[ Page 8363 ]

CONTENTS

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

On vote 14: minister's office — 8363

Mr. Blencoe

Mr. Stupich

Ms. Sanford

Income Tax Amendment Act, 1986 (Bill 8). Committee stage — 8369

Third reading

Motor Fuel Tax Amendment Act, 1986 (Bill 9). Second reading

Hon. Mr. Curtis — 8369

Mr. Stupich — 8370

Mr. D'Arcy — 8370

Hon. Mr. Curtis — 8370

Insurance Premium Tax Amendment Act, 1986 (Bill 10). Second reading

Hon. Mr. Curtis — 8371

Mr. Stupich — 8371

Mr. Cocke — 8372

Hon. Mr. Curtis — 8372

Taxation Statutues Amendment Act, 1986 (Bill 11). Second reading

Hon. Mr. Curtis — 8373

Mr. Stupich — 8373

Income Tax Amendment Act (No. 2), 1986 (Bill 23). Second reading

Hon. Mr. Curtis — 8373

Mr. Stupich — 8373

TUESDAY, MAY 27, 1986

The House met at 10:05 a.m.

Prayers.

MR. SKELLY: Mr. Speaker, I have the honour to introduce today in the gallery the visiting delegation from Abashiri, Japan, led by Mayor Tetsuo Ando, and the chairman of the Abashiri twinning committee from Japan, Mr. Kobun Ohbayashi, and also their delegation who has come to visit us in Port Alberni from the city of Abashiri on the island of Hokkaido in Japan. The twin city arrangements were formalized in an unseasonable downpour, Mr. Minister of Forests (Hon. Mr. Heinrich), on Saturday of last week, and a good time was had by all. We're looking forward to a closer relationship between the city of Abashiri and the city of Port Alberni, which we hope will expand into cultural, travel and economic exchanges in the future. I ask the House to welcome our delegation from Japan, who are accompanied today by alderman Don Whyte from Port Alberni.

HON. MR. HEWITT: As a person who has visited the beautiful island of Hokkaido, and I enjoyed visiting many farm operations there, may I say on behalf of the government side: "Kanishua."

Orders of the Day

ESTIMATES: MINISTRY OF
CONSUMER AND CORPORATE AFFAIRS:

(continued)

On vote 14: minister's office, $212,804.

MR. BLENCOE: Mr. Chairman, I want to mainly speak this morning about tenant issues and the residential tenancy branch, some of the concerns we have with the current branch and some of the issues we think have to be resolved.

Before I get into that, I would like to go back to yesterday's discussion and get a clarification from the minister concerning Victoria Mortgage Corporation. The Victoria Mortgage Corporation, as you know, ran into serious difficulty and the member for Vancouver Centre and myself have prepared a number of recommendations for the government.

One of the things that struck me as odd was that the minister said he is still investigating the perhaps false advertising, or the misleading advertising, of that company. Before this minister took over, I had a number of discussions with the former minister and put before him things that I considered to be misleading in terms of how they purport to do business and what they do for their depositors. The former minister said they were not going to investigate, that they didn't see anything wrong with what the Victoria Mortgage Corporation had done or how it advertised itself. I ask the minister to clarify this conflict, because yesterday he said the investigation was ongoing.

HON. MR. VEITCH: For the clarification of the member, what I said yesterday was that there was an investigation or there is an investigation underway regarding a question of misrepresentation, We weren't talking about your advertising, or anything else, not necessarily in that particular.... I don't intend to comment any further while the investigation is underway. There is an investigation underway concerning possible misrepresentation.

MR. BLENCOE: I'm certainly pleased to hear that, because there are 300 or 400 mainly elderly in this community who have been waiting for that kind of investigation for it must be nearly a year now.

Although I welcome the investigation, I do have to say that the delay in this situation has been somewhat disturbing. The former minister gave no indication that the investigation was going to continue, and it would appear he didn't think it was a priority, and now we have a minister saving the investigation is continuing. I think the work in this area has been sloppy, to say the least, and there are a lot of people, particularly elderly, who have been waiting for some response from this government — I would add that it's not only with the Victoria Mortgage Corp. but with the Teachers' Co-op, which, as you know, is another issue.

With Victoria Mortgage Corp. I have to really indicate from this side of the House that we are concerned and really don't support the way the government has handled this issue and the delay. I forget exactly how long ago, but I put before this government — and so did the member for Vancouver Centre — the issues and have asked a number of times for investigations and for some follow-up policy or legislation that can clear up and deal with this kind of problem in the long term. I will leave it there, but on behalf of the people that I have talked to in my riding and Vancouver who have been waiting for a long time for something to happen, the delay is really quite disturbing.

I want to talk a little bit this morning about the residential tenancy branch. I will commence by stating that we would like to see some major changes there. I am sure the government side will recall the debate when the rentalsman's office was cancelled, and I'm not going to go through why we thought the rentalsman did a terrific job, because those things are all on the record. I think those things have all come true in terms of the problems that have been created by the cancellation of the rentalsman's office.

In our estimation, we need to return to the office of the rentalsman in the province of British Columbia. We need to have that very high-profile office that works on behalf of tenants and landlords in a very financially efficient way and which is efficient in terms of dealing with issues on behalf of tenants and landlords. We find now that the majority of tenants have just no idea that there is any mechanism to deal with their problems. Most tenants today just forgo trying to deal with issues. We constantly — I know I do — meet tenants who say: "Such and such is happening but why bother to do anything, because there's such a long process now." In terms of trying to deal with problems, we will continue to advocate the return of the office of the rentalsman in British Columbia.

[10:15]

I think it's a very useful study that has been done by the tenants' rights coalition in Vancouver. I'm sure the minister has received a copy. I hope the minister and his staff have gone through it because I think it's a serious indictment of the residential tenancy branch and what it's not doing. I might add that thousands of British Columbians live in tenancy situations. It's not a matter of dealing with just a handful of people. I don't have the statistics in front of me, but they're astronomical in terms of the number of households that live in tenancies. The study highlights a number of the problems in

[ Page 8364 ]

the residential tenancy area. I'll go through some of them, and the minister may wish to respond.

Again, it's a frustration on this side of the House; we'll present these concerns, but this government has shown no support for tenant problems in the last few years. As a matter of fact, they have weakened the legislation so badly that, as I say, a majority of tenants now don't bother approaching the residential tenancy branch.

Let me go through some of the reports that come out of the tenants' rights coalition recommendations. I should add, Mr. Chairman, that the coalition is made up of a number of well-established and well-respected organizations in Vancouver, and I think they speak for thousands of British Columbians who require better protection in tenancy. Here are some of the problems.

Licensees. It's the feeling of the tenants' coalition — and we agree with this — that all permanent residents of hotels and rooming-houses be included as tenants under the Residential Tenancy Act. We've advocated that a number of times in this Legislature. We believe it's a loophole in the legislation that needs to be plugged. We faced that with the Expo evictions. In our estimation, the people who live in those kinds of accommodation hold permanent tenancy arrangements and should be included. They have the right to be included, and to some protection.

Tenancy agreements. A prescribed standard tenancy agreement should be introduced and authority given to the arbitrators to enforce compliance. We don't have a standard tenancy agreement. The minister shakes his head, but this is the area....

HON. MR. VEITCH: Point of order, Mr. Chairman. While I wouldn't mind addressing these situations with the hon. member in another forum, the need for legislation and changes in legislation are certainly not something that ought to be addressed in estimates.

MR. CHAIRMAN: The minister has a valid point of order. On the administrative functions of the minister....

MR. BLENCOE: I won't refer to legislation. I will refer to weaknesses we see in the current policies. The weakness that I've just outlined is the lack of a standard tenancy agreement, and we feel that that should be in place for arbitrators to utilize and to enforce compliance.

A third area of concern, Mr. Chairman, is repairs. Provincewide minimum repair standards should be set, incorporating municipal authority for local enforcement with avenues for expedient tenant....

MR. CHAIRMAN: Order, please. Hon. member, you are involved in necessity for legislation or changes to legislation. We are debating here today the administrative functions of the minister under vote 14.

MR. BLENCOE: Mr. Chairman, if I cannot put before this House — and I won't mention the word "legislation" — the concerns with existing policies.... All I'm stating are problems with repairs. This is the House that we bring tenants' concerns before and where we ask the minister to respond. I'm suggesting that repair standards are poor under current policy, regulations and legislation. That's straightforward. There's nothing wrong with stating that, I hope.

The whole area of security deposits is a boondoggle and should be cleared up. Many tenants never see their security deposits returned because landlords hold onto them, don't return them, and all sorts of disputes arise over security deposits. There needs to be some serious thought given to that. I also believe that security deposit disputes should be removed from the court system and handled by a rentalsman's office, currently called the residential tenancy branch.

The whole area of affordable rents and security of tenure is a major issue for us, Mr. Chairman, and I wish to go through that in a little more detail this morning. Security of tenure has been an issue in the last few months, and I refer again to what's happened in the downtown east side. We believe that security of tenure should include the following specific measures in addition to the fundamental principles of adequate and affordable housing as a basic right in the province of British Columbia.

First, Mr. Chairman, in terms of security of tenure, provisions for repairs should be enforced. Tightening of control over evictions to just cause....

MR. CHAIRMAN: Order, please, hon. member. We're on the minister's administrative functions. Local bylaws, repair bylaws, are not in the purview of the minister. Tenures are a common-law type of agreement between people. If you would get within the minister's estimates....

MR. BLENCOE: Mr. Chairman, there's a tradition that usually we put forward our concerns in this part of the estimates.

MR. COCKE: On a point of order, Mr. Chairman, I'm amazed that the minister jumps up on a point of order. One of the minister's functions in the past has been: how about some constructive criticism? The member comes up with constructive criticism, and now all of a sudden the Chairman calls him to order every time he makes a move. As far as I'm concerned, the minister's vote has latitude, and that latitude is one of constructive criticism, and it can't be interpreted always as being anticipating legislation. What the member is talking about is the policy of the department, and what that policy should lead to.

MR. CHAIRMAN: The comments are accepted.

MR. BLENCOE: Mr. Chairman, let me just continue with the issue of security of tenure and finish by saying that we should be tightening up the control over evictions for just cause. There are some real abuses in that area. I know the minister is aware of the things I'm talking about, and it's an area that we should be discussing, perhaps by all sides of the House, Mr. Chairman.

The whole question of security deposits. Either abolish security deposits or provide better management through a trust arrangement. I'm not going to go into details. I'm sure the minister is aware of that. I'm sure his staff can tell you that.

The $30 user fee. Either do away with it or bring back a cheaper method of using the rentalsman's office with full powers returned, appeals to be dealt with through the courts. No problem with that.

On the whole question of rent review, we don't have rent control or rent review in the province of British Columbia

[ Page 8365 ]

today. We feel that we don't want to go to rent control, but what we would like to see is a process of rent review whereby in a fair way — tenants who feel their rents don't fit the marketplace — a landlord can't put them up any amount he or she desires. There should be a process of rent review, and it should be aimed at a prescribed sector of the housing market and pegged to the inflation rate. The system would protect mobile-home owners and residents of hotels and rooming houses. And rent review does not affect housing starts, because it would not be on new construction. That myth has been discredited years ago and is not.... I don't wish to go into details of that today. A better approach in terms of the question that the rent-review process hurts housing starts is to look at the external factors such as U.S. Interest rates and federal policies. I think we need to look at a fair, balanced rent-review process, one that is fair to both landlords and tenants, and at the moment we don't have any process like that.

On the whole question of displacement of low-income people again, we've gone over that for a number of weeks in this House in terms of the Expo situation, and that re-emphasized the need for much better legislation. We would hope the government will pay attention to that.

MR. CHAIRMAN: The hon. member is aware that we are not talking legislation. A great deal of the debate has been made at previous legislative debates.

MR. BLENCOE: I mentioned the word legislation. This morning all I am trying to do is offer positive suggestions to the government for change that I think would help British Columbians. It is meant in a sincere way, and if I refer to the word legislation.... I will do my best not to use that word.

Mr. Chairman, I feel that the working poor of this province are particularly affected by the lack of security of tenure and by the problem of no rent review, and, again, I think that has to be looked at in the province of British Columbia.

MR. STUPICH: A constituent of mine has had some exchange of correspondence with the ministry. It's the Ladysmith Nursery School, and I have copies of the letters back and forth. The most recent one I've seen is dated April 7. There might have been another one I'm not aware of. It was to do with a Mr. Currie, of Currie Weatherley and Associates, and some problems they were having with him. The insurance administrator in the ministry said that if there wasn't something further very soon, then further action would be taken. I can wait for the answer to this if the minister doesn't have it with him at this time.

HON. MR. VEITCH: Just first of all referring to some of the statements the hon. member made relative to financial institutions in the province of British Columbia, the hon. member, as I mentioned yesterday, when this document is finally released, will do well perhaps to have a look at this discussion paper which we will be putting out: "Perspectives for Growth in British Columbia's Financial Sector." Some of the items that he addressed are addressed in there by way of questions.

The Teachers' Investment and Housing Cooperative, hon. member — I don't want to reopen that one again, by any stretch of the imagination. However, having said that, it's important to realize that the institutions....

Interjections.

MR. CHAIRMAN: The member for Victoria.

MR. BLENCOE: Point of order. Mr. Chairman, the minister and I are trying to have a fairly good conversation this morning, and the member for Surrey (Mr. Reid) is being incredibly rude and disturbing a rational, intelligent discussion. Perhaps you would just ask him to come to order.

MR. CHAIRMAN: The Chair is confident that the member for Surrey will recognize that the minister is on his feet and has the opportunity to speak. The member for Surrey will have an opportunity as he so desires.

HON. MR. VEITCH: Thank you for protecting the committee, Mr. Chairman.

At any rate, the institutions which do fall within our control and which are controllable, such as trust companies and credit unions.... We're very careful, hon. member, to ensure that any financial instrument that flows from those institutions is clearly delineated on the face of it; or at least there's full and absolute disclosure as to whether or not that instrument is covered by deposit insurance. I referred yesterday to the so-called Ethical Growth Fund that the Vancouver City Savings has in place. Across the top of each one of those certificates is the notice that "this instrument is not protected by any form of deposit insurance" — or words to that effect. I would like the House, the committee and the people of British Columbia to understand that.

[10:30]

With respect to the residential tenancy situation, hon. member, the legislation remains essentially the same with respect to the resolution of disputes. Arbitrators are dealing with repair standards, wherever these situations are reported to them, and legislation does provide for arbitration in cases where there is a rent increase, or where that rent increase may be intended to evict someone.

Just a few numbers for you: during the first ten months of the fiscal year, 2,504 arbitration applications were processed. There were 76,753 telephone inquiries answered, 641 information files resolved, and 9,742 office interviews conducted. I honestly believe that by and large, except for a few isolated situations.... If you're referring to hotels at Expo or something of that nature, the hon. member is completely aware that that does not fall under any legislation which I administer. Since 1983. when this government removed rent controls, the vacancy rate has hovered at about the 2 or 3 percent range. We found most landlords to be quite reasonable in not dramatically increasing rents. Vacancy rates in Vancouver have been relatively high, approximately 2.3 percent, and in such a climate it's unlikely that there will be any real need to have rent controls or anything of this nature.

As I said before, other types of accommodation, such as hotels, boarding-homes, and bed and breakfast houses and so forth, are not covered under existing legislation.

[Mr. Strachan in the chair.]

MR. BLENCOE: I'm going to go back and continue to list some of the concerns we have in this area. I want to respond to the minister's use of statistics this morning in terms of what the residential tenancy branch is doing. The survey by the tenants' coalition is a very exhaustive study. I

[ Page 8366 ]

think it's an excellent one, and I would hope that the minister quietly — he would never admit to the opposition, of course, that he would even take anything like this seriously or make any changes — might take a took at some of these things, because there is, I think, somewhat of an indictment of the current process.

They did a survey of problems, particularly non-monetary problems, and that's one of the areas where a lot of things are not taken up or not resolved. Non-monetary problems, actions taken, percent of tenants with problems: problem taken up with the landlord/manager, 89 percent; residential tenancy branch, 0.9 percent; city inspectors, 4.1 percent; other actions, 6 percent. The bottom line is that only 26 percent of those tenants with non-monetary problems got any success; 74 percent of tenants who had any non-monetary problem in this — and it's scientifically done; it's a well recognized study — were unsuccessful in resolving problems. The serious indictment — I use that word a lot this morning, because I think this branch is in serious trouble — is that only 0.9 percent of those with problems bothered with the residential tenancy branch. That's no reflection on staff, or anything like that. You know why? It's because they don't get anything resolved there. There's a feeling out there that the government's not serious about the tenants' issues.

MR. REID: Oh, come on!

MR. BLENCOE: There is a feeling about that. When we had the office of the rentalsman, there was a feeling that the province of British Columbia was serious about dealing with tenant issues. Today there isn't that feeling at all.

MR. REID: It's a caring, feeling government.

MR. BLENCOE: A caring government. Well, the record speaks for itself.

About some of the other problems: a number of trends were apparent in the study.

Interjection.

MR. BLENCOE: Mr. Chairman, I really ask again if I could perhaps ask the member for Surrey to come to order and allow us the opportunity to discuss with the minister some of these issues. He has many tenants in his riding, and if they knew....

Interjection.

MR. CHAIRMAN: Order, please. The second member for Surrey will come to order.

MR. BLENCOE: Thank you, Mr. Chairman. The study found that a number of trends were apparent: a vast increase in the number of security deposit cases, a severe drop in the number of repair order applications to the new residential tenancy branch, an increase in the level of illegal acts and a greater incidence of harassment of tenants, just to name a few. In the interviewing of tenants — and this is a serious point for the minister to take note of — there was an overwhelming response from tenants that with the office of the rentalsman being abolished, tenants' rights had been abolished and landlords were free to act as they wished in managing their properties. Illegal rent increases and illegal seizures of goods were not uncommon. There was an overwhelming feeling that the province of British Columbia had very much abandoned tenants here. That came through loud and clear in the study.

The type of tenancy problems which are not being resolved were non-monetary tenancy problems; I gave you the statistics a minute ago. The largest involved major and minor repairs such as heating problems, plumbing, appliance repair, broken windows and frames, etc., etc. Tenants are just not getting those things resolved. Heating problems — in my riding here, I have spent two or three days trying to get heat turned on in buildings that house senior citizens, because the landlords.... Let me say, let me really clarify very quickly here, that the majority of landlords are very dedicated and very sincere people who try to do a job, but unfortunately in all walks of life there are those who abuse the system. Unfortunately, we now have a system that really does not.... I talk to a landlord who has turned off the heat for whatever reason and won't repair it, and you get a bad landlord who says: "Oh, I don't have to bother with that; no one's going to do anything to me. I'll take a couple of days. I'll get it fixed sometime." I remember that in one building here in James Bay, if I recall, during that cold snap there were senior citizens without heat for at least a day and a half. That landlord just didn't seem to really care.

When we had the office of the rentalsman, I could phone the office up. I phone the residential tenancy branch up now, and I just get a runaround. "Oh, well, we don't really deal with that issue." "Well, I suppose if someone comes and complains, we might look at it." When I talked to the rentalsman's office, the rentalsman officer was on that issue tout de suite, on top of the landlord and saying: "Hey, you get that heat turned on fast." Really all you've got now is a storefront, a PR number, with the residential tenancy branch. It doesn't resolve issues quickly and efficiently at all. Those are the kinds of issues that have got to be dealt with. You've got to find better mechanisms. Do you want to respond to that?

HON. MR. VEITCH: The hon. member has just proven that the Residential Tenancy Act is working. If you have a situation where — no, just a moment — you have 89 percent of the disputes that he spoke of being dealt with between the landlord and the tenant, isn't that the proper place? Isn't that the proper place to deal with these things? The intent of the legislation is that the tenants take their problems up with the landlord without resorting to arbitration.

You also mentioned that the majority of landlords are trying to do a good job. Hon. member, we do have the arbitration section 1n case they are not. I can tell you right now, if heating or severe repair problems are in evidence, and if the tenant makes an application, the arbitrator will immediately deal with this problem. If it's not happening, I would like the hon. member to bring this to my attention. There are very few landlords that are causing problems. There may be a few lawyers or a few accountants or a few anything that are causing problems in our society. If you want to legislate, hon. member, for the minority to the detriment of the majority, I don't think that's what it's all about. I may be just broaching into another ministry and I'll try not to, but the idea is to provide accommodation at the best possible rate. That is best done, in our opinion, by the checks and balances of the marketplace, not by legislating against every incident and by

[ Page 8367 ]

setting up a bureaucracy that causes as many problems as benefits.

MR. BLENCOE: The minister didn't get the point I was making with the numbers I was quoting. He's right, the majority of people are going to the landlord to try to resolve problems. But I said 74 percent of those problems are unresolved; the landlord doesn't bother with them. That's the survey. Only 0.9 percent of those people go to the residential tenancy branch. You might as well cancel that residential tenancy branch in terms of its effectiveness. Seventy-four percent of people trying to get non-monetary problems resolved don't get them resolved; totally unsuccessful. You don't have any strength in the legislation, in your policies, to give tenants the right to say: "Here I have" — whatever you want to call it — "the policy that says you have to do this, this and this." At the moment they don't have that. Seventy-four percent are unsuccessful in resolving problems. That's in your riding and all the other Vancouver and greater Victoria tidings. For the majority of people living in tenancies, 74 percent of non-monetary problems are being unresolved. People are just not bothering; they're taking it. I don't think that's satisfactory.

I think what it comes down to, Mr. Chairman, is that it is a philosophical question of how we view the kind of homes. We tend to still sometimes think that if you don't own your own home, it's really not a home. Well, Mr. Chairman, more and more in today's society people live in tenancies or live in apartments; that's their home. They're entitled to better protection. Seventy-four percent. It's an indictment, Mr. Chairman. It's something I think the minister can't refute and should look into.

Another area of concern, Mr. Chairman, is seizure of goods and lockout. I think there should be some resolution that gives the residential tenancy branch the authority to require landlords to rectify illegal acts, and authority to levy fines for non-compliance. Non-compliance is astronomical because there's no clout, no clout at all. The landlord doesn't have to do it. Non-compliance is the norm in the province of British Columbia.

Abandonment: I think the definition of abandonment, Mr. Chairman, has to be redefined. And I think the residential tenancy branch has to have the right to enforce the return of goods and to prosecute for non-compliance. Non-compliance is the norm in the province of British Columbia.

Harassment, security of tenure: I think this whole area of harassment of tenants, Mr. Chairman, is something that has to be looked into. I constantly get letters and hear from tenants who are being harassed, being threatened with eviction. There's no mechanism where that can be dealt with at all. It's something that's totally unsatisfactory.

Tenants in the province of British Columbia, Mr. Chairman, really are second-class citizens in terms of the current legislation. I think there has to be a far more accessible arbitration system. Restore all the offices of the rentalsman, with full staffing, as set out in the Residential Tenancy Act of 1974. I'm sorry, Mr. Chairman, I'm referring to future legislation, but I'm saying the current system is not adequate. The minister knows that; he knows that. Abolish the $30 user fee. Abolish it and establish an internal administrative review system. It just goes on day to day, that department.

[10:45]

When I think of the staff and the people we used to have in that rentalsman's office, and how dedicated they were and the things they resolved quickly and efficiently, and then I think of what happens today.... I think most MLAs will say they don't bother with the residential tenancy branch anymore. I certainly don't bother with it any more, I don't get any answers, and it's no reflection on staff. It's just that they have no clout. They sit there, and there's very little for them to do.

Most people in the province of British Columbia.... I have some statistics on that, Mr. Chairman, and I'm sure the minister is aware of them. People don't even know the residential tenancy branch exists. About 5 percent of all those surveyed in this study-an extensive survey in Vancouver correctly identified the residential tenancy branch as the body replacing the office of the rentalsman. Five percent! Well, you're not doing a job. I know that you're a new minister, but you're part of that government and part of the problem.

Interjection.

MR. BLENCOE: Good. I'm glad to hear you're part of the solution as well. But only 5 percent, Mr. Chairman! I know they're a good staff, and some of them who are around still were part of the rentalsman's office and have got good ideas. But we happen to feel on this side that tenants in British Columbia deserve better treatment and better policies — let's not talk about legislation.

There's another area. I'm listing them all, and the minister may not wish to respond to them, but I think it's important to get these on the record, Mr. Chairman, because we've had this residential tenancy branch now for a few years. We believe there should be an appeal procedure with a 30-day limitation period at no cost to the parties. As you know, at the moment the arbitrator's decision is binding. I think there has to be.... I know of some arbitration decisions that have been somewhat questionable. I think there has to be an appeal system. I'm not sure that system is working as effectively as it should.

I think there should be a separate body in charge of investigations and issuance of charges for all offences under the Residential Tenancy Act. At the moment nobody — landlords and, I guess, tenants as well — really feels there is any teeth there or that they have to comply with the regulations. There needs to be some tightening up. I think tenants have to feel — and landlords too.... We need fair legislation. I happen to feel, though, that this current legislation is stacked somewhat in favour of landlords, and I think we need to balance that out a little bit.

I want to go back, Mr. Chairman.... Those are some of the major concerns that we have on this side with the current approach to tenant issues in the province of British Columbia. There are a couple of other things that I want to bring to the attention of the minister before I leave this. The level of awareness among tenants facing problems was very low in terms of their rights. When asked about the current legally allowable rent increase, 42 percent could not answer. Only about 30 percent were able to correctly state that rent increases could now be any amount; and only 18 percent could identify that a written three-month notice of rent increase is legally required. There is a real lack of awareness of that particular branch. When asked about what kind of notice a landlord must give of an eviction for failing to pay rent, 45 percent could not answer. Only 67 percent could respond that a standard form was required and/or that the notice period was ten days. When asked how soon after one moves a

[ Page 8368 ]

security deposit must be paid back, 65 percent were not aware that deposits must be returned within 30 days. When asked whether a tenant has to notify a landlord before moving out, almost all — 98 percent — were aware that notice was required. Only 35 percent, however, could properly state that the notice must be in writing and given one month prior to moving out.

There are all sorts of.... I recommend the study. Maybe the minister hasn't looked at it. Maybe his staff has. There are all sorts of other sections of this study that I think are really very useful. Of course, I think the indictment is the recognition that only 5 percent of those surveyed correctly identified the residential tenancy branch as the body replacing the office of the rentalsman.

Mr. Chairman, those are a number of concerns that we have with residential tenancy. We feel that we need to tighten up on tenant issues such as tenant rights, security of tenure and eviction for just cause. We feel that those who live in rooming-houses need protection. We feel there's a need for a decent process of rent review, when it can be determined that a rent is indefensible in terms of the market. Quite frankly we feel the residential tenancy branch is not doing the job for thousands and thousands of British Columbians who are tenants, and we would ask sincerely for some objective review of that branch.

HON. MR. VEITCH: Well, I've read the document that the hon. member is alluding to, and yes, there are a lot of questions asked. I suppose, if you were not having any problems and someone came up to you on the street and asked a legal question, you might or might not know the answer. The only time you know the answers to these things is when you have a problem, and it's up to the individual citizen to search out the areas and find out. The particular organization to which the hon. member alluded asked tenants if they were having any problems, and to their dismay they said: "No, we're not having any problems." Does that bother the hon. member too much?

What is the point of the exercise? The point of the exercise is to have accommodation at the best possible price and to control any untoward practices. The residential tenancy legislation is very detailed about the landlord's obligations, and deliberately so. The new legislation, as the hon. member may or may not know, has exactly the same procedures as the previous legislation regarding abandonment of chattels and seizures. The same remedies are available as prior to this.

Interjection.

HON. MR. VEITCH: The way it gets enforced is for someone to put the case before the arbitrator. That's why we have a system of laws in this country. You talked about the $30 fee. I'm instructed that in almost all cases where there is an emergency, Human Resources pays this particular fee.

No legislation is perfect, but I think it is a better system. It certainly follows more closely my philosophical bent to have as few controls as possible, but what are we looking for in the end? We are looking to establish a climate where we can have proper rental accommodation for people, and I think you do that better without a proliferation of unnecessary controls.

MS. SANFORD: Mr. Chairman, I want to raise a couple of issues with the minister with respect to the grape industry and find out what is happening regarding imposition of the surcharge on all wines sold in B.C., which was to pay for the bail-out program of the grape growers, and more particularly the bail-out of Calona wines, as I understand it. I don't know that that bail-out was ever necessary for Calona Wines. I can certainly understand the bail-out required for the grape growers, but I have a lot of reservations about the money that was paid to Calona Wines to buy out their surplus red wine and convert it.

I would like to know what moneys have been collected under the program. I don't know if the minister has that information available right now or if he can give me even an approximation of the amount that has been collected under that program, and whether or not that program will end at the end of December this year. I understand it was originally suggested that the program would end then and that surcharge be dropped. Can he give me some assurance that the surcharge on the wine will be dropped regardless of whether or not they have recouped all of the money that was paid out under that bail-out program?

The other question I have relates to the wine standards that have been proposed and advocated by the grape marketing board for a number of years. In a copy of correspondence from the previous minister dated September 13, 1985, they had established a special committee to look into this whole grape industry. At that time, one of the guidelines for this particular committee was the possible establishment of provincial wine standards. I know the industry is still concerned about this. I don't know what the delay is through the provincial government for establishing some kind of standards for the wine industry.

Would the minister comment on those?

HON. MR. VEITCH: In my discussions with the wine group, the red wine problem appears to be dissipating; it is now becoming manageable. The replanting to other varieties of grapes is now in process. It is intended that the surcharge will be in place until approximately $3 million in costs is collected. We haven't collected that yet. I can't tell you exactly what we've collected to date; I suppose I could get that information for you if you want it and bring it back to you.

Interjection.

HON. MR. VEITCH: I don't know when the cutoff will be, but it's assumed it will be around the previously announced date. It's hard to tell on the consumption. With increased wine sales during Expo, perhaps it will be sooner.

I might also mention to the hon. member that we will be meeting with the wine and grape producers in the next few days to talk about their opportunities and their problems and see how we can cooperate with them to help to increase that industry in British Columbia, which employs about 2,000 people at the present time.

A standard is now is place: for each four tonnes of local grapes, they're allowed to import one tonne of grapes from another source.

MS. SANFORD: Mr. Chairman, I didn't hear the minister say anything about the wine standards. Has he established any criteria there?

If the minister is going to be meeting with the people from the industry over the next few days, I wonder if he would talk about wine standards and give the industry some assurance

[ Page 8369 ]

that that's going to be established. I know that the grape growers are very concerned about this, and I would like the minister to put this on the agenda for the meeting. In addition to that, the minister has talked about the 80/20 formula, which doesn't really work out to an 80/20 formula, Mr. Chairman, because of the fact that they now have these import credits on new plantings, and other ways and means in which that 80/20 can be circumvented and changed around drastically. It's more like 55/45, when you look at all of the problems that are involved with the present formula.

[Mr. Ree in the chair.]

It was fine for the minister to get up and talk about this easy formula that's been established, but that's not the way it's working at all. I hope that he will put that as number two on the agenda, because I think that the minister and the government have an obligation to ensure that the grapes that are produced in this province are utilized here so that we don't get into the kind of mess which was created by government prior to the bailout program.

Government knew what was happening respecting imports. They knew that the wine industry was not insisting on replanting white grapes or replacing red grapes that they were producing far more of than the industry could use. That wasn't happening. The ministers were aware of that, the government was aware of that, and yet they took no action until they got to the stage where the wineries simply cancelled the contracts with the grape growers, forcing the government to bail out the grape growers. In the process, Mr. Chairman, they bailed out Calona Wines as well. I had a lot of questions about that, a lot of reservations around the decision that was made surrounding that bailout.

Those are issues: the wine standards and the import quotas at this stage, with respect to the special import credits that are now given to the wineries for new plantings with the contracts that they have. What is happening right now with those wine standards — anything?

[11:00]

HON. MR. VEITCH: Mr. Chairman, the hon. member will appreciate that there's an industry standard, and you can't do it on a case-by-case basis. You'd have to work it across the industry. What happens here — you talk about the grape credits — is that there's a time lag. I'm not a gardener or a botanist. People come from miles around to sneer at my petunias, but I know that it takes five years to produce a growing grapevine that is going to produce an acceptable, usable grape.

There are certainly some allowances there where the product is not available because the demand is still for the white variety and not for the red variety.

This is a bit of a two-edged sword. The grape growers in British Columbia are now paid the highest price for grapes in the world. Some of the wineries will tell you that that doesn't help them when they try to sell their B.C. product and produce it in its final form, which is wine. That is a fact, that the growers in British Columbia are paid the highest prices for their grapes in the world.

The 80/20 standard will be enforced when it is possible to enforce it completely, but the hon. member will appreciate that it takes time to get the product on board and to process the proper grapes.

Vote 14 approved.

Vote 15: ministry operations, $20,771,055 — approved.

The House resumed: Mr. Ree in the chair.

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

HON. MR. McCLELLAND: Committee on Bill 8, Mr. Speaker.

INCOME TAX AMENDMENT ACT, 1986

The House in committee on Bill 8: Mr. Lauk in the chair.

Sections I to 4 inclusive approved.

Title approved.

HON. MR. CURTIS: Mr. Chairman, may I draw the Chair's attention to the straddle provision and seek the Chair's advice as to whether that needs to be dealt with by the committee' Probably the answer is no.

MR. CHAIRMAN: No, it's all section 4, Mr. Minister.

HON. MR. CURTIS: I move then that the committee rise and report the bill complete without amendment.

Motion approved.

The House resumed: Mr. Ree in the chair.

Bill 8, Income Tax Amendment Act, 1986, reported complete without amendment, read a third time and passed.

HON. MR. McCLELLAND: Second reading of Bill 9.

MOTOR FUEL TAX AMENDMENT ACT, 1986

HON. MR. CURTIS: Mr. Speaker, I move second reading of Bill 9, the Motor Fuel Tax Amendment Act, 1986. This also is proposed legislation which flows from budget day of 1986, implementing a number of measures announced in the March budget with respect to motor fuel taxes. Most importantly, it caps motor fuel tax rates, and it implements a number of changes to improve the fairness and the administration of motor fuel taxes.

With respect to improving the fairness of the tax system, may I say that this has been and continues to be an important priority of my ministry and of this government. I'm pleased to have been able to table the measures in this bill, to further improve the fairness of taxes related to motor fuel.

Earlier this year, as world oil prices began to fall, I announced a review of the appropriateness of indexed tax rates for motor fuel in this situation. I'm pleased that the formulas and the tax rates were demonstrated to be just as appropriate in this environment as when they were implemented in 1981. But we did discover early on a potential anomaly. Despite reduced prices for gasoline and other fuel at the pumps, it appeared that provincial taxes could have risen by April I of 1986 if no action had been taken. Mr. Speaker, this was expected to occur because of the data upon which the

[ Page 8370 ]

indexing formula is based: it must, of necessity, be collected some six to eight weeks earlier. To prevent a tax increase, therefore, Bill 9 places a cap on all fuel taxes levied by the Motor Fuel Tax Act for the 1986-87 fiscal year. To restate what was said some two months ago, at no time during the fiscal year will taxes rise above the rates prevailing on March 31, 1986.

I'm pleased to report to hon. members, Mr. Speaker, that in fact the gasoline component of the consumer price index for February, released on March 21, 1986, reflected the initial decrease in gasoline prices. That, as a result, indicated that the indexing formula has automatically produced a fuel tax decrease of about 0.1 cent per litre, effective April 1, 1986. Although the cap on fuel prices did not have any effect on April 1, 1986, the tax decrease demonstrates that our confidence in the current fuel tax system in the province of British Columbia is justified. In addition, although gasoline prices are not expected to rise over the course of the coming year, if prices do rise, then fuel tax increases will automatically be limited by this cap. The cap indicates that we are committed to a fair fuel tax system, with reasonable tax rates and a stable indexing formula.

Another important measure implemented in this proposed legislation is the broadening of eligibility for the fuel tax rebates to handicapped drivers. Mr. Speaker, in addition to the existing criteria under which an individual can qualify for a full rebate of fuel tax, anyone suffering a permanent impairment of locomotion so that public transportation would be hazardous to the user can also now qualify. Since the program is directed at assisting those who must drive their own vehicles, the requirements that an individual must have a valid driver's licence and must own or lease a vehicle still apply. The measure ensures that the legislation reflects the spirit of the program. So because of this measure, the program will address the needs of handicapped or disabled drivers more fairly and more consistently.

The bill also closes a loophole in the taxation of marine fuel, whereby some fuel was unintentionally escaping taxation. This was occurring for some marine diesel fuel purchased outside the boundaries of British Columbia but delivered on ships within provincial boundaries. It also occurred for some very light blends of marine bunker fuel, unfairly allowing some purchasers to avoid taxation. Again, in the interests of fairness, the bill ensures that all marine fuel will be taxed at the appropriate rate, and that taxpayers will be treated consistently in this respect.

Consistent with changes being made to the social service tax and the hotel room tax in other legislation, the refund period for motor fuel taxes is being extended to six years for taxes paid after April 1, 1983. Consistent with common law, there will be no refund in the case of a mistake in law. This measure improves the fairness of the Motor Fuel Tax Act by relaxing the constraint presently imposed by the relatively short three-year limit on refunds.

Mr. Speaker, the several measures implemented through this bill represent, in my view, a significant improvement to the taxation of fuels within the province of British Columbia. The bill prevents undesirable tax increases while maintaining the integrity of the fuel tax indexing formulas, and it improves the fairness and administration of these taxes.

Mr. Speaker, I look forward to the views of other hon. members, and again move second reading of Bill 9.

MR. STUPICH: The opposition will support this bill. But I look forward to seeing the copy of the minister's notes in Hansard. I had a little difficulty following his argument that the indexing system that we have is working so well and is doing exactly what we wanted it to do, and therefore we have to change it. That's my summary of what I thought I heard him say.

As I say, Mr. Speaker, I look forward to reading exactly what he did say, to see whether I can understand it a little better with my eyes than I could with my ears. The opposition will support this bill.

MR. DARCY: First of all, we are supporting it and I welcome the changes, particularly for handicapped people.

The minister is arguing that because he was concerned that provincial fuel taxes would raise themselves automatically to unconscionable levels, he felt a cap should be put on them, although as he himself pointed out to the House, it turned out that that was not necessary, at least for the most recent quarter. Considering where fuel prices are going, it probably won't be needed for the foreseeable future. I would have to ask the minister, though — perhaps rhetorically — why he is concerned only for the 12 months of the fiscal year beginning April I if he has a concern about unconscionably high gasoline taxes and other fuel taxes in British Columbia, which I think is long overdue. I think we all should have had that concern long before.

Why does he have this concern for only 12 months, and why the sunset provision in this particular statute? Why is there not a permanent capping? If it's bad to have fuel taxes increase over what they were in the first quarter of 1986, surely it would still be bad to have them increase over that level at any point following March 31, 1987.

[11:15]

HON. MR. CURTIS: Mr. Speaker, I thank the hon. members for Nanaimo and Rossland-Trail for their comments. I will also enjoy reading Hansard, Mr. Member. I believe that I said what I intended to say. Perhaps I can deal with both points in closing debate on second reading.

First of all, as the members will recall, budget day was March 20, and there is considerable preparation in terms of revenue forecasts, revenue measures, etc. For argument's sake, let us say this was occurring around the beginning of March. We were then two-thirds of the way through the first quarter of the year in terms of reviewing what might happen to any indexed taxes, and I had to make the decision with respect to what might occur.

I think all hon. members will know that the fall in world oil prices occurred quite dramatically, but as I recall it had not started at the very beginning of the 1986 calendar year. Therefore I was somewhat in the dark. I did not know what all the data would show for the full quarter — January, February and March of 1986 — yet I had that immovable deadline of March 31 — April 1, 1986, to be more correct — when whatever had occurred would be reflected if we did nothing. As I indicated, we had to take a precautionary move, and I made the decision to cap the tax rate as of December 31, 1985, ensuring that regardless of what the index might tell us or might demand of us, indeed it would not exceed that level as of April 1, 1986.

As subsequent events proved, and as I indicated in my earlier remarks, we did in fact see a slight decrease in the formula; but that was not known to us until March 31, or just

[ Page 8371 ]

a couple of days before that. I indicated that the indexing formula automatically produced a fuel tax decrease of 0.1 cent per litre for April 1, 1986, but I had no knowledge that would occur when the final decision had to be made with respect to this bill. It is sunsetted — through you, Mr. Speaker, to the member for Rossland-Trail — in the confident expectation that there will be a provincial budget in 1987, and one can assume that it will be in the first part of 1987. So I was addressing the next 12 months — in other words, April 1, 1986 to March 31, 1987, the period covered by the budget presented on March 20 — knowing there would be an opportunity to make further adjustments: to extend, to introduce another cap, to do any number of things as are deemed appropriate when the 1987 budget is in preparation.

So I don't think any hon. member should be alarmed at the fact that it is a one-year measure. That seemed to be the most sensible thing to do, rather than try to guess what revenues we might require from fuel taxes, what world oil prices might be, what other factors may be at play some nine months from now. That is the reason. We have an opportunity to do any number of things in preparing the 1987 budget.

Mr. Speaker, I am pleased the opposition is supporting this. I therefore move second reading of Bill 9.

Motion approved.

Bill 9, Motor Fuel Tax Amendment Act, 1986, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

HON. MR. McCLELLAND: Mr. Speaker, second reading of Bill 10.

INSURANCE PREMIUM TAX
AMENDMENT ACT, 1986

HON. MR. CURTIS: I move second reading of Bill 10. This bill, another budget measure, provides for one of the more important such items introduced in the 1986-87 British Columbia budget: the elimination of the insurance premium tax for companies with their permanent headquarters in the province.

I think we will all agree that the insurance industry forms a significant part of the financial services sector. The government is committed to encouraging the development of this as part of its broad program to stimulate British Columbia's economic renewal. Institutions such as banks, trust companies, credit unions, investment dealers and the insurance industry all benefit from initiatives which will promote a variety of aspects of the financial service sector, including both international and domestic financial activities.

The passage of this bill and the regulations which flow from it will make a significant contribution to the development of the insurance industry. It will help existing British Columbia companies be more competitive, and will help to induce new and existing companies to locate their headquarters in the province. As a result, not only will employment in the insurance industry be maintained through this particular period, but there will also be an opportunity for our native industry — our British Columbia insurance industry — to grow, creating new jobs and considerable spin-off activity.

The measure will not provide a way for companies located elsewhere to avoid British Columbia's insurance premium tax by incorporating subsidiaries to run their B.C. operations. Concerns that companies will create subsidiaries but not undertake any additional activity here or employ any more people have been addressed in the bill. B.C. — headquartered companies must be certified by the commissioner, pursuant to regulations that will be made under the bill, before becoming eligible for the tax exemption. Limiting the exemption to institutions making a significant contribution to the British Columbia financial services sector will, in our view, ensure that it is not abused.

In short, Mr. Speaker. this bill represents another important measure in a series being implemented or being considered by the government of the province to encourage financial sector development in B.C.

MR. STUPICH: The opposition will support this bill but, I must confess, with something less than unbridled enthusiasm. It's one more gift to corporations. To the corporations that have proven their ability to be able to pay, we're saying, here's $4 million a year that the government has no better use for than the companies themselves have. But we're not asking the companies what they're going to do with it. We're not even asking the companies whether or not they're going to increase the investment of their funds in B.C. There's nothing in the bill and nothing in the minister's remarks that would indicate that there will be any inducement for them to provide employment in B.C., to invest their funds in job-creating opportunities in B.C. We're simply saying to them: to make it easier for you to compete with companies that have their head offices in other places, we're going to reduce the cost for you to do business in the province of British Columbia, because certainly paying income tax is one of the costs.

Information that I've had in the past — I'm not sure whether it's current and I wonder if the minister could maybe bring back some information when we get to committee stage of this bill — is to the effect that the companies with head offices in B.C. have not done quite as good a job of investing their funds here as have companies with their head offices elsewhere. The large companies have done a better job of investing in B.C. But I don't know if that's the case today. There's nothing in this bill that would indicate that the minister is concerned about what's happening in that regard.

Certainly it will help companies with head offices in B.C. to be more competitive. But how will that help the province? The minister suggests that they could be more competitive, but they needn't be, Mr. Speaker. There's nothing in here that says they will be or that obliges them to be more competitive. They may simply make greater profits that they will distribute to their shareholders. There's nothing to say that they're going to reduce the cost of insurance, and nothing to say that they're going to be persuaded to enter the liability insurance field in greater volume than they have in the past. And certainly currently there are some real problems with liability insurance. Yet there's nothing in this bill that deals with that, unless the minister has had some discussions with them and is expecting some change.

The minister suggests it will help them to grow. If they do become more competitive then it will help them to grow, but they're not creating new business. They may take business away from some of the other firms, and while they might employ more employees it would seem to me that the companies losing the business would have to let some employees go.

So I can't see that this will mean any total increase in the amount of insurance business being done in the province, and

[ Page 8372 ]

therefore it's unlikely that there will be any new jobs created; as a matter of fact, quite possibly the reverse.

The minister in his press release talked about the tax relief for the insurance industry, for a small part of it. He also talked about complementary initiatives such as the establishment of small business venture capital corporations and the Equity Investment Plan, about which I would like to ask him when and if we get to his estimates to find out just how these programs are working. I can't ask him how this is going to work, but maybe a year from now I will be able to ask him. It's quite possible that he'll still be there and I'll still be here a year from now.

We will support it but, as I say, not with enthusiasm.

MR. COCKE: I, too, stand with the member for Nanaimo respecting this bill. I can remember years and years ago chatting with a president of a major North American life insurance company who said that what British Columbia needs is a major life insurance company with its head office here. That sounded very reasonable to me at the time and, as a matter of fact, still sounds quite reasonable if we're ever to become a financial centre.

Our problem has been — and I'm not sure that this bill addresses anything other than a continuity of what's occurred in the past — providing a crutch for local corporations, for local companies, which have not necessarily adhered to what I consider to be a good, sound business philosophy. The life insurance companies.... Now I'm not dealing with casualty, because everybody in this House knows how I feel about casualty companies. I think they've been darned irresponsible over the years and, as a result, we see that we have ICBC here in answer to their irresponsibility.

As far as their investment attitude is concerned, B.C. Is a place where you put your buck for a fast buck and forget about it. As far as their firm investments are concerned, they're — as they always were — decisions based in Hartford, Connecticut; or Bay Street; or Waterloo, Ontario; or whatever. The life insurance companies, on the other hand, did a good job, and I'm quite sure they're still doing a good job in terms of their proportion of investments. They had a policy, and I'm quite sure it still exists, where they invest proportionately. Their investment is proportionate to the premium income that they receive from a particular jurisdiction, and as far as I'm concerned, that's fair enough.

[11:30]

But this bill, Mr. Speaker, is going to enable some of the companies — and there are none of them that are significantly large at the moment — to continue with their investment decisions that take their money all over the place. Nothing to do with proportion; nothing to do with anything except the fast-buck syndrome. We have seen some absolute disasters in the financial aspect of our province. We've seen trust companies go broke, we've seen investment companies go bankrupt, because of their decisions to invest in far-off real estate and all sorts of other areas of bad management.

If we could see in this bill, as the member for Nanaimo pointed out, something that would indicate to us that there were criteria other than the home-office criteria.... Now I recognize the bill is subject to regulation, but the problem is that when we have access in this House to the legislation, which is at best vague under these circumstances, we can't argue about regulations that we don't know will or will not exist. So, Mr. Speaker, it's really not addressing the problem.

Now the second point that I would like to raise is the concern that I have that other companies — and I mean very significant investors in our province — may change their policies vis-à-vis investment in British Columbia as a result of this premium tax; that they will still be paying, and that hose who are headquartered here are not. We may be raising a red flag to some of these corporations, who may say: "Well, if B.C. wants to play the game of looking after its own, then let them, and we'll look after our own as we see it." I would hate to see the life insurance industry in this country withholding investments from our province or not dealing with us, as they have in the past, on a proportional basis. I can just imagine what would occur in B.C. If the life companies became as irresponsible as the casualty companies have been. It would be a bit of a disaster. The amount of mortgage money that comes into this province as a result of the major assignments of capital from the life companies is very significant. I just don't want to see us putting ourselves in a position where we might jeopardize that.

Having said that, I understand — and listen, I'm not criticizing the motivation here — what the Minister of Finance wants to do. He wants to encourage as much development in this area as possible. When you think about British Columbia, all of British Columbia, a province with 2.7 million, 2.5 million, 2.6 million — we'll see after the census is over — with its limited number of financial institutions compared to little places like Kitchener-Waterloo, which has two huge life insurance companies headquartered there, plus a number of casualty companies.... Then there's London, Ontario — and on and on it goes, Mr. Speaker. If that's what the intention is, I applaud the intention. But I suspect that what we have before us is not going to be as significant in those terms as the minister might feel, and as the government backing him may feel in this instance.

As the member for Nanaimo said, we will, of course, support the bill, but we have some hesitations.

HON. MR. CURTIS: Mr. Speaker, the member for Nanaimo asked for some specific information which I shall have for him in committee stage. I'm sorry that I don't have it here today in closing debate, but I can readily have it when it is called for committee.

As I indicated, this should be seen as one element of a series. The bill is vague, yes. Regulations will flow from it, yes. Not unexpectedly some insurance companies not headquartered in B.C. have conveyed their views to me in no uncertain terms, but we have their attention. That was one of the elements I took into consideration when I decided to take this particular step.

I also hold open the opportunity to make further changes to the Insurance Premium Tax Act if and as such are deemed appropriate at some time in the future. That's not a commitment; that's not getting into any specifics; but, again, we have an opportunity to change this act with the will of the Legislature on an annual basis. I don't mean to rescind that which we are approving today, but rather to introduce other elements into it if that is felt appropriate.

[Mr. Speaker in the chair.]

The member for New Westminster has touched on the amount of investment money which flows from companies other than those headquartered in B.C. That's a fair comment. Mr. Speaker, without spending a great deal of time on

[ Page 8373 ]

another piece of legislation which is on our books, I think I can refer him to the fact that the corporation capital tax, as it phases out, is now limited only to Canada's chartered banks not headquartered in B.C. So there is some parallel.

If I may offer some reassurance, I am not aware of any decision being taken by Canada's major chartered banks to stop doing business in the province of B.C. because of a specific piece of legislation, a specific move which we took earlier on. I trust that the same will be the case in terms of the insurance industry. They may not like it, but now is their opportunity to be more innovative, to show ways in which they can have a greater and a more useful presence in British Columbia, and without just setting up some sort of B.C. shell.

There may be ways in which some companies — it's a competitive business — can assist us in our goal of strengthening this element through this bill, this element of the very broad financial spectrum in the province of B.C. It's a single move, but it must be seen in the context of a whole series of moves which have been taken over time, and others which I trust will follow.

Mr. Speaker, I move second reading of Bill 10.

Motion approved.

Bill 10, Insurance Premium Tax Amendment Act, 1986, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

HON. MR. McCLELLAND: Second reading of Bill 11, Mr. Speaker.

TAXATION STATUTES AMENDMENT ACT, 1986

HON. MR. CURTIS: Mr. Speaker, this is an omnibus bill, so-called. It deals with a number of tax fairness measures and administrative steps. They touch a number of different statutes. They have in common, however, the theme of improving the tax system and attempting to treat taxpayers more equitably. I would think that the members of the Legislature will want to discuss points of interest in the committee stage.

I move second reading of Bill 11.

MR. STUPICH: I agree with the minister on that. We will support it, certainly in second reading and I expect in committee stage as well.

I do want to make this one observation. When it comes to handing out tax revenue to corporation, the minister is very generous. When it comes to handing it out to individuals, he is very stingy. We will get into the details of that as we work our way through in committee stage. But we will support second reading.

Motion approved.

Bill 11, Taxation Statutes Amendment Act, 1986, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

HON. MR. McCLELLAND: Mr. Speaker, second reading of Bill 23.

INCOME TAX AMENDMENT ACT (No. 2), 1986

HON. MR. CURTIS: Mr. Speaker, I move second reading of Bill 23, the Income Tax Amendment Act (No. 2), 1986.

This bill introduces amendments to the Income Tax Act in two areas. First, a number of the amendments bring administrative, enforcement and collection provisions of the provincial act in line with Income Tax Canada, which has been done, I believe, almost every year. The amendments have been initiated by changes made to the federal act from 1983 to the present. Changes to the provincial act have been requested by Ottawa under the terms of the Canada-British Columbia tax collection agreement, by which the province agrees that it will maintain its taxation statute on the same basis as the federal act.

Secondly, a minor change is being made to correct a technical anomaly in the appeal provision of the act. Taxpayers who calculate taxable income under section 8 of the Income Tax Act will now be permitted to file an appeal with federal authorities. Prior to the introduction of this bill, taxpayers who calculated their income under section 8 of the act had, we understand and found out, no right of appeal even though provincial taxable income differed from federal taxable income. That is the essence of the Income Tax Amendment Act (No. 2). Mr. Speaker. I move second reading.

MR. STUPICH: Mr. Speaker. the opposition will support second reading.

HON. MR. CURTIS: Mr. Speaker, how would you feel if I moved that the bill be referred to Committee of the Whole House for consideration at the next sitting after today?

MR. SPEAKER: Pretty good.

Motion approved.

Hon. Mr. McClelland moved adjournment of the House.

Motion approved.

The House adjourned at 11:44 a.m.