[ Page 4093 ]

CONTENTS

Routine Proceedings

Oral Questions

Ambulance dispatch service. Mrs. Boone –– 4093

Heart surgery waiting-lists. Mr. Harcourt –– 4094

Privatization of provincial park campgrounds. Ms. Edwards –– 4094

Vancouver Island tourism. Mr. Blencoe –– 4095

Ambulance dispatch service. Hon. Mr. Dueck –– 4095

Ministerial Statement

Organ Donor Awareness Week. Hon. Mr. Dueck –– 4095

Mrs. Boone

Committee of Supply: Ministry of Finance and Corporate Relations estimates. (Hon. Mr. Couvelier)

On vote 37: minister's office –– 4096

Hon. Mr. Couvelier

Mr. Stupich

Mr. Clark

Mr. Sihota

Mr. Rose

Mr. Blencoe

Presenting Reports –– 4117

The House met at 2:08 p.m.

Prayers.

HON. MR. SAVAGE: It gives me a great deal of pleasure to introduce one of my constituents and a past president of the B.C. Social Credit Party, Melody Harris; accompanying Melody today is Al MacLean. Would this House please make them very welcome.

MR. SKELLY: I would like the House to welcome Shirley Cherwak, who is my constituency assistant.

HON. L. HANSON: In the House today are two constituents of mine who are also relatives: my daughter Nancy and her husband Wayne from Vernon. Would the House please make them welcome.

MR. BLENCOE: This morning the House was privileged to have a group of young people from George Jay Elementary School in Victoria who came to see the activities. Two members of that school group were so interested that they have returned this afternoon to watch the proceedings. Will the House please welcome Tammy Barnatt and Anne Belanger.

MR. MOWAT: In the gallery today are two guests who were over having meetings with the government this morning: Dr. F.M. Swangard, managing director of Paracomp Technologies Inc., and Mr. Bill Lewis, the marketing manager of communications for Paracomp. In the precincts is Mr. Sucha Gill, president of that company. I'd ask the House to please make them welcome.

MR. JONES: On behalf of the member for North Island, I would like to introduce to the House a friend and constituent of that member, Hugh McConnell, who is an officer of the International Union of Operating Engineers. I know the House will join me in a warm and enthusiastic welcome.

MR. PELTON: Hon. members, my seatmate the member for Shuswap-Revelstoke (Mr. Michael) and his wife Dilys are celebrating their eighth wedding anniversary today, and I wonder if it might not be appropriate that we extend them our heartiest congratulations not just for today but for many years to come.

MS. MARZARI: I'd like to draw the House's attention to the fact that the member for Prince George North (Mrs. Boone) celebrated her forty-first birthday yesterday and was properly bestowed with a hula hoop in honour of the occasion at a banquet given in her honour and paid for by her last evening. It fell within four days of the birth of her grandson, a son born to her foster daughter six days ago now. Happy birthday to the member.

MR. PETERSON: I'd like to introduce two people in the members' gallery who are very dear to me: my brother, Gregory Peterson, and his wonderful wife, Devinder Gil. Will the House please join me in making them welcome.

MRS. GRAN: I wonder if the members of the House would join me in paying tribute today to all of the secretaries who serve us so well, and the secretaries throughout this province in Secretaries Week.

MR. DE JONG: On behalf of the first member for Central Fraser Valley (Hon. Mr. Dueck) and myself, I am pleased to introduce to the House today Len and Jaquelene Jansen. They have been longtime residents and successful farmers in the Matsqui area, and I would ask the House to give them a cordial welcome.

Oral Questions

AMBULANCE DISPATCH SERVICE

MRS. BOONE: A question to the Minister of Health. Beginning Sunday, priority 4 patients in the lower mainland will no longer be transported by ambulance but delivered through private contractors. Will the minister confirm that he is still proceeding with moving patients by private contractor rather than by ambulance beginning May 1?

HON. MR. DUECK: I think I have answered this question a number of times in the House, and I am quite willing to do it again. We have transferred non-emergency patients for some time — as a matter of fact, for about two or three years — and we will continue to do so. This in no way will hinder the service of the ambulance. As a matter of fact, it will enhance the service, because they will be available for emergency service which in some instances has been lacking because of overloading of calls. When we speak about transferring patients who are not emergent, that will continue; we have done that in the past very successfully. No one will lose their job over it.

[2:15]

MRS. BOONE: Supplementary. British Columbians count on our public ambulance service because they know it's staffed by well-trained ambulance paramedics — professionals who have saved lives during the course of so-called routine transfers. Will the minister tell the House exactly what health care or paramedic training the staff of private contractors will be required to have?

HON. MR. DUECK: I have said that for non-emergent transfers, the hospital, the physician or the nurse on staff — the administration — will make the decision, not the Ministry of Health or me as the minister. If it's a transfer from one facility to another, which is not considered emergent, it can well be done by way of other than our medics. We do not require two medics in an ambulance for an ordinary transfer — and that will continue.

MRS. BOONE: I take it, then, that there are no standards whatsoever for any of their staff. Will the minister tell the House exactly what standards have been established for vehicles of private contractors which will be transporting patients?

HON. MR. DUECK: First of all, I should say "Happy Birthday" to you; I neglected to do that. I feel much more comfortable now that you're a grandmother and I'm a grandfather. We're on an even keel.

As far as that question is concerned, I'll have to take it on notice because I have not had any word back on the inspection of a private ambulance versus a public one run by us.

[ Page 4094 ]

MRS. BOONE: Mr. Minister, I'm a little concerned. You have no standards for the vehicles and no standards for the staff. This takes place on May 1.

The municipal councils of Vancouver, New Westminster, Burnaby, Richmond, Delta, White Rock, Langley and North Vancouver have all passed motions opposing the privatizing of priority 3 and 4 ambulance services, because they believe that it puts British Columbians at risk. I know the minister doesn't like to hear that he's putting patients at risk, but I ask him: how can he reconcile the legitimate and real fear that private transportation companies will put profits ahead of standards of care, that this government is willing to lower standards for staff and vehicles transporting ill people, and that many British Columbians in the lower mainland will no longer have access to reliable ambulances staffed by skilled paramedics?

HON. MR. DUECK: Again, many statements were made that are erroneous, and of course it would take a long time to explain to that member. She could have had all that information from me, if she had desired, before the House sat. However, I said that in the metropolitan areas of Vancouver and Victoria, where we need the ambulance service on duty for emergency calls, we're using transfers from other than ambulances that are non-emergent, as declared by the hospital in charge. I don't know what more information you want than that.

HEART SURGERY WAITING-LISTS

MR. HARCOURT: I have a question for the Minister of Health. British Columbians in need of heart surgery still face an unacceptable wait for what is, in many cases, lifesaving health care. Will the minister tell the House exactly how many British Columbians are on the heart surgery waiting lists at this time?

HON. MR. DUECK: That's a question that requires an answer from my staff, because that changes from minute to minute and day to day. I can't give him the exact figure, but I can sure as heck get it. I'll take that question on notice.

MR. HARCOURT: The Vancouver General Hospital alone has a waiting-list of 250 patients in need of cardiac surgery. The minister knows that such delays put British Columbians at risk. As a matter of fact, at least three people on British Columbia's waiting-lists have died this year waiting for surgery. How can the minister reconcile the long waiting-lists we still find with his promise of last December to allow for more heart surgery for British Columbians?

HON. MR. DUECK: Again, the Leader of the Opposition is making certain assumptions that are not correct. We had a fairly large waiting-list last year, which has improved significantly. I can't give you the numbers to the last figure, but since the new theatre was opened at Vancouver General, they have informed me in the last couple of days that they are catching up and doing many more, and that the situation now is under control. There always will be some waiting period.

I reject the statement that three people have died. I wish he was as good a lawyer as he is a doctor, because he's making statements that doctors wouldn't make. I reject the statement that three people have died because they were on the waiting list. You cannot say that, because even a physician wouldn't make that statement. So again, you're trying to make a few Brownie points by going on the backs of the poor people and the sick people. You keep saying that we do that, and you're doing the same thing.

MR. HARCOURT: While the shepherd is away, the sheep will play. They finally got their voice. They wouldn't offend the Premier when he was here earlier.

Interjections.

MR. HARCOURT: Mr. Speaker, that is exactly my point. When is the minister going to deal with the sick? When is he going to deal with the disadvantaged in this province? What we're looking for is a commitment in this Legislature from the minister that he will end these long waiting-lists for heart surgery so more people don't die in this province. We want a commitment, Mr. Minister.

PRIVATIZATION OF
>PROVINCIAL PARK CAMPGROUNDS

MS. EDWARDS: My question is to the Minister of Parks. I have in my hand the document which outlines the government's strategy for privatizing park campgrounds. The document lists disadvantages to privatization, including admissions that there will be pressure to commercialize campgrounds and that there will be conflict with free public access. How can the minister reconcile privatizing campgrounds with these particular disadvantages found in the ministry's own report?

HON. MR. STRACHAN: When you undertake any initiative, Mr. Speaker, you look at the pros and cons, advantages and disadvantages of what you're doing. That's just good management. If the member is suggesting that ministry officials don't take into account all the details of any management plan, then that's her suggestion, but we want to have a look at everything that concerns good park management. One has to consider at all times the pros and cons and what benefits or lack of benefits there are. I think it's only appropriate and only responsible that in developing our position paper on the contracting of services in the parks, we do identify the potential disadvantages.

MS. EDWARDS: A supplementary. Since these disadvantages are very clearly there, according to the minister's answer, and there are other disadvantages such as a reduction in the quality of facilities and private operators dictating public park management.... In the light of all these disadvantages, is the minister still prepared to give control of park campgrounds to private operators for periods of ten to 20 years, as suggested in the same report?

HON. MR. STRACHAN: We're dealing with future policy here, essentially, Mr. Speaker. Let me respond by again saying that listing the disadvantages is part of good management. It doesn't mean they're going to occur; it's just identifying to the management personnel that we do have these potential problems to consider. When we consider the potential problems, then we can develop means and strategies of organizing ourselves so we don't have to worry about them.

The member is quite correct in what she reads. Those were the briefing papers developed for my benefit, and she

[ Page 4095 ]

quite correctly points out what the disadvantages are. But I see no problem in identifying them. I think it's of benefit to the management operations of the parks branch that we have those problems identified, so we can take future action when it's considered necessary.

MS. EDWARDS: Supplementary. Will the minister tell the House if he has developed tendering packages for privatizing campground operations for the 1988 season, and if so, how many of B.C.'s 206 park campgrounds are included?

HON. MR. STRACHAN: To begin with the last question first, I told you yesterday that I believe 158 use contracted private services now, and have since 1983. This is by no means a new program, a new step into privatization. It's been in place for some time now — five years.

I don't know where they are in terms of new tendering documents being prepared; but as soon as they are, I'll let you know. I have no knowledge as of 2:27 this afternoon what the extent of tendering-document preparation is.

MS. EDWARDS: Supplementary. The minister's report says that privatization will result in a reduction in staff, particularly seasonal auxiliary workers. Yet it also says the government will fulfil its obligations under the collective agreement. How can the minister reconcile that with job and wage cuts due to privatization that fail to honour in spirit the government's agreement with its workers?

HON. MR. STRACHAN: That's a difficult one to answer. We do know what the collective agreement says with respect to auxiliary employees. We are prepared to honour that, and yet we still know that we have an appropriate mechanism within the collective agreement for further privatization — it can be done.

VANCOUVER ISLAND TOURISM

MR. BLENCOE: I have a question for the Minister of Tourism. Your generic marketing budget has been reduced dramatically this year from $15 million to $10 million. We also know from your own research that Canadian visitors to Vancouver Island, and in particular the capital, are also down dramatically in the last few years. It's been made up for by U.S. visitors. With that dramatic cut in budget of $5 million, there's a distinct possibility that visitors to Vancouver Island, even American visitors, might drop dramatically in the next few years. What is the minister prepared to do to ensure that Vancouver Island and the capital keep the number of visitors they should be getting?

HON. MR. REID: I am pleased with that question because it indicates to that member, I would hope, the success of other organizations and government agencies of the province, such as the B.C. Steamship Company, B.C. Ferries. B.C. Transit and others, who do marketing on behalf of this government — and not on behalf of the ministry primarily, but internationally — in drawing people to Vancouver Island. The marketing of the product called Vancouver Island in Alberta and Saskatchewan is the mandate of the area of Vancouver Island, but the government's mandate is to draw people from primarily California, Oregon and Washington, in relation to other organizations who are also funding the marketing.

The international tourism coming to Victoria and Vancouver Island will continue to grow, whereas the Canadian market and B.C. market in Vancouver Island.... Unless the Vancouver Island communities market this product in British Columbia and in the rest of Canada, there isn't an opportunity for further people from those communities to be invited here. The increase in tourism to Vancouver Island from Washington, Oregon and California is primarily as a result of a strong focus that we had during Expo '86 and a strong focus we had in '87 to continue that marketing thrust. We increased the tourism to Vancouver Island and will continue to do that — and not to the detriment of the rest of Canada — but it certainly is incumbent upon the community of Vancouver Island to market British Columbia.

[2:30]

AMBULANCE DISPATCH SERVICE

HON. MR. DUECK: Mr. Speaker, I would like to respond to a question I took on notice as of yesterday, and following that I would like to make a ministerial statement.

The member for Prince Rupert (Mr. Miller) mentioned three instances of delayed ambulance service in the Prince Rupert area. I could only find one, and that was of the 25th. He has chosen not to give me the other details, so I couldn't follow up on those.

However, the one on the 25th: the call was received at 14:26; crew paged at 14:28: crew en route to scene at 14:29: crew arrived at scene at 14:37. Mr. Speaker, this response time is acceptable, given that the unit had to respond a distance of seven kilometers through downtown traffic.

I'm really concerned that these things are coming up again and again, because we keep absolutely accurate time when an ambulance is dispatched and when it leaves and when it arrives at the scene. When fear-mongering tactics are used, like someone dying because the ambulance service wasn't there on time, and they're blaming people who are working hard, who are conscientious.... Here I have 11 minutes and travelling 7 miles; you couldn't do it any faster by any means. I want the members to know that if there is a problem, I want to know about it, but don't give me this stuff, this....

SOME HON. MEMBERS: Garbage.

HON. MR. DUECK: Well, it is. This time is exceptionally good, and I don't like having that used to have people fear that the ambulance service is not doing its job. These are good, conscientious people and I think, again, that they deserve an apology.

Ministerial Statement

ORGAN DONOR AWARENESS WEEK

HON. MR. DUECK: Mr. Speaker, I'd like to make a ministerial statement, and this is much more pleasant.

This week, April 24-30, is National Organ Donor Awareness Week, and I ask all British Columbia families to mark this week by discussing this vital issue. This national week helps to encourage organ tissue donations by increasing public awareness of the growing number of patients requiring such transplantation.

Two main developments have contributed greatly to the success of transplants: medical progress and widespread

[ Page 4096 ]

public acceptance of the concept of organ donations. A recent public survey indicates that as many as 88 percent of North Americans would give permission to donate a loved one's organs under the appropriate circumstances. Consenting to participate in an organ donor program means each individual could potentially contribute to the beginning of many new lives.

Organ donation can include kidney, liver, lungs, heart, pancreas, skin tissue, corneas and bone. In 1985 the provincial government and the medical community established the B.C. Transplant Society, which subsequently initiated the Pacific Organ Retrieval for Transplantation program. Funded by the Ministry of Health, PORT has responsibility for coordinating organ retrieval efforts throughout the province. Last year alone, 270 patients underwent corneal transplants, a procedure that now has a 95 percent graft survival rate after the first year. This compares to fewer than 50 such operations before the Eye Bank of B.C. was set up five years ago. In 1987, 137 kidney transplants were done in British Columbia, compared to 98 in 1986 and 37 in 1985. This year a goal of 180 kidney transplants has been set. Per capita, B.C. is ranked second in Canada after Ontario. Graft survival rate at one year following transplant is 85 percent.

Roughly 20 percent of the B.C. population have signed up as potential donors. Many have done so by completing the organ donor consent card that accompanies their B.C. driver's licence. Improvements to this system are presently under active review by the government. Most important, people who have chosen to become potential donors should discuss their desire with their next of kin. Make your wishes clear to them so that they know what to expect and understand what to do in case of your death. The presence of a signed donor consent card carried in your wallet or purse, indicating your wishes, makes discussion between the doctor and your family much less difficult at a time of critical medical judgment and decision.

MRS. BOONE: I'd like to thank the minister for notice of his statement.

We on the New Democratic side would like to add our voice to that of the minister in congratulating people who have signed up as organ donors, and to encourage people to make that commitment to save lives, to sign their names on the card when they get a licence. These are very important things. We all hear about individuals who require organs, and the ones that really touch us are usually the young children that we see requiring kidneys or what have you.

I would like to take this opportunity, though, to voice my concern and raise once again something that I've brought up with the minister. It has to do with the bone marrow registry, which is something that could potentially save the lives of many leukemia victims. It is something that I know I've brought up with the minister, and I understand that you are looking into it to develop a way to develop this registry. I have spoken with the Red Cross, and this is a registry that can be done strictly through computerization, so that people have knowledge of what type of bone marrow you have so that they can potentially save lives. In addition to the bone marrow transplant, I'd like to see us make that commitment to the bone marrow registry so that we can start saving lives, not just with organ transplants but also with the lives of the many leukemia victims out there.

Orders of the Day

HON. MR. STRACHAN: Committee of Supply, Mr. Speaker.

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

ESTIMATES: MINISTRY OF
FINANCE AND CORPORATE RELATIONS
(continued)

On vote 37: minister's office, $293,411.

HON. MR. COUVELIER: The ministry's main operating estimates are shown under votes 37, 38 and 39. As Minister of Finance and Corporate Relations, I'm also responsible for the management of the public debt, vote 72; contingencies, vote 73; and new programs, vote 74, shown at the back of the estimates.

With respect to its operating estimates, the ministry is asking for an '88-89 budget of $62 million. This represents a decrease of $2.3 million from '87-88. The decrease primarily relates to the establishment of a self-financing B.C. Securities Commission. The commission's budget will be fully recovered through fees and licenses charged to the securities industry. This self-financing initiative will enable the commission to adjust its activities and budget in accordance with the market.

On a comparable basis, excluding the Securities Commission, the ministry's operating estimates are up 3.7 percent, while FTEs, again after adjusting for the Securities Commission, are down 6.7 percent. A significant amount of moneys is being placed into improving productivity. The estimates include $2.2 million for systems development, compared with $1.4 million for '87-88. These investments will save operating costs in the future.

With respect to the corporate relations division, funding is up 14.5 percent over last year. There has also been a reorganization of the division's activities in Vancouver and a realignment of responsibilities between the division and the B.C. Securities Commission. The revenue division also remains a priority, in that their estimates are being increased by 9.6 percent over '87-88. This is where a significant portion of the ministry's systems development is being directed.

It should be noted that our estimates include $257,000 for the operation of the compensation stabilization program until the office closes on September 30, 1988. The requested funding is less than half the amount for '87-88. It will allow the commission to monitor the compensation plans not yet expired under the program, as well as maintain its data bases and produce a windup report.

That concludes my overview of the estimates. I now welcome any questions.

MR. STUPICH: First, I'd like to comment a bit and ask the minister some questions about some of the remarks he made in closing the budget debate. He took issue with some of the remarks made on this side of the House, and now I'd like to come back and have my turn at him.

First, quoting from Hansard, page 3776: "During this debate it was claimed that the gross provincial product is still at the level of 1981 in constant dollars. This is totally incorrect." I agree with the minister that that statement is incorrect, but as I recall it — and I haven't checked it — what was said on this side of the House was that 1986 was the first year that we reached and passed the gross product that was achieved in 1981.

[ Page 4097 ]

The next comment I'd like to make is that he says: "This clearly means that the standards of living are higher now than they were then. Furthermore...." I'll leave that; it's just about wages.

I don't think we can afford to rest on our laurels. Stats Canada says B.C. families are poorer than they were in 1980. B.C. family income fell 9.7 percent from 1980 to 1985. B.C.'s 775,820 families earned an average $37,655 in 1985, down from $41,688 in 1980. Canada-wide, the decline was only 1.2 percent, from $38,277 to $37,827.

Further on that, a new report released in Ottawa today and dated April 26, 1988, shows just how far B.C. is lagging behind other provinces in recovering from economic recession in the early eighties. Those below the poverty line have increased significantly. In 1981 there were 69,000 families; in 1986 it had grown to 105,000, a 52 percent increase. In terms of percentage of overall population, the poverty rate in B.C. jumped from 9.4 percent in 1981 to 13.3 percent in 1986. Ontario has the lowest poverty rate at 8.7 percent. B.C. trails behind Ontario, Prince Edward Island and Alberta.

If the minister wants at any time to get up, that's fine with me. If he indicates otherwise, I'll keep on going for another ten minutes or whatever.

The minister went on to say in his closing remarks: "Much comment was made about our fee increases in the two budgets that we have brought forward. The suggestion was that these are somehow hidden taxes." He goes on to argue that they are simply recovering the costs of delivering services.

Mr. Chairman, you were in the House and heard the previous Minister of Finance embark on a three-year project, I believe it was, to rationalize the fees that were being levied by government for various government services. He was trying to bring them in line with the cost of delivering those services, and he achieved that, according to what he told us. Since this minister took office as Minister of Finance, we have had over 700 fee increases. We're still getting them. Almost on a daily basis another list of fee increases is.... I was going to say made public. I think they are released. I'm not sure the public ever hears about them except for the individuals directly involved — that is, the ones who are paying.

[2:45]

Nevertheless, after we were supposed to have rationalized them, we then started on a series of fee increases — over 700 to date. In some cases the fees have not just increased marginally; they have increased three and four and ten and twentyfold. If the minister is just recovering the costs, is he telling us that the costs of delivering some government services have in the last three years in some cases increased tenfold? I find that difficult to believe, but if he has any examples of costs having gone up that fast, I'd like to hear about them.

He says they're "sensible alternatives to tax increases." Sensible from the point of view of politics. As I say, there is no debate in the Legislature, no justification, no discussion here as to whether.... And I'm not saying there should be; I think the Legislature would be dealing with nothing else if it had to deal with every single fee increase. But it would seem to me that when the minister is putting out press releases — and he does so regularly — he might put out some about these fee increases and tell us exactly why they are going up with respect to that particular service, especially the ones where there are the most dramatic increases.

"A statement was made that B.C.'s small business income tax rate of 9 percent is the second-highest tax rate in Canada. That is totally incorrect.... "

I'll leave it to you as to which one of us is on in this case. The minister said there are six that have higher rates, and indeed there are. Six provinces have 10 percent. We were at 11 until this recent budget. We still are, I guess, until we pass the legislation. He said there's another one that has the same rate as us, and that is the case — one other. exactly the same. Six at 10, two at 9. We have company — there's lots of company for first place. We're the second highest. So the minister is wrong in saying that our statement was totally incorrect. Maybe it wasn't telling the whole truth any more than he did, but neither one of us was totally incorrect.

The minister argued with respect to Medical Services Plan premiums that they contribute "only 12 percent of the total cost of health care in this province and, indeed, are less than the premiums charged in the richest province in Canada — that is, Ontario. " Yes, they are less than Ontario's. The minister didn't say there are only three provinces where such premiums are charged. I just want you to note, Mr. Chairman, that the minister is now comparing the amount of medical services premium revenue to the total cost of health care and saying that it's only 12 percent. In the budget, the minister wasn't comparing the Medical Services Plan premiums with the total cost of health care. I'm reading from the budget: "Effective May 1, 1988, MSP premiums will fund 50 percent of physicians' fees and 100 percent of the taxpayers' costs of enhanced medical benefits." In saying that by using a different yardstick we can get the percentage down lower — that if we compare it to total health costs, it's not 50 percent; it's only 12 percent — the minister is not incorrect. But he might just as well have said that by comparing it to the total cost of the provincial budget, it's only 4.7 percent. I don't see the relevance of it, Mr. Chairman.

The fact of the matter is that we have dramatically increased Medical Services Plan premiums in British Columbia. That is not happening in other jurisdictions, to the best of my knowledge. There are still seven provinces — again, to the best of my knowledge — that charge absolutely no MSP premium. Everything we said in complaining about MSP premiums was true.

The minister talked about us complaining about the increase in charges for seniors living in extended-care homes. We referred to seniors having just $3.69 a day left to them. The minister described that as a distortion of fact, and went on to say: "The fact is that if these seniors are getting GAIN...the amount of money left for them is $4.95 per day, not the $3.69 that the hon. members waxed eloquently about." That's right, if the senior is a single. Of course, a single gets a maximum of $50 under GAIN; a couple gets a maximum of $60 between the two of them. So if you're looking at a single person, the minister's figure is correct; if you're looking at a couple and looking at each one of them separately, the figure is much lower than the $4.95 and much closer to the $3.69 quoted on this side of the House — whether it was me or somebody else I'm not sure right now. When we say what they are left, whether it's $3, $4 or $5, or $3.73 or $3.63, let's bear in mind that these seniors, either from their own resources or from those of their families or friends or other agencies, still have to pay for things like wheelchairs, denture relining, glasses, user fees for physiotherapy, dispensing fees for prescriptions, and personal items that we can't count at all.

[ Page 4098 ]

Let's remember also that in the minister's rush to increase fees, the fees for ambulance service have gone up to $35 for the first 40 kilometres. That is a significant increase, and often the residents of such places are called upon to use the services of an ambulance. So it doesn't really matter when we're down that low just how much it is — it takes a lot of saving to pay for a trip in an ambulance.

Costs of education: "He" — that was me — "claimed that the regressive property taxes account for 37 percent of education funding, and the funding shortfall is caused by the reduction in non-residential property taxes which has been assumed by residential property owners, individual homeowners." He went on to say that this government's contribution to education amounts to 80 percent of the cost of education. I suppose it's true. The government is collecting money from the rural areas. They have been increasing the rural rate of taxation regularly; it's now up to 17 percent. I think it was 10 percent when it started going up just a few years ago. They've removed the right from local school boards to tax non-residential property, but the residential property tax in total is still covering the 37 percent that it was covering before. When you take the 20 percent the minister spoke of that's left to the control of the school boards and add the 17 percent that is being collected by the government in rural areas — and which is being turned over to the school boards — we're still left with the property tax raising 37 percent.

The only study that was done on this, to my knowledge, was the McMath commission, which delivered its report to the Bennett administration in 1976. Their recommendation was that it should be 75 percent covered from other than property taxes. There has been no positive action in response to that McMath commission report.

Interjection.

MR. STUPICH: My colleague from Coquitlam-Moody (Mr. Rose) assists me now by asking: when was the last time you can recall an increase in the homeowner grant? I recall that when the NDP were in office it happened every year. I think it's happened twice since. Both of them — entirely by coincidence — were election years.

AN HON. MEMBER: A good Social Credit program.

MR. STUPICH: Yes, Mr. Chairman, I'll give the Social Credit the credit for having introduced that program. But what's happened to it under this regime? Are we waiting until election year before there's any adjustment upward in the homeowner grant? I'm asking, Mr. Chairman; it's a question. I know it would be a coincidence, but let's ask the question.

"The hon. member" — myself — "also talked about this budget having an impact of $700 for each family." Then he went on to talk about how his middle-income family — with one smoker; moderate drinking; two cars — would have an annual effect of only $317; and for seniors with $20,000 income, $116.

Mr. Chairman, there were representatives of the Institute of Chartered Accountants in the lockup. They arrived at figures somewhat close to what the minister arrived at — and maybe that was what he was quoting; I don't know. They sat down with some of our staff afterwards and went over the figures, and they agreed with us that the average is $700. An average is not very comforting, perhaps, to some people.

Tommy Douglas used to talk about having your head in an oven and your feet in a block of ice, and the average might be satisfactory, but it's kind of tough on the extremities. If the minister is saying that some people are getting away with a figure of $116 or $317 — I think that is what he said — then some people are paying a lot more, to bring the average to $700. Some of them are paying $1,400, at that rate, to get the average. I don't know what the minister can do about the average, but I'm telling you what it is, and I'm telling you that the Institute of Chartered Accountants representatives agreed that that was the figure from their examination of this year's budget.

Now we get into the amount of the debt. I said that the B.C. debt at March 31, 1989, will be $19.2 billion. I don't know what it's going to be, Mr. Chairman. The minister did say in a press release that the direct debt of the government and its Crown corporations on March 31, 1989, will be 28 percent of the gross domestic product — the lowest level in six years. Looking at table B1 of the budget, the gross domestic product is $68.97 billion, and 28 percent of that figure is $19.3 billion. Was the minister telling us the truth when he said 28 percent? Was he telling us the truth when he said the gross domestic product will be $68.97 billion? If either of those statements was wrong, then it's conceivable that the debt will be less than $19.3 billion. But if he's right in those two other figures, then 28 percent of the gross domestic product equals $19.3 billion. He must have been using some other figures to come up with a figure that indeed is shown in the budget, in schedule B1, in the amount of $18 billion. I'd like to know: if he can, will he tell me whether his 28 percent was wrong? Or will he tell me that, in calculating, he used different figures for the gross domestic product for 1988?

This is a specific question, Mr. Chairman. In the budget speech of last year, 1987, social service tax was reduced from 7 percent to 6 percent, and a further reduction to 5 percent was to be made later in the 1987-88 fiscal year. What I'd like to know is: how much did the minister estimate it was going to cost in forgone revenue? He didn't say in exactly what month it was going to be reduced, but he did say it would be reduced a further 1 percent. He must have allowed something for that in arriving at his figures in the budget, and I'm wondering what the amount might have been.

I didn't bring my Public Accounts for 1987 with me. Oh, I guess I did; I have photocopies here. I'm just wondering about an item in the farm income assurance fund. The government did put a total of $11 million into this fund, to meet deficits of individual programs in 1979-80. I think both amounts went in that period. I note now that there's a fund balance of $22.28 million. I'm wondering whether the minister has any intention of recovering that $11 million from the farm income assurance fund at some time.

Another question about Public Accounts for 1987 with respect, again, to special funds. I noted that the lottery fund — the balance as at March 31, 1987 — was in a deficit position of $45,048,721. Was it just a coincidence that that included the election year 1986, or is there some other reason that there was a deficit for the first time in the history of the fund, which was established just in the year ending March 31, 1975? Did the government feel that it was called upon to put out a lot of extra money in election year, and is that why the fund is in a deficit position?

[3:00]

I've seen something, I'm not sure whether in a press release or in something similar, to the effect that the govern-

[ Page 4099 ]

ment has changed its position on the sales tax exemption with respect to agricultural chemicals — not agricultural; I don't mean to say agricultural, because agriculture was involved but I understand that the forest industry was involved to a much greater extent — and that it's going to cost us a total of $1 million in forgone revenue.

I understand also that the government has rethought its position on the $50 deduction from single-parent mothers with young children. It was supposed to be implemented, and I think the government has said that it has changed its mind on that. I'm wondering what that is going to cost in forgone revenue as well.

This is a golden oldie, as they would say on JR Country. I used to ask the former Minister of Finance about money that was advanced in the ill-fated attempt to save the Canadian Commercial Bank, and the previous Minister of Finance used to tell me year after year that the government was still hoping to recover this. The government of British Columbia put up $13 million in the form of a debenture; the Workers' Compensation Board put up $5 million of its fund in a debenture; B.C. Rail had a $500,000 note. That's a total of $18.5 million. I wonder if we've recovered this, whether there's any hope of recovering it, or just what the score is.

There's one other item I want to ask the minister about. When the federal government embarked upon its fair taxation scheme, included in that was a total change in sales tax, or whatever we want to call it — it's consumer tax, really — and there were going to be negotiations with the provinces to see whether there could be a common approach to this, or even a common rate. I wonder if the minister can tell us anything at all about these negotiations, and whether he or his staff have been meeting with their federal counterparts on the negotiations with respect to a Canadian consumer-tax system.

HON. MR. COUVELIER: Mr. Chairman, I had no difficulty with the hon. member's opening comments, because they were sort of generic and I was well able to deal with them en masse, so to speak. But towards the end of his presentation he got rather specific, and I'm not sure that we captured all of the specific questions on this side of the floor.

First — with the permission of the House — I would like to introduce my staff, who are here this afternoon to assist me in dealing with some of these technical matters: my deputy minister, Mr. Frank Rhodes; the secretary to the Treasury Board, Mr. Philip Halkett; the director of corporate relations, Mr. Gerry Armstrong; and the chap in the corner is Mr. Doug Hyndman, who is the securities commissioner for the province of British Columbia.

Mr. Chairman, there are a number of comments. The question of B.C. families doing poorly, and the reference to some StatsCan figures which show that family income is down: I also was interested in that release, and upon examining it satisfied myself that it's another classic illustration of taking selected information and making something out of it. There's an old truism that figures lie and liars figure, and while I wouldn't want to characterize our loyal public servants in StatsCan of being guilty of that offence, nevertheless I think there is the opportunity for all of us to be selective in the kind of material we would use.

It is certainly true that the B.C. economy went through some very rough times in the early '80s, and all of us were agonizing about the solutions we might be able to embrace in order to help pull ourselves out of that economic slump. It's undoubtedly true that many dual-income families during those hard times became single-income families, and in looking at that StatsCan information, it occurred to me that that was the most obvious illustration or example. Family income is down or was down, but that was family income. If you look at the record of this government since it has assumed office — just a very brief year and a half ago, Mr. Chairman — the fact that we have increased employment and created 90,000 new jobs in that short year and a half.... The economy has clearly turned around. Revenues are up, certainly in a governmental sense. But more importantly, the level of vitality in the economy is without question much stronger than it has been in recent years.

I would be less than honest and a little too bombastic if this government were to claim credit for all that marvelous recovery. On the other hand, I trust that my critic from the opposition side might have the generosity of heart to concede that we at least were participants in that recovery. Obviously none of our actions had the effect of minimizing or reducing that tremendous record of re-energizing our society.

There's just no question that the B.C. economy has had an outstanding year just past. That's not to say that we are resting on our laurels. Clearly we are continuing to work very hard in every line ministry to ensure that we continue to build for the future.

The hon. member dealt with fee increases. He referred to them, if I'm not mistaken, as "hidden" increases in cost to our citizens. As a matter fact, nothing could be further from the truth. The fact that they are user fees means that they are perfectly obvious to those paying them. Far from being hidden, they're quite evident to all. That's by design.

This government believes that whenever we are able to identify a service being provided to a small segment of society and being heavily subsidized by the general taxpayer, we should then be examining the level of fee charged to make sure that to the maximum extent possible the average taxpayer does not pay for those very specialized services.

Admittedly, governments have been traditionally slack and reluctant to address that philosophical issue because we can quite properly be criticized for "nickel and diming," which I've heard alleged from time to time. It's easy to understand why that has not traditionally been done. Therefore, when we came to office and learned to our amazement that some of these fees hadn't even been looked at since the early 1900s, it was clearly time to deal with that issue even though we may, in the process, suffer some criticism for doing so.

As to the philosophy that the average general taxpayer should not be subsidizing those very specialized services being provided only to a small sector of the economy, I think that we can support and defend it. That is to say that we recognize that some sectors must be subsidized for the average taxpayer, even though they may be a narrow service provided only to a few. Those instances are rare, by and large, and when you look at the range of government services provided by all the line ministries, it's clear that the need to address this question of user fees was overdue.

As to the suggestion that we should be having press releases to justify each decision, may I just point out to the hon. member that we in the Finance ministry do not normally become involved in the setting of individual fees. We leave that to the line ministries. We merely point out to the line ministries that they have not addressed the various fee issues since x number of years, or that in our judgment they should be expected to recover x percent of their operation costs from

[ Page 4100 ]

fees. We will offer generic advice, but we seldom get down into the specifics of each fee schedule.

The hon. member pointed out that our MSP premiums took a large rise and spoke critically of that. I think he also mentioned that only three provinces charge medical service premiums, and therefore our claim to be second best in Canada was a little fatuous. While I don't have any trouble agreeing that there are only three provinces in Canada that charge fees, nevertheless may I point out to the hon. members opposite that those provinces that don't charge medical service premiums collect their taxes with other devices. May I remind the hon. member that probably a contributing factor to the election results in Manitoba yesterday might well be attributable to the fact that they charge a payroll tax to help finance medical costs in that province — probably a taxation system far more onerous and less sensitive and less fiscally responsible than an MSP premium charge.

The hon. member also mentioned the increase in OAS-GIS rates from 75 percent to 85 percent. My colleague the hon. Minister of Health (Hon. Mr. Dueck) just reminded me that he and his ministry are adjusting the rate for couples so that there is no penalty to them in a financial sense for that relationship. I don't know if the hon. member opposite was aware of that fact.

The hon. member gave us a quote from Tommy Douglas, dealing with the issue of averages: "Head in the oven, feet in the ice," which was appropriate. I am reminded of a quote from one of our famous sages on this side of the House, W.A.C. Bennett, who on the same subject of averages said: "It is possible to drown in an average of six inches of water if you're at the deep end." We now have two quotes from two sages of the respective philosophical basis of both parties on the record.

Dealing with lost sales tax, the question was: how much did we expect to forfeit had we followed through with our statement that we were to cut another 1 percent off the sales tax before the end of the fiscal year '87-88? It is very difficult to be specific in this sense. We were very uncertain how much vitality there would be in retail sales generally in British Columbia after the Expo year. I can tell you that our target figure in terms of a financial balancing act was about $20 million in expected forfeited sales tax revenue had we followed through with a further 1 percent cut, which likely would have been for a period of a month or less.

The reason for my vagueness is, as I say, the difficulty we had in predicting how much vitality there would be in the retail sales sector 12 months before its occurrence.

The hon. member asked whether we would attempt to recover the funds from the farm income insurance program. The answer is yes.

We were also asked about the lottery deficit over year-end. The deficit arose because of our decision to accrue the Expo debt over that year-end. For that brief period of the financial statements, when they took the snapshot of the province's affairs, it had the consequence of leaving a deficit. Dealing with the lottery deficit, it was a consequence of a decision we made to accrue Expo debt. During the time the snapshot was taken over that year-end, you are quite correct; there was a deficit in the account.

We were also asked about the extra expense that would flow from our decision not to institute the 15-week requirement for mothers on welfare. My memory of that issue, and no staff member has corrected me here, is that that decision cost $8 million.

Dealing with the question of the federal government's willingness to consider recompensing the province for our deposit in the commercial bank, I unfortunately must advise the member that that request was declined. We have absorbed that cost into our statements.

To the best of my ability, I have answered the specific questions I was able to catch. If I've missed any, I would be pleased to have another stab at it.

[3:15]

MR. STUPICH: In spite of the reassurances from the former Minister of Finance, I never believed for one moment that we'd ever see a penny of that money come back, but at least now we know the answer.

I'm not sure whether I should raise this question or not, but I really want the answer. There's nothing about it other than that it's a shortcut for me to find out something. Since Mr. Prowse left, I don't know who to talk to over there; shows how far behind I am.

In any case, the mining tax is administered by your ministry. The mineral resource tax is administered by the Minister of Energy. The mining tax, to some extent at least, is a deductible item in calculating corporation tax — I'm not sure who I should be looking at here. I'm not sure whether the mineral resource tax is a deductible item, and I'm not sure which one you calculate first. I've never done a mining tax return. There is legislation coming up, and this is information I'd like to have before we get to that. I just thought I'd ask today, and if you want to refer me to someone in the ministry, I would be only too happy to take this up with them.

While people are maybe thinking about that.... The minister said that nothing done by this government would hold back the economy. I think there will be some comment about that from this side of the House, but there is one thing that I want to raise. I am concerned that there will be a lot of damage done in the not too distant future partly because of the support this government has given to the federal government in its entering into a free trade deal with the United States. I believe it is going to do a lot of damage to British Columbia.

I'd like to quote none other than the Premier, who recently said that it is going to cost B.C. taxpayers "multimillions of dollars" to assist those industries which are going to require assistance once we get into the free trade deal. He may have mentioned more, but one industry that he mentioned was the grape producers and the wine industry. He said "industries" — plural — and I'm not sure what others he had in mind; I don't recall from the article. I wonder whether the minister has made any provision in the budget for the multimillions of dollars about which the Premier spoke, or when he believes it will be necessary to include this in the budget; whether he really expects any help from the federal government in this program to try to rescue some of the B.C. industries that are going to be damaged or even wiped out as we get into this free trade deal, or exactly what plans the Ministry of Finance has to deal with the difficulties this is going to cause a lot of British Columbians.

HON. MR. COUVELIER: I will take the technical question of the mining tax calculation on notice, and I trust we'll have the answer back soon for the hon. member.

Dealing with the grape industry question and the other issue related to the free trade agreement, I can tell the hon. member that the government is aware of the need for us to provide support services to those industries affected. You're

[ Page 4101 ]

quite right: the grape industry is one of those identified. I find myself unable to go much further than that generic statement because we are in the midst of negotiating the matter with the federal government; and insofar as the federal government will have considerable exposure to the Ontario wine and grape industry, the matter is still the subject of active negotiations by the hon. minister in charge. I can only say that we have provided in this budget for an expectation that assistance would be provided. Its amount. I'm afraid, will have to be left unaddressed in this public chamber until the negotiations with the federal government are complete.

MR. STUPICH: I did ask the minister earlier — and it's one of the things that he missed, I guess — about the negotiations with the federal government about an all-over federal-provincial consumer tax; a sales tax, if you like, but the federal tax proposals included in negotiations with the federal government.

HON. MR. COUVELIER: The province has been actively engaged in discussions with the federal government, in concert with other provincial governments, on the issue of a national sales tax. We have not yet given our support to the concept. We are interested in a number of specific questions dealing with application and the matter of uniformity across the country. At the moment, I don't believe any province has made a categorical statement on the issue. I can just assure the hon. member that the discussions we are having are amicable and are proceeding at the appropriate political pace, given the dynamics of the moment. I don't imagine there will be any great difficulty in finally resolving the issue at some point in the distant future.

MR. STUPICH: Just one clarification, Mr. Chairman. Does the minister believe that there will not be great difficulty in getting the ten provinces and the federal government to reach agreement on this plan? I hope that is what he said.

HON. MR. COUVELIER: If I said it, Mr. Chairman, I would retract it; I wouldn't want to be hoist by my own petard a year from now. But at the moment I can just repeat that negotiations are amicable, all sides recognize the validity of the others' points, and there are frank discussions going on. It will be a negotiation process. Each province of Canada expects something it might get as a consequence of embracing the national scheme. It's rather convoluted, but I can just repeat: we are involved in negotiations at the staff and political level. I think we might have met on this subject three times last year at the political level and far more frequently at the staff level.

MR. STUPICH: On the same subject, the minister said that one of the areas of discussion is the application. Is he able to tell us anything about the scope of the application of the tax? I would think not, but if he can, I'd like to.... I wasn't going to mention food.

HON. MR. COUVELIER: Food is clearly one of those issues. The matter of municipalities, universities. school districts and hospitals is another. But the issues are even larger than that, in the sense that each province, as I said, has some unique ambitions that they're attempting to roll into these considerations. At the moment there is no cause for concern; at the same time, I wouldn't anticipate that you'll see a national sales tax in place in British Columbia within the next 12 months.

MR. STUPICH: Mr. Chairman, the remark from behind me was: "That's comforting." I know the federal target was January 1989, and the minister says not within the next 12 months. So it appears as though the federal target of January '89 is not going to be met.

He also said that food is one of the items that has been discussed, and something even larger. I can't think what might be larger.

HON. MR. COUVELIER: I think we're dancing around on the head of a pin here. The reason I felt the other issues might be larger is that I think the food issue has been publicly addressed by the national Minister of Finance; so it's a non-issue in my terms. I’m not sure he has publicly addressed the other issue: municipalities, universities, school districts, hospitals. That explains my choice of words.

MR. CLARK: Just a couple of points on the same topic. Does the provincial government have a position with respect to the food tax yet? I know it's negotiations and you're sensitive, but Nova Scotia and Manitoba, for example, have already rejected a food tax. One other province, I believe, has categorically rejected it. This province to date hasn't taken a public position on it. Is the government prepared to take a position on that?

HON. MR. COUVELIER: Mr. Chairman, I want to state categorically that this province is totally opposed to a national sales tax on food, and I conveyed that message most aggressively and emphatically to the Minister of National Revenue. I'm pleased to advise the hon. member that as a consequence of our protestations, he agreed and said publicly there will be no national sales tax on food. I take absolute, total credit for that victory — a small victory for the average British Columbian.

MR. CLARK: It's ironic, because I asked the Premier this question in the House last year, and he refused to reject a sales tax on food. If the government has seen the light on this question, then we applaud them.

The second point on the same topic: does the government have a position with respect to the variance of the sales tax that is being promoted? For example, does the provincial government prefer a business transfer tax or a national sales tax? There are at least three models floating around. The business transfer tax seems to be the one the feds are leaning toward. I don't want to prejudge sensitive negotiations, but I wonder whether the province has a preference in terms of the kind of national sales tax they would prefer to see.

HON. MR. COUVELIER: The hon. member would like to know the answer to that question, and I'm sure so would the national Minister of Finance. That's one of the issues around which the negotiations swirl, and I trust the House will understand my inability to deal with it in a specific sense.

MR. SIHOTA: I want to deal with a number of issues during the course of these estimates. I want to deal first with the matter of Principal Trust and subsequent to that with the matter of the stock exchange. I intend to put in a fair bit of time on Principal Trust and to ask some very specific questions

[ Page 4102 ]

to the minister. I hope those seated around him will be able to provide equally specific responses to the questions posed.

The reason for this is quite clear: there are 18,000 British Columbians who have been affected by the collapse of the Principal group of companies, FIC and AIC included. Somewhere in the neighbourhood of $156 million in savings are deposited with those companies — savings that are now at risk. Affected individuals are walking around in a state of shock really, from the letters and phone calls that I get, wondering how this could have happened, wondering where the government stood on this issue in terms of protecting investors. They're asking themselves about the responsibilities of government regulators — responsibilities they had been led to believe were there, and apparently were not. We'll get into that a little bit more.

I'm touched by the personal stories that I get of seniors who have contributed their life savings to Principal Trust in the expectation that it would provide them with a reasonable income. Many of the people involved in Principal Trust are individuals who worked hard during the course of their lifetime, contributed taxes, thought that they had built up a bit of security for their retirement days and looked forward to enjoying those retirement days. They were people who had participated in a very positive way in this society.

I am always reminded of one instance in my riding where a couple who didn't have any children retired at an early age, at 55. They had $150,000 which they deposited with Principal approximately a month before the collapse. Worse still, there is another situation of a couple in Duncan who had come into an inheritance of $200,000. The woman's family had worked hard to accumulate that level of wealth and had passed it on carefully and conscientiously to the children. The money was deposited at Principal the day before the collapse.

It destroys people to learn now that that money is in jeopardy and there is limited or no chance of them securing that money. What is particularly galling — and I think that is the best way to describe it — to many of these people is picking up the newspaper in the ensuing months and reading what is happening in Alberta and the type of evidence that's coming out of the Code inquiry. They see that some of their money which they had put into this institution is now being used to hire the daughter of the principal of Principal Trust to the tune of $150,000 a year to do studies on weather patterns.

[3:30]

It shakes them up when they read that the family in charge of Principal Trust — the Cormie family — is able to transfer millions of dollars out of British Columbia and Alberta into foreign jurisdiction in the United States to make sure that they have wealth in the future, despite the outcome of the hearings. Yet, on the other hand, the investors don't have the same level or any level of individual security. It is galling for them to hear about family members on payrolls, exclusive houses in the Victoria area, yachts and leather furniture and briefcases, all really being there as a function of their investment. Small people working hard, seniors working hard, families working hard to raise a level of capital for their future.... To see it being abused by these people as the evidence comes out really hurts the people that had invested.

I want to emphasize to the minister the extent of personal stress caused by the collapse of Principal Trust. In British Columbia 18,000 people are very carefully watching what is transpiring in Alberta these days. They are also looking to their provincial government for some leadership and assistance.

I want not, however, to overly stress the personal situation. I think I've sketched it out fairly to the minister. I want to move to the actions of the provincial government in comparison to other governments to assist the individuals affected by the collapse of Principal Trust.

The provincial government appointed a commission, headed by Mr. Lyman Robinson, which reported last year, and from that commission came a number of recommendations. I want to point out what those recommendations were, and then I want to point out the shortcomings of that inquiry and ask the minister a whole series of questions.

At the end of the day, after Mr. Robinson's efforts were completed, his investigations were in and his report tabled, the government said it would assist investors in several ways. It said that the government would seek a court declaration that the Principal group of companies cheated and defrauded depositors. What is the benefit of that to those investors who have lost their life savings? I would submit that the benefit is nothing. If the minister disagrees, I would like to hear why. The net effect of that action on the part of government would be to have the courts declare what we already know. We already know that these small, innocent investors were cheated and defrauded. To seek a court declaration stating that is of no benefit, no assistance and little comfort to those individuals who have lost their life savings.

The government, after the completion of the Robinson report, came down and said, as its second action, that it would stop Principal from carrying on cheating and defrauding the public. Again you have to ask yourself: what was the benefit of the government saying that at that time? After all, the Principal group of companies were no longer in business. It might well have been useful if the provincial government had stopped Principal from carrying on cheating and defrauding the public while it was in business and while it had access to some assets, but there is no benefit in that government action to try to stop Principal from carrying on cheating and defrauding the public. The government took great pains to indicate that in a press release which I have a copy of somewhere. Again you have to ask yourself: how did that assist or stand to benefit the average investor? It did not. Accordingly, that government action after the Lyman Robinson report really is of no benefit to investors.

The government went on to say that it would seek damages for the losses accrued to the investors by a court action or by assisting the individual investors through some type of court action. Again you have to ask: what was the benefit of that to the small investors? What's the benefit of a dry judgment against Principal Trust? As we say in the legal community, a dry judgment is just that: you may well have secured yourself some kind of declaration or damage award from court, but if there are no assets to attach to, what is the benefit?

[Mr. Rabbitt in the chair.]

Again, the government's supposed willingness to assist investors in this regard really amounts to nothing. Where would the money come from? The Principal group of companies is bankrupt. Their major creditors, the promissory note holders who stand to lose a greater percentage of their savings than the contract holders, were just as much victims of the cheating and fraud. Any damage award to contract

[ Page 4103 ]

holders would have the effect of increasing the losses to these note holders. The process, in part, would set victim against victim, and more importantly, as I said, there's nothing really there to attach to because the companies are insolvent.

The fourth action that the government indicated it was prepared to take after the Robinson report, in a gesture demonstrating its overt and ongoing concern for the investors, was to seek a declaration from the courts that the defendants in each of them, namely the Principal group of companies, were suppliers within the meaning of the Trade Practice Act. Well, that's fine if you want to do that in court and seek that declaration from the court, but there are no real tangible benefits and no assistance to the individuals affected, the small investors.

I guess fifth was the commitment on the part of the provincial government to seek other relief through bankruptcy proceedings. Again, there was no real benefit in any tangible sense to the investors, because of course the investors will have little or nothing to attach to.

If you review those supposed commitments made by the provincial government after the filing of the Robinson report, really not much comes out of it in terms of actual, tangible benefit to the investors. You see, Mr. Speaker, what the investors are looking for is an assertion of leadership from government. They're looking for this government to assist them in seeking recovery of their funds. They're walking around in a somewhat dazed and stunned state saying: "How could this have happened? We had faith in government regulators. We had faith in the Investment Contract Act. We put faith in the assurances that were given to us when we went down to the Principal offices as to the solid stature of the company." They are walking around in a dazed state asking the government to give them some assistance in proceeding against Principal and also, of course, proceeding against the provincial government should it be found to be negligent. I'll come back to that latter point in a few minutes.

I see that my time is running short.

MR. ROSE: I was fascinated, Mr. Chairman, with the trend and the line that the hon. member for Esquimalt-Port Renfrew was taking in relation to the Principal Trust collapse and the tragedy associated with it. I'm sorry that his 15 minutes ran out, and as an intervening speaker, I urge him to carry on.

MR. SIHOTA: The point I was making in a brief way to the minister — and I really wanted to flush out some introductory comments so as to allow us to get into some specific questions later on — was really that any action this government has taken to date is of no benefit to the investors, and there's a vacuum of leadership that requires some type of government action. What I intend to do is compare what this government has done for those investors, which is nothing, with the commitments the Alberta government has made, in order to demonstrate some of the things that should be done by this government. I'm not saying that what the Alberta government has done is in and by itself perfect — there certainly are shortfalls there. But I want to bring to the attention of the minister the assistance provided by the Alberta government.

The Alberta government, unlike British Columbia, has agreed to have a public inquiry. They are paying 100 percent of the costs of the Code inquiry. The Alberta government is paying 100 percent of the costs of special counsel — namely, Mr. White. Mr. White is there to represent the interests of all Principal contract holders, including the 18,000 individuals from British Columbia. However, I think it's fair to say that the focus of his questioning is in relation to the Alberta aspect of the problem. The Alberta government is also paying 100 percent of the Milvain committee costs — that's the committee representing contract holders in Alberta. We have, of course, a similar group in B.C., which is self-funded, which is not receiving any type of assistance from the province of British Columbia.

It's interesting to note again.... I'm not saying that government ought to be providing assistance for the sake of providing assistance, but I think it speaks volumes about the extent to which the Alberta government has some sympathy for the investors that it is prepared to fund 100 percent the Code inquiry, 100 percent the special counsel and 100 percent the costs of the Mulvain committee, the committee of investors, so that the investors can get out and talk in communities across the province of Alberta — explain to them what's happening with the hearings to indicate to them where people stand in terms of recovering their funds. That communications device is very important to those seniors and to those investors who have lost money, because they feel as if they're left in the dark.

The Alberta government has also paid 44 percent of the Coopers and Lybrand fees. They are the people responsible now for looking after and managing the assets of both FIC and AIC. These are the companies that triggered the collapse of the Principal group of companies, and Coopers and Lybrand are acting in the interests of the investors. The Alberta government is prepared to pay 44 percent of those costs. B.C. has refused to pay, as I understand it, any portion of those costs,. and I stand to be corrected if the minister wishes to correct me on that point. What will happen, and the way it works, of course, is that B. C. residents will not benefit from the Alberta contribution, because that 44 percent contribution goes back to the Alberta investors. A cheque is written by the Alberta government to those investors to offset the fees of Coopers and Lybrand, and that's how they arrived at the 44 percent figure. So the British Columbia investors will have deducted from any money they see at the end of the day the accounting fees to Coopers and Lybrand. But Alberta has agreed to put in 44 percent of the costs of Coopers and Lybrand.

As I say, there is a level of sympathy and tangible assistance to the investors in Alberta, whereas in British Columbia there certainly is no tangible benefit flowing from the actions which government has committed itself to. Secondly, there is no assistance to the investors to pursue their matter through the Code inquiry, through special counsel, through the committee and through other processes that are involved, save for the nominal assistance the government has said it's prepared to give in terms of legal matters and, of course, the costs of the Robinson report.

[3:45]

My first question to the minister: is he now prepared to pay some of these costs. and in particular, is he prepared to pay the costs that relate to Coopers and Lybrand fees so as to provide some level of assistance and comfort to those who are affected?

HON. MR. COUVELIER: This is an issue and a matter that I think has to concern all British Columbians in a way that tugs at the heart-strings. I suspect that I have received

[ Page 4104 ]

more human-interest stories than the hon. member opposite from individuals and British Columbian citizens who unfortunately found themselves caught in the decline in the prosperity of western Canadian financial institutions over the last few years. I suppose that's natural; that's my responsibility. I of all people have no difficulty whatsoever in agreeing with the hon. member's comments about the difficult human problem — in a humane sense — that all of us are faced with when we hear of these sad matters.

I'd like to remind the hon. member that the individuals so affected are not only those who had a relationship with Principal Trust, but those who've had relationships with many other western Canadian financial institutions. As government, we are denied the opportunity that members of the opposition have to deal only with a narrow issue. When government looks at this matter — that is to say: what is government's responsibility to deal with people's investments that have gone sour? — we must be cognizant at all times of the generic problem and consider the consequences of addressing a solution at only one narrow sector who have been abused by the process. The opposition, of course, have the luxury of being able to use a rifle, and that is always difficult to deal with, in a public-relations sense, for the government of the day.

I think it's important that this government goes on record as confirming that we are no less concerned about the humane issues here than the members of the opposition are. Our responsibilities in dealing with those, however, are somewhat different. We happen to be in government, and therefore we have to find the remedies that can be acceptable not only to all of those affected by their unfortunate financial circumstances but also — our larger responsibility — to all citizens in this province, who have an interest in making sure that we spend our money prudently and responsibly.

The hon. member had some comments to make about the Lyman Robinson commission which surprised me. I didn't come to the House today with clippings, but I'm sure the hon. member has not forgotten that this government was the first to move on this matter. This government received international applause for being the first to move on this matter. This government took decisive action at the time it was most critically needed to get the profile of the issue elevated in western Canada. May I remind the hon. member that this government funded that cost entirely, 100 percent, ourselves.

This government, by virtue of the Lyman Robinson inquiry, was able to acquire enough evidence for us, on behalf of all the investment contract holders, to lay charges against Principal Trust, Principal Group, Principal Consultants and the owner Don Cormie himself, and the hon. member knows full well we took that action in the interests of protecting the investment contract holders of this province. So we have nothing whatsoever to be ashamed of as a government in terms of the actions taken on this matter. We provided leadership on the issue.

The hon. member said that the Principal investors are seeking leadership on this issue and not getting it, if I understand him properly. I'd like to point out to the hon. member that in my judgment it's not leadership they are seeking so much as restitution, and that's an entirely different issue.

The hon. member made reference to the Alberta government being sympathetic to the plight of the investors in the Principal Group companies, and seemed to imply that this government was less sympathetic. We are, I can assure you, sensitive to the difficult situation these people find themselves in. I must point out to the hon. member that by virtue of the Alberta government having its own unique legislation and by virtue of the Alberta government being the head office of many of these companies and having unique ability to access records as they relate to intercorporate matters and transfers between this group of companies, their degree of sympathy, to some extent at least, is motivated by their assessment of their degree of responsibility for the litany of events as they unfolded.

This government is monitoring the Code inquiry closely. Like most observers, we are learning more almost every day. I would remind the hon. member that much of the information that is coming out of the Code inquiry can only be obtained by an Alberta court or inquiry. It is useful for all affected parties to allow the Code inquiry to unfold so that full and complete knowledge is available to all who may then wish to move to a second stage of legal activity.

For the record, Mr. Chairman, this government was first, was most responsible and was applauded nationally for its leadership in dealing with this difficult matter. This government funded 100 percent of the Lyman Robinson inquiry which provided the documentation necessary for any citizen who wishes or feels comfortable launching a fraud suit to institute that suit, as we have accumulated the data for them to do so. In addition, to make sure that the issue didn't die there, we ourselves launched a suit in the interests of all investors against all of those companies.

I am at a loss to understand, given the state of affairs as they are unfolding, what more this government could possibly do in the interest of protecting not only the investment contract holders in those companies but also the interests of all British Columbians.

MR. SIHOTA: Let me tell the minister what he should be doing, because he's asking what he can do. The minister is saying that he has all sorts of compassion and understanding as to the human element as it relates to these problems. I think that's where he started in his comments. We're saying on this side of the House: if you have that compassion and that sympathy, if you suggest that you've got that understanding, then back it up financially and make some commitments to these people. Make the commitment today to pay the costs of the Coopers and Lybrand fees as one small gesture of your government's commitment. That's the first thing that you can do. Make a note of it, or I'll come back to it later on and ask you that question, because I want to go through all the comments you made first.

If you have that sympathy, then provide the assistance that is required in terms of the Coopers and Lybrand fees. The Alberta government is doing it to the tune of 44 percent. The B.C. investors, who are relatively impecunious as a consequence of that collapse — and we'll get to the causes of that collapse later — are in the least position to pay those fees.

The minister said in his comments: "You've got to look at the generic issue. You've got to talk about what the government's responsibility is in all of these matters and that the government has to provide remedies." I want to say to the minister, in a generic sense and in the sense of Principal Trust, that your requirement, when these types of things go sour, is to assure those who relied on government regulators that the regulators did their job properly.

You're quite correct when you say that the Code inquiry is only looking at Alberta matters. It is set up under the

[ Page 4105 ]

auspices of the Alberta courts, so it can't reach out to what is happening in British Columbia and in Saskatchewan. If you want to say in this House that your government should be applauded — and let's not forget I also applauded the government for the establishment of the Robinson inquiry; we didn't hesitate to say "well done" in that regard.... If you want real applause now, and if you are still committed to the type of leadership that you are talking about, then my suggestion to you, in keeping with that generic comment, is to extend the terms of reference of Mr. Robinson's inquiry to allow him to do what you did not allow him to do in the original terms of reference. In other words, allow Mr. Robinson to take a look at the inactions of government regulators. Allow Mr. Robinson to do precisely what Mr. Code is doing in a public way. Extend those terms of reference if you want real applause and to show real leadership. I didn't raise the matter of restitution; I raised the matter of leadership. You raised the matter of applause, and I'm saying if you want it.... It's easy to say that you're taking leadership, but if you want to demonstrate it in some tangible way, then get Mr. Robinson back doing what you prevented him from doing in the first place, which is to take a look at the actions of government regulators in this regard in an open and public way.

The minister made two other comments. He said Alberta has unique legislation, and the head offices and the records are there. Look, the Alberta legislation parallels our Investment Contract Act — that's the first point — so it's not so unique. Secondly, those records can be gotten. Records had to be presented by Principal in British Columbia in order to get their licences and to meet all the other regulatory steps that were required under the Investment Contract Act. Those powers are well within your reach, so don't try to faze and buffalo us all by false jurisdictional arguments.

[4:00]

Finally, the minister says: "Well, we launched a suit." Again I say, wonderful. What's the benefit of that suit to investors? Nothing, because all you'll secure at the end of the day is a dry judgment. There's no money there that you're going to secure by way of that suit. That doesn't get you anywhere.

To go back to what the minister said, let me put the questions to him one by one. First of all, Mr. Minister, it's very easy to say that you've got that human interest at heart and that you feel the same way that we do on this side of the House. But you're right when you say that you've got the ability to exercise some remedies. My first question that flows from the minister's comments is: will the minister demonstrate his understanding, sympathy and compassion by agreeing to fund the matter of Coopers and Lybrand's fees?

HON. MR. COUVELIER: The member, as usual, rambled all over the place. I'll attempt to address the many issues that he incorporated in his ten- or 15-minute monologue.

The question of the Lyman Robinson inquiry being expanded strikes me as being a typical indication of the NDP opposition's inclination to drag an issue out, despite the hardship that this dragging out would bring on those affected.

These people who got involved and lost their money with these investment contracts can't afford to wait for any further studies, hon. member. It's time to resolve these issues. There's no good in creating an RCMP investigation. There's no good in expanding the Lyman Robinson inquiry. What for? You've got the Code inquiry unfolding more information than Lyman Robinson could ever legally obtain. You know that full well. It's not the absence of information that we need; it's action. The action can only be obtained by taking the issue to the courts, as I have said repeatedly.

For the hon. member to be sanctimoniously protesting and claiming to be representing the interests of those unfortunate citizens trapped in this situation, I find difficult to accept. To suggest that we would have more studies — a typical socialist attitude. My goodness. We can study these issues to death. You've got more committees running around this country looking at this matter, and we've consumed almost a year and a half with nothing of consequence flowing through to benefit those citizens who have been impacted by this, and what does the hon. member do? He calls for another study. My goodness, that's ridiculous. It's the kind of uninformed comment we get from people who have never been accustomed to having to deal with an issue and solve it.

The matter can be solved quite simply by taking this issue to the courts. As I've said repeatedly, it is absolutely not in the scheme of things that the government of British Columbia is going to be prepared to make restitution to people who have made investments. If anyone thinks that we should be doing that, then they should take that matter to the courts, and we will be happy to honour any verdict that comes down.

Furthermore, I've said repeatedly that we will do everything we can to expedite resolution of the matter by that device. I understand full well that as these weeks and months and years go by, these people are placed in greater jeopardy. We can pontificate and make speeches across the floor at each other, but it doesn't affect us. Those people out there need some help. The sooner we can get the issue in front of the courts, the better it will be for them, and we have said that we will do everything we can to make sure that happens. To suggest that we're going to do this little thing and that little thing, and we're going to create another study, as if it's going to help those poor, unfortunate people, is ridiculous. As I've said, the issue is beyond the ability of any elected government to deal with, and it will require addressing in the courts.

The government obviously does not agree that our regulators have done the job improperly.

May I also remind the hon. member, Mr. Chairman, that the ombudsman is studying this matter now and that we are giving absolute, total cooperation to the ombudsman in the conduct of his study. As a matter of fact, I've just received compliments from the ombudsman's office about the degree of cooperation we're giving him. We've got the Securities Commission providing him with details; we've got the corporate relations division providing him with details. He has the issue before him. Surely, to suggest that we should create vet another investigation or another inquiry.... What for? They all know that the issue will have to go to the courts sooner or later. The sooner it gets there the better, not only for those people who are, as I say, unfortunately caught in this web, but also for all British Columbians and for us as a government, so we can have clarified in people's minds exactly what our obligations are.

The hon. member asked about this question of our making a contribution to Coopers and Lybrand's expenses, as the Alberta government has done. I can only repeat what I said earlier: the degree of responsibility of the Alberta government is entirely different from the degree of responsibility of the British Columbia government. It is the view of

[ Page 4106 ]

this government that the Alberta government, if found in some way to be in a position of having to make some sort of accommodation to these people.... It should not be restricted to the citizens of Alberta exclusively but should be extended to all investors who were affected, because, let me remind the hon. member, these were primarily Alberta registered companies, and therefore that government had the greater responsibility.

MR. SIHOTA: Oh, come on! You know better than that.

HON. MR. COUVELIER: Well, with respect, I didn't pass the bar examination, so I don't profess to be the ultimate authority, as does my egotistic friend across the floor. But let me just tell the House that all Canadian provinces have enacted a simple licensing procedure which enables extraprovincial companies to act within their boundaries. This licensing of extraprovincial companies does not absolve the incorporating jurisdiction of its primary responsibility over the creation of a company and the definition of its business powers. Presumably the hon. member passed his exam, and he would have been able to understand that. We can wave our arms and flannel-mouth all we like. The fact of the matter is that we've got many British Columbians who are looking for some action. I say again: the action will flow from a court decision, and the sooner we get the issue before the courts, the better for all concerned.

MR. SIHOTA: This minister can stand here and bellow as long as he wants to and speak as loudly as he wants to, but the inactions of his government won't go away. What's come from the minister in the last few minutes is absolute garbage, in terms of what this government has or has not done.

I'll tell you why we ought to have a study — and it's not just another study. There ought to be an inquiry into the actions or the inactions of your government on this matter. If you want to know some specifics, we'll get to them in a minute, in terms of the kinds of questions that should be put to your regulators, who screwed up this whole situation to the detriment of 18,000 investors in this province. You want some specifics? I'll give you some specifics in a minute, in terms of what your regulators have to be hauled out on the carpet for to answer.

You, Mr. Minister, when you drafted those regulations as they apply to Mr. Robinson, limited those regulations so as not to allow Mr. Robinson to take a look at the actions or inactions of government. If you say, Mr. Minister, what you have the gall to say in this House — that those regulators did nothing wrong — then it would seem to me that you have nothing to hide; that you'd be more than willing to allow Mr. Robinson to conduct an inquiry into the actions of those regulators. It's only if you've got something to hide that you're prepared to limit those terms of reference.

I'll tell the minister something. We need Mr. Robinson to look at that issue, because we need to know what the government did and why the government did not do what it was supposed to do under the provisions of the Investment Contract Act. That's why we need that inquiry.

It's not another study. I'm sick and tired of this government.... Mr. Chairman, I'm going to wander for exactly one minute here. I remember that the government said, when it came to prisons: "Well, we don't want to spend a long time looking at the escapes from Oakalla. We don't want to agree with what the NDP says, when they want a full inquiry into the matter of corrections in this province." Accordingly, the government said: "We just want a quickie — a quick two-week investigation." It's taken you six months. You said the same thing on the Coquihalla — "We just want something quick" — and it took them six months, because there are a lot of issues here to investigate.

I would venture to say that if Mr. Robinson were given the same liberties that the Coquihalla inquiry was, he'd come to similar conclusions with respect to the actions or the inactions of government. But I'll get to that.

The minister stands up and wails away. He has the gall to stand up in this House and say to us: "Well, look, what these people want is some action." I agree that there ought to be some action. That's what we're saying to you: give these people some financial assistance in deferring those accounting costs.

More importantly, Mr. Minister, if you want to assist these people in court, if you think that is the appropriate form of action, will you agree to fund all actions in court by Principal Trust investors, including those against both the company — which you've agreed to do — and the government? Are you prepared to make that action a reality? Are you prepared to fund that action, instead of asking these investors to go and look for legal assistance and provide their own funding? If you want to provide court action, if you think that's the way to go, then will you agree to provide financial assistance to these people, in the case of an action against both Principal and government regulators? That's the question, Mr. Minister. So let's for a change hear once from you a commitment to these people in some financial sense, instead of all that garbage we heard a few minutes ago and all that junk about compassion and understanding. Let's put it in action; let's see some remedies.

MR. CHAIRMAN: Before we proceed, I would like to ask the members to direct their remarks to the Chair and to keep the language parliamentary.

HON. MR. COUVELIER: I am very pleased to continue to address the Chair as I have done all afternoon. It's only those emotional participants in this discussion who seem unable to control themselves.

The issue here is, quite simply: is there a responsibility of government to make restitution for those investors who have lost money as a consequence of a failed investment? The hon. member has said yet again, for another 15 minutes, that we should be creating, expanding and reopening another Lyman Robinson inquiry to look into the role of the regulators in this affair. The hon. member went further. He even accused this government of deliberately denying Mr. Robinson the opportunity to look at the question of the responsibility of regulators.

The hon. member, on the other hand, admits that this government moved with alacrity and was first out of the gate in dealing with this issue. May I just remind the hon. member that at that time the issue of culpability of regulators was far from anybody's mind. The issue was purely and simply to stop any bleeding of assets by the people who were managing those assets and making those investments on behalf of the people who made investments.

The hon. member would now have us resurrect the Lyman Robinson committee to look into the regulators. I say it again: that's merely another indication of this socialistic jingoism, which would create two bodies to look into the role

[ Page 4107 ]

of regulators. As I said earlier, we already have the ombudsman doing exactly the same thing.

MR. BLENCOE: Get serious.

HON. MR. COUVELIER: I understand that the hon. member seemed to take exception to my remarks. Let me read for the record the news release issued by the ombudsman on the question, and if the hon. members will take the wax out of their ears and climb down off the walls, maybe they might learn something.

The B.C. ombudsman, Mr. Owen, announced today that he is commencing an investigation into the role of the B.C. superintendent of brokers office in the regulation of the Principal group of companies. The hon. member opposite would have us make yet a further public investment in a second inquiry to examine exactly the same subject. If ever there were needed an illustration of a wasted public expenditure, and more possibly a confusing consequence, that would be it. What would the hon. members do if they were faced with two different reports on the same subject with two different conclusions? What would the hon. members do in any event, no matter what those reports say, if the issue still is not resolved?

I tell the House again: this government is anxious to see the matter addressed by the courts. This government will abide by the court's ruling in the matter, and irrespective of how many investigations are conducted in the interim, the issue will eventually have to go there.

[4:15]

It will matter not a whit to this government what the ombudsman may finally decide in terms of influencing our ability or willingness to make restitution. It will be a useful public service and we're happy to participate, because our view is that we are not responsible. In any event, the degree of responsibility and the amount of restitution that may be required in the unlikely event we were found responsible will have to be settled by a court of law. Notwithstanding all the brave words of the member opposite, the fact of the matter is that that's where it will have to go. To delay and obfuscate and suggest that we should create other bodies to investigate.... My goodness, nothing could work more against the interests of those poor citizens who have made these investments than to have further investigations and delay.

So we are very pleased to repeat again that we will be expediting, to the maximum of our ability, the addressing of this matter in the appropriate place, which is a court of law.

MR. SIHOTA: Let's deal first with the matter of the inquiry. Then I want to deal with the matter of the courts.

First, the minister has obviously forgotten that in Alberta we have the Code inquiry going on as well as an ombudsman's inquiry. So there's nothing wrong with that happening. Secondly, I want to point out to the minister that the position I'm taking, which he calls a socialist position, isn't that at all. That position is the position advocated by the investors' association — by those people who speak out in favour of the investors who have been affected by the collapse of Principal Trust. I'm sure the minister has met with Mr. Charbonneau and knows full well that that is his position and also that group's position — and they represent those 18,000 investors. So they're calling for it.

I'm not taking an ideological position; I'm asking the government to do the commonsense thing, which is to react positively to the demands made by the groups affected. The minister talks about delay. I'm sure they would be glad to wait for the outcome of any inquiry, because it's that.... You know, the minister was correct originally; the idea was to stop Mr. Cormie, etc., from running the company. But after that, questions were asked about the role of government. Mr. Robinson's report dealt with the actions of Principal Trust, not with the actions of government. But salient questions were being asked as a consequence, and it's those questions which now ought to be investigated. But don't describe it as some type of socialist plot.

I'm only telling you what the investors want, and you're telling me that you're not prepared to accede to any of the investors' requests. You're not prepared to assist them in the deferment of accounting fees. In the course of your comments, Mr. Minister, you told me and the House that these people want court action and that the government is prepared to assist. I want to ask you again because you haven't answered this question: will the minister tell us now, one way or the other — yes or no; it’s not a skill-testing question, Mr. Minister — whether you will agree to pay the court costs of these groups so that they can bring forward actions against both Principal and government?

HON. MR. COUVELIER: No, Mr. Chairman.

MR. SIHOTA: So there we have it. The minister stands up in the comfort of this room and listens to what I've got to say, and says: "Well, you know, I have all sorts of compassion; I have all sorts of understanding; I have all sorts of sympathy; I have all these fuzzy feelings about these investors." Then he says: "Because I am the Minister of Finance, I've got the ability to provide the remedies." When we ask him to provide remedies and assistance, he's not prepared to do anything. So because he hasn't answered this question, I'll ask the minister again on a yes-or-no basis — again, no skill-testing question: will he do what the Alberta government has done in terms of assistance to these people to defray those Coopers and Lybrand fees? What type of financial assistance, to back up all those sanctimonious words from the minister, is he prepared to give to Principal investors?

HON. MR. COUVELIER: It would be inappropriate, I think, for me to deal with that question now. After all, there are further inquiries unfolding. So I don't wish to deal with the question now. And I will refuse to answer that question on the basis that it's future government policy, and therefore the question itself is out of order.

MR. SIHOTA: This minister talked about leadership. This minister talked about applause. This minister talked about action. And now he's not prepared to do one thing, not prepared to invest one dime, not willing to provide any type of assistance, not willing to do anything to provide any comfort or sympathy. Hollow, shallow words, Mr. Chairman — that's what emanates from the Minister of Finance: hollow words of no substance, of no assistance and of no comfort to the individuals involved. It's obvious why the people affected are losing faith in this government.

In stark contrast we have the Alberta government providing all sorts of assistance to these people to see them through these very difficult times, to help them in getting through to the courts, getting through the inquiry and getting through on the matter of the accounting fees. If only this province would demonstrate the same level of sympathy.

[ Page 4108 ]

I was speaking of hollow words. I want to say to the minister.... I have my file here; I have the ombudsman's report. I trust you have Mr. Charbonneau's press release. On February 9, 1988, your government was sent a letter by Mr. Charbonneau, president of the Principal Investors' Protection Association of British Columbia — the group, by the way, Mr. Minister, who want the terms of reference of the inquiry extended; if you want to call them socialists, I guess that's your prerogative, but you're off the wall. The letter, addressed to the Premier — and I know a copy was subsequently forwarded to the minister — says:

"Your government was in power February, March and April of 1987. During that period, the superintendent of brokers approved the licence renewals of First Investors Corp. Ltd. and Associated Investors of Canada Ltd. The renewal application of FIC was received on February 26 and it was approved March 18; the dates for AIC were April 6 and April 7 respectively.

"At the time of the applications, financial statements available to the superintendent showed combined losses for FIG-AIC of about $23 million in 1985 and a further $28 million in 1986. According to the books of the companies, their combined operating deficit on December 31, 1986, was...$48 million.

"Section 9(a) of the Investment Contract Act states that the superintendent shall grant renewal if the applicant is suitable for registration. However, section 5(l) states that: 'No corporation shall be registered as an issuer unless...(b) at least $100,000 of its authorized capital stock has been subscribed and paid in, in cash, and the aggregate of its unimpaired paid in capital and its surplus is at least $200,000.'

"These companies were in clear violation of the laws of the province of British Columbia, yet a senior civil servant granted almost immediate renewals of licences, apparently with no regard for the financial security of thousands of citizens. In fact, it appears to us that our own watchdog facilitated the out-and-out theft of millions of hard-earned savings.

"As spokesman for the 18,000 British Columbians affected by this regulatory debacle, I would like to receive a direct answer from you to this simple question: do you, Mr. Premier, believe that regulators have a duty to the public to enforce regulations established by the Legislature of British Columbia and intend to protect the public?

Yours truly,
A.L. Charbonneau"

We'll get back into the specifics of that letter in a moment. This letter was written to the minister on February 9, 1988. Can the minister tell this House why he has chosen not to respond to this letter?

HON. MR. COUVELIER: As I understand the question, Mr. Chairman, the letter was addressed to the Premier.

MR. SIHOTA: It was sent to you, Mr. Minister, from the Premier's office shortly thereafter. If you want the exact date, I'll go down and pull it. But it was shortly after the February 9 letter.

HON. MR. COUVELIER: Yes, I would appreciate that piece of privileged confidential information, and I'm sure the Premier's office would be delighted to receive it, Mr. Chairman.

MR. SIHOTA: I'll say this on the record so that my research staff will hear me and send me up the reply from the Premier, which indicated that the letter had gone to the Minister of Finance. I'm sure it will be up here in a matter of minutes.

Is the minister prepared to accept my word that this letter was relayed over to the Minister of Finance, so we can continue this discussion? I can assure the minister I have a letter which demonstrates it was sent over to the Minister of Finance for comment. Is the minister prepared to accept my word on that so I can proceed with questioning on this matter.?

HON. MR. COUVELIER: It may well be that the hon. member has the copy of the letter that was supposed to come to me. I've asked my staff members if they have seen such a letter, and they said no. I'm led to the conclusion that not only are there leaks from a variety of different sources, but now we've got the mail going right to the NDP when it should have come to me. I'd like to know what on earth the hon. member is doing with my letter, Mr. Chairman.

MR. SIHOTA: I've said this before, but more huff and puff from the Minister of Fluff. Anyway, here's the letter, Mr. Chairman. I now have it, so the minister will have to accept my word.

It's not as if there are leaks from your department, Mr. Minister, although we can talk about the Toigo affair, if you wish, and the role of your officials on December 2. Perhaps we will later on.

On March 3, Mr. Chairman — and I'll table this, if the minister wants it tabled — the Premier wrote as follows:

"Thank you for your recent communication regarding the failure of Principal group of companies. I appreciate you taking the time to write me about this matter.

"As you raised a number of specific questions which I feel would be best answered by the minister responsible for this area, I am referring this matter to the Hon. Mel Couvelier, Minister of Finance and Corporate Relations, for his direct reply.

"I am certain you will hear from the minister in the near future. Thank you again for advising me of your concerns, with best wishes for the days ahead. Sincerely yours, Premier."

A copy to was sent to the Hon. Mel Couvelier.

Now that we've established to the satisfaction, I'm sure.... Do you want me to table the letter, Mr. Minister?

[4:30]

HON. MR. COUVELIER: Yes, I'd appreciate seeing it.

MR. SIHOTA: Here's the letter, Mr. Chairman. I'll table the letter to the minister.

MR. CHAIRMAN: You must request, hon. member, that on reporting, permission be granted to table the letter. You cannot table it directly in committee.

MR. SIHOTA: Mr. Chairman, on reporting, may this letter be tabled.

MR. CHAIRMAN: When we report, you may then request to table.

[ Page 4109 ]

MR. SIHOTA: In the interim, may I pass it to the minister.

MR. CHAIRMAN: Send it right over with the Page, hon. member. Please continue.

MR. SIHOTA: Okay.

I enjoy dealing with this minister. If he can avoid, duck or pontificate, he will. He has to have all the proof in his hands. There you see, Mr. Minister, the letter in your hand that says the letter was sent to you. It is dated February 9. In fact, Mr. Minister, let me tell you this....

MR. CHAIRMAN: Through the Chair, please.

MR. SIHOTA: Through you, does the minister want the letter of February 9 as well?

HON. MR. COUVELIER: I understand the rules are that two of us can't stand at the same time.

Interjection.

HON. MR. COUVELIER: I'm astounded that a member of the legal profession should be so ignorant of the proprieties of this House.

If I understood the introduction of this subject, the hon. member talked about a transmittal letter coming from the Premier's office to my office. What he has provided here is a carbon copy of a letter addressed to a third party. I can understand that. What got my curiosity piqued was the reference to a transmittal letter. If I've misunderstood the hon. member, I'd be pleased to be corrected.

MR. SIHOTA: I don't know what the minister did or didn't understand. Let me just go over it again in simple terms for the Minister of Finance. On February 9, 1988, Mr. Charbonneau wrote a letter to the Premier of this province. I have already read for the record what that letter says. I have but one copy in my possession; I will refer to it later. However, if you would like a copy of it, I shall transmit it over to you now.

The Minister of Finance, I thought, then said he didn't recollect this letter. Because it was addressed to the Premier, he went to some length to say that he probably didn't receive it. I then told the Minister of Finance that the letter had been sent to him, because the Premier in a subsequent letter had indicated so. That letter is the one I tabled, dated March 3, 1988.

Interjection.

MR. SIHOTA: No, Mr. Minister. None of these letters were sent to me; they were sent to you or to the Premier. Is that clear? I have the letter, so I'll send over the letter of February 9 as well, with permission to table it upon...whatever it is that we do.

I would ask the minister to take just a brief moment to read the letter of February 9, 1988 — not the one to Mr. Riis, but the one on the other side, to the Premier. Is the minister following me? Will he read the letter, and will he tell this House whether he recollects receiving that letter, so that I can get on with my line of questioning on this matter without any further cheap shots from him as to my profession?

HON. MR. COUVELIER: In answer to the question, I do not recollect receiving this letter, but that's not to say that I didn't receive it; we will make inquiries. But as I understand it, when the hon. member first introduced the subject, he was implying that I had not responded to it. I have a practice of responding to every letter I receive. I'm not aware of any letter sent to me that has not been answered. If this letter dated March 3, of the Premier's, copied to me, has not been answered by me, then I either did not get the letter or it's been misplaced or misfiled somewhere, because I am very strict about this question of responding to correspondence.

MR. SIHOTA: It's like a courtroom in here in the sense that the minister's trying to bring out every technicality in the book. I want to ask questions in relation to that letter, and if he and his officials aren't prepared now, we'll get back to it later.

The point here is.... Before I get to the point, let me first deal with the minister's comment. Mr. Minister, you may have replied; I can't say with certainty that you haven't replied. You may have replied in the traditional sense — to help you out here, Mr. Minister — to Mr. Charbonneau and said: "Thank you for your letter. I'll be looking at it." You may have done that, but you haven't done any more than that. You haven't answered the question in the letter, I can tell you that. If you want to doubt me on that. I'll get affidavits to prove it. Let me also say — I will say this in the House and outside the House, Mr. Minister — that it's my understanding that you have been asked about the letter by representatives of the investors, and in particular by Mr. Charbonneau. You've had verbal discussions with him, so I find it difficult to believe that you're not aware of the letter, and I'll repeat that both inside and outside the House.

[Mr. Pelton in the chair.]

Now let's get to the meat of the matter, finally, Mr. Minister. The meat of the matter is this: you're talking about action; you're talking about these people not wanting delays; you're talking about responding.

Interjection.

MR. SIHOTA: Why, Mr. Minister, has it taken you so long? Why to date have you not replied in any substantive form, if at all, to this letter? If you're not prepared to respond to the points in this letter by way of letter, will you do it on the record here today?

MR. CHAIRMAN: Just before I recognize the Minister of Finance and before we proceed, hon. members, I would like to talk to you for a moment about the necessity of addressing questions through the Chair. The Chair is here so the debate on any given subject will proceed in an orderly manner. In order to achieve that, questions and statements must be addressed through the Chair, not directly across the floor. Over the past five minutes or so, I think the hon. member for Esquimalt-Port Renfrew has been asked on at least two occasions if he would kindly address his remarks through the Chair. So if we can accomplish that and if that can be the way we proceed, this debate will proceed in a much smoother way, and we will accomplish what we are setting out to do.

Now I will recognize the Minister of Finance.

HON. MR. COUVELIER: I will recognize that it does require humility to live by the rules of the House. If that

[ Page 4110 ]

human characteristic is missing from some, it's easy to understand the variation from the procedure.

In answer to the question, I have asked staff to research the issue now to verify whether I actually did receive the letter, because as I've said, I do not recollect receiving it. But let me just tell the House and the hon. member that my mail is voluminous on a variety of subjects. Indeed, it touches most subjects that each ministry of the government is involved in. If the actions of that ministry have resulted in a citizen feeling that addressing the Minister of Finance will somehow assuage the concerns of the issue.... So I get voluminous mail. As a matter of fact, I am told that our mail is second only to the volume received by the Premier; I don't know if that's true or not. In any event, there is absolutely no way I could retain in my memory bank the specifics of the thousands of letters I get on a variety of subjects.

Now my staff member has returned. No, we don't have an answer yet, but we will verify whether we received this letter or not.

Interjection.

HON. MR. COUVELIER: No, I think the issue of whether I received the letter isn't critical. Obviously the member has a purpose for introducing the issue. I am quite happy to have him follow up on the contents. Whether I received the letter or not, he can certainly make his statement and make his outrageous claims as he has been doing for the last two hours. So go ahead.

MR. SIHOTA: I would venture to say, Mr. Minister, that you haven't even replied to the letter, despite your comments....

AN HON. MEMBER: Through the Chair.

MR. SIHOTA: ...through you, Mr. Chairman. Because the minister seems to be having so much difficulty with this letter, we will put the letter aside until his officials have had a chance to look at it. I want to approach the problem from a different angle, and maybe the minister will be able to follow this, because he certainly had some difficulty following the matter of the letter.

I talked earlier about the government's lack of financial support for these investors and compared it to the Alberta government. I want now to move on to another aspect of this and ask the minister some questions with respect to the actions of his officials during his tenure as Minister of Finance, to ascertain what checks and balances were in place from within his ministry which would have allowed action to be taken at an earlier date so as to protect the interests of investors. I am going to suggest to the minister that his regulators were not as conscientious as the minister would have us believe, in terms of monitoring the affairs of Principal Trust. I want to deal with some very specific questions in this regard.

I want to ask the minister about the granting of the licence to Principal Trust on April 1, 1987. Can he tell this House whether or not the financial statements submitted in support of the application for licence by Principal and its group of companies complied with the provisions of the Investment Contract Act? The reason I want to ask that question of the minister is that I think he would agree with me that his regulators had a responsibility to ensure and to assure themselves that the provisions of the Investment Contract Act were being met. If those provisions were being met, a licence ought to have been issued; if those provisions were not being met, then, of course, no licence should have been issued. Can the minister assure this House, in full confidence, that all of the provisions of the Investment Contract Act were complied with prior to the issuance of the licence on April 1, 1987, with respect to the Principal group of companies?

HON. MR. COUVELIER: I will just deal with the first question, Mr. Chairman, which had to do with the fact that I don't answer my mail. Evidently I sent a response to Mr. Charbonneau on April 25. It was a two-page letter, and while I might understand Mr. Charbonneau's dissatisfaction with its contents, I have some trouble believing or agreeing with the hon. member's assessment that the letter lacks substance.

In any event, the second issue had to do with a specific question on the Principal affair. I have decided, Mr. Chairman, that in view of the fact that this issue will be before the courts as soon as the appellants wish to bring it there — and we will be supporting their bringing it forward hastily — it would be inappropriate for me to allow the hon. member to embark on a fishing expedition which could have the effect of influencing the outcome of those matters. So I will not be responding to specific questions of that nature.

MR. SIHOTA: To this Minister of Finance, first of all on the letter: I'm relieved to see that you responded. The letter was written to your government on February 9. You said that you reply to your letters quickly. You didn't issue a response until April 25, which was two days ago. It obviously hasn't arrived in Kamloops yet. It seems to me that a three-and a-half-month delay isn't exactly a quick response when you're talking about delay and the lack of it and action on the matter of the investors. I would be most delighted if....

Interjection.

MR. SIHOTA: The minister says that if he wasn't so popular, he wouldn't get so much mail. I think the inverse is true, Mr. Minister. If your budgetary actions were not so unpopular and hadn't such great consequences to seniors and others in this province, you wouldn't get so much mail. If you did your job, you would not get so much mail.

[4:45]

I would be most interested in having the minister table that letter in the House now, so that we can see what his response is, or give a commitment to me that he would forward it today to Mr. Charbonneau. Is the minister prepared to do that?

HON. MR. COUVELIER: I have a better idea. I'll send it over to the Premier, and you can get it through that source.

MR. SIHOTA: Another frivolous action in keeping with the minister. We're talking about 18,000 people being affected. We're wondering about a letter that they wrote to him, but we'll let that be at this stage of the game, or we'll come back to it later. But the minister certainly can't stand up and pat himself on the back with respect to quick responses when it took him three and a half to four months to respond to that letter.

I want to continue with what the minister had to say. The minister says: "Because these matters may be before the

[ Page 4111 ]

courts, I'm not going to answer any specific questions." That's another attempt by the minister not to deal with the substantive issues at hand here on the matter of Principal Trust. We are trying to get some answers. The minister should realize that any matter that comes up within the confines of this chamber may someday be in court. You don't use that as a shield to not answer questions.

We've been asking questions in this House for the last week on the Toigo affair. That matter may well be before the courts one day too. Is that a shield against answering the questions? I don't know of any rule of this House that says that because something may be in front of the courts, the minister doesn't have to answer it. If the minister wants to duck the questions, he should stand up and say,"I want to duck the questions," and then he had better explain why he wants to duck the questions, and he'd better explain why he wants to vacate his responsibilities as a minister of the Crown, someone who's supposed to be accountable to the people affected, and why he wants to abdicate his responsibilities to those people who are affected by the Principal Trust collapse and not offer some explanations as to the actions of his own ministry.

What are we going to do later on, Mr. Minister — through you, Mr. Chairman — when we talk about the stock exchange? Is the minister going to say: "Well, all of these matters may be in front of the courts one day; I'm not going to answer it"? Someone may launch a class action suit against the minister tomorrow with respect to his actions on extended and long-term-care facilities and say it's contrary to the Charter of Rights. I don't know. When they do that, is the minister going to say now that he's not going to answer any of those questions? Does the minister not realize, of course, that what's said in answer is not necessarily evidence in court? Does the minister understand that rule? He's got enough advisers there. Perhaps he should talk to them.

No, Mr. Minister, it's not acceptable for you to say that you're going to abdicate your responsibilities in terms of being accountable to these people. It's not sufficient for you to turn around and say that you're not prepared to answer questions that these people are legitimately asking. You have an onus and a responsibility as a minister to answer those questions. If you don't like the heat in the kitchen, get out and let somebody else occupy that seat. Every time the political heat is turned up, Mr. Minister, you can't turn around and say: "I'm not going to answer the question." That's wholly inappropriate.

Maybe it ought to be someone who's a little more senior than I to lecture the minister on his responsibilities. Maybe in the pecking order of things, there may be a point made there, but hopefully the minister has now seen the penny drop and understands....

MR. CHAIRMAN: Hon. member, it might help if I clarified something at this juncture. Under standing orders, in committee, although the critics or members opposite may ask any question they choose, there is no compulsion that they be answered. It is strictly the minister's prerogative. If he chooses not to answer a question, he need not do so.

MR. SIHOTA: Well, that's true, Mr. Chairman, and the minister may choose not to answer these questions, but I think he's got an obligation here, and he can't just lightly utilize that prerogative. "Lightly" is the word that needs to be underlined there.

1 want to ask the minister again: did the financial statements of March 31, 1987, which his ministry looked over, which were sent forward by Principal Trust in support of their application for a licence renewal, meet the provisions of the Investment Contract Act? Yes or no, or does the minister not know?

MR. CHAIRMAN: The member for Esquimalt-Port Renfrew continues.

MR. SIHOTA: I guess now the cone of silence is going to come down with respect to this minister, who's not prepared to answer these questions.

Let me put another question to the minister. Let me make this point first. The Minister of Finance sat there and said these people deserve all sorts of actions. Well, they deserve answers. I think you are obliged to provide those answers.

More importantly, the Minister of Finance has said during the course of our debate on this matter this afternoon that he thinks his regulators did nothing wrong. That's what he said. If you are so confident of your own statement, Mr. Minister, then it would seem to me that you ought to be confident enough to stand up and answer specific questions. It's not good enough for the minister to stand up in a general, generic way and say,"I’ve got no problems here; my officials did exactly what they were supposed to do," but when one asks some very specific questions as to the responsibilities, to bring down the cone of silence.

Either the minister has faith in his regulators or he doesn't. Can the minister assure this House that his regulators reviewed the statements in a general sense and complied with the provisions of the Investment Contract Act before they issued the licences in April 1987?

HON. MR. COUVELIER: I do not intend to answer specific questions on the Principal issue. I can appreciate that the hon. member can keep us here for an interminable time, putting specific questions. That is his pleasure, and we will endure. I will not risk violating material that could be used in a court of law. The issue, as I've said, can only be addressed there, and I do not intend or allow the member to embark on a fishing expedition for the purposes of confounding the natural resolution of this issue through the appropriate authority, which is a court of law.

MR. SIHOTA: Let's ask a simple, straightforward question. Do you, Mr. Minister, believe that regulators have a duty to the public to enforce regulations established by the Legislature of the province of British Columbia which are intended to protect the public?

HON. MR. COUVELIER: I'm happy to answer that question. The answer is yes. I totally agree.

MR. SIHOTA: Is the minister then prepared to tell this House that his regulators did the proper job as required under the Investment Contract Act with respect to the issuance of licences to Principal Trust in the year 1987?

HON. MR. COUVELIER: It is my judgment that our public servants have acted responsibly in all these matters at all times.

MR. SIHOTA: Mr. Chairman, we'll take this one step at a time. Section 9 of the Investment Contract Act says:

[ Page 4112 ]

"The superintendent, where the application is made" — this is an application for a licence — "and fee paid in accordance with this Act, shall grant registration or renewal of registration (a) to an issuer where the applicant is suitable for registration and the sale of investment contracts issued by it would not tend to be a fraud on buyers of the contracts...."

Section 5(l) says:

"No corporation shall be registered as an issuer unless...(b) at least $100,000 of its authorized capital stock has been subscribed and paid in, in cash, and the aggregate of its unimpaired paid in capital and its surplus is at least $200,000...."

That's what the act says. Will the minister agree that that's what the act says? We'll take this one step at a time to make it really simple. Does the minister agree that I have quoted the act correctly, in that no registration can be granted unless you've complied with the act, and the act says that you must have at least $100,000 of authorized capital stock and in cash at least $200,000? Will the minister agree that that is what the act says?

HON. MR. COUVELIER: While I must say that I have moments of weakness, nevertheless on balance I do believe the hon. member is an honourable member, and if he tells me that it's a direct quotation, I'm quite happy to accept his statement that it is.

MR. SIHOTA: Third question to the minister. We'll take this step by step. Is the minister aware that the financial statements made available to the superintendent showed combined losses for FIC of about $23 million in 1985 and a further $28 million in 1986 and therefore, according to the books of the company, a $48 million deficit? Now remember you've got to have $ 100,000 in pocket in order to get your licence. Will the minister agree that the financial statements showed there was a loss of $48 million in the case of these companies, or does he require the financial statements to be tabled in the House?

HON. MR. COUVELIER: I do not intend to respond to any questions running down that train of thought, Mr. Chairman. As I explained earlier, this issue will be addressed in the courts, and once I allow the hon. member the comfort of thinking I'm going to respond down some progression leading to issues that properly belong in the courts.... I do not intend to put myself or the government in that position. There are larger issues at stake which should be addressed appropriately to ensure that all sides are treated equitably, and that assurance can only be provided by a court of law, not by some sort of cross-examination in this discussion on my estimates.

MR. SIHOTA: I am only telling the minister what is public record; the act, which I've just quoted from, is public record. The minister admits that the words I used are indeed the words of the act. The financial statements of Principal Trust are public record in that they're available to the public because it's a publicly listed company. I'm taking public fact number 1, the statute; I'm taking public fact number 2, the financial statements, and telling the minister that the two do not dovetail, that if those financial statements were submitted — and we are led to believe that they were — then it's obvious that a licence should not have been granted. If a licence should not have been granted for 1987, then these companies should not have been in operation. If they were in operation, the government must have been somewhat negligent in allowing them to go into operation when the act says they should not be in operation. If they shouldn't have been in operation as of April 1, 1987, then it seems to me that these investors could have been protected if the regulators had done their job. It's as simple as that.

[5:00]

The act is public; the statements are public. It's obvious that the provisions of the act were not complied with, that somebody in the minister's department was sleeping at the switch to the detriment of 18,000 investors, costing them $156 million in savings.

The minister is correct: it is a matter that ought to be before the courts. That's perhaps one thing I can agree on with the minister. But, Mr. Chairman, I think the minister should be answering some of these questions. If the minister is not prepared to do that, then perhaps he will be prepared to tell us what financial statements, if any, were submitted to the regulators in support of their licence application in March 1987.

MR. BLENCOE: My colleague wants to take a break, and I thought I would make some general comments around this topic, because it's of prime importance, not only to the province but also.... I know that in my constituency, I have many constituents who have been caught in this particular predicament with Principal Trust. I've also had constituents who have been affected by the Victoria Mortgage failure and the teachers' co-op failure. Although in many respects there are basic differences in the circumstances surrounding the failures of those other institutions, there are some common problems that have not been dealt with by this government.

It's my contention, Mr. Chairman, that years ago the government should have been monitoring far better and supervising financial institutions in British Columbia. Victoria Mortgage supposedly should have had better supervision. In terms of the teachers' co-op, which I'm more familiar with, there was a superintendent of co-ops who clearly, when I looked at the evidence.... The minister is no longer with us, the former Hon. Mr. Jim Hewitt. The ministry at that time had been notified that the teachers' co-op was in some trouble, but for whatever reason, the government didn't move fast enough, and with that particular institution millions of dollars were lost.

In our estimation, the province's monitoring, supervision, liquidity requirements, reserve requirements and lack of requirements for insurance have been brought to the attention of this government for years, and yet we continue to see institutions fail in this province, and investors requesting that if you are going to have the public sector involved in monitoring, supervising or regulating, at least do the job properly.

In terms of the teachers' co-op, there are all sorts of problems there. As a matter of fact, the Minister of Finance even tried to block the teachers' co-op going to court — I suspect because he knows that there is great exposure to the lack of supervision and the proper regulations and the work that should have been done by government officials in that case.

We constantly hear this government wanting to encourage investment in the province, asking British Columbians or other Canadians or offshore investors to invest in our finan-

[ Page 4113 ]

cial institutions. We have seen over at least the last five years some very sad cases in terms of financial institutions that got themselves into trouble in this province, and the reaction of the provincial government at best has been minimal — apparent reluctance or failure to ensure that these kinds of things don't happen or are minimized. Yet we say we want people to come to invest in the province. Unless, Mr. Chairman, we are prepared to tackle these kinds of issues and provide greater confidence for investors in our financial institutions, we are not going to get the investment we need. How many failures do we have to have?

I recognize that when you invest — like the Victoria Mortgage — there is some consumer awareness. It's buyer beware to some degree. I recognize that. But when you have minimal standards or monitoring or supervision in terms of consumer or investor protection and that becomes known not only in British Columbia but elsewhere, then you don't build faith in the institutions that we have in the province. There's no question, Mr. Chairman: we have excellent financial institutions in British Columbia. But there are some problems. There are some things that need cleaning up.

The one I know best is the teachers' co-op, because I was the critic at the time. It wasn't this minister who was involved. I tried for months to get the minister responsible to even conduct an investigation. He refused to conduct an investigation into that failure. He finally agreed to do an internal investigation rather than a public inquiry. I forget the exact figure of the millions lost by those investors — approximately $60 million if I recall, but I'll be corrected on that.

There was incredible reluctance on the part of the government to deal with these things in a forthright and, may I say, wholesome manner on behalf of British Columbians who invested in good faith. The hurdles, the trauma and the emotional problems that this government created with those teachers' co-op people, trying to get to first base.... They had incredible evidence, in my estimation, that indicated that the work and the supervision had not been done. If it had been called to the attention months before the co-op had failed, if that teachers' investment institution had been monitored properly, there's a distinct possibility that we could have avoided the catastrophe with that institution. There's no question, Mr. Chairman, of the reluctance of the government to deal with that in a forthright manner. This Finance minister's attempt to block a class action by those investors clearly could be construed as an attempt to ensure that the exposure of the government in that matter did not come to the attention of the courts or anybody else,

Some would say that we are crying over spilt milk, but you know, Mr. Chairman, these issues are really important. I've listened today to my colleague for Esquimalt-Port Renfrew trying to get some information, and it reminds me of other members in this House — including myself over the years — who have really tried to get this government to deal with these issues once and for all and to introduce policies, legislation, guidelines, monitoring and supervision that are the best that we can get. There are examples in other jurisdictions. You cannot, obviously, protect the investor totally; we know that. We know that it's a marketplace. We know that Victoria Mortgage Corp. was a realty investment place, and there was a gamble and a risk to that.

Mr. Chairman, if you purport to have regulations, supervision and monitoring, and you have acts — for instance, with the teachers' co-op, the co-op act and a superintendent of co-ops — surely you should let it be known to those investors, who rely on those systems that are purported to be there or are there on the books, that they are at work doing the people's business. No one is calling for thousands of regulations — obviously not. We can't have that; we know that. There has to be some give and take.

In this province there is no question that we have a number of problems in financial institutions that we continue to see getting into trouble — Victoria Mortgage, that I know well; the teachers' co-op and now Principal Trust. There are some common threads and some common issues. All British Columbia investors are asking for is for this government to ensure that the regulatory or monitoring components on paper are actually used and are activated.

If we don't do that, and we continue to get these.... Every time we get another failure, these issues are brought up. I just don't understand that this government — which is supposedly so interested in the business community, foreign investment and in setting up Vancouver as an international banking and investment centre — isn't prepared to deal with this fundamental issue of faith or confidence in some of the issues we have raised over the years in and outside of this Legislature.

Depositors and investors who have found themselves in a very unfortunate situation cannot feel that their government is prepared to work on their behalf. Everybody wants British Columbia to be successful in terms of the banking and investment community. We have an enormous potential, but if we don't deal with these issues that my colleague and a number of others have raised today — not just this side of the House; others have raised it.... It's time that this government has the ability and the desire to deal with these issues properly and adequately.

I understand the minister does not want to deal with these issues because supposedly there is a law case. I think my colleague made some excellent points in terms of that argument, which could be used in many other areas to ensure that the questions we put to you are not answered on behalf of those thousands of investors, not only in Principal Trust, but in other organizations that have got themselves into trouble, with those questions unanswered.

[5:15]

We can battle back and forth across this legislative floor about who's right, but it doesn't come down to who's right. What it comes down to is what is right. What's right is that we start to introduce in this province adequate protection, adequate supervision, and to build the confidence level in our financial institutions so that we can become one of the best parts of the world for investment, for the international banking that this government supposedly wants to bring to the province. Without the things we've been talking about for a number of years, that's not going to happen. I hope that's the long-term objective of this government, because it's certainly the long-term objective of this side of the House.

HON. MR. COUVELIER: The hon. member made some points that I would like to deal with. I would just remind him that there is a vast difference between the question of whether governments have an obligation to insure deposits and the question of whether governments have an obligation to insure investments. It is a matter of record that deposit insurance has been properly assumed by governments to be one of their obligations in order to maintain the integrity of the financial system. Governments at all levels, federal and provincial, are in the process of recognizing that obligation.

[ Page 4114 ]

This issue that we're discussing — the Principal Group and the other illustrations just mentioned by the hon. member — deals with the other aspect of financial management, which is investments. Indeed, I don't believe any government can or would willingly assume the obligation to make whole people who have made an investment and suffered financially as a consequence of that investment turning sour.

I agree with the member that the integrity of this system is our first priority, and it should be. I can assure the hon. member that this government understands that and will at all times work to ensure the integrity of the system. That is not to say this government accepts an obligation to ensure that the actions of regulators will work to protect all investments. Investments are broad-ranging in their nature and can be anything from a simple handshake agreement over a mortgage to far more complex instruments. The issue of government's obligation in terms of keeping investors whole is obviously one, as I've said before, that will have to be settled by some higher authority than mere politicians like us.

The hon. member also made some reference to this government's refusal to allow a class action suit — with a different financial institution, by the way, than Principal Group. Nevertheless, I would just point out to the member and for the record that in these matters we take advice from government's legal advisers. It's unfortunately a fact of life that these practitioners of that craft frequently seem to the layman to be dancing on the head of a pin and dealing with such fine nuances that it's difficult for many lay people to understand or even agree with.

Nevertheless, by virtue of our larger responsibilities to all the taxpayers, I do believe as a matter of philosophical style that I am required to take the advice of government's legal advisers on legal matters, and that the failure of myself, a layman, to take that advice might well be tantamount to abuse of office. So occurrences of that sort are dictated by other considerations, but at all times our concern is to maintain the integrity of the system. We believe we have done that, and we will continue to do that.

MR. BLENCOE: I appreciate the minister's response. I just want to make a comment, and I'm sure he probably wouldn't agree with this, though you can see why investors get confused over government actions. Today you've been encouraging lawsuit and hiding behind lawsuit in some degree, yet you wouldn't allow a lawsuit with the teachers' co-op. No wonder people who invest and see this kind of.... On the one hand: "We'll do this — please sue. " On the other hand: "We're going to block you from suing." Circumstances are different, you might say. I suspect I know why you wanted to block the teachers' co-op. You see why we really have to tackle this thing on a long-term basis — confusion.

For the lay person out there who is either an investor who got caught or an investor who might want to get into an institution....

HON. MR. REID: A speculator who got caught.

MR. BLENCOE: Oh, that's what the Premier said on the open-line show. All those Principal Trust people? "Oh well, they were just gamblers. We won't worry about them." That's what he said: "Oh, they just gambled. " They gambled with their hard-earned money, Mr. Member. They gambled with their savings, Mr. Member. They gambled, did they, according to the Premier? What a gamble! What a future for institutions in this province when the Premier can say to loyal British Columbians who invested in Principal Trust or other institutions: "Well, too bad, you gambled." They gambled with their money, so we're not going to bother — that's the attitude of this government. That's where they're at. "If they want to gamble — any institution — so be it; and if it goes down, well, that's the marketplace. We're not going to bother. We don't care if we have proper supervision. We don't care if we have proper monitoring."

HON. MR. REID: That's the NDP philosophy. We don't think that way.

MR. BLENCOE: The Minister of Tourism is reflective of the attitude of this government, which is the marketplace and to hell with anything else. No protection at all. That's the Premier's attitude. When asked about Principal Trust, the Premier said: " Oh well, they were just gambling. We're not going to worry about them. " It's sad, and we now know where we are in this province with financial institutions, particularly the ones I referred to today. The three that I've named have gotten themselves into trouble. That's the attitude that pervades and why we can't get some decent legislation and policy to guide these kinds of institutions.

MR. SIHOTA: It's a pleasure to be back. On the matter that the second member for Victoria was raising, maybe I should ask the minister a few questions.

The minister knows that the Premier has called these people gamblers. He has said, and I quote: "If people take chances, they should expect to lose sometimes. " He's gone on to say that they should have been more careful; that when investments go bad for investors, they shouldn't come whining to government to bail them out. That's what the Premier has had to say. I'm wondering whether the Minister of Finance agrees with the Premier in describing these investors as greedy and as gamblers. Does he concur with the view of the Premier in this regard?

HON. MR. REID: Your question is tedious and repetitious.

MR. SIHOTA: Let it be known, Mr. Chairman, that that's the first time I've asked that question, and the minister chose not to respond. Is the minister not prepared to comment on the Premier's comments? Does he not think the government owes these people an apology with respect to those comments? Is the minister not prepared to do that?

HON. MR. COUVELIER: Mr. Chairman, I don't know that the Premier said that. I've heard two members of the opposition claim that that is his verbatim comment. I've not heard the comment, so I've no knowledge of it. Were I to have knowledge of it, I don't think I would make comment. The Premier is an elected person, as I am, and is free to make whatever statements he chooses, as are all hon. members. I don't wish to get into any commentary on the appropriateness of the Premier's comments — or yours or anyone else's in the House. That's something each of us will answer for personally. But I'm not implying in any way that the Premier necessarily said it; I never heard him say it.

MR. SIHOTA: Again, we have the minister ducking the question, hiding behind the veil of innocence he tries to say

[ Page 4115 ]

he has; it's really a veil of ignorance when you get down to it, because the minister knows as well as I do what the Premier said.

Let me come from another way and allow the minister an opportunity to get off the hook. The minister, I'm sure, has a copy of Mr. Robinson's report. I'm stretching this to give the minister a chance to get off the hook. Mr. Robinson said:

"I have deliberately refrained from using the term 'investor' in this overview, because many of the people who have been issued investment contracts did not regard themselves as investors. They believed they had placed their funds in a term deposit certificate with Principal Savings and Trust Company. However, in the balance of the report I have frequently referred to them as investors because that is how they've been referred to in various legal proceedings which have taken place. "

Does the minister then agree with the tenor of Mr. Robinson's comment that these people really are not investors, that what they were really doing was thinking they were putting money in guaranteed investment certificates, and they were not risk-takers in the traditional sense of the word, nor were they greedy or gamblers? Does the minister agree now?

HON. MR. COUVELIER: Mr. Chairman, that deals with the very essence of the case, the question of fraud. As our investigator and inquirer, Mr. Robinson has quite clearly confirmed in his report that in his judgment many people were misled. There are remedies in the court system for that kind of fraudulent activity, as the hon. member fully knows. I think he made a living at that business a few years ago. So the point he is raising points to the very heart of that issue; he knows that full well.

MR. SIHOTA: So the minister has no opinion on that. This minister dares not come near to criticizing his beloved leader.

Question to the minister, very quickly. On June 19, 1984, the Canadian Deposit Insurance Corporation wrote to Alberta and told their regulators that the Principal company was involved in unsound business and financial practices. The letter stated that Principal is "following unsound business and financial practices, in that its debt is substantially in excess of the limit CDIC believes appropriate." I would like to ask the minister whether he can tell this House whether the British Columbia regulators received that letter.

I notice the minister walked out as I was asking that question. Prior to that, the minister refused to answer questions. Now he's chosen to walk out. I'm wondering if the government House Leader could tell us whether the minister will be returning in order to answer these questions.

[5:30]

HON. MR. STRACHAN: In response to the member's question, I'll advise you, sir, and members of the committee that the Minister of Finance and Corporate Relations had inadvertently arranged for a 5:30 appointment on this day, and it's something he just can't get out of. So I advised the opposition House Leader at 2 o'clock this afternoon that I'd be prepared to stand in as the minister responsible and listen to the concerns, and have members of the Finance staff note those concerns. The Minister of Finance will be responding in due course, no doubt tomorrow. But I will answer any questions generally that staff advise me I can answer; the rest will be duly noted by the staff, and the Minister of Finance will be responding to the committee tomorrow when we return.

MR. SIHOTA: I don't want to touch upon any deals that have been made, but I'm not happy; nor will I proceed without the minister present. I want to know from the government House Leader: why don't we just adjourn and take it up first thing tomorrow morning?

HON. MR. STRACHAN: You probably have lots of concerns that you want to address to the ministry, Mr. Member, and I think it would be appropriate now — we still have half an hour left — for you, or other members who wish to note their concerns to the Ministry of Finance, to address them to the committee. They will be duly noted. There will be some, I am sure, that I can respond to, if briefed by the staff who are surrounding me; others will be taken as notice and responded to tomorrow by the minister. But I certainly think we can use this last 20 minutes or so productively if we put our minds to it.

MR. SIHOTA: That's unacceptable. I'm quite prepared to ask the minister all sorts of questions, but I want him in the House to respond, unless of course the government House Leader is prepared to respond. To date the minister has been silent on several of these questions, but if the government House Leader believes he's capable of answering these questions, then we'll proceed on our understanding that he will respond to these questions. Will he?

HON. MR. STRACHAN: My response will of course be consistent with the responses you've heard earlier today.

AN HON. MEMBER: In other words, you have nothing to contribute.

MR. SIHOTA: Exactly. In other words, the government House Leader has nothing to contribute to this debate. Well, I'm not going to pursue the matter of Principal Trust any further. I'm going to wait for the minister to return. If the government wants to kill 25 minutes, we'll kill 25 minutes, but it's not going to be a saving in any real sense of the word, because we expect some answers from the minister and we intend to pursue these questions with him. I know what will happen. We'll put them on the record, fair enough, but the minister has not been responding to date and I want him in the House to respond to them.

I'm not prepared to deal with the Principal Trust issue any further. We have the matter of the stock exchange, which we will deal with tomorrow then as well. It's our expectation that the government officials will be available so the minister will be in a position to answer those questions. If not, I guess we'll be here for a little longer to debate these issues. It's not hard for me to say that. I live a stone's throw away from the Legislature. That's where my riding is, and I can attend to its needs quite easily and be in here.

Accordingly, I will come back tomorrow and ask more questions on Principal Trust when the minister decides to come back. Will the government House Leader assure us that he will be in attendance tomorrow morning at 10 o'clock and thereon until 6 o'clock?

HON. MR. STRACHAN: Yes, the minister will be here, and the member should be aware that the only time that we

[ Page 4116 ]

noted to the members of the opposition that the Minister of Finance would be absent was this afternoon from 5:30 to 6:00, and that information was conveyed to your House Leader at 2 o'clock today. I find it curious that the critic, the member for Esquimalt-Port Renfrew, indicates that he has been pressing the Minister of Finance on matters dealing with Principal Trust and that the Minister of Finance has declined to answer specific questions and has been consistent in that response throughout the afternoon, but the member will not pose the same questions to me because I would not respond. Given that the Minister of Finance has not responded at all today to any of those questions, I don't see why he would respond tomorrow when he does return.

MR. SIHOTA: Well, he may.

HON. MR. STRACHAN: He may, although it's highly unlikely, given that he hasn't this afternoon, by your own admission.

MR. SIHOTA: Maybe the minister will have a change in heart; maybe the penny will drop. Maybe a good idea will come into the minister's mind so that he can respond. But then again, a good idea is sometimes very lonely in an empty head, so I guess we'll just wait until tomorrow.

MR. CHAIRMAN: I'll just remind hon. members that the Chair has no alternative but to call this vote if we don't have someone standing on their feet.

MR. CLARK: That's why I'm standing, Mr. Chairman. I assumed that that was the case, and that's why I thought we'd better spend 20 minutes talking about some other issues in finance.

The one I might deal with — although I have no notes on it — is the federal government. I note in the throne speech the great pains the government took to criticize the federal government. I want to talk about some real problems that British Columbia has with the federal government and see what the government's been doing on it.

For example, right now we have a situation where the Bank of Canada is raising interest rates. Why are they raising interest rates? They're raising interest rates because they're worried about inflation. Why are they worried about inflation? They're worried about overheating the economy in Toronto and the little golden horseshoe down there. That has tremendous implications for British Columbia in the simple terms of high interest rates for British Columbia and the problems that we have with a barely recovering economy, at least in terms of unemployment and some other indicators. It also has implications for the Canadian dollar, because the Canadian dollar is rising relative to the American dollar.

All of these major levers of the national economy are being utilized to raise interest rates and keep the dollar higher, in order to fight off inflation in southern Ontario. That's a real threat to the British Columbia economy. Every penny the dollar rises costs the coal industry in British Columbia $20 million. Every penny the dollar rises costs the forest industry.... I think it's $75 million; I could be wrong on that. It's an enormous amount of money.

What I want to know is what this administration has done. What has the government done to deal with this real problem with the B.C. economy, this real problem with the federal government? Instead of whining about procurement policies and not getting enough ship-building and all these other issues — which are all legitimate issues — what has this Social Credit administration done to deal with the biggest threat from the federal government to British Columbia's economy, rising interest rates?

HON. MR. STRACHAN: The member's point is valid, and I couldn't agree more with his concerns. I guess it's something all British Columbians are concerned with, particularly our Minister of Finance. Believe me, as a member from a riding that is largely in the business of exporting lumber, I can assure you that we do see rising interest rates as a cause of concern. That point is valid.

I am advised by ministry officials, Mr. Member, that the concern is at the officials' level; that every argument we can make on behalf of the citizens of British Columbia as a provincial government and as a Ministry of Finance, and every argument we can make to the federal politicians and the federal officials, we do make. That is a concern that's addressed by the Ministry of Finance in every way that it can be, and one on which we agree with you. Efforts are made on a regular basis to the full extent possible.

MR. CLARK: I won't belabour the point, but it is curious that the throne speech certainly talks about problems that British Columbia has with the federal government and doesn't mention this problem. Maybe the officials are quietly voicing their concerns, but if we want to deal with the high interest rate problem and we want a solution to pending inflation in southern Ontario, then we need political heat. We need the government and the Premier to stand up to Mulroney and say that it's not acceptable to have a national monetary policy because of problems in southern Ontario, and that the regions have not felt the kind of employment generation that's happened in southern Ontario. We need strong action and strong words from this administration, and we haven't had them. We've had them on all these other problems, which are little in comparison to this problem.

One other thing I might ask the House Leader in the Minister of Finance's absence, and another problem I didn't hear a peep out of the government on.... Some time ago last year the federal government allowed the chartered banks to write off all their bad loans in one quarter. That meant a tax loss to the federal government of some $25 million, I believe. I have worked out the tax implications for British Columbia of allowing the banks to write off all their bad loans to Third World countries in the last six months. It works out to $5 million. British Columbia lost $5 million because of a decision of the federal government to allow the chartered banks to write off their loans to Third World countries.

Where has the province been on that question? Not a peep. We go to great pains not to pay for hungry school kids, and to raise rates on seniors and all these other things because we have a problem with money — one can argue that — and here we're giving away $5 million to the big chartered banks because of a federal government policy decision, and not a peep from the provincial government. Maybe the minister can explain that.

HON. MR. STRACHAN: Once again, Mr. Chairman, we're dealing totally with the federal jurisdiction. But the member poses the question that if we as a government are going to be critical of another administration in our throne speech, then it follows that we should be critical in all areas. I

[ Page 4117 ]

can assure the member that I am advised by the Ministry of Finance that at the political and the officials' level, we are continually bringing these concerns to the federal minister. Although I can't divulge any of the conversation of last Saturday, the member is aware that there was a cabinet meeting with the B.C. cabinet and members of the federal cabinet. So we do stay in constant contact with them, ensuring at all times that the best interests of British Columbians are served at those meetings.

The other comment you raised has been noted by the ministry staff, and I'm assured that the minister will be responding to your concerns in greater detail tomorrow.

I think that should just about do it. I thank the committee for their indulgence and for allowing the Minister of Finance and Corporate Relations to get away a bit earlier this evening and for posing those questions to me.

The House resumed; Mr. Speaker in the chair.

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

Presenting Reports

MR. PELTON: I have the honour to present a report from the Select Standing Committee on Standing Orders, Private Bills and Members' Services. I move the report be read and received.

Motion approved.

CLERK-ASSISTANT: Your Select Standing Committee on Standing Orders, Private Bills and Members' Services begs leave to report as follows: "The committee has waived compliance with standing orders in respect of late filing of Bill PR405, intituled Vancouver Charter Amendment Act, 1988 (No. 2) and ordered the bill to be placed on the order paper for introduction.

"All of which is respectfully submitted. A. Pelton, Chairman. "

MR. PELTON: By leave, I move that the rules be suspended and the report adopted.

Leave granted.

Motion approved.

HON. MR. STRACHAN: I move the House do now adjourn,

Motion approved.

The House adjourned at 5:45 p.m.