no effect unless the zoning is changed.

Surely the hon. member is not suggesting at the same time that the province, through an agency of the province, should not only build these transportation arteries but also get into the zoning business within the municipalities.

MR. BARBER: That is what you have done at B.C. Place.

MR. DAVIS: That is an exceptional development in an area where the city was incapable, from a financial point of view, of reaching a conclusion with the CPR. The province moved in to solve an otherwise insoluble problem. We are not talking about one property site. At this point in time we are talking about at least 12 stations and, in the longer term, maybe two dozen stations and so on. The province, through an agency of the province, will be buying some land around station sites. Not really being in the land business but having to buy the land to facilitate the development, the province will sell it back. Hopefully we will sell it back at some profit. That profit would flow into the financing of the urban transportation system. I assume the hon. member would think that would be desirable in itself. I think the hon. member would have us reach much further afield around these stations — rather than taking only those several lots that the station physically impinges on — and take more than just those

[ Page 8127 ]

several lots. That would be more in line with the kind of thinking that he is proposing. He would see the Crown, the government and this agency in the land business to a considerable extent and use that land operation to help finance the project. We will be doing a bit of that. We will not be doing it to the extent that he would like, I know. Certainly we are not advocating a 100 percent capital gains tax on private properties abutting on the properties taken by the Crown agencies.

MR. BARBER: I wasn't just referring to the UTA development, Jack. I was talking about the real estate market generally.

MR. DAVIS: I think a very important aspect of this is the relationship between the provincial agency and the municipalities. Should the provincial agency mop up this enhancement of values — assuming it is allowed by rezoning — or should this accrue to the municipality?

In the case of the Olma property, if we can call it that — or the O&K Tract property, because they own it now — the city looked at the property with a view to buying it. It was offered to the city two and a bit years ago. The city decided not to buy that property, even though it knew there would be a transit station within 50 feet either way of it. They decided not to buy it using their heritage fund. Someone else bought it. Genstar sold it at what now looks to be a low price to Docksteader. Docksteader sold it to O&K Tract at a high price. O&K Tract has allowed UTA to cross for one dollar and are prepared to pay — depending on the rezoning they get — additional dollars. The public agency has not put out more than one dollar but, depending on the zoning, will get $1.3 or $1.5 million, depending on the square footage. The public agency has not used public money to line the pockets of Don Docksteader, O&K Tract or whatever. It has, in effect, extracted some kind of tax from that property, depending on its rezoning. We have done something. Maybe the dollars aren't enough for the bon. member. In a very general way we have done in a specific case exactly what he would do wholesale. One dollar has been paid by the Urban Transit Authority for the right to go through.

The station will substantially be built by the operator. A minimum station will be built by the UTA. If they get a rezoning and the right to build a hotel enveloping the station, they pay money into UTA depending upon their square footage — let's say $1.3 million or $1.5 million. What would the hon. member have had the government do — buy the property and then sell it again at some time in the distant future, meeting the carrying charges and ending up with a profit of $1.5 million? That's a characterization of what we've done. The hon. member for Victoria and the hon. member for Vancouver East may say that we didn't drive a hard enough bargain. We could maybe have got $2 million, $3 million or $4 million, but we would have had to wait some years to recover our investment. In that case we did something which is a bit unusual, but we may be doing a similar thing by buying properties and selling them back again. I really don't see any difference in principle.

The one question that the hon. members opposite should really address, if they were government and running the UTA, is to what extent they would steamroller over Vancouver, Burnaby and New Westminster. They would do the zoning, the upzoning and recover values. Those municipalities have their own ways of recovering the values. They regard any intrusion along these lines of zoning, or along the lines that the bon. members are suggesting, as a usurpation of their powers.

There was mention of one alderman, George Puil, and his annoyance with the actions of the UTA. George Puil was essentially upset because he saw big bad Victoria in yet another instance steamrolling over the city, assuming that upzoning would be forthcoming, being presumptive and stripping off $1.3 million. It was jurisdiction more than anything else that concerned him. I believe that we did the right thing cutting a corner there. The line was shorter, less expensive and there will be less slowing down of the trains. I believe that we did the right thing in principle in getting $1.3 million because we went across a private property. We could have accomplished that in other ways, such as buying and then eventually reselling the property. I don't believe that the government, the UTA specifically, lost anything in this process.

It has established one point: that we can get something out of the presumed enhanced value of property around stations. I don't think anyone can make a case in terms of dollars for the people of the province or the people of Vancouver being ripped off in any way. They collectively spent one dollar; they will collectively get back $1.3 million in the next few years, and they've got a somewhat shorter and easier line to operate through a property. I certainly don't think anyone in this Legislature will claim that any member of the staff that negotiated that deal gained in any way from the transaction. I didn't negotiate it; it was new staff hired several months after Docksteader had sold O&K Tract. All they can complain about really is whether we got enough by investing one dollar and getting back $1.3 million or $1.5 million in a few years. That's gain to the people of the province, and all the hon. members opposite can say is that they would have done better. I doubt very much if they could possibly have done better with a 100 percent capital gains tax, which doesn't work anywhere and which would frighten investment off and certainly wouldn't build up ridership around our stations.

HON. MR. NIELSEN: Mr. Chairman, the member for Victoria has stimulated a certain amount of discussion with respect to speculation and again with respect to the estimates of the Minister of Municipal Affairs. The member offered a lot of ideas and concepts that are worth consideration by everyone in the province who may be interested in this particular subject. I think perhaps the member has indeed stimulated some very legitimate discussion in this House, which unfortunately doesn't occur frequently. I'm not speaking with respect to that specific property that the member for North Vancouver–Seymour (Mr. Davis) offered some specific information on. I don't know who Don Docksteader is, but I presume he's part of the Docksteader family that is well-known in the Vancouver area.

The concept that the first member for Victoria put forward was the 100 percent tax on profits earned, I think, on commercial or industrial property where improvements had not actually occurred — I think that's the category — and the effect it may have on home costs. Mr. Chairman. I would agree with the member for Victoria that those who engage in flipping properties and speculations add to the overall cost of the acquisition of those properties at some later time by someone for a specific use. I don't know how the flipping or speculation on commercial or industrial properties would bear on the residential value other than by, I guess, general increases in property values. But I'm not quite sure how a 100

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percent tax — government's favourite way of bringing someone to his knees by imposing increasingly heavier taxes on people because they don't have the capacity to do it in some other way, so you just take it all.... I would think that if a person is investing in property, he does that with the idea that at some time the property will be sold, and he may gain a profit.

The member for Victoria didn't argue — in fact, emphasized — that a profit earned is a profit that should be properly gained. I wonder how attractive it would be to anyone to know that should he make a profit, depending on the criteria of the government of the day as to whether it was legitimately earned, it could be completely taxed away. I wonder how many people would take that chance, wondering what the policy was going to be next week depending on who might be in government. With the NDP in government, as the member said, it would be 100 percent tax unless it was earned. That's a pretty tough definition — "earned" — presumably earned to meet the criteria established by whatever government.

I suppose those who are engaged in flipping and in speculating have a very limited circle of people who would publicly support them, because I think most people agree that they do engage in an activity which has an effect on property values. It's interesting that the member for Victoria in his discussion and debate on the minister's estimates had to engage in name-calling. Apparently any person who engages in purchase or sale of property is a Social Crediter. According to that member, everyone who buys property is a Social Crediter. It seems so strange to hear that every person who may make a profit on a property sale is automatically a Social Crediter. I can just remember so distinctly the dreadful spectacle we saw in Vancouver some years back when a politician was engaged in evicting people from their apartments down in Vancouver because he was converting them to townhouses. That gentleman later became a cabinet minister — Mr. Bob Williams is no longer a cabinet minister. I remember the concern that was raised that someone was evicting people to convert apartments into townhouses so he could make a profit. What really concerns me, Mr. Chairman, is that the definition of the member for Victoria makes Bob Williams a Social Crediter. But in defence of Mr. Williams, he did hire his mother-in-law as a bricklayer — and that was generous, I think.

Interjections.

HON. MR. NIELSEN: I think it was his mother-in-law — she was on the payroll — or a relative of some kind. Possibly it was his mother, I'm not sure.

MR. CHAIRMAN: Perhaps we could now return to the estimates and vote 63.

HON. MR. NIELSEN: Well, Mr. Chairman, I think the question of those who speculate in real estate — those who flip land and property — is vitally important. I think that if the people of this province are to be concerned about how Municipal Affairs, municipalities and regional districts, or whoever, affect the value of property and eventually the cost to a citizen, they should pay particular attention to the concerns which have been raised in this House. And interestingly enough, those municipalities and regional districts, or whoever else may have zoning power, themselves engage in this practice of seriously affecting the value of the property and eventually the purchase price that an individual may have to pay to get that property. It's certainly not a secret nor is it a new concept that it is zoning that creates the wealth. Looking back in history, the capability of a municipal council — whichever government has that authority — to cause huge evaluation increases simply by rezoning.... Now in rezoning without, as the member for Victoria said, improving the property in any way, all that is done is that it is rezoned, and suddenly it is worth many times more than it was previously.

The same thing happened in this province when the agricultural land boundaries were imposed upon the people. The former Premier, the Leader of the Opposition, said: "I guess we have to agree that we created a lot of millionaires."

Because other property was not available for industrial, commercial or residential use, that which was not in the ALR was available, and the price zoomed up. That is because of zoning imposed upon land, by the provincial government in this case. More frequently it is imposed by municipal or regional districts. I think the Minister of Municipal Affairs has an enormous area of concern with respect to land values and costs, particularly when it is associated with providing properties for residential purposes. The problems associated with the acquisition of residential property go far beyond flippers or speculators in commercial and industrial property. They go far beyond the rezoning capabilities that municipalities or regional districts have, and beyond the capacity of a province, eventually reaching the federal government's concepts and ideas with respect to residential property and home ownership.

I welcome the news from the member for Victoria that he is in favour of home ownership and private property. Many people have been concerned about the statement from the member for North Island in which he said he didn't believe in the private ownership of property. I commend the member for Victoria, who recognizes and agrees that home ownership is worthwhile and he supports it. I hope the member for Victoria will not frighten anyone into thinking that, should the NDP ever become government again in British Columbia, and should a person who owns property, be it zoned commercial, industrial, residential or whatever, sell it for more than he paid, there will be a 100 percent capital gains tax to recover any such property. I hope no one believes this will occur.

Interjections.

HON. MR. NIELSEN: There are people who own a home that they may have purchased many years ago, and the home today may be worth a quarter of a million dollars.

Thirty years ago they may have paid $15,000 for it, or even less, the way the prices of homes have gone. Many of these people can barely afford their taxes. They may think: "This is my pension or my estate and I'm going to sell it." But if government is going to confiscate that profit at 100 percent simply because they didn't earn it according to the criteria that could be established by a socialist government, I would think those people would be pretty frightened. If the minister could develop processes for what I consider to be the extraordinary powers of local governments in zoning and the effect it has on the escalation of prices of land, I think he would be doing us a great service. I share the concern of the member for Victoria about the fact that a government at any level can simply, by signing a paper,

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rezone major areas of a city which now are so valuable that the average person can't even approach purchasing them. That has been happening for a long time. It is an area that perhaps can't be resolved quickly or even in this chamber at this time. I think the member for Victoria brought forward some thoughts that probably will stimulate discussion. It does typify an attitude that some people hold, and it will be very much worthy of consideration.

MR. CHAIRMAN: The member for Victoria. The Chair also regrets that the debate was not allowed to reciprocate during the last exchange. I was misinformed about something.

MR. BARBER: I appreciate the Chair's apology.

We have more common ground than I had expected and I am glad for it. Dealing with the comments of the member for North Vancouver–Seymour (Mr. Davis), in our view, the preservation of air rights along major rights-of-way, be they public highways for the automobile or public highways for transit — either way, they are public thoroughfares — should be the permanent preserve of the public itself. The temporary ownership and finally the sale to private interests of those air rights and related benefits is not in the public interest.

That does not necessarily mean, though, that the Crown is competent or adequately empowered to administer those. I don't happen to think it is. I think the Bay Area Rapid Transit district in the Oakland-San Francisco-Marin-Richmond area made a serious mistake when they decided to abandon the opportunity to retrieve benefit in order to subsidize the costs of BART. They did so out of terrible political fear. There was an enormous controversy in San Francisco. I happen to be fairly familiar with that. I've met with officials from BART on three occasions now, and I happen to read the San Francisco Chronicle. Although it's not a great newspaper, it usually carries these details fairly well. I've read some studies and once attended a hearing of BART. They made their decision to abandon the possibility of public benefit from the rights-of-way along BART lines because they were terrified of the criticism that would result that members of the board of BART — which is an elected board in that system — would somehow have been benefiting their friends.

As far as I can tell, there's no other rationale. In many other systems, as the member for North Vancouver–Seymour (Mr. Davis) knows full well, they retain those benefits and values for the private or public interest. It certainly can be done. Those values are measurable. They can be planned for, they can be anticipated, and they can be built. There may be certain areas of the United Kingdom where, for esthetic reasons, it's not appropriate to have development along major rail or highway lines. That may have been one of the rationales. I don't know. But it seems to me that you can make the argument as well that you don't want strip development along a major transit line. There may be esthetic, environmental or historical reasons, especially in Europe, for choosing not to proceed. In Vancouver, of course, that would be ludicrous. The primary benefit should be commercial and should be commercially available in such a way as to benefit transit.

The member said that there's fundamentally, if I understood him correctly, simply a difference in degree. He thought our response to him would be that they're not going far enough. Public ownership isn't great enough, public return of value isn't considerable enough, and the public process isn't well enough served. I think he correctly calculated our view. In our view, the air rights and related land benefits along ALRT lines should be preserved in their entirety for the public. However, the way they are earned need not by any means be the conventional way that they've been earned in other places.

Why, for instance, could the government not consider a policy as follows? The Crown would retain ownership. Public equity would be preserved in those benefits and rights. Local municipalities would be permitted by legislation to share in the proceeds, in return for which, as partners, they would guarantee certain rezoning for certain purposes. Thus the element of doubt and accident would be removed altogether. Let me illustrate. Vancouver, for instance, having agreed that it is consistent with its plan and their purposes, would agree to rezone for, say, a hotel, the property at Main and Terminal — if we can use that as an example. In return for that agreement, by virtue of the public planning process which Vancouver is already engaged in, they are then entitled to a share of the proceeds. They benefit; we benefit their planning proceeds; ours proceeds; ALRT is built; and not just the $1.3 or $1.5 million, but the tens and twenties of millions that will eventually be earned on that profit over the life expectancy of the buildings — shall we say, 30 years — would, in its entirety, return to the people of Vancouver and British Columbia.

Furthermore, there is no need to set up a British Columbia hotels corporation. That would be ludicrous. However, what you might do by public bid and tender or some other open process would be to invite private enterprise to participate: to build the hotel on the leased land along the specifications that the city of Vancouver, which is a partner in the venture, would set out. That private enterprise would be entitled to run it, just as private enterprise runs facilities on airport land. Cara, for instance, has made enormous profits by leasing land in airports across Canada, by operating restaurants, dining rooms and bar facilities. It doesn't matter to them that they don't own the airport. They don't have to own the airport. They own the rights of business. They provide a service — admittedly in this case a very expensive one — the Crown is reimbursed, the cost of the terminal is somewhat reduced, and private enterprise makes a profit which they have earned.

What is wrong with that policy? What is wrong with sharing the revenues with the city of Vancouver? What is wrong with using the provincial revenues to subsidize the real cost? Transit is a loser. Transit will never make money in North America. The distances are far too great and the densities are far too small. What is the matter with using those profits to benefit the people of Vancouver and British Columbia and simultaneously reduce the losses on the ALRT system? What is wrong with challenging private enterprise to participate in this co-venture? What is wrong with asking private enterprise to build a hotel above the ALRT station? They did that in Montreal. Place Ville de Marie is a classic example of how they did that, connecting conventional rail service, the new Montreal underground service — Metro and private enterprise.

In this case, one of those enterprises happens to be a Crown corporation, as you know — the CNR. The CPR is also involved in its end of things in Montreal. In Montreal they found that joint venture formula which allows profit to be made to reduce the costs of operating Metro, and allows private enterprise to make and earn a real profit and keep

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people employed and the economy moving. It seems to me that's a more desirable combination.

In British Columbia, as in Canada, we enjoy the benefits of a mixed economy. Private ownership and public ownership both have a role, a duty, an obligation, a responsibility, and a way of keeping our people working and our economy moving.

The member for North Vancouver–Seymour (Mr. Davis) says we disagree basically in degree and not in consequence. He may be correct. But for us the final consequence is that we may see — over the period of time that ALRT exists — millions of dollars earned by private entrepreneurs along the rights-of-way that could have been shared with the public and could have been shared.with the public originally so as to reduce — at the outset — the capital outlay that will be necessary in order to finance this project. The sooner we pay off the ALRT debt the better. We will thereby pay less interest and do so over a shorter period of time. It's clearly in our interest to pay off the ALRT debt as soon as we can.

Therefore timing is really very important — $1.3 million a year at Main and Terminal is a nice pile of money, and I'm glad we may be able to obtain that. However, if $4 million or $5 million a year were available because we were in a partnership with private enterprise and with the city of Vancouver, that's even more desirable. That's the harder bargain, and in the long run that is more greatly in the public interest. The consequence of receiving those greater revenues is that we can pay down the debt of ALRT and the UTA more rapidly and thus pay less interest and finally evacuate that debt in a quicker period of time. I think that's in our interest too.

To reiterate, BART made a mistake. It's understandable because of the political complexion of the Bay Area Rapid Transit district; the fact that the members of the board are elected persons; the fact of the imposition of a district-wide sales tax, which they twice increased in order to pay for BART. Also one has to point out that the technology, courtesy of Westinghouse, turned out to be not very practical. That is no reflection on the issue of rights-of-way, but it was certainly a problem of finance that they had to deal with. The directors of BART clearly wish they had not abandoned the public benefits that could have resulted from development at the stations and along the right-of-way. They desperately wish today that they could finance the writing-down of BART's debt by taking advantage of that. I am advised that they are now looking at ways to reconsider. For instance, they are looking at ways to build above the Berkeley transit station, which is in the east bay of San Francisco. That particular locale near Telegraph Avenue, near the gates of Berkeley — one of the great universities in the western world — may provide such a physical opportunity. However, they have problems with engineering associated with earthquakes and other problems there, and they may not be able to build to the density they would like in order to recapture the gain they need.

Nonetheless, I hope we don't make BART's mistake. BART's mistake was to say no to everything. Our mistake may be to say no to some of the things, and this is fundamentally a mistake that over the period of time ALRT will be in existence will prove to be very costly. I'm glad the member for North Vancouver–Seymour shares our view that the public is entitled to retain value and obtain benefit from air rights and rights-of-way. I just don't think they are going at it in as serious or as disciplined or as profound a way as they could.

I would call on this government to establish that partnership with both local government and private enterprise in order to allow private enterprise to do what it does extremely well — which is to efficiently operate business, make a profit and employ people — and at the same time to allow local government to do what it does well — which is to examine local planning priorities and zone accordingly — and to allow the province to do what it does well — which is to build these projects with a level of finance that is denied completely to private enterprise and local government. I think the government should be a little more serious about discerning and obtaining public benefits along ALRT rights-of-way. We agree with the basic principle; we wish you would go a lot further in its execution.

With regard to the comments made by the member for Richmond (Hon. Mr. Nielsen), I would only argue that it's a welcome thing to hear that he shares our concern about the devastating impact of flipping and speculation in real estate, be it in the residential, the commercial or the industrial market. It is devastating, crippling and damaging; it is unearned profit that they are not, in my strongly held view, entitled to make. I want to say, for the twentieth time, that I believe that people are entitled to take profit that they earn. That is our system in this mixed economy of Canada. But if they don't earn it, they are not entitled. They haven't worked for it, and they don't deserve it.

Now if the government rejects the notion of a 100 percent tax on speculative gain, on real estate flipping, then I ask them to tell us what other notion they would advance as an alternative. It's useful and worthwhile to give speeches condemning flipping in real estate. I'm glad the member for Richmond did so. I share his view. But I would commend to him, and to his colleagues, the three principal alternatives that exist.

First is through some system involving the income tax to retrieve 100 percent of that unearned profit in the speculation and the flipping of land.

The second alternative is of course through the capital gains tax, which would have to be done, obviously, with Ottawa.

The third alternative involves some system of zoning of sufficient complexity to be precise enough to deny unearned value. The member for Richmond raises a useful question. He says: "What about someone whose family built the home in the year 1900, shall we say, and they did so for $5,000? This year it is worth a quarter of a million dollars. Are you going to make them sell it for $5,000, or are you going to tax away $245,000?" He raises a useful point, and I agree that that would be unfair and an absurdity. It would be unfair and unreasonable, as it would not take into account the cumulative impact of inflation or whether those people improved the value of their land by adding wings or bringing the wiring or the plumbing up to date or putting in a fancy garden. All of these things have to be taken into account.

Again, I commend to the minister the illustration in Australia. As we're advised, two of the Australian states have found a formula to take those things into account. In one of them, what they appear to do — if I understand their system correctly, and I think I do — is to allow, in effect, a total exemption for a family home under any circumstances. They make a 100 percent exemption and anything goes. However, when that family — be it the parents or adult children — own other properties for revenue purposes, as can be easily demonstrated through the income tax mechanisms that exist, and

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they use those for revenue purposes and attempt to sell, usually in a matter of days in a high-value, high-turnover real estate market, then they are taxed 100 percent. They are taxed at that level because they have not earned any profit and therefore they are not entitled to any profit.

In the other Australian state I'm advised that the way they do it is basically by observing the calendar. That is obviously open to abuse and is obviously artificial in a sense. What they say is: "If the land is sold within three or six months" — I forget precisely which — "you are then subject to the tax." If it is sold after that period, it is held to have been for a legitimate purpose and legitimate uses on it occurred, and it is therefore subject to a partial tax. Beyond the further period of time, a partial and a lesser tax is imposed. That is a complicated formula but it may well be better than what we've got, which is no formula and no mechanism at all.

If the government does not accept those means of dealing with the problem of real estate and flipping, which I'm glad the member for Richmond and the member for North Vancouver–Seymour acknowledge and also see as being real problems, then could they tell us what other system they're prepared to consider? Could they tell us what other system they're prepared to establish? In the absence of any system at all, the people of British Columbia who wish to assemble land for legitimate commercial and industrial purposes or who wish to enjoy the benefits of home ownership will continue to pay more than they should. For all practical purposes, they will be denied the benefits to which they're entitled by right of citizenship and by right of their own ability to participate in this system. I think they are entitled; they should benefit. It is a right of citizenship to own your own home, but when flippers and speculators are driving up the cost of that home, for all practical purposes that right is denied you. That's unfair and it's unreasonable. The continued unwillingness of this government to deal with the problem of flipping and speculation is a problem that should not be left unaddressed much longer.

MR. LEGGATT: Mr. Chairman, I just want to add a few remarks to those of the member for Victoria, and particularly to those of the Minister of Health in defending the present tax structure on capital gains. At the present time a person who works for wages is taxed on 100 percent of his earnings. If, however, you're fortunate enough to flip a house or sell a business, you get taxed on 50 percent — 50 cents on every dollar. It's time we should really ask ourselves about the fairness of a tax system which tells someone who works very hard for a living and earns every dollar of his money that he's going to pay tax at twice the rate as those who are fortunate to buy, sell and flip houses. That is what the minister has been defending this afternoon. He has defended a tax system which, in fact, punishes the hard working and rewards those who wish to speculate. That's exactly what it does.

AN HON. MEMBER: A buck is a buck.

MR. LEGGATT: Yes. A non-socialist, called Mr. Carter, produced a commission report on the tax structure in this country which still makes an eminent amount of sense. In order to pay for the costs of services you tax dollar-for-dollar, which means that if you had a tax on succession duties, tax on capital gains and tax on revenues, you would reduce the tax to working people in this country by at least 50 percent to 60 percent. We've never had the courage to look at the income structure of the country to bring forward a fair tax structure, one that would have a built-in incentive for people to work. There's lot of talk about people who don't have incentive to work. You tax wages at 100 percent; you tax speculative profits at 50 percent. What kind of fairness is that? What kind of system is that?

MR. CHAIRMAN: I call the committee to order. The member is straying a bit. The Chair recognizes how we have arrived at this situation, but perhaps you could be brief with the subject of federal income tax.

MR. LEGGATT: If you wish to bring tax relief to ordinary people in British Columbia, find a way to bring revenues to government that are other than a tax on earned or wage income. You must find alternative sources. One of the ways to do it is the way that the member for Victoria has suggested, and also the member for Vancouver East, which is to participate in a lease-back structure around those properties which can yield permanent and perpetual revenue to government. Permanent and perpetual revenue to government is the future, but the high-taxers over here want to savage working people with tax rates that are some of the highest in the western world. They provide a disincentive for average income earners. Those high-taxers on the other side will deny the public the opportunity for any other source of revenue to balance the necessary costs of government.

That's what the debate was about this afternoon, Mr. Chairman. That's what the Minister of Health (Hon. Mr. Nielsen) had to tell you. He said: "I still want to stick it to the working guys. That's where we're going to get our money. Those who speculated will be taxed at half the rate. Those who have unearned income will not be taxed at all. There will be no succession duties to be paid in this country. No, we won't look for any other source of revenue except the working guys. They're supposed to carry the can." Mr. Chairman, that's the debate. That's their position, and they are stuck with it.

MR. CHAIRMAN: Order, please. There appears to be an awful lot of conversation going on in the committee. Perhaps we could remind ourselves that only one member at a time is recognized. Before recognizing the first member for Victoria, the Chair appreciates how the topic has strayed, but perhaps we could return to Vote 63, the administrative actions and responsibilities of the Minister of Municipal Affairs.

MR. BARBER: Mr. Chairman, I would now like to proceed to a series of specific questions to the minister, and I will try to ask them exclusively along the lines of particular subject areas. I’ll do so in a group and then wonder if he could reply. That might be the most efficient way to handle it. I have quite a number of different subjects here.

The first has to do again with the Islands Trust, but in this case with proclamation of that section of the Islands Trust Act which allows the establishment of an Islands Trust Fund. I'm in receipt of a copy of a letter from the Minister of Municipal Affairs which indicates to the chairman of the Islands Trust that he was unable to persuade his cabinet colleagues to have that section proclaimed. I wonder if he could now advise us — this is my only question on the subject — whether or not he has been able to go back to cabinet; whether or not he has better news to report to the Trust.

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That section of the act allows the establishment of a fund in order that the Trust itself may hold property. The purpose of that, in the view of the Trust, and as illustrated in the plan which they are now attempting to advance among the Gulf Islands, is that they may pick up property for public and recreational purposes. These are obviously worthwhile purposes, but they cannot do so without authority. The only authority available to them is under the Islands Trust Act. The only specific authority available is under a section that has not yet been proclaimed. Could the minister tell us whether he's been able to go back to his cabinet colleagues, and whether or not he could advise the likely date of the proclamation of the section which would allow the establishment of the Islands Trust Fund?

[Mr. Davidson in the chair.]

HON. MR. VANDER ZALM: Mr. Chairman, the matter is still up for consideration, but I would not took forward to proclamation this year.

MR. BARBER: The next question is about ALRT. Is it the government's position yet that the equipment will continue to be automated and that the trains themselves will have no drivers? If that remains the position of the government, can they advise whether or not they have taken a look at the problems encountered when the BART system first went in without drivers, and when, as a result, they suffered tremendous opposition from and rejection by the riders on that system, who were especially concerned about the public safety in the tunnel sections under the bay? We will have tunnels in one part, the Dunsmuir Tunnel. Is it still the government's position that ALRT trains will be driverless from day one? If so, I would appreciate hearing that from the minister at this point.

HON. MR. VANDER ZALM: Yes, that is still my position. We have the experience of San Francisco, as was mentioned, as well as Washington and Hamburg. They are working well, and we intend to go with an automated system.

MR. BARBER: The point was that BART didn't work very well and they had to put drivers on. They started without drivers, but later, because of passenger objections, they had to put drivers on, which of course enormously increased the cost of the system. I have been on BART many times. They have a trainman at the beginning. Originally there was to be none. It should be pointed out, additionally, that there was also a problem in BART with trains colliding. The braking system failed on at least three occasions and the trains collided. This was another obvious reason why the passengers were concerned about driverless trains.

On March 2, 1982 the minister was quoted in the Vancouver Province as saying that ALRT will likely carry 25,000 people per hour in each direction. However, UTDC, in the material which they made available to us, indicated that its system capacity would only be 10,000 people per hour in each direction. I wonder if the minister could explain the anomaly. I have reviewed the UTDC material and it is simply not at all consistent with what the minister advised. I am quoting statements that he made in the Vancouver Province as recently as March 2 of this year.

HON. MR. VANDER ZALM: The answer is that it will initially carry 10,000 people per hour each way, but it is capable of carrying 25,000 people per hour each way if we get the additional cars. Certainly there wouldn't be the need to begin with, so we are aiming at 10,000 initially and hoping that 25,000 will arrive soon.

MR. BARBER: Part of the explanation and, if you will, the defence that the government has offered in regard to the UTDC technology is that it is guaranteed in such a fashion that if it does not work we will not have to pay for it. The contractual obligations are such that if certain requirements are met, UTDC is protected. If they are not, we are protected. The UTDC contract specifies that the hourly rate will initially be only 7,500; it will thereafter proceed to 10,000. I cannot find anywhere in the contracts with the UTDC a provision that it will be required to obtain or handle the capacity of 25,000 people per hour. I cannot find any reference in any UTDC–British Columbia contract that specifies a capacity — be it from the standpoint of the planning purpose, rail-carrying purpose, computer-guidance purpose or the number of trains to be made available — that will hit 25,000 per hour. That does not appear in the contract. What does appear are the references to the figures of 7,500 and 10,000. The 25,000 appears nowhere in there. If we are given financial protection for a system that can only handle 10,000 and the minister tells us he thinks it can go to 25,000, I want to know who protects us if it handles 10,000 but cannot handle 25,000 and if 25,000 is the optimum carrying capacity and anything less makes the system more costly and less efficient. Nowhere in the contract do I read a provision that will provide the same guarantees at 25,000 an hour that the minister says he has established for the figure of 7,500 to 10,000 an hour. This is a problem in terms of protecting the public interest along the contractual basis by which protection has been established here.

HON. MR. VANDER ZALM: The contract could not meet 25,000 per hour. The contract, as we now have it with UTDC, would only be good for up to 10,000 per hour. If we wanted to go to 25,000 — certainly we would later on — we would have to purchase additional cars. We only have 114 cars in the contract.

MR. BARBER: If I understand it correctly, though, it is more than simply a problem of purchasing the additional cars. It is also a problem of rewriting the computer programs and guidance systems necessary in order to continue to guarantee the level of safety and the rapidity of travel that an extra load — in this case, more than twice the ordinary load — on the system would require. I see the member for North Vancouver–Seymour (Mr. Davis) is here. Perhaps he could handle it as well. What concerns me is to know whether or not UTDC has the engineering and computer capacity to guarantee the rapid and safe transmission of those extra 15,000 passengers an hour. The contract only holds them accountable for 10,000. The minister indicates that the contract may be rewritten to take it to 25,000. If that is the case, I want to know whether the current engineering and computer-guidance considerations are such that they can handle that. If so, could the minister advise what assurances he has along those lines? The current contract itself, as he acknowledges, does not answer that.

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HON. MR. VANDER ZALM: If you double the number of cars, obviously you would have to make some changes to the computer programming. That is understood, but there are no difficulties.

MR. BARBER: Do I understand that the UTDC has given assurances that the safety and the transit designs of the current system will allow it to go to 25,000 per hour without a major rewrite of the mutual obligations between UTDC and the province?

HON. MR. VANDER ZALM: We would have to buy more equipment. Unless there's something in the question I didn't get, he member's just repeating what he asked before.

MR. BARBER: My concern was whether the equipment, apart from the issue of cars, has the capacity. Let me illustrate again. When BART decided to expand down on the East Bay, Westinghouse assured them originally — and Mr. Davis will know this — that the guidance systems would have the capacity to allow for extra track, extra passengers and extra cars. It turned out that Westinghouse was wrong. They had to do a second rewrite of their computer-guidance program. Westinghouse had assured BART that it would have the extra capacity that BART said it wanted. When it got to the point of opening the new lines on the East Bay, it turned out that Westinghouse was wrong. In that instance, fortunately BART was protected. If I recall correctly, Westinghouse was sued. I believe the appeal of that suit is still in the courts, but Westinghouse rather than BART was found liable.

I just want to know if the minister is assured, on the basis of engineering and computer-guidance specifications that have to be taken into account, that they can in fact do this. I would just remind the minister that a company as reputable as Westinghouse did provide a similar assurance to BART, which turned out to be perfectly worthless.

HON. MR. VANDER ZALM: We're satisfied. Obviously there would need to be a new contract to acquire more cars if we increase the capacity.

MR. BARBER: In a letter to the Vancouver Province on April 13, 1981, the minister estimated that ALRT would cost approximately $40 million more than its conventional light rapid transit counterpart. However, when we inquired along the same lines, UTA indicated that the actual comparison would see the ALRT system cost in excess of $100 million more than conventional light rapid transit. I again refer the minister to his letter of April 13, 1981 — at that time it was $40 million more. The UTA has now provided figures which indicate it will cost in excess of $100 million more than conventional light rapid transit. In the letter of 1981, the minister was using 1979 dollars. If he wishes to continue to operate on that basis, that's okay. On either basis we need to know what the cost may prove to be. I wonder if the minister could bring us more up-to-date figures than did his letter of April 13, 1981.

HON. MR. VANDER ZALM: It's apples and oranges. If you were to compare the two systems and attempt to determine what the difference in price might be, you would have to design one like the other and ensure that there were no level crossings. In fact, if level crossings were accepted as satisfactory, then a conventional system would be cheaper. On the other hand, if you didn't accept 28 or 30 level crossings, with their gates coming down every few minutes — and the tremendous chaos that would create, particularly through the Burnaby-Vancouver corridor — and if you elevated the conventional system, you would spend a whole lot more than what you're spending on ALRT.

MR. BARBER: It wasn't our side that compared apples with oranges; it was the minister in his own letter of April 13, 1981 to the Vancouver Province. The minister, not the opposition, first attempted to compare the costs of CLRT — conventional light rapid transit — and ALRT. Again, it's now simply a matter of public record. The UTA itself has provided figures which indicate that ALRT will cost more than $100 million more than what would be the cost of its CLRT counterpart. Those aren't our figures; that comes from the UTA.

I have other questions about the costs of this system. We have already seen a very considerable overrun in the cost of building ALRT. Let's go back in time to December 6, 1980. At that time the minister announced, for the first time publicly, that ALRT was going to be built in greater Vancouver. At that time — December 6, 1980, a year and a half ago — he established that the system would cost $290 million. Again I am quoting from his statements released to the public at that time. However, in May 1981 the price had begun climbing; it was $324 million. This is the figure that appears in the UTDC contract. However, that inflated figure of $324 million — by the way, Mr. Chairman, this is all in 1979 dollars; that's the basis of comparison that the minister has offered; I know you're interested; I can see that you're following each of these figures — excludes certain items which subsequently are found to be the responsibility of the UTA itself. The UTA advises that these additional items total another $70 million. Additional costs include, for instance, the cost of providing access for the handicapped, which is estimated by the UTA to be $6 million, and the alignment change on the north side of the Georgia viaduct to accommodate B.C. Place, which the UTA tells us will be some $10 million.

When you include those additional charges, you find as we did three months ago when we did these calculations, which were based entirely on UTA information provided to us by the minister, that total cost of the ALRT, in 1979 dollars, now stands at $410 million. On December 6, 1980, the minister said it would be $290 million. Now, in the spring of 1982, it's $410 million.

There are, of course, additional charges which may also be added. That includes the esthetic considerations of an elevated track, the cost of additional changes that the municipality of Burnaby is requesting and additional costs at the end of the line in New Westminster. This is provided in a report that the GVRD produced on March 26 of this year. This also includes, of course, the possibility of a tunnel under Commercial Drive, the estimate of which is $13 million to $14 million, but which, clearly, the government has ruled out. We accept the fact that they've ruled it out, but we observe that the additional costs here may well amount to some $750,000 to $1.1 million. That brings it clearly in excess of $410 million.

I wonder if the minister could help us reconcile the apparent inconsistencies: December 1980, $290 million; contract signed in May of 1981, $324 million; and current conservative calculation, $410 million. That's a very considerable increase in less than a year and a half. I wonder if the minister could tell us — in 1979 dollars or contemporary

[ Page 8134 ]

dollars — what the costs are in fact going to be when the line is finally built.

HON. MR. VANDER ZALM: Mr. Chairman, it hasn't changed. I can't really speak for the GVRD, and I'm not really here to debate figures that are sometimes put forth by GVRD or one of their bureaucrats. The initial estimate was $290 million in 1979 dollars, and that is still the estimate, with the exception that the figure of $324 million which was quoted included an item negotiated with respect to the tunnel. The entrance will be changed and there will be an arm coming off the tunnel which will head towards Richmond, but the time to do it is when they do the work for the tunnel initially. It's going to cost money and a figure has been negotiated, but it's cheaper to do it then than to try to do it later on.

Similarly, they negotiated a change in the service facility, and the negotiated change will allow for expansion of this service facility. But the figure of $290 million that was initially used still stands.

MR. BARBER: Can the minister confirm that the additional costs include, for handicapped access, $6 million over the figure he just cited?

HON. MR. VANDER ZALM: That decision was made by UTA after the contract. If you'll recall, there was a lot of discussion at various councils, and certainly they brought it to our attention. Similarily, I asked UTA to immediately look at this, and that's an addition of $6 million following these decisions.

MR. BARBER: That takes it to $330 million. Can the minister confirm that the alignment change required on the north side of the Georgia viaduct to accommodate B.C. Place will cost an additional $10 million over and above the previous figure? This figure has also been provided to us by the same people who told us it would cost $6 million for handicapped access.

HON. MR. VANDER ZALM: I'm not sure just exactly what the figure is, but it could perhaps be correct. However, B.C. Place pays for that. If a municipality or a Crown corporation or anyone else wants to negotiate something outside of that provided for in the contract, it's at their cost.

MR. BARBER: Mr. Chairman, the point is that when B.C. Place pays for it, that means the taxpayers pay for it. B.C. Place is us. We own it. To try to pretend that somehow it's a separate source of money when, in fact, it's public money, is, I think, not stating the case accurately. B.C. Place pays for it; that means we pay for it. That's an additional cost and an overrun. What is the precise value of the performance bond that the UTDC has signed?

HON. MR. VANDER ZALM: It's $300 million.

MR. BARBER: This concerns me, Mr. Chairman, because the minister has now agreed that the contract is in excess of $300 million. In fact, it's initially $324 million, on top of which are certain additional charges. Let's ignore those additional charges — UTDC may well say that they're not responsible for them — and deal with the dilemma of seeing that a performance bond is worth $300 million and the contract is worth $324 million. If, for instance, the entire system should collapse in a hail of electric sparks and it doesn't work and you have to start again, obviously we are not fully protected. If inflationary costs are such, how will we be protected at all? It seems to me, on the simplest basis of calculation, that the amount specified in the performance bond is patently inadequate to the job of recovering public expenditure if it turns out this system does not work — as a performance bond must always anticipate the possibility of.

The performance bond is $300 million. Does that include an inflation factor so that if three or four years from now, when the system is fully operational — four years, I guess, is a fairer calculation.... Will that $300 million in 1986 dollars prove to be worth far less than it was anticipated to be today? I wonder if the minister could answer both those questions: the distinction between the $324 million minimum value of the contract, the $300 million top value of the performance bond and the problem of, so to speak, indexing the value of the bond to meet the costs of inflation.

HON. MR. VANDER ZALM: The $300 million reflects the contract which we had initially negotiated. When you negotiate a change in a tunnel because you know that certain works have to be done there and it's more economic to then provide as well for the arm that will lead to the line that provides for Richmond, then obviously that's an extra. Similarly, when you provide for handicapped services which the initial conventional proposal put forth by GVRD and our initial proposal did not, those are extras. Obviously you pay for those extras. I'm sure the member is not suggesting we remove those decisions which now provide for the handicapped. The amount has increased for those reasons. Those were good decisions that I think were well thought out, and fortunately were made because they're necessary. They had to be made then.

The $300 million performance bond is still very sufficient, because it provides for all of the technical components of the system. Then every specific contractor takes out a further performance bond. For example, the one that builds the guideway has a performance bond for that particular facet of the operation. Those that build the stations have their bonds. When you add it all together, it's a whole lot more than we might ever require. But the $300 million covers the technical aspects of it.

MR. BARBER: I think the opposition has some cause to be skeptical about performance bonds. We've seen what they're worth in northeast coal, for instance, where it turns out after all that the province of British Columbia is about fourth in line after the banks. If northeast coal falls apart, we get nothing.

However, there is a particular problem with the performance bond that I wish the minister could address. It relates to the difficulty of assessing the total cost of the project when you recognize that roughly 70 percent of the items in the contract are cost-plus items. What this means is that the supplier, through the tender process, determines the cost to the purchaser, regardless of the amount stated in the original contract. When 70 percent of the items in the overall contract are cost-plus, of what value is a $300 million performance bond? If cost-plus, for the reasons of cost-push, takes it well over the original contract price, the performance bond will

[ Page 8135 ]

again, it seems, become inadequate. I wonder if the minister could tell is how he proposes to deal with this problem.

To reiterate, we have a $300 million performance bond on a $324 million contract. We also now discover that 70 percent of the item in this contract are cost-plus. The supplier, rather than the purchaser, will determine the cost of executing certain aspects of the contract. If 70 percent of them are that way, and inflation continues to proceed as it is doing in this country, I don't understand how the performance bond could possibly be found adequate. Could the minister please explain, from his view, how it could be made adequate?

HON MR. VANDER ZALM: The $300 million is for fixed costs.

MR. BARBER: The UTDC seems to think that the levies and penalties they will have to pay have to do with conditions of the whole contract. I don't know what the minister means by fixed costs. Reading the memoranda attached from their side to the various contracts that we have been able to obtain, the various documents we have been able to read, makes it quite clear what they believe their obligations to be. I don't know if there is a disagreement between the two parties, but what the minister just explained is not consistent with what was explained to us by the UTDC. For them, the performance bond of $300 million covers the whole package. The minister seems to be suggesting that it includes pieces of the package and that therefore the $300 million total should somehow protect us. I don't know how that could be argued but I would appreciate the minister's explanation. UTDC explains it quite differently when we ask them.

HON. MR. VANDER ZALM: The $300 million covers the technical aspects of it. The other parts of the construction, the guideways and the likes, will be secured separately and apart from the $300 million.

MR. BARBER: A transportation engineer with the transportation system in Portland, Oregon — a very sophisticated and successful system in North America — a fellow by the name of Lloyd McCoon, says one of the problems with driverless transportation is that, although you save money by having no trainmen, you spend money by having a far more expensive and more highly trained body of staff to maintain the ALRT's more elaborate electronics. Obviously, the question of maintaining those electronic guidance systems is far more important than it might be ordinarily. A fellow by the name of Robert Bates in Morgantown, associated with the same kind of system, indicates as well that the expenses involved with extra maintenance personnel for an automated rapid transit system are far greater. Has the minister any figures that would allow us to compare the costs of maintenance for the purposes of guidance between the CLRT and the ALRT systems?

HON. MR. VANDER ZALM: I really can't comment much on the statement about Portland, Oregon. Unfortunately the people in Portland are very jealous of the system we have slated for British Columbia. It is certainly a lot more than their streetcar system and it is difficult therefore to compare this two.

MR. DAVIS: Perhaps I could add a few thoughts. The hon. member for Victoria is asking about the $300 million performance bond. That relates to the equipment in the sense of cars, wiring and electronics. It doesn't relate to the civil works, namely the tunnels, the guideways and indeed the stations.

MR. BARBER: There are separate performance bonds for them.

MR. DAVIS: That's right. The $300 million covers, as the minister said, the technical side. It covers equipment and the gear. Other performance bonds collectively add up to something more than $300 million. The civil works are, as is suggested, two-thirds of the cost of the system; the hardware, in the sense of cars and so on, is one-third. There are other performance bonds and the total will add up to something more than $700 or $800 million when the contracts are let for the civil works. So the performance bond story is not confined to $00 million. It is larger than that.

The member also asked about maintenance costs, comparing ALRT and conventional rapid transit. The maintenance costs have to be less with ALRT, basically because, for example, there are no moving parts in the motors, there is no gear train to be maintained. Also, with the steerable truck there is no rubbing of the wheels against the rails, so the wheels will last longer and the rails will last longer. The motors certainly will be running for longer periods before maintenance and there are no gear trains. There is no connection between the motor and the wheels. Essentially, the maintenance has to be less; we will have to wait and see what the extent of the saving is.

MR. BARBER: I am well aware that there are separate performance bonds for what the member for North Vancouver–Seymour aptly calls the civil works. I was referring to the much-publicized primary bond of $300 million and to the information provided us that roughly 70 percent of the components, the manufacturing costs associated with that bond, consist of cost-plus items. I wasn't talking about the civil works.

MR. DAVIS: No, it's the other way. It's 30 percent related to that and 70 percent civil works.

MR. BARBER: Only 30 percent cost-plus in the performance bond for the electronics, the cars? We were given a very different figure by UTDC. Is my figure not correct? They certainly made it quite clear that it was. With regard to the package of construction associated with the S300 million on-board system, if we could call it that — it's separate from the civil works, which the member calls off-board....

The performance bond associated with the on-board system contains components, 70 percent of which are cost-plus, at which point it's fairly clear that the supplier rather than the purchaser, for practical purposes, will, in fact, be determining the actual cost.

MR. DAVIS: Mr. Chairman, the hardware in the sense of cars with motors and so on — the electrics and the electronics — are a fixed price with an escalator, which will reflect what is, say, the Vancouver cost of living over a period, but it is fixed otherwise. What are not fixed are the civil works — the guideways, the tunnel work, the station construction and so on. They will go out to tender and we will have to see how the tenders come in. We have called tenders on the pre-built one-

[ Page 8136 ]

kilometre-plus line. The bids have come in just under the estimates, so the first indication is that the bid work, or the civil works, may well be on budget. Certainly present indications are that they won't be above budget, but we have to wait and see how the civil works will be, in fact, costed. We now know the price of those cars, the electronics and the electrics, other than the inflation index, which is defined in the contract.

MR. BARBER: I hope the member's assurances come to pass and there are no great overruns. I also hope, though, that if there are such overruns, protection can be found within the body of the current contracts.

I would like to move now to the subject of Pacific Coach Lines. The minister was fibbing a bit when he said he had to coax me to speak at the public hearing in Victoria; that, of course, is not true. I asked him for permission to speak. He was momentarily hesitant and then finally conceded. I did speak at the hearing and I now ask the minister to advise us whether he has reached any conclusions as the result of the public hearing process into the status and future of Pacific Coach Lines.

HON. MR. VANDER ZALM: Mr. Chairman, we're now compiling a report which will gather all the submissions that were made at the various hearings throughout the lower mainland and Vancouver Island, and we will then be taking it forth for further debate and discussion at the cabinet committee.

MR. BARBER: What is your timetable?

HON. MR. VANDER ZALM: I mentioned at the hearing that it is probably some time in July, and I would still expect that timetable.

MR. BARBER: If it's the middle of July, that's useful. We'll probably still be here and we can talk about it.

In Cranbrook last year there was a peculiar circumstance in which a person who was defeated for re-election as an alderman and another person who was defeated for first election to the school board were refused recounts. The narrowness of their defeats was quite extraordinary. In the case of the person who was defeated for re-election as an alderman, she apparently lost by three votes; the person who was defeated as a first-time candidate for the school board lost by five votes. There were evidently a number of unaccounted-for ballots and there was, according to the information I have received, a simple refusal to provide the recount that was formally requested by these individuals. I wonder if the minister could advise us whether the ministry has reconsidered this. The last information I received on the matter was at the end of April of this year; it may well be that there is more current information, but I've been preoccupied with other matters and have not been able to pursue it. Could the minister advise whether recounts were ordered? If not, could the minister advise whether he would accept a policy that would see within the regulations attached to the act a requirement for an automatic recount if a certain percentage of difference between the last winning vote and the first losing vote were not met?

For instance, Mr. Chairman, would the minister consider a policy whereby if the difference between the last winning and the first losing vote were less than 5 percent, there would be an automatic recount? It seems to me that someone who loses by only three votes in a town like Cranbrook is entitled to an automatic recount. I'm advised she was denied it. The person who lost the school board campaign in the same district — School Board 2 — is also entitled to a recount. It's obviously not practical to assign an arbitrary number to that which must be attained in order to receive a recount; a percentage might be a more appropriate policy. Can the minister advise on the details of this particular case? Could he advise as well whether or not he would consider a policy change to require an automatic recount if a certain percentage were obtained between the last winning vote and the first losing vote on a public ballot?

HON. MR. VANDER ZALM: No, there's no consideration of such change. Actually, I think you could deny someone the opportunity of gracefully getting out after going through the campaign and being glad to have lost by a few votes. That could well be the situation.

MR. LEA: It was the winner who wanted a recount.

HON. MR. VANDER ZALM: Yes. I don't think it's too onerous for anyone to request a recount if he deems it necessary.

In the Cranbrook example, a request was made of the returning officer, and the returning officer denied the request. The applicant then came to the inspector. The inspector saw no irregularities in the procedure that had been followed. However, when the applicant was so advised, apparently he didn't proceed to go through the court until the time had run out, until they were beyond the 30 days. There are 30 days in which to go to court. I'm not arguing that there shouldn't have been a recount, but I don't think it should be necessary to bring about an automatic recount for elections.

MR. BARBER: The problem is that not everyone can afford to go to court. The simple option of going to court is not always an adequate one. It costs money to do so, to retain a lawyer, to pay the court fees. People who run for alderman and school board are not necessarily prosperous people and it may in fact be impossible.

HON. MR. VANDER ZALM: You don't have to retain a lawyer.

MR. BARBER: To go to court? If you hope to win you certainly do. The minister says you don't have to retain a lawyer to go to court. That's technically true, but certainly if you hope to win you had better have a lawyer, or the other side with a better lawyer and a dumber judge may find out that not much good happened.

I'm advised in this particular instance that the ballot count of December 21, 1981, showed that there were 46 lost ballots in Cranbrook; also that more votes were cast than there were registered voters. This evidently was the finding when the returning officer prepared his statement to the county court judge on the issue of refusing a recount. Let me reiterate, and I wonder if the inspector could indicate whether or not those figures hold up. They were, I'm told — I wasn't there, but I'm told — presented to the court. There was no ballot accounting until December 21, 1981. It showed there were 46 lost ballots, and in fact more votes were cast than

[ Page 8137 ]

there were registered voters. Could you explain that? That's an anomaly even in British Columbia.

HON. MR. VANDER ZALM: Was that in Cranbrook, Charles?

MR. BARBER: Yes.

HON. MR. VANDER ZALM: There is that possibility through the instant registration provision. Maybe that's a weakness in the system. Certainly the Cranbrook situation points out that possibly the process, as you suggest, ought to be looked at, and we would not be averse to considering change.

MR. BARBER: I'm concerned when the margin of victory is variously three votes or five votes, and when both sides, returning officer and candidates, admit there were 46 lost ballots. I think they have good cause to be concerned that this election was conducted fairly. If they're not in a position to go to court — in this case the county court judge refused a recount — if they're not in a position to do anything beyond that.... How would the minister feel if he were a candidate in Cranbrook, there were 46 lost ballots and he lost by only three votes, but no one would provide a recount? On the surface of it, that's not fair. On the face of it, that's not reasonable. I realize the 30-day period is up; nonetheless, I did promise to raise this as a matter of policy and I will so advise the individuals. With any luck, further representations might be made.

Did the minister have anything else he wanted to say on that one? If not, I'll pass to another subject.

HON. MR. VANDER ZALM. We did express our concern to the municipality at the time, but I don't disagree. It obviously points out that there may be a need for us to look at some of the procedures again. We would welcome any specific suggestions from the member, or from anyone who participated in that or any other election.

MR. BARBER: My suggestion is that you establish a percentage figure which would require an automatic recount. They do that in many other places; again, the percentage would be, say, 5 percent, which seems to me fairly reasonable, between the person who wins with the least number of votes and the first loser, the person who loses but still does the best among the losers. If the difference between those two figures is as a matter of percentage of the total number of votes cast, less than 5 percent, then an automatic recount procedure would kick in. It seems to me that that is one practical way to do it. The minister joked before that maybe some people would be happy to get out and wouldn't want a recount. I suppose that is theoretically possible, but I don't think that really deals with the issue of democratic procedure. I think that the automatic kick-in procedure on the basis of a percentage being established might be a fairer way to deal with it and with the problems of people in Cranbrook and other communities.

Cortes Island Ratepayers Association — the member for Victoria said, changing the subject — wonders whether or not the official settlement plan they have developed is enforceable. They are particularly concerned about order-in-council 418, with regard to the strata rural development policies and regulations, and that the proposal — unfortunately, in their view — now being executed by Raven Lumber will be allowed to go ahead. They believe that the approval should not have been granted by the ministry in the first place. They ask that the preliminary approval granted be revoked and they ask, as well, to be reassured on Cortes Island that their official settlement plan will not be contravened by the preliminary permit granted in favour of Raven Lumber and their proposed strata title development. Can the minister advise whether or not it is policy to contradict the official settlement plans by granting permits that are clearly not permitted under them? I ask, by way of illustration, about Cortes Island but of course generally inquire about the whole policy.

HON. MR. VANDER ZALM: I could be wrong, but it seems to me that the Cortes Island plan has not had final reading as yet.

MR. BARBER: I may be wrong too, but they believe it has. The Cortes Island Ratepayers Association believe that it is a fixed document. If that is not the case I will get back to them, but that is certainly what we were given to understand.

In any case, assuming that it has not obtained final approval from the ministry but is not going to be changed by the ministry, for all practical purposes it is an official plan. It may not have the particular designation but it obviously should have the impact. Obviously none of us can know at this very moment whether or not it has been officially approved. Fair enough. Perhaps you can look into it. Nonetheless, is it policy to allow such contraventions of an official settlement plan — for Cortes Island or anywhere else — when a company like Raven Lumber comes along and wants to do a strata title development against their clear objection, inconsistent with the plan? Is that to be permitted?

HON. MR. VANDER ZALM: The request for a change of land use would have to come from the Islands Trust. First of all, regardless of where the initiative is, we would always be not only reluctant to grant a change of land use, but practically in every instance would not grant one where it was contrary to the plan, unless the plan was changed by the body responsible.

MR. BARBER: To summarize, they believe the plan is official. The Islands Trust has not made a recommendation in favour of this particular strata development. To the best of my knowledge, as of April this year the strata proposal for Raven Lumber was evidently going ahead. Perhaps the minister could look into the matter and formally advise both the Trust and the Cortes ratepayers. Does the minister give that undertaking to look into it?

HON. MR. VANDER ZALM: Yes.

MR. BARBER: Fine.

[Mr. Richmond in the chair.]

I would like to change now to the subject of the University Endowment Lands and the proposal being advanced by the University Endowment Lands Ratepayers Association for village status. An incorporation committee was created out of the membership of the UEL Ratepayers Association. Members include GVRD director Eva Mann, Helen Chitty, Jane Cochrane, Neville Scarfe and one Robert Bonner. These five

[ Page 8138 ]

individuals wish to create a village. In the view of certain opponents, if a village is created it will disfranchise hundreds of residents from a municipal vote in the city of Vancouver. An incorporated village so contiguous to Vancouver would in other respects be administratively very clumsy and provide a turning back of the clock which many people might not accept. Of course, as the minister will know, Point Grey district was included in the city of Vancouver many years ago. I wonder if the minister could tell us whether or not he is prepared to consider a proposal to incorporate a village, as is now being proposed at the University Endowment Lands in Vancouver.

HON. MR. VANDER ZALM: Mr. Chairman, we had recommended that consideration be seriously given to joining Vancouver, but obviously that was not acceptable — at least to those who were heading up the move for self-government in the area — and it seems that they wish to pursue the village-status approach. For that reason, they are now attempting to determine where the boundaries should be. I can't provide any guarantees as to what the outcome might be, but I would be very much prepared to take it forth on their behalf.

MR. BARBER: Do I understand the minister to say then that he would be prepared to endorse a proposal to establish a village at the UEL? If so, I wonder if he could tell us what form of referendum, if any, would be required in order that this occur. What testing of public opinion in the area, by boundary, about the proposed village would he require before this suggestion of the UEL Ratepayers Association — or, at least, some of its members — would go forward?

HON. MR. VANDER ZALM: Mr. Chairman, I can't say for certain just what my position might be. It would depend upon all of the information, once it's received from them. But I would certainly take it forth. Generally, and in most instances, I'm extremely supportive of self-government in these local communities. With respect to the question as to whether there would have to be a referendum, yes, a referendum would be necessary.

MR. BARBER: In regard to the boundaries of the proposed UEL village, on October 22, 1981, John Callan, an employee of the ministry, attended a meeting at which he revealed a proposal that would allow a portion of electoral area A to incorporate separately as a village. I wonder how it was that a public servant came forward with such a detailed proposal in regard to partitioning area A and establishing a village. It seems a little peculiar that a public servant would be involved in doing that when, as the minister surely knows, this is a somewhat contentious issue in the area, and it's obviously, I think, inappropriate for a public servant to appear to be taking sides in a dispute that should in fact be settled by referendum.

If the public servant was simply pointing out options, that would be fair enough, but I'm advised that he was actually advancing favourably a particular position and showed up with maps and talked about it in a very positive way. The practical impact of it, by the way, would be to disfranchise all eligible voters residing south of Toronto Road and west of Wesbrook Crescent. I wonder if the minister could advise what this particular public servant was doing and whether or not he was advancing government policy at the time.

HON. MR. VANDER ZALM: Mr. Chairman, I would expect him to speak in a positive way about any proposal that might be put forth to such a group. Our people often go out to various community groups and make presentations on the various options available. If he appeared to be favouring a particular approach, I really can't speak on that. Nor do I get terribly upset, because the issue would still be one for choosing by the local people. I think it is more important that they get all the information as to what the various options might be.

MR. BARBER: Could the minister indicate whether or not eligible voters on the campus of the University of British Columbia would, were village status to be achieved, continue to enjoy a vote for GVRD director?

HON. MR. VANDER ZALM: The village would obviously have a representative on the GVRD, but we would have to look at the remaining area. It depends. It could be that there wouldn't be enough people left in the area to elect a director, but I'm not sure.

MR. BARBER: Could I recommend to the minister that he pay some attention to that problem, because that is a further element of divisiveness in the debate going on right now in Point Grey. Creating a small village within a larger compound will not only tend to provide special status for the residents of that village that some others might object to on the grounds that the boundaries are artificial and a bit self-serving — this is part of the dispute — but will also, as the minister just indicated, potentially disfranchise the remaining voters in the Point Grey district from participation in GVRD elections.

Could I also recommend to him a general instruction to his public servants. Precisely because it is an increasingly contentious issue, they should be urged to act in the most disinterested and objective way possible. They may not think it looks like they're playing favourites, but the truth of it is that some residents perceive them to be doing that. I well accept that it may not have been intentional, but I would ask the minister to advise his public servants that as this issue becomes increasingly controversial, those same public servants have got to be and appear to be increasingly neutral, or the government will find itself embroiled in a not very helpful way.

If there were a referendum to determine whether or not village status would be created in some district or other of Point Grey, would that referendum, by entitlement, include students — married or single — living in residences on the UBC campus?

HON. MR. VANDER ZALM: Yes, if they qualify as electors.

MR. BARBER: The charter which established the University of British Columbia is, of course, a provincial statute. Is the minister in receipt of any advice which indicates that the campus of the University of British Columbia would have to be excluded from the land area encompassed in any proposed village at Point Grey?

HON. MR. VANDER ZALM: I have no advice in that regard, but I expect it probably would be excluded. I could not see the benefit to the village or the area to be incorporated

[ Page 8139 ]

in taking it the campus grounds and taking on the responsibility for some of the maintenance and other services.

MR. BARBER: It does happen elsewhere. Obviously Simon Fraser and the University of Victoria are both within municipal boundaries; so it's not unheard of. I wonder if the minister would inquire as to whether or not the charter would permit that. Let me illustrate. As you know, there is at least one modest-sized shopping village in UBC off University Boulevard, if I recall correctly. Some proponents of village status would I argue that that "revenue base" should be incorporated in part of the village. Some people at UBC think that's nonsense, that the current condition should prevail. I would ask the minister if he would look into the charter which established the university and into other relevant legislation to determine whether or not that could or should be included in the village. It's not unheard of for universities to be included within municipalities; in fact, it's far more common than is the rather peculiar situation that is found at UBC. I wonder if the minister could give his undertaking to look into that, and also provide that information to the residents of Point Grey who will in increasing numbers be coming to the municipality. Would he give that undertaking? The minister says yes. Thank you.

The municipality of Powell River has advanced the argument that as a result of the new school-financing formula, they will lose a major portion of investment capital, which last year earned interest in excess of $750,000. The municipality of Powell River is in a unique situation because of its industrial base. It has advanced a unique argument in favour of guaranteeing the return of those moneys. For instance, Powell River argues that in 1981 the municipal treasury earned approximately $760,000 from investing the school taxes it collected. In Powell River that is obviously a very significant amount of money. Again, because of the unique circumstance in that community with the large Mac-Blo industrial base and the relatively small residential base, for them this is a matter of real consequence. That is one way to illustrate the general question as to whether or not the minister is prepared to develop a policy which will allow municipalities that formerly earned this investment income to obtain those benefits from some other source.

The educational finance act was amended earlier this year; the consequence has been that the provincial government gets to keep the interest on the school taxes paid by those businesses. Local government no longer can have the benefit of that interest. In the case of Powell River, that interest adds up to three-quarters of a million dollars last year. That pays for a lot of services, hires a lot of cops and firemen, and mows a lot of lawns. I wonder if the minister has considered a policy which will reimburse those municipalities which have a uniquely high industrial base, all of which has now been subsumed by the province under the Education (Interim) Finance Act, and all of which interest is no longer a benefit for the municipalities. Is he prepared to consider that sort of policy?

HON. MR VANDER ZALM: It's not only a matter of being prepared, Mr. Chairman, but the Ministry of Education is already one ahead of us. Firstly, of course, it should be remembered that it's not just a one-sided thing, because municipalities perhaps lose interest on moneys held for part of the year but they used to pay the interest for the other part of the year when the moneys weren't there. So now it's reasonably equal. I grant you there are still perhaps some differences, especially in the initial year, but the Ministry of Education has provided for that by introducing a special grant program.

MR. BARBER: According to the municipalities who've complained to us, that grants program is simply not adequate to make good the losses they've suffered as the result of the other statute. However, that may be something a succeeding administration will have to deal with.

On March 1 of this year Mr. Woodward, the inspector of municipalities, wrote to a colleague of mine in regard to the dismissal of an individual from the employ of the city of Kimberley. Chris may well remember his name. It leads to a question of policy in regard to the obligations that municipalities have to advise their employees — in this case a relatively senior employee — about the reasons for dismissal. The Municipal Act is silent on this matter. Judging by the letter from Mr. Woodward to my colleague Mr. King, and other correspondence that I've seen, which is of a private nature and which I don't propose to disclose at this moment, the individual in question feels that he or she was not properly or fairly informed of the reasons for dismissal. Again, the act is silent. I wonder if the minister could tell us what his policy is in regard to requiring or asking municipalities to provide competent reasons for dismissal. Most employers are so obliged, the labour standards act refers to it, but municipalities apparently are not bound by it.

HON. MR. VANDER ZALM: Mr. Chairman, my policy is that this is a matter for local government. The mayor and the aldermen, I would suggest, are well qualified to consider that, and these are people who themselves are employed or in business and obviously could decide whether they give reasons — when or what. I think this should really be a matter for the local council, and we should not interfere from the province.

MR. BARBER: Ordinarily I don't advance arguments in favour of provincial interference either, but it's not a question of planning. It's a question of human relations; it's not a question of zoning but one of labour relations — good, mature labour-management relations. I'm not so sure such a hands-off attitude is appropriate here. Some municipalities are a little more mature about these things than others. Some municipalities accept the moral obligation to practise good labour-management relations by way of providing full information to their employees when it's required; others don't. I think it's appropriate for the government to try and set a higher standard and to require a higher standard as well in regard to those areas of labour-management relations which can be raised from time to time.

The member for Kamloops (Mr. Richmond) on January 2 of this year expressed some concern about the cabinet rejection of a proposal to include Afton Mines within the boundaries of Kamloops. The mayor of Kamloops said that he thought this was a sad commentary on the province's apparent reluctance to help cities reduce the taxation imbalance. The annexation was denied. Kamloops lost revenue and that apparently continues to apply. The member for Kamloops (Mr. Richmond) has not spoken on this subject, so I do so now on his behalf, to argue that the benefits of Afton Mines should accrue to the people of Kamloops.

[ Page 8140 ]

In a very interesting step about a year and a half ago in the Kootenays, the minister established a kind of regional revenue-sharing formula that I approve of. I shouldn't talk about private conversations, but I said so personally to the member for Kootenay. I think it is an excellent proposal and I wonder whether some version of it might be found for the Afton Mines district and for other resource-based districts in British Columbia as well.

One of the major arguments against amalgamation has always been concern about inequitable revenue-sharing bases and inequitable taxation that follows. One of the arguments in favour of regional revenue-sharing is such an argument that takes away that concern and allows municipalities to continue to develop uniquely and allows them as well to enjoy the benefits of regional revenue — obviously in areas like the Kootenays; certainly in areas like Kamloops; and one thinks, of course, of areas in the northeastern part of this province. Proposals for regional revenue-sharing might be really appropriate. I wonder if the minister could tell us whether or not he would be prepared to accept such a proposal for Kamloops.

HON. MR. VANDER ZALM: Yes, I would agree. Certainly we are very pleased that we were able to reach an agreement in the Elkford Valley. We would hope that it could be done in other areas as well. That may be a good solution for the whole of that Highland Valley area. We have therefore had a meeting already with Logan Lake and other regional people. The ministry has done some preliminary investigation into the feasibility of it and we would be most interested in putting forward a proposal to that end.

MR. BARBER: For what it may be worth, you have my personal support for those notions. I think they are advanced, useful and helpful. They tend to allow municipalities to continue to govern their own affairs without insisting on border changes and at the same time enjoy the benefits of regional revenue-sharing.

I have been in conversation with the mayor of Ashcroft, Ward Bishop, on the same matter. I was up in Ashcroft about a year ago and saw some of the problems they face. They are expected to house a great many of the workers who will go to the copper mine in the Highland Valley, but at the same time they are not permitted to enjoy the benefits of the industrial tax base which that mine would otherwise allow them to enjoy. I think that proposals in those and other districts for regional revenue-sharing are long overdue. I congratulate the government on the initiative in the Kootenays and hope that the same principles can be applied elsewhere.

I have here a letter from the office of the commissioner of planning and development in the city of Toronto. It regards an unusual proposal that the city of Toronto has advanced recently. They established a special case in what they call section 3(a) of the official planning which requires an amount of residential development where the commercial floor area of a project exceeds a certain limit. It does so within what they call "high density mixed commercial-residential areas." These areas are generally seen — I quote from the letter from the office of the commissioner — "as providing a mix of housing and commercial and are generally those areas outside the financial district in which there had previously been considerable office development."

The policy proposal — another one among the many we have advanced today and yesterday — that I would like the government to consider is to empower and encourage local government, particularly in Vancouver and Victoria, to establish a range of bylaws which would get developers who wish to put retail space on the main floor and commercial space above it to create as well, within that tower of space, residential development. This is an ancient pattern in Europe. It has been done for the reason of common sense that everybody knows about in high-density communities in Europe. But it has never been done here in that fashion because we've enjoyed the luxury of too much space. We've been clumsy and careless with that space and haven't used it to its highest value. In downtown Victoria and Vancouver I think it would be really useful if we could follow the example that has now been set in Toronto under section 3(a) of their official plan to empower and encourage municipalities to require developers who wish to build at a certain density for retail and commercial purposes to include residential components as well within that tower.

For instance, I have been in a building in Ottawa, on Elgin. They do it in a very successful way. The bottom two floors are retail; the next ten or twelve floors, perhaps, are commercial; and the top eight floors are residential. They have separate entrances, separate elevators and separate functions for the residential part. You don't have to walk through the retail stores or climb through the offices to get to your home at night. There are separate entrances and it works very well. It also provides a level of public safety, though, because people live above the sidewalks and walk home at night in an area that is otherwise commercial after 5 o'clock and therefore unsafe. It encourages public safety, greater residential density downtown and a much more interesting mix of development in this particular area. I wonder if the minister is prepared to contemplate such a policy and prepared, as well, to encourage the great urban communities in British Columbia to adopt it themselves.

[Mr. Strachan in the chair.]

HON. MR. VANDER ZALM: I can't speak about legislation now but perhaps there is hope still that we might get unanimous consent for the land use act, because it certainly provides for that.

MR. BARBER: The Land Act in fact provides something called zoning, right? Well, I've read it really carefully, and we've been meeting with lots of people about it, and I'm not persuaded that it meets the requirements that we've just indicated, although I don't want to debate the bill at this time. In our view, it's thin soup. It's a useful principle, but it's thin soup and may not in fact deliver the goods. That's for another debate, I freely admit. But as a general policy we strongly endorse it. The mix of residential, retail and office purposes in one facility is extremely important to the revenue base, to public safety and to the general delight that people might take in walking about downtown.

On May 17 of this year, the minister received a letter from Noreen Pringle and Diane Thomas of Princeton concerning an alleged conflict of interest on the part of a regional director in electoral area A. It specifically concerns amendment bylaw 671. Has the minister replied to this yet? If so, what is the nature of the reply? If not, could the minister indicate whether he is preparing a reply? This alleged conflict of interest concerns, as I mentioned, a member of the regional district who did not disclose a relationship described as that of close

[ Page 8141 ]

personal friendship, that was obviously material in a controversial rezoning hearing. I wonder if the minister could indicate whether or not he has examined it, and if a reply has been drafted. It's of real urgency, and as of May 21 there had been no reply. Because of the urgency I was asked to raise it here, and I do so now.

HON. MR. VANDER ZALM: I recall the matter the hon. member brings here, but it seems to me that's been responded to. You say it was not responded to as of May 21?

MR. BARBER: As of May 31, I should have said.

HON. MR. VANDER ZALM: I'd have to look it up, Mr. Chairman. I don't really know. I recall the situation, and I recall referring it for further information, but where it is now I'm not sure. I think it has been responded to already.

MR. BARBER: If it hasn't, may it take it that I have the minister's undertaking that there will be a rapid reply? It's of concern there, as they appear to have something of a case. It would be useful to have it settled as soon as possible.

In regard to ward status for Vancouver, I wonder if the minister could advise whether or not the media correctly quoted him as saying that not only would he require 60 percent plus one in order to allow ward status to be established, but that he personally would want to author the bylaw.

Is that a correct statement of your policy?

HON. MR. VANDER ZALM: Personally would what?

MR. BARBER: Author the bylaw — that the wording of the bylaw would have to approved, word for word, by you before you would allow it to be put on a referendum.

HON. MR. VANDER ZALM: Yes, Mr. Chairman, the letter I wrote to the mayor contained words to that effect. But of course it's now a matter of legislation for the private bills committee. I cannot comment much on it, because I don't know what the outcome will be.

MR. BARBER: I wasn't asking about legislation so much as your policy. The legislation now before the private bills committee neither asks the minister to set a 60 percent limit nor asks him to be the editor-in-chief of referendums. So it's really not related .

What I'm asking is: regardless of what's at the private bills committee, what is the minister's policy? If it should pass, then the policy will apply. If it shouldn't pass, the policy will be a nullity. In either case, the policy does not have an actual bearing on the request of the city of Vancouver currently before the private bills committee. I want to know if it is in fact your policy. The minister said "words to that effect." I wonder if he could give a really precise answer. Is it your policy that you will require 60 percent plus one and, additionally, that you will personally supervise the wording of the referendum to make sure that it meets whatever standards you care to impose?

HON. MR. VANDER ZALM: If it were for me to decide, yes, Mr. Chairman.

MR. BARBER: It sound like awesome, sweeping powers, Mr. Chairman. Ministers ordinarily don't have a personal hand in writing municipal bylaws. I think that's regrettable.

If a municipality wishes to build a public recreational facility and they propose to pay for it themselves, is it the view of the minister that they should be allowed to do so?

HON. MR. VANDER ZALM: I'm sorry. Could you repeat the question? I think the answer is yes, but I don't know if I got all the question.

MR. BARBER: If a municipality wishes to build a recreational facility at its own expense, is it the minister's policy that they should be allowed to do so?

HON. MR. VANDER ZALM: Mr. Chairman, certainly, if they're within the allowable mill rate. It's the decision of the community that they would sooner take the moneys for that than possibly for roads or something else. If they had to go out and borrow the money, that would be a different question.

MR. BARBER: What you told the people in Prince George last October was something different. In October of last year the inspector of municipalities sent a Telex on your behalf which indicated that the pool referendum bylaw would be rejected because of the high cost of the project. It strikes me as very curious that the council of Prince George — I'm sure you are familiar with the issue — had decided by a nearly unanimous motion to spend $5.5 million on an aquatic centre, which was in their judgment an appropriate public expense. Then they decided to go to referendum to see whether or not the people of Prince George supported their decision. Peculiarly, even before the opinion of the people of Prince George could be obtained, through the inspector the minister said: "No referendum; you're asking for too much." Well, what you said in October to the people of Prince George is quite distinct from what you just told the committee 30 seconds ago. If by referendum the people of Prince George decide to build a pool and pay for it themselves as a public amenity they wish to have, is it really appropriate for the province to say no? The referendum would surely tell what the people's feelings were. The debt load of the city of Prince George was evidently not in question. The ability of the city of Prince George to pay for the pool was evidently not in question either. May I ask plainly what business it is of the minister to tell the people of Prince George that they can't buy something they want. If they can afford it, and if by referendum the people say so, who can object?

HON. MR. VANDER ZALM: The inspector requires that the municipal council provide information as to the need and essentiality of the project. They were not able to indicate that sort of information to the inspector. The committee working on the recreational centre was apparently not....

I can't say they weren't recommending it, but they didn't provide that sort of information — or couldn't — and the council was split on the question.

MR. BARBER: I don't see how the council could be split on the question, when they passed a motion to call a referendum. The motion passed. There may well have been a split; nonetheless, the motion passed to call a referendum. Is it within the competent purview of the inspector or the ministry to decide whether or not the people of Prince George need a

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swimming pool? Why is it up to Victoria to tell Prince George whether or not they can have a swimming pool? Do you go around and count the flippers or add up the number of bathing suits, and decide there are enough to justify a swimming pool? That's really kind of silly.

When the New Democrats were in power, the people in Oak Bay didn't have to ask permission for the Oak Bay Recreation Centre. They didn't have to get the inspector of municipalities to say: "Yes, you've demonstrated need." Do you know what you had presented? I remember it well, because the current supervisor is a good friend. What you had presented was a very simple proposal. It was the result of a recreation study which itself was funded, in part, by the province. It was through the Recreational Facility Act, which has now, regrettably, been shut down by this government, as you know. In Oak Bay they did not have to do anything other than demonstrate that this would likely be used by a lot of people. That was obviously easy to demonstrate because it is a wonderful facility. I play hockey there every Thursday at midnight and our team continues to lose. We are not very good.

Interjections.

MR. BARBER: It's true. I play defence on a hockey team. We're not very good but it's lots of fun.

AN HON. MEMBER: For the elite?

MR. BARBER: Elite? We play at midnight. Some elite who gets to play at midnight!

The people of Oak Bay were not required to jump through the hoops that the people of Prince George have had to jump through. I don't think that's fair. Of course, it is useful to try to demonstrate need when you decide whether or not the provincial government is supposed to pay for something. But to try to meet the requirements that the people of Prince George had to meet in October of last year was to ask them to do something unfair and unreasonable.

HON. MR. VANDER ZALM: The council was told that we would not accept the proposal as put forth because they had been unable to provide the information that we had requested. We have not heard back since, however. It is going on a year now, so there is the opportunity of them coming back with a changed proposal or another proposal. Oak Bay went through the same process. However, let me assure the member that it is our business because the Ministry of Municipal Affairs is responsible for the financial viability and responsibility of all the municipalities.

MR. BARBER: Surely you're not responsible for counting bathing suits or flippers or the number of swimmers who might want to use the facility. Why didn't you let the referendum go ahead? Isn't that reasonable, to allow a referendum? If, as the result of the referendum, it turned out that the proposal would bankrupt Prince George, that is another issue. Surely there is nothing wrong with taking a test of public opinion. Who knows? Maybe it would have been rejected in the referendum and then you wouldn't have anything to fight about, but now you'll never know, because you denied the referendum. Surely it is not so difficult to allow a referendum, to time it to coincide with November civic elections so that it doesn't cost any more than the cost of adding one more ballot to the list. There is nothing wrong with asking them if they want it. If it turns out after they say, "Yes, we'd like it," that it would bankrupt them, then under the provisions of the Municipal Act you say: "No, you can't have it because it will make you go broke." That is another issue. But you will never know. I think it was a mistake.

I move that vote 63 be reduced by the amount of $4,000 this year. Office expenses in the minister's office are up by 13.8 percent. Travel expenses of the minister this year are up by an incredible 14.3 percent, which totals $4,000. This is an unjustifiable expenditure in a year of restraint. How can this be justified in a year of restraint? I move that vote 63 be reduced by $4,000 in the name of a program of real restraint, which has been consistently advanced by the New Democratic Party during all of these estimates.

MR. CHAIRMAN: The amendment is in order.

On the amendment.

MR. SEGARTY: Mr. Chairman, at this time I would like to take this opportunity to thank the minister and his staff for all of the work that they've put into the Elk Valley this year, and for travelling to and from Victoria to the Elk Valley, saving considerable expense to the municipal councils in the Elk Valley in the development of the revenue-sharing agreement.

I'd also like to thank the minister for the numerous visits that he has made to the Elk Valley in the preparation of that agreement, and I look forward to their further participation this year. Obviously, Mr. Chairman, I'll be voting against the amendment because of the work that I expect the Ministry of Municipal Affairs to do in the Elk Valley this year with respect to refining to that agreement.

MR. BARBER: The work in the Elk Valley is just fine, and it's got nothing to do with this vote. We're talking about the office and travel expenses of the minister himself, not his staff. In this vote, if he's already been to the Elk Valley and done the job you liked him to do, you don't need to pay for it twice. This is a year of restraint, we're told. If there was restraint in this budget, we would see these non-essential expenditures kept at least to last year's level, which is what this amendment has proposed. Besides, now that they already know the sound of his voice, they're bound to recognize it when he calls long distance and saves a lot of money instead of travelling there personally.

MR. SEGARTY: I heard the member for Victoria talk earlier on in the minister's estimates about the need to develop agreements like the Elk Valley revenue-sharing agreement in other areas of the province, and no doubt the Minister of Municipal Affairs will be expected to travel to those other centres of the province to help develop those agreements. I also said that I would like the minister to return to the Elk Valley this year to add further points to that agreement. I look forward to his participation.

Amendment negatived on the following division:

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YEAS — 15

NAYS — 28

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

Vote 63 approved.

On vote 64: operations and administration, $10,382,288.

MR. BARBER: Mr. Chairman, I move that vote 64 be reduced, in order to save the taxpayers money in a year of restraint, by $226,534.

Interjection.

MR. BARBER: How many bottles of booze would this buy? Quite a lot, even by the fancy standards of Socred cabinet ministers.

We observe for, instance, that in vote 64 professional and special services are up by 12 percent; offices expenses, 2.2 percent; travel expenses, 31 percent; office furniture and equipment, 142 percent; advertising and propaganda, 15 percent; data processing, 3 percent; BCBC, 3 percent; other expenditures — category 90 — 200 percent. In a year of restraint, to increase expenditures on office furniture and equipment by 42 percent, as vote 64 would provide, is to do something that is not acceptable, even by Pat Kinsella's fancy standards. One hundred and forty-two percent more for furniture in one of the smallest ministries in the government? How on earth can that be justified? This is, we're told, a year of restraint. If the government believed in restraint they would support this motion to cut these non-essential expenditures by the amount of $226,543, as the New Democrats propose.

Amendment negatived on the following division:

YEAS — 15

NAYS — 28

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

MR. BARBER: That concludes the budget restraint proposals that we'll be making in this ministry, but I would like to advise the committee that last year New Democrats proposed spending cuts totalling $82 million. They were all rejected by Social Credit. So far this year, as we have now concluded four ministry estimates, Municipal Affairs being the last, we have proposed budget cuts in the order of $3,863,526.

MR. CHAIRMAN: I will remind the member that we are dealing specifically with the Ministry of Municipal Affairs.

MR. BARBER: That's right, Mr. Chairman, and we would have more money for revenue-sharing, which is the next vote, if we spent less money on advertising, PR, travel, office furniture and other expenses that are not essential in a year of restraint. We have proposed $3.8 million so far; we will be proposing millions more in the future. I hope the Socreds are prepared to accept a program and a proposal of real restraint. We will continue to make it.

Vote 64 approved.

Vote 65: Revenue Sharing Fund, $235,000,000 — approved.

Vote 66: transit services, $100,633,308 — approved.

HON. MR. GARDOM: I move the committee rise, report resolutions and ask leave to sit again.

Motion approved.

The House resumed: Mr. Speaker in the chair.

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

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

Presenting Petitions

MR. REE: I beg leave to present a petition.

Leave granted.

[ Page 8144 ]

MR. REE: It is the petition of Seaboard Life Insurance Co., praying for the passing of an act intituled Seaboard Assurance Company Act, 1953, Amendment Act, 1982. I move that the rules be suspended and that the petition of Seaboard Life Insurance Co. be received.

Motion approved.

Hon. Mr. Gardom moved adjournment of the House.

Motion approved.

The House adjourned at 6:03 p.m.