[ Page 6881 ]

CONTENTS

Routine Proceedings

Oral Questions

Vancouver Stock Exchange. Mr. Harcourt –– 6881

Race relations. Mr. Clark –– 6882

Accreditation of private colleges. Mr. Jones –– 6882

Ministerial Statement

Lead solder in water systems. Hon. Mrs. Johnston –– 6883

Mr. Cashore

Property Purchase Tax Amendment Act, 1989 (Bill 10). Second readingé

Mr. Blencoe –– 6884

Mr. Cashore –– 6884

Mr. Miller –– 6885

Mr. Sihota –– 6887

Hon. Mr. Couvelier –– 6888

Committee of Supply: Ministry of Labour and Consumer Services estimates.

(Hon. L. Hanson)

On vote 41: minister's office –– 6891

Hon. L. Hanson

Mr. Sihota

Mr. Clark

Mrs. Boone

Ms. Marzari

Mr. Rose

The House met at 2:08 p.m.

HON. MR. WEISGERBER: It's my pleasure today to introduce four visitors to the House. With us today in the members' gallery are Paul Perko and his wife Maria, along with Cveta Mogus and Barbara Novak. The Perkos are from Ambrus, Yugoslavia, which is the capital of Slovenia. Cveta and Barb are from Prince George. Would you please join with me in making them welcome.

HON. MR. DIRKS: In the House this afternoon, visiting from the good constituency of Nelson Creston, are two of my constituents. Would the House please make Lily Edgren and George Veale welcome.

MR. PELTON: Hon. members, in the members' gallery this afternoon with my wife Louise are two longstanding friends of our family, Anna and Bob Paul. Would you please make them welcome.

MR. ROSE: I'm informed that there are a number of grade 10 students, 28 in number, from Moody Junior Secondary School in Port Moody, and they're here with Mr. D. Meronuk. I would like to welcome them because they're here studying government, and I hope they're not disappointed. Would you please welcome them.

Oral Questions

VANCOUVER STOCK EXCHANGE

MR. HARCOURT: Mr. Speaker, I have a question for the Finance minister. The minister is by now surely aware of the damaging concern caused by his unfortunate reference to unnamed scumbags that he says are operating on the Vancouver Stock Exchange. He has added fuel to the fire and sent a very damaging message to the world. Is the minister now prepared to name names and clearly define who he means when he says "scumbags," and then apologize to the thousands of legitimate people associated with the Vancouver Stock Exchange?

HON. MR. COUVELIER: That's really priceless, Mr. Speaker. Here we have been listening to the members of the opposition — in the absence of the Leader of the Opposition, I admit; he wasn't here; maybe he was unaware.... For the last three or four days his colleagues have been lambasting people who operate on the VSE for past practices. If the hon. member wishes to read Hansard he would be able to see specifically the allegations, many of them spurious; many of them misinformed; and many of them deliberately manipulative in terms of public opinion. If the issue is what damage is being done to the VSE, the record is quite clear: the damage to the VSE is being done by members of the loyal opposition.

I am just now getting the chance to read the press stories — I haven't had time this morning. I do understand that some commentators are making a point about my remarks dealing with certain operators on the VSE, and I have no hesitation in repeating them.

It is the intention of this government to continue to pursue those who violate the accepted standards of practice on the VSE. To the extent that we catch scumbags who are violating those kinds of rules and regulations, we will prosecute. I am very proud of that statement. I stand behind it. There certainly is no need to apologize.

The reference clearly did not refer to all the operators on the VSE. Indeed, I have spent the last two and a half years of my life standing in this House defending the majority of the operators on the VSE and their methods of doing business. The record is clear in that respect. I find it humorous in the extreme to see the Leader of the Opposition all of a sudden trying to have it both ways. I put it down to the fact that he fails to regularly attend, and therefore would be unaware of comments made by his colleagues.

MR. HARCOURT: While the minister may find what he has done a laughing matter, we on this side of the House don't think it is a laughing matter at all.

We want to see the Vancouver Stock Exchange be a successful venture capital market. It is building towards that goal, but the minister has a responsibility to repair the damage which has been caused in large part by his careless attitude and his careless remarks. New Democrats have demonstrated their commitment to improving the exchange by meeting with the superintendent of brokers, the governors of the exchange and the Securities Commission, and by putting specific names and instances before the minister.

Is the minister now ready to cooperate with the opposition in bringing this matter before an all-party committee of the Legislature? Today I have tabled a motion to that effect. Is the minister prepared to support our initiative and take up our offer to help?

[2:15]

HON. MR. COUVELIER: If I had any confidence that the genuine motive of those members opposite would be to do what the Leader of the Opposition portrays, I might have a different reaction. For the last two and a half years we have stood in this House defending the VSE and the majority of operators who practise their craft on the VSE.

I am the one who has been making the speeches about the role the VSE can play in our developing financial community. I am the one, as recently as two days ago, who made exactly those comments. Admittedly, the Leader of the Opposition wasn't in the House to hear them. At the very least, while he's traveling around at taxpayers' expense, he might read Hansard so that he's aware of what occurs in his absence.

[ Page 6882 ]

A day or two ago I referred to the chameleon-like approach taken by certain members of this House in respect to some of these matters. This is a classic illustration of the point I was attempting to make. That is to say: on the one hand, we have the Leader of the Opposition who tries to portray himself as a friend of business and certainly the Vancouver business community; and on the other hand, we have other members of the crew opposite who seem to be making it their life mission to destroy the reputation of the VSE and maliciously malign individuals who have been operating on the VSE.

We are convinced — and have been since we took office — that there is a marvellous opportunity for the Vancouver Stock Exchange to improve its profile in the Pacific Rim and to expand its business dealings with other stock exchanges in the world. We have consistently put in place regulations and legislation which will enable us to reach that objective. Each of those initiatives rebuts the suggestion that this government is less than serious about the matter. We clearly are serious. We will bring forward regulations and legislative changes this session to further refine the opportunity for our regulators to do their job more effectively. That is in the interests of all British Columbians, and we will continue to pursue that objective.

MR. HARCOURT: While the Social Credit government laughs and smiles about the damage that they've caused to British Columbia's reputation, while the Minister of Finance refuses to take this matter seriously and refuses to answer my question, which I offered in a genuine way to deal with this very dramatic situation, I will once again ask the minister if he is prepared to accept our genuine offer and refer this matter to an all-party committee of the Legislature to assist the VSE to become the venture capital Pacific Rim exchange it is becoming and to deal with the blackening of the financial reputation of British Columbia that he has caused.

HON. MR. COUVELIER: I repeat the answer I provided to that question originally. If I was satisfied that the motivation of the members opposite was genuine, I would have a different reaction than I am presently inclined to bring to the issue.

The members opposite have accused the Vancouver Stock Exchange of being used for a laundering operation. That's in Hansard, Mr. Member. Such a ridiculous accusation hardly deserves mention, and yet it gets publicity and gets trumpeted around the world. It's absurd to suggest that a relatively minor market, with that relatively small opportunity to actually launder money, would be used for such a purpose. Yet the allegation was made in this House It's quoted in Hansard — I'll find you the reference — and it gets trumpeted all over the world. There could be no more absurd suggestion to make. Anyone who understands anything at all about stock exchanges would understand that if laundering was to occur, it would occur In New York, Tokyo or Toronto long before it would occur in Vancouver. The sums of money being moved there wouldn't facilitate that objective.

The hon. member suggests that they have something to contribute in talking about the rules and regulations and legislation affecting the VSE. If that kind of comment is exhibited or brought forward as an example of the kind of contribution you might make to such an examination, I tell you, hon. member, we would all be wasting our time.

RACE RELATIONS

MR. CLARK: I have a question for the Provincial Secretary in his capacity of being responsible for multiculturalism. It's a serious question. I have here copies of two leaflets produced by neo-Nazis, which have been handed out in the streets in my constituency and in the school grounds of East Vancouver over the last two days. The so-called "skinheads" are apparently holding a rally tonight near Commercial Drive. Racism is clearly at a dangerous level. This isn't funny at all, Mr. Member. I wonder if the minister could tell us what concrete steps he has decided to take to deal with the dangerous outbreak of racial tensions in Vancouver.

HON. MR. REID: In response to that, I wish the Attorney-General (Hon. S.D. Smith) were here, because it is more legitimately a question to the Attorney-General. But I am not aware of the material; this is the first time I've heard about it. I'll certainly look into it following this question period.

MR. CLARK: I will be raising this with the Attorney-General and the Solicitor-General (Hon. Mr. Ree), of course, but there are two ways of dealing with outbreaks of racial tension. One is legitimately a police action; the other, in my view, is more appropriately an education response. It seems to me that the policies on multiculturalism of the ministry responsible appear to be little more than a publicity gesture.

I would like to ask you whether you have now decided — in light of these or after you see these — to deal with some of the legitimate concerns, such as funding for ESL for adults in our schools, and to embark on any kind of race relations education program and other efforts to deal with this problem.

HON. MR. REID: I take the comments made by the member seriously. Since I am not aware of what prompts them.... When you get into discussion about ESL and education, I have the hon. ministers for post-secondary education who deals with ESL and also the Minister of Education (Hon. Mr. Brummet). My ministry does not, under the multiculturalism component, deal with education at all.

ACCREDITATION OF PRIVATE COLLEGES

MR. JONES: I have a question for the Minister of Advanced Education and Job Training. This week, I think the minister is aware, students from Western Media Institute, a private career college, who were

[ Page 6883 ]

misled about course content, instruction time and school facilities, have had no recourse but small claims court in order to retrieve their $3,000 in tuition fees. Given that present government policy does not protect students from this type of deception, will the minister finally accept the need for an accreditation process to ensure that these private colleges deliver the services they advertise publicly?

HON. S. HAGEN: I do thank the member for the question. It's a very timely question. I can assure the member opposite that I asked my staff several weeks ago to bring me a report and recommendation on this matter, and I will be dealing with it as soon as I get that report.

MR. JONES: The minister indicates that he's studying the issue. He said that a year ago. He was studying it two years ago. Obviously the minister is not a quick study.

The Ministry of Advanced Education and Job Training claims in its policy that it protects the interests of these consumers. However, only one person oversees more than 400 of these colleges, with something in the order of 40,000 students involved in the process. Given the litany of problems we've had in the past couple of years, where students have experienced serious deception and serious financial problems, does the minister not now see the need for a proper accreditation process and proper staffing to ensure that these schools operate ethically and responsibly?

HON. S. HAGEN: In answer to the member for Burnaby North, I dispute his statement that there is a litany of complaints. We do have, in fact, over 400 private training institutions in this province, and the vast majority operate very effectively and as a matter of fact are very effective in finding graduates jobs. I guess this seems like the same sort of brush they were using a couple of days ago in dealing with the Vancouver Stock Exchange. The members opposite always want to paint all of the organizations and all the colleges and schools with the same brush, which is not true. I can tell you that we deal with these matters very seriously. I know the member knows that, and I will be dealing with this matter seriously.

Ministerial Statement

LEAD SOLDER IN WATER SYSTEMS

HON. MRS. JOHNSTON: Mr. Speaker, I would like to make a statement concerning this government's commitment to the purity of our drinking water and the measures my ministry is taking to ensure that the buildings in which we live and work are free of contaminants which might threaten that purity.

In doing so, I would like to assure the member for Maillardville-Coquitlam (Mr. Cashore) that the bill he is proposing is entirely unnecessary, as he would have discovered if he had taken the freedom that is his to inquire of me or my ministry. We are entirely aware of the potential for harm that exists in the use of lead solder in our plumbing systems and have been making arrangements to accelerate the introduction of Building Code components to eliminate the use of lead solder and adopt approved lead-free varieties. Originally, the National Building Code target for such a measure was to have been 1990. However, my colleague the Minister of Health (Hon. Mr. Dueck) and I concurred that the situation warranted swifter action. Therefore, as long as two months ago we initiated the process to change our code, with a target for adoption of approximately four to six weeks from today. These new standards will eliminate the use of lead solder in British Columbia's water systems.

Our resolve in this area is easily verified, because it has been acted upon through open and thorough consultation with the building industry, trade schools, manufacturers and environmental groups. In fact, this commitment was known to the West Coast Environmental Law Association back in March.

All this would have been available to the member for the asking. The member opposite has indeed succeeded only in raising the level of fear in our wider community unnecessarily and without consultation with the ministry responsible for public safety. I am happy to say that we do not follow his party's lead in these cases, but have moved swiftly and effectively, in a highly coordinated manner, to eradicate the danger.

MR. CASHORE: Mr. Speaker, I would like to thank the hon. minister for making a copy of this statement available to me just prior to question period.

HON. MR. RICHMOND: Did you give her a copy of your bill?

MR. CASHORE: Yes, I believe she now has a copy of the bill, thank you.

I would like to say to the minister that I appreciate the announcement. I take it in good faith, I believe that the initiatives the minister has just announced are worthwhile, and I applaud them.

I find it difficult, however, to know why the minister would use this as an opportunity to be defensive. Surely it's an item that requires a proactive approach, and there's no necessity here whatsoever to attack the messenger.

I appreciate what the minister said about the West Coast Environmental Law Association. I too have been in consultation with them, and last November I announced that I would be introducing this bill.

Mr. Speaker, I make no apology for introducing a private member's bill. This is a time-honoured tradition in this House whereby the opposition has an opportunity to put forward viable alternatives, and it means that democracy is healthy in this place. If democracy were as healthy as it could be in this place, this bill would be brought forward.

[2:30]

[ Page 6884 ]

While I appreciate this announcement, it is not legislation. What we are putting forward is legislation to protect the health and safety of British Columbians. It should not be a time for this type of an unnecessary attack, but a time to get on with it, and I appreciate the fact that the minister has said that she should.

Having said that, I would point out that the government's track record on enforcement is abysmal in this and other areas, especially where it has to do with the environment. The minister started off her comments by stating that she was concerned about the purity of our drinking water. I would remind this minister that to ensure the purity of our drinking water in the lower mainland, keep that pipeline out of the watershed!

I appreciate the fact that we on this side of the House with our private members' bills are setting the agenda.

MR. SPEAKER: Order, please. Would the member resume his seat for a second. The member knows the rules of ministerial statements; he's now gone into three different items. Would he finish up his reply, sticking to the minister's statement, please.

MR. CASHORE: Mr. Speaker, I appreciate that, and I would invite all cabinet ministers to respond to each one of our private members' bills in this House. We would appreciate the opportunity to respond.

Orders of the Day

HON. MR. RICHMOND: I call second reading and adjourned debate of Bill 10, Property Purchase Tax Amendment Act, 1989.

PROPERTY PURCHASE TAX
AMENDMENT ACT, 1989
(continued)

MR. BLENCOE: I said before the adjournment that I was going to relate to a letter that I think really states quite well the general feeling about the property purchase tax and the amendment currently before us. I think most people, particularly young British Columbians who want to get into the market for the first time, have seen that this amendment really does little to help the majority of first-time purchasers to buy that dream home.

I have here a letter from a constituent in Victoria addressed to the Minister of Finance and Corporate Relations. I just want to read some parts of it, and the minister can take note. I think it really says it all in terms of how ridiculous this amendment is:

"I am baffled by your plans to give a break on the property purchase tax to purchasers with small down payments. I have scrimped, saved, sold inherited furniture, etc., to amass life savings of $40,000 for a down payment and have managed to qualify for a maximum pre-approved mortgage of $90,000 based on income. In Victoria, the resulting maximum purchase price of $130,000 won't result in much of a house. The place will likely need $5,000 to $10,000 worth of repairs, updating, new appliances, roof, etc.

"Your property purchase tax of $1,300 on this purchase represents a large burden for me and for my family. I'm trying to put a roof over our heads, not speculate in real estate. It is baffling why some people" — and this is the major point — "with whom I am competing for a house in the $130,000 price range should get a break on the tax while I will not. My $40,000 down payment is 30 percent of the purchase price of a $130,000 house. The tax break will go to someone with only 10 percent down" — that's $13,000 — "requiring a 90 percent mortgage, or $117,000.

"This means one thing to me: to get such a large mortgage would require a much larger income than mine. So it seems you are favouring high-income people with low down payments...over people like me with lower incomes and larger down payments. This doesn't make sense to me."

The constituent is absolutely right.

[Mr. Rabbitt in the chair.]

"Please explain the rationale behind this tax and why your tax break is limited to people with small down payments. Why the tax inequity? How does the tax assist the average B.C. family trying to attain its own home? We need help in this regard, not yet another hurdle.

"In my opinion, the purchase of dwellings serving as principal residences should not be subject to any purchase tax. Charge speculators and investors, but not B.C. families who could put the scarce funds to much better use. Please don't penalize people with reasonable down payments entering the world of real estate with their life savings prudently and with caution as though we are playing the stock market, purchasing luxuries or trying to get rich quickly."

I think this constituent says it all. This is an average young British Columbian with a family hoping to obtain that dream of a home, who not only disagrees with the property purchase tax but has seen right through the amendment that's before us today. It's basically unfair. It continues to penalize the average British Columbian, the ordinary British Columbian family that just wants to get into a home and to purchase that dream. This government should have at least exempted the first-time buyer.

Let's do something for home ownership in British Columbia. Let's do something for those British Columbians who want to own their home, and exempt the first-time buyer. This government purports to speak for the interests of home ownership. They've always said that. Well, their policies speak.

MR. MILLER: Actions speak louder than words.

MR. BLENCOE: Thank you. Actions speak louder than words. Let's at long last do something and exempt the first-time buyer at least. This letter that I've read into the record I think says it all.

MR. CASHORE: This is the second opportunity we have had to canvass this subject since we first arrived here in March 1987 and the act was originally introduced.

[ Page 6885 ]

At that time, you may recall, there was a tremendous outpouring of response from concerned citizens who sent us letters, petitions and postcards. I know the minister is well aware of that. People could see the hardship that was going to be coming their way as a result of this inappropriate initiative. It's certainly not a progressive way of dealing with the fact that taxes must be collected, because it was being applied in such a way that it was hurting those who could least afford to deal with it.

Here we saw a situation which this amendment now purports to try and address. It perhaps addresses it for some small segment of people but certainly does not address it in a significant way for the people who would nevertheless still be hurting from this law that was not well thought out in the first place.

I, too, have constituents who have come to me with their concerns about diminished earning power, and yet they have been frugal. They have tried to make it possible to get into the housing market so that they too could share that dream of owning their own homes and raising their families in a neighbourhood of their choice, only to find that what it was amounting to for them was not really — even for those properties under $200,000 — a tax of 1 percent but in many instances a tax of 10 percent, because it was 10 percent of the down payment that they were able to raise at that time. It's a very serious incursion into their carefully honed budget.

It appears that the government has recognized that there is a certain unfairness and a certain unpopularity in this tax and has decided that they must do something about it. They have come forward with this amendment. As one wades through this amendment and tries to analyze it, it is dealing to a very little extent with the actual problem as defined. It's being called the Property Purchase Tax Amendment Act. Yet we know the topic out there in the mind's eye of the public is the property purchase tax. It is made to appear as though this act is dealing with that issue. There is much verbiage within the act that deals with anything but.

It doesn't, for instance, really deal with the loopholes that enable those who are very wealthy to avoid having to deal with this tax altogether. It is a situation that leaves British Columbian families in a great deal of difficulty.

It was only a few days ago that I was out visiting several of the homes in my constituency. When I was talking to people on the doorstep this was a topic that came up, especially among young people on many different occasions. Young people in rental accommodation were finding that it was going to be extremely difficult for them to be able to get the wherewithal to get into the housing market, given the rising prices and the fact that this tax would still be taking a very significant portion of what they had available away from them.

As the second member for Victoria has said, this isn't really helping the first-time buyer. It's the first-time buyer that we look to become a part of the citizenry who is going to be able to participate in a very significant way in the development of our province. We look to the first-time buyer to be the person who is out there in the workforce, who through entrepreneurship is developing those businesses that help to make this province strong and grow in an environmentally sustainable way. We think of the families and we think of the children. What we end up with is something that is seen by these people to be an attack on their situation.

Recently I received a letter very similar to the one that was read by the second member for Victoria. One of the points that this particular constituent was referring to was that this was not going to be any help to them at all, although they might have qualified for some relief from it, simply because of timing, because they had been unfortunate enough to have purchased their property prior to this taking place.

We find there is an administration of taxation throughout our society that is becoming more and more onerous for low- and middle-income people, more and more of a burden for those who can least afford it and more and more of a problem for the people who we look to to solve the problems of tomorrow.

So I too — while I am speaking very briefly on the subject — would like to say that this amendment is not addressing the issue that needs to be addressed. This amendment is not going to deal with the dilemma being faced by people who are being cut out of the market because of this very draconian measure that still exists in their case.

I would ask the minister to go back to the drawing board, take a look at the mistakes that were made in 1987 when the legislation was first brought in and come back with something that is equitable and fair for British Columbians and doesn't create this unnecessary burden.

[2:45]

MR. MILLER: I wanted to add — not a very long segment — but my voice to the issue.

First of all, I think it's legitimate. Those who have been describing the general plight of the first-time home-buyer are completely accurate. All of us — if we cast ourselves back — were probably at one time or another in that position. I don't know too many people who were born into or who easily accumulated the wherewithal to make that initial leap. It's a very difficult one, at least in my experience with the people that I have associated with throughout my life, and that has generally been the people I worked with.

I recall my own first home and the manoeuvring that was required to get into it. It's hard these days to go back to 1972 and 1973. In 1973 I bought a home, which was a reasonable home for $30,000. Those days are long gone. I look back with some fondness, though at the time I thought $30,000 was a heck of a lot of money.

Nonetheless, I was able to do that with the cooperation of an agent who said: "Look, I'll just pass up my commission for a short time." That coupled with the outright B.C. second mortgage at the time,

[ Page 6886 ]

and we were able to work the deal and get in. It proved to be — as home-ownership normally does prove to be — a good and prudent move.

I think it's legitimate also — and I hope I'm not offending anybody by saying this — to tax the appreciated value of homes. It seems to me that this scheme is simply a means of doing that, particularly in a very hot housing market.

It is not unrealistic, in my opinion, to capture some portion of that value through taxation. After all, the government or the state also has programs, although we have been quite critical — and I think rightly so — of the programs that have been put in place to develop housing. Nonetheless, there is an expenditure of public money in terms of development of housing, and I think it's reasonable for the state to tax a portion of the appreciated value, as they do in many other areas.

The problem with this scheme is that it puts the onus on the purchaser as opposed to the vendor. I recall when this was originally suggested. I believe it was the Premier who, in his feeling — which obviously must have been much the same as many of us had, and I suspect many members on the government side probably had the same feeling — and in responding to the criticisms about the policy, said: "Well, we'll just switch it so that the vendor pays."

The Premier did this kind of simplistic analysis and came to the conclusion that really the scheme was an attempt to tax a portion of appreciated value, and if we make the vendor pay, the pain will be minimized if not completely done away with. Of course, you can't put that kind of system in place. So the government has chosen to remain with a system that will tax the buyer.

All we're proposing — and I recall that members on the opposite side have also been in favour of it — is that there be relief for the first-time home-buyer. I haven't seen any analysis of where those first-time home-buyers — and obviously it varies regionally.... You can still buy a fairly low-grade home in my constituency in the $70,000 range. Obviously that is completely out of the question in a market like Vancouver, the lower mainland or even here in Victoria, but there are areas in the province where that is still possible. Nonetheless, the aim of the opposition in proposing that there be some relief is, I think, quite legitimate.

I know it's not always easy to introduce new taxation measures. There is an element of resistance. I know it's not always easy to implement housing programs, because again, there is an element of resistance. I can recall when the New Democratic Party government, for example, introduced the tax deferment for seniors, which I think has continued to this day. In fact, I believe there's another bill, but I won't get into that. I think it was a good scheme. It was an attempt to provide some relief to seniors.

MR. BLENCOE: We passed it, and they attacked it.

MR. MILLER: My colleague from Victoria advises me that the opposition of the day, which was the Social Credit Party, apparently attacked that scheme.

I realize it's not always easy when you introduce new programs and new measures. Sometimes they do meet with some opposition, and I think it's incumbent on the minister to separate this sort of straight political opposition from legitimate suggestions that come from both sides of the House. I recall the program of leasehold that we attempted to introduce. Again, I thought it was legitimate in terms of some of the difficulties, particularly the land value question. It was tried with very little success in my constituency; there was resistance from consumers who thought they didn't like the concept of leasehold. Nonetheless, it is appropriate in some circumstances, and simply to oppose for the sake of opposition sometimes is not the wisest course.

Getting back to this particular tax, it seems to me that it's regressive in its impact on the first-time home-buyer, particularly as we enter this new era of taxation in which the federal government has embraced the concept of what is essentially a sales tax — I believe they call it the goods and services tax — on many commodities. I think that will be an inflationary factor as well in terms of house prices, and an added burden, along with the property transfer tax, for those people — normally we're talking about young couples — in the market for their first home. As we all know, with advancing years that home in fact becomes your collateral in many instances. That's what allows you to retire. Hopefully there's an asset there that will allow individuals to enjoy a quality life, to have the kinds of things we all require and enjoy when we're no longer in the workforce.

I think it's a legitimate attempt by the opposition to advance an amendment that is meaningful.

AN HON. MEMBER: Are you advancing the amendment?

MR. MILLER: Haven't we advanced the amendment yet? That's all right. No doubt there will be further debate, Mr. Speaker. The minister knows what I'm saying.

With that, I think I'll conclude. There will be more debate on this issue along the same lines, and the opposition will continue to pursue what we think is a reasonable and legitimate course in terms of dealing with this revenue measure. Given the fullness of time and the reasonableness of the opposition's points, I hope we can fully expect the Minister of Finance to acquiesce and give a legitimate break, particularly to those young couples who struggle so hard to get into their first home.

DEPUTY SPEAKER: Before the Chair recognizes the next speaker, I would very much like to remind the members of the House that the Chair ruled earlier today that debate on a bill amending an act is such that only the matter being amended may be canvassed, and not the entire original act. The Chair has been more than lenient to date as the principle of

[ Page 6887 ]

taxation has been discussed. What the bill is addressing is the exemption. I would request that in further discussion members limit their discussions to that bill and to the exemption.

MR. SIHOTA: It's too bad that the Attorney-General (Hon. S.D. Smith) is not here, because this government talks over and over again about rights to property, how that should be enshrined in the constitution, and how it's the only way to make sure that people's homes and property are protected. In a funny sort of way, if there was a right-to-property clause, maybe this taxation measure with respect to homeowners could be thrown out on the basis of right to property. I find it paradoxical that the government, which so strongly advocates right to property and its inclusion in the Charter of Rights, would now introduce measures that would deny individuals the opportunity to own a home.

For one sentence I'm going to digress by saying that it's interesting that it was our party, federally, which sought to introduce an amendment to the Charter to include the right to home-ownership.

By implementing a taxation measure which serves to increase the cost of acquiring a new home, this government really is adding to the barrier that most people feel when they are trying to acquire their first home. If this government truly had at heart the interests of young couples and families who wanted to buy a house, they would introduce changes to this legislation which would make it easier and exempt them from the payment of taxation. Instead, we have this half-baked measure by the government to try to curry some political favour by implementing this measure that tries to give a break to people intending to buy a home.

[3:00]

MR. BLENCOE: It's a leaky band-aid.

MR. SIHOTA: It's worse than that. It's an ill-conceived, poorly-thought-out program by government, because it encourages people to go further into debt in order to get the maximum benefits of the program.

The Minister of Finance would laugh and chortle, as he often does when we make legitimate comments. I appreciate the minister has had a bad week with all the talk about the Vancouver Stock Exchange this week. Maybe he'd like to go back to Saanich council.

DEPUTY SPEAKER: And maybe the Chair would like to get this discussion back to relevancy. Please proceed.

MR. SIHOTA: As I was saying, Mr. Speaker, it's a program which actually encourages people to go into further debt to take the maximum benefits of the program. It's strange indeed that a government that talks about balanced budgets, fiscal responsibility and fiscal prudence would actually introduce a program that.... I didn't bring in the two or three letters from people in my riding who have pointed out the weakness and the flaw — former members of the Social Credit Party, I might say. Real estate agents are upset with what the government is doing in this regard.

It would have been a simple matter for the government to say: "If you're buying a home for the first time, you're exempt." I know it would boggle the Minister of Finance's mind to think there could be an administrative scheme set up to achieve this. I understand from what I hear around town that that's the reason the government didn't implement this blanket exemption for first-time home-buyers. It's very easy to do, Mr. Minister. It's very easy to ask people who are buying a home for the first time to sign a declaration to that effect. We do it with respect to all sorts of aspects of real estate transactions, when these matters come before lawyers or notaries, and they're filed in the land title office. You sign all sorts of declarations, and you can have all sorts of penalties if people take advantage and bypass those declarations. So there is no administrative barrier to the implementation of an exemption from the property purchase tax for first-time home-buyers.

Others will argue that apart from the administrative concerns, there's a financial concern: the fact that the government would lose some of its much-desired revenue by creating this exception. I'll tell you where you can make up that money and, in fact, surpass the amount of money you'd lose. You would make it up, quite frankly, by closing the loophole that allows corporations to transfer property through share transfers and avoid the tax. That's how you can make up the money, literally tens and millions of dollars that the government could accrue in additional revenue if it said to someone who wanted to sell a 50-storey skyscraper in downtown Vancouver....

DEPUTY SPEAKER: The Chair regrets to interrupt the member, but we are now talking about the principle of taxation. The bill is dealing with the exemption, and I would ask that the member abide by the earlier ruling of the Chair this morning. Please proceed.

MR. SIHOTA: Mr. Speaker, in all respect, I was talking about a taxation measure and other taxation exemptions available to government. I don't see how that can possibly be out of order.

MR. BLENCOE: On a point of order, this government is always calling on this side of the House to suggest positive ways to help them out with their financial constraints, and my colleague from Esquimalt-Port Renfrew is showing them, if indeed they could exempt the first-time buyer, where they could make up the revenue shortfall. I think that's quite in order, Mr. Speaker. It's a positive suggestion, and it's what the Minister of Finance continually calls on us to do. I suggest that you should allow him to continue in that vein.

DEPUTY SPEAKER: The Chair thanks you for your remarks and will abide by the earlier ruling of

[ Page 6888 ]

the Speaker this morning, and allow those remarks to be canvassed in the committee stage. Please proceed.

MR. SIHOTA: Thank you, Mr. Speaker. I'm just trying to talk about how government can raise revenue and plug a particular loophole. I certainly don't want to get into trouble with the Chair, because next time I go to Yale-Lillooet I might not get the warm reception he always gives me when I go up there.

The point I'm trying to make here is that there are no administrative or financial barriers to going full bore and implementing the type of exemption that we ought to have seen in this legislation. Instead, we've had a situation in this legislation, with the taxation exemption that's been introduced, which really sort of tangles a further web for the government. It recognizes itself that there is a need to show fairness to those people who are entering the marketplace in terms of home acquisition for the first time, but it's not prepared to forgo the revenue necessary to make the full exemption, to make it up.

When this legislation was being drafted, the choice was between, on one hand, the principle of saying to young people buying a home for the first time — people my age, quite frankly, or the second member for Vancouver East (Mr. Clark) or, almost, the second member for Victoria (Mr. Blencoe) — that yes, we in this society believe that first-time homeowners ought to get a break, and on the other hand, a matter of financial greed in terms of not wanting to give up the quantum of money the minister had latched onto from the tax grab that occurred two years ago when he first introduced this legislation.

He tried to go halfway. By going halfway, who does he appease? He doesn't appease anybody in the greater Victoria or greater Vancouver area, because the limit on the program is $100,000 or $150,000, and the price of most housing has gone beyond that threshold. He doesn't appease the people who have been prudent and have saved up $30,000 or $40,000 to increase the equity in what they will buy. In fact, he does the opposite by telling them to go out and borrow some more — certainly a move which the banks would like, but not ordinary young couples in British Columbia.

He doesn't appease the real estate industry, which has made submission after submission to him. I had the opportunity the other day to have lunch with the current president of the Greater Victoria Real Estate Board — a very decent chap — and we discussed this problem. And he was perplexed at why it was that the government wasn't prepared to do that which it had been lobbied to do. It led him to conclude, Mr. Speaker, that this was a government that was not prepared to listen, a government that's out of touch.

[Mr. Pelton in the chair.]

This is not, Mr. Speaker, the Social Credit Party of W.A.C. Bennett, which was known for the sober second thought, which was known for home-ownership. This is a narrow-minded, insulated, radical government that's not prepared to listen to the people of British Columbia when they make a legitimate and fair request. It is a government that is more fixed on some of the internal squabbles and leadership difficulties that they're having than on attending to the needs of the people of British Columbia.

Interjection.

MR. SIHOTA: The member for Surrey asks which party I'm talking about. I should say, Mr. Speaker, I'm speaking about his party, that's having all these difficulties.

HON. MR. REID: You're just rudderless.

MR. SIHOTA: That is, indeed, as he says, rudderless.

Interjection.

MR. SIHOTA: It's going downhill fast. I don't know if I should feel sorry for the minister because he isn't in on what's happening, or if he's just simply unaware of what's happening.

Anyway, Mr. Speaker, the government should move to do what people on both sides of his House have said: the government should create a full exemption for first-time buyers. People on both sides of the House have said that. The real estate industry has said that. Families have said that. Ordinary British Columbians have said that.

It's only an invitation to cynicism if this government waits until the eve of the next provincial election to say that yes, it has now seen the light and that finally the penny has dropped, that they were wrong and that there is going to be a new beginning, a fresh start. Mr. Speaker, it's disappointing in the extreme.

The members from the government side are giving me all kinds of signals, asking me to terminate my debate — and I will, at this stage.

Interjection.

MR. SIHOTA: You didn't applaud, though. [Applause.] Thank you.

Like I say, it is a disappointment to families in ridings like mine, where, quite frankly, real estate values are competitive and still relatively low. These types of benefits really could have helped people in my riding. And you fail to deliver again; the government has failed again.

DEPUTY SPEAKER: The members are advised that pursuant to standing order 42, the minister closes debate.

HON. MR. COUVELIER: They wore themselves out, Mr. Speaker. Isn't that something!

I attempted to listen closely — as closely as I could, given the dreadfully repetitive nature of the comments — and have captured some, I think, of the

[ Page 6889 ]

essence of the comments that I heard expressed over the last hour or so.

First of all, there seemed to be some comment about the original act, and many of the comments dealt with the basic act produced two years ago. Despite repeatedly being told that they were out of order, the members continued to use up their allotted time with those kinds of irrelevancies.

The fact of the matter is, Mr. Speaker, that with the tremendous expansion of social program spending this government has embarked on since it assumed office, it's necessary to finance these essential human services. Obviously, all governments have been looking at property purchase taxation as one device to accomplish not only, of course, a new revenue source, but maybe more importantly, and certainly in our case, a larger motivation was to attempt to take some heat out of the Vancouver real estate market of the day and at the time. There was every indication that that market was getting more and more overheated and overpriced. Those members who spoke, some of whom have municipal experience, would, I think, have the generosity of heart to admit that this whole issue of how to capture for local government the windfalls that accrue to those kinds of property escalations has captured local government's attention for many years.

[3:15]

So the ethic of government imposing some kind of a tax on that kind of inflationary effect — that is to say, escalating property prices — is not new or unique. Many provinces have such a tax. I notice in Ontario's budget announced yesterday that they increased their tax to approximately our rates. The ethic of the tax, then, is long established at the provincial government level. We spoke to that two years ago when we passed the act.

This bill — that we are supposed to be discussing, Mr. Speaker — provides a device by which some people can have their property purchase tax lowered The members of the opposition consumed much of the clock, despite the fact that, I gather, they're all going to vote for the bill. They couldn't resist the opportunity to see their names in print, so they decided to consume the allotted time with some comments that I don't think were relevant at all.

One speaker commented about the fact that only 15 percent of renters will be affected by this program The issue seems to be — at least in that speaker's mind — that the program should be universal. This brings us back to where we were in discussing the previous bill and, I think, characterizes the major philosophical difference between members opposite and members on this side of the House. This side of the House is committed to promoting home-ownership. This side of the House is hopeful that we can, in the fullness of time, ensure that every British Columbian owns his own home. Therefore we consider things like rental assistance programs and those kinds of things to be of a temporary nature.

In a similar sense, we see no compulsion to ensure that all citizens of British Columbia be able to live in downtown Vancouver at government expense. I couldn't afford to live in the West End of Vancouver and most British Columbians could not. I see no necessity for government to subsidize such an event. Therefore I take no offence that 15 percent of the population are going to benefit by this program. I take pride in that. It's a targeted program, and it's targeted to need.

Many members spoke about the fact that it fails to address first-time home-buyers. Of course it does. It completely fails to address the narrow issue of first-time buyers. That's deliberate. The issue is not first-time buyers; the bulk of first-time buyers in British Columbia in the last 12 months have come from outside the province, probably buying their third, fourth, fifth or tenth home. By your definition, I take it, members opposite, you would give them a tax break and not charge them the property purchase tax, despite the fact that most of them come here with their retirement plans intact and well funded.

The fact of the matter is that what was needed was a device to address the need for those people who had a large mortgage, not the need to address first-time buyers. As I've said, the majority of first time buyers don't need help. Certainly last year that was true. What we've done is designed a program — a very narrow program — to fill the need of people who, by virtue of requiring a high mortgage, obviously are going to have some difficulty paying an extra 1 percent tax.

It was suggested by some speakers that what we should be doing is eliminating the exemption completely in that instance. I would merely point out that traditionally there has been a fee for property title changes in the land title office. This initiative eliminates that charge. Indeed, with this benefit for those with relatively high mortgages, some of them will wind up paying less than they would have paid under the old ad valorem system in place at the land title office. It's an improvement in that respect.

There were other comments about the ineffectiveness of this bill in terms of the marketplace. I must point out to the hon. members present that 38 percent of condominiums sold in the greater Vancouver area were sold for less than $100,000 over the last 12 months, up until March 31, 1989. Certainly in suburbs of Vancouver even single-family detached homes had similar kinds of buying opportunities.

To the allegation that the facets of this housing action plan that we've implemented do not address or offer any relief to people in Vancouver or greater Vancouver, the facts clearly refute that. However, facts don't have relevance in these debates, I've learned over the last two and a half years.

The incidence of the tax has clearly not dampened the housing market. It was alleged when we introduced the tax that the housing market would come to a crunch, sales would cease and home ownership transactions or changes would be dramatically reduced. Of course, the facts have totally refuted that. As a matter of fact, in a perfect world, if we were designing housing market activity, I think that all of us would still say that housing activity in greater Vancouver, and to some extent Victoria, is still over-

[ Page 6890 ]

heated and that there are price levels which likely cannot be sustained in the long haul. So the tax has not impeded the marketplace or restricted it in any way.

There was even one speaker who wanted to get into the Expo lands issue, which has had much discussion over the last two and a half years. That speaker seemed ignorant of the fact that the purchaser of the Expo lands did indeed pay property purchase tax. I am surprised that the speaker was ignorant of that fact. It's an oft-repeated fact. I have said so often, and the House has been told before. Once again it's another indication of how desperate and difficult it is to fill allotted time when you don't have much to speak to.

MR. ROSE: You're taking quite a bit.

HON. MR. COUVELIER: I am attempting to respond to points made by your colleagues, Mr. Opposition House Leader. I have been led to believe that that's part of the democratic process. Believe me, I would rather be doing important people's business at my desk. I must stand here and attempt to deal in an intelligent way, if I can, with the comments that have been raised.

It has been raised during this discussion that a loophole exists with the issue of being able to transfer shares in a company which owns real estate, and avoid the property purchase tax. As we have said often in debates previously in this House, there is no such loophole. The fact of the matter is that if anybody wishes to buy any real property that's held by a corporation, the first question that the accountant or lawyer you retain — and hopefully if you are smart you will do that — will put to you is: "Are you buying shares or are you buying assets?" If you are ignorant of the impact of that question, they will explain to you that you can buy shares and escape sales tax, for example. You can buy shares and escape property purchase tax, if the property purchase tax has been paid in the first instance. That's a long-established practice in taxation law.

When the members opposite seemed to wish to continue to meet the point, I had said to them....

MR. BLENCOE: On a point of order, an interesting point of order was ruled earlier that talking about the loopholes was out of order. Now I understand it is clearly back in order, because the minister has deemed it appropriate to address that issue. That is indeed fine with us, Mr. Speaker. We are pleased that we are going to be able to expand the debate in committee to talk about those issues. I thank the minister for doing that.

DEPUTY SPEAKER: Thank you, second member for Victoria. Would you please continue, minister.

HON. MR. COUVELIER: I was going to respond to the point of order, but you are going to allow me to continue?

DEPUTY SPEAKER: Mr. Speaker made a ruling this morning, I believe, on this selfsame subject. I think we are all aware of it.

HON. MR. COUVELIER: I was just going to point out to the Chair that the point of order that was raised this morning, to my memory, was not this issue of the loophole. The point of order raised was the constant reference to the original bill.

In any event, Mr. Speaker, I am merely responding to statements made in this House in a way that I would have assumed the hon. members wish to hear me respond. It is a democratic process. I listened patiently to many of these irrelevancies, and I do feel compelled to put on the public record some kind of response to these comments that have consumed our time over the last few hours.

The issue of the loophole, I think, has been adequately dealt with in previous conversations, but once again was raised here. The fact of the matter is that it has long been established law in terms of taxation matters that purchase of shares in a corporation does not require the payment of sales tax, for example, for assets acquired through that process, nor does it require property purchase tax.

When we made that point to the members opposite and pointed out to them, "How would you apportion a consumer's purchase of ten shares in MacMillan Bloedel between real estate and between assets, etc.?" of course, it becomes an imponderable question. We pointed out to the members opposite during that debate that there was a socialist government, I believe, in Manitoba that attempted to introduce this kind of legislation that would do exactly what you claim to want to do, and it had to withdraw from the imposition of such a tax because of its impossibility to enforce and its philosophical lack of justification. So I did close that discussion many months back by challenging the members opposite to draft for our interest some legislation that we could look at seriously to see if it would accomplish the objective they claim to desire. Of course, they have not yet brought forward such draft legislation, which I think adequately indicates the impossibility of the task which they asked us to perform.

Much was made of the issue by one speaker that this bill wasn't going to help people in greater Vancouver. As I mentioned before, it clearly will. The point that arose in my mind the second time it was raised was: "Are these people opposite somehow opposed to Maple Ridge? What's wrong with living in Maple Ridge? Are they saying that we shouldn't be providing assistance for people to live in Maple Ridge, Surrey, Burnaby, New Westminster, the suburbs of Vancouver? They seem to be saying that they want a program that enables everyone to move into Vancouver." Well, I've just got to tell my friends opposite that that would be the worst thing in socialistic terms, or humanistic terms, that could occur to the citizens of the lower mainland.

We're proud of the fact that this program will allow 96 percent of the condominium transactions in Maple Ridge to qualify for this program: 54 percent

[ Page 6891 ]

of the citizens of Coquitlam will be able to qualify with this program in condominium purchases; 69 percent of the citizens in New Westminster will be able to qualify; 78 percent of those residents of Vancouver East. The first member for Vancouver East — or second member for Vancouver East (Mr. Clark); we don't want to promote him yet — might be interested in that comment: 78 percent of the properties changing hands in Vancouver East from the condominium sector would be eligible for this act.

Clearly it does address the issue of need, despite what we've heard over the last two hours. What's wrong with dealing with a question of need? Are the members opposite telling us that need should not be a criterion of government assistance? Are they all of a sudden abandoning their long-held socialistic values where universality should apply to all? Are they now saying that need should be ignored when we design government programs? What do they really want to do? I am at a loss to understand.

Here we are, designing a program that conserves public expenditures and attempts to manage public money effectively, and the members opposite seem to be saying that need should be irrelevant, that the only criterion should be first-time buyers. All you have to do is move to B.C. and you're going to qualify for a freebie.

The members opposite seem to be mesmerized by this giveaway to people who won't even be able to vote for the first few months. After all, isn't there some benefit to being a British Columbian? Shouldn't we be serving our own citizens' needs first?

My goodness, when I listen to the rhetoric from the members opposite around this first-time-buyer issue, I am confused. To the suggestion that this program is an incentive to borrow money, I just broke up. I'd never heard such drivel in all my years, and I've heard some drivel, because I've had to sit here for the last two and a half years and listen to it. But to suggest that someone is going to be duped into borrowing more money because the interest rate declines, I find absurd. If that's the degree of expertise that these financial wizards opposite bring to these questions, I really have to shake my head in wonderment.

And they want to be government? They really believe they can manage public money when they have this thought that: "Oh boy. If I can cut the interest rate by 1 percent, I'll borrow another $50,000." I mean, is that really what you believe? We had this very erudite member opposite from Esquimalt-Port Renfrew trying to sell us that bag of hogwash. They might be able to sell the Brooklyn Bridge to some citizens of B.C.; they certainly can't sell it to us on this side of the House.

[3:30]

Mr. Speaker, I think I have adequately addressed some of the concerns that we heard, and I'm very pleased now to move second reading of the bill.

Motion approved.

Bill 10, Property Purchase Tax Amendment Act, 1989, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

HON. MR. RICHMOND: I call Committee of Supply.

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

ESTIMATES: MINISTRY OF LABOUR
AND CONSUMER SERVICES

On vote 41: minister's office, $273,577.

Interjection.

HON. L. HANSON: I will be pleased to serve you in the manner that you are accustomed to.

[Mr. Pelton in the chair.)

I am pleased to take my place in debate of the Ministry of Labour and Consumer Services estimates for the year 1989-90. Last year at this time, I said that government had reaffirmed its commitment to launch a coordinated attack on alcohol and drug abuse problems in our society. At that time the alcohol and drug program from the Ministry of Health and the Counterattack program from the Ministry of Attorney-General were transferred to Labour and Consumer Services. Previous to that, the liquor distribution function had also been transferred to my ministry.

I am pleased to say that these moves have resulted in a systematic, effective approach to the most serious matter of substance abuse and use in this province. I am sure that hon. members are aware of our comprehensive TRY program, which stresses prevention of substance abuse problems at the community level. We have already seen a dramatic increase in the number of referrals to our regional alcohol and drug off ices. A recent public survey indicated that TRY has enjoyed a remarkably high level of recognition and acceptance by the public. I should point out that the TRY campaign is only a small part of the overall program.

Enhanced funding under our community awareness and action plan now covers 101 out-patient clinics, up from the 55 in place last year. We now have nine detox centres, up from seven. We have 13 supportive recovery homes, as opposed to only ten last year, and 11 residential centres for intensive treatment, which is an increase of two. Last year the program recorded more than 32,000 admissions, including clients and their families. Now that all these new services are fully operational, we expect the figures to increase even more.

During 1989-90, government will spend a total of $48.9 million for the prevention and treatment of substance abuse. We will add to that $1 million on the Counterattack program, bringing the total to in excess of $50 million. That $48.9 million is: $10.8

[ Page 6892 ]

million on prevention programs, which includes the TRY program; $31.6 million on treatment programs, including expanded residential treatment programs, out-patient counselling, detoxification centres and supportive recovery programs; $4.2 million on the community action program and innovative programs; and $2.3 million on research and evaluation.

Many of the changes we have made in our approach to substance abuse problems arose from the liquor policy review which is commonly referred to as the Jansen report. In our administration of liquor control and licensing matters, one of our major objectives last year was to implement that Jansen report. I am pleased to report that we have now implemented 70 of the 99 recommendations, with work proceeding on the others. At the same time, we have developed new referendum guidelines for neighbourhood pubs, along with strict new review and control measures to ensure that referendums are administered consistently and fairly.

We are in the process of developing a licensee training program, and I look forward to industry's continued support when it is implemented. The purpose of the program is to teach licensees and servers their rights and responsibilities regarding the service of liquor. All holders of liquor licences will be required to obtain training within one year of the date of program launch; this will include management of licensed establishments. We will phase in similar requirements for servers in licensed establishments within two years of program launch. At this time we estimate that the program will be launched on September 15. It's interesting to note that British Columbia is already considered a leader in this field I've had a number of inquiries for speaking engagements for my staff from both the United States and Canada.

As I said a moment ago, government is fully committed to fostering an attitude of moderation in the use of alcohol, an attitude which the people of British Columbia expressed over and over during the policy review. In line with this commitment we have more reasons and resources for the enforcement of our liquor laws. Accordingly, the liquor control and licensing branch conducted 125 hearings last year They wrote 212 warning letters and issued 72 suspensions for violations of the Liquor Control and Licensing Act. Day-to-day operation of the branch continues to be one of the largest jobs in the ministry. Currently the branch regulates more than 6,000 licensed premises. Added to that list are four breweries, seven cottage breweries, three brew pubs, seven distilleries, nine commercial wineries and nine estate wineries.

Another major part of this equation is our highly successful Counterattack program. Over the 12 years that this program has been in existence, the proportion of alcohol-related casualty traffic accidents has been reduced by 50 percent. This represents a saving of lives, a saving of injuries and the emotional and other problems associated with those injuries, and of more than $10 million in costs each year.

As an indication of how important we consider this program to be, especially in the context of our overall assault against alcohol- and drug-related problems, we have increased the Counterattack budget by 180 percent. The budget is now $1.15 million. In 1989-90 Counterattack will receive an additional $650,000 in special funding for equipment purchases, bringing the total of this year's budget to $1.8 million. These new funds will help increase the public education component through the production of new television and radio messages — some of which are already on the air and you have probably viewed — new brochures and new display material for the public and the police.

We are also increasing our production of roadside signage for the enforcement campaigns and increasing our efforts at publicizing these campaigns. Also, my colleague the Solicitor-General (Hon. Mr. Ree), and I recently announced that convicted impaired drivers now face a one-year prohibition from driving, which is up from the six months in place prior. They also face an automatic jail sentence for violation of that prohibition. It is a sad fact that drinking drivers are responsible for almost 40 percent of all road fatalities.

That leads me to another area of responsibility: ICBC. In 1988 claims exceeded the corporation's expectations. The 649,000 claims filed represent a 13 percent increase over the previous year. For every $100 of earned premiums, the corporation paid $101 out in claim payments. Put another way, ICBC paid out $8,400 for every minute of every business day last year. At the same time, on a more positive note, wise investments saw a surge of investment income to $213 million. This income helped offset premium costs by about $105 per policy.

In the final analysis, the corporation produced a modest operating surplus of $26.2 million, about 2.5 percent of the earned premium. To address the increased need for claims service, the corporation found it necessary to add staff and new facilities. Average staffing in the claims division grew by 159 people last year, and new claims centres were opened in Victoria, New Westminster and Richmond.

Another major program responsibility in my ministry is consumer affairs. The mandate is to seek a fair balance in the marketplace by promoting fairness through the development, administration and enforcement of consumer legislation without infringing on the legitimate rights of responsible businesses. We continue to educate consumers, most notably through publications such as our recently updated Consumer Assistance Directory, which consolidates important consumer information. This pamphlet is aimed at helping consumers help themselves in teaching them their rights and responsibilities.

In another area, our motor dealer registrar maintains standards for motor dealers through the administration of the Motor Dealer Act and the regulations attached. In 1988-89 a total of 1,565 registrants were renewed, and 286 new licences were issued. The registrar conducted 27 disciplinary hearings and laid 26 charges.

Another consumer program, the investigation services branch, investigates alleged contraventions of

[ Page 6893 ]

consumer protection laws. Last year this branch received 25,000 complaints. They issued 231 warnings and laid 15 criminal charges. Our cemeteries branch approved 294 annual reports. They approved 69 rate increases and 40 changes to cemetery rules, regulations and bylaws. This branch handled almost a thousand inquiries.

Another consumer office, the registrar of reporting agencies, administers the Credit Reporting Act, which regulates the activities of B.C.'s credit industry. As an indication of the impact this industry has on the economy of British Columbia, there is currently $26 million in homeowner debt outstanding in B.C.

Also under the umbrella of consumer services is our residential tenancy branch, which encourages a positive relationship between landlords and tenants. The branch provides information and arbitration services to landlords and tenants, investigates alleged contraventions of the act and conducts public information seminars. Last year the branch received 5,300 arbitration applications, an increase of almost 25 percent over the previous year. This increase is partially the result of our strong economy and certainly is partly attributable to the increased migration from British Columbia, which in turn resulted in lower vacancy rates. The branch opened almost 1,500 information files and assisted more than 114,000 people with questions and problems relating to tenancies. The rental housing council has also been very cooperative in dealing with the lower vacancy issue.

Our travel assurance fund, another consumer protection program, paid out almost $180,000 in claims on behalf of 295 customers last year. The registrar was successful in recovering $10,000 in reimbursements from agents who went out of business. The balance of the travel assurance fund at year end was just short of $490,000.

[3:45]

Another of our high-profile programs in consumer services is the debtor assistance branch. Last year they counselled 4,770 debtors and arranged almost 900 repayment plans for debtors facing financial hardship. As well as helping debtors directly, these payment plans help divert costly court actions, and in addition the branch helped return almost $4 million to the economy. That's an impressive increase of $1 million over 1987.

Another piece of good news is the fact that complaints against debt collectors fell to their lowest level in seven years. This happened during a period when gross debt collections rose by almost 10 percent. This improvement is largely the result of the ongoing effort by the ministry both to communicate with the debt and consumer industry and to educate the debt collection industry.

On the labour side of the ministry, the hon members will be aware that we are in the process of preparing new legislation that will see a major restructuring of the Workers' Compensation Board and system. The report submitted to me last year by Don Munroe, chairman of the Labour Relations Board, was an excellent example of the cooperative effort by labour and management. They were unanimous in their recommendations, a fact that speaks to the climate of cooperation that can and often does exist between labour and management in this province.

Last year in the Workers' Compensation Review Board the backlog of appeals continued to fall. By the end of the year it was reduced to 633 cases, As of March 31, 1989, there were only 319 appeals older than one year, compared with 724 at this time last year. It is significant that most of these appeals were delayed at the request of the appellant. They do not represent inherent problems with the system. In 1988, 5,365 review board findings were issued. On average, the time taken from appeal to finding is now eight or nine months. That is a significant improvement over last year's average of 11 to 14 months. Simple appeals are taking only about three to four months. In short, we are no longer receiving complaints about the backlog.

Our worker's advisory office continued to help workers and their dependents with advice and assistance regarding WCB matters. Some 15,000 workers came to us for assistance, and our employers' advisers provided similar assistance to the employers.

On the industrial relations side of our operations, the adjudication division of the Industrial Relations Council received 3,695 new applications during the year and disposed of 3,614 cases. The dispositions made during 1988 included the remaining undecided files which the IRC had inherited from the former Labour Relations Board. During 1988 the Industrial Relations Council streamlined the registry and adjudication procedures. This resulted in significant improvements in the average time between the receipt of applications and the disposition of those cases. In 1989 the council expects an increase in the number of applications.

The dispute resolution division of the Industrial Relations Council monitors collective bargaining and helps parties to successfully negotiate new collective agreements. In 1988 the chairman appointed mediators in 88 disputes covering 103 employers and over 10,000 employees. Mediators were successful in reaching agreements 84 percent of the time.

The preventive mediation program is designed to bring labour and management together in a non-confrontational setting to achieve common goals and improve their ongoing relationship. In 1988 the division responded to eight applications for participation in this program. Also during the year that division began to develop and implement a computer-oriented database containing compensation information on all collective agreements in the province.

In the labour field, my ministry's employment standards branch handled over 14,000 complaints and recovered almost $5.5 million in unpaid wages, vacation pay and severance pay for British Columbia workers.

Another important program that is my responsibility is the British Columbia Council of Human Rights. Last year the council received more than 7,200 human rights inquiries. They opened 348 formal

[ Page 6894 ]

investigations and referred 80 cases to hearings. The council also performs a valuable role in educating our citizens about their human rights. The council developed a curriculum unit on human rights for social studies and law students at the senior secondary school level. As a result of such target educational programs, there was a 31 percent increase in complaint files opened last year. The council has a high profile and remains a credible and effective agency for protecting human rights in British Columbia.

Just before I close, I would like to introduce my staff members who are present: my deputy minister, Mr. Lee Doney; Jacquie Rice, who is the assistant deputy minister on the consumer affairs side; and the assistant deputy minister on the labour relations side, Mr. Claude Heywood.

I hope these remarks give the hon. members a sense of the scope and importance of my ministry's programs and activities. We look forward to another productive year in Labour and Consumer Services.

Interjection.

MR. SIHOTA: I don't know if the minister heard that comment, but I hope not. I can assure him we won't be doing this for the next five consecutive days. We're taking the weekend off.

I want to thank the minister for his opening comments. I listened with care to what he had to say.

My responsibilities as critic fall in the labour end of his ministry. My colleague for Prince George North (Mrs. Boone) has jurisdiction with respect to the consumer end of the ministry and will be handling that aspect of it. Of course, the minister has the benefit of having two rookies who have just assumed critic responsibilities taking on the challenge of estimates this time round, and I'm sure that gives the minister great comfort. He doesn't have to deal with all the rather experienced individuals he had before; and with the repertoire of assistants he has in the House, I'm sure we will be able to plow through these estimates fairly quickly and resolve many of the issues that are at the forefront of our minds on this side of the House.

I always have enjoyed estimates in the House, particularly in my capacity as the Attorney-General's critic. I think we've tried to operate within a particular spirit which is different than one would see in question period. I'm sure, knowing the minister, that we'll be able to succeed in that regard this go-round on the Labour estimates.

It's been an interesting experience for me to be involved in a new area of responsibility. What I've enjoyed about it is that I get up and around and have an opportunity to meet with people involved in different endeavours in a different walk of life than I've been accustomed to. As someone who never did practise labour law, I didn't have as much contact with employers and employees or with management and trade unions to the extent I do now as a consequence of inheriting this critic's area.

I should tell the minister, as an aside, that one of the things we've been doing on this side of the House.... The minister talked about some of the positive things he saw in the performance of his ministry, and there are also positive things we're doing on this side of the House as New Democrats. We believe firmly — this is no surprise to the minister — that Bill 19 and Bill 20 are unacceptable legislation. Having said that, I'll leave it at that and go on to what I consider to be the most exciting aspect of what I'm doing and certainly the most time-consuming.

We've been going around privately meeting with employer organizations, trade unions, management and labour in this province and talking to them about Bill 19 in particular and getting their views on that legislation. We've been determining what they don't like about it, what they do like about it, where the common ground is, where the differences are and what solutions can be directed towards those differences. It's been a very informative process for me, probably similar to what the minister went through when he first engaged in this portfolio. I have on my desk stacks of correspondence and submissions from groups, because we firmly believe we're going to win the next provincial election, and we made a commitment prior to the next election to tell the people of British Columbia what we would do in terms of principles to guide us on new labour legislation.

MR. LOENEN: It's about time.

MR. SIHOTA: We're proud of that, and we only wish — the member for Richmond wishes to heckle — that the provincial government had undertaken this process, because I will commend the minister for this. I have no hesitation in applauding the minister when he does something right, and I commend the minister for the process that has resulted in the Munroe recommendations coming forward in the legislation he spoke of in his opening comments. I will be talking about a few things during the course of that debate in terms of areas where we think you can make some improvements. I'm sure those comments will be taken in the spirit with which they are put forward to the minister.

Having said that, if only that process had taken place with respect to Bill 19, 1 think the issues which occupy a lot of my time and a lot of the minister's time and some of the issues that perplex both myself and the minister with respect to the IRC, the boycott and the credibility of the instruments of Bill 19.... A lot of those things which cause both of us a fair bit of worry need not be there.

From my experience in the meetings I've had.... Because I've kept the meetings in confidence, I don't want to talk about who I've met, but I think it's fair to say that we've met with most of the significant players on the scene already. Really, it's not as difficult a task as one would first imagine in terms of patching up the pitfalls in Bill 19 and patching up the differences between government, management and labour in this province.

[ Page 6895 ]

The discrepancy I see in what the minister had to say is in saying: "Yes, this government recognizes now that the process of Bill 19 was unacceptable, inadequate, flawed, confrontational — call it what you will." In my way of thinking, if there is one commitment that this ministry ought to be making as we go into this fiscal year, it is a commitment to deal with that legislation. I think that this government would get universal applause if it said it was going to do that, and sincerely went and did it, and started to repair the harm in this province that it caused by the introduction of Bill 19, which is unnecessarily confrontational. I believe, quite frankly, Mr. Chairman, that the Minister of Labour himself understands precisely what I'm saying, and I believe that he too would like to see some of these things remedied. It is in the hands of, perhaps, his cabinet to determine whether these things will ever occur.

I'm going to talk a little bit more about the IRC and Bill 19 and that component of the ministry during the course of my more detailed comments in this session of estimates. But I put that on the table, because the minister should know where we're coming from and what we see as the item which ought to be the number one priority within his ministry this year.

May I also tell the minister, having said that, what the other priorities are that the New Democrats feel are important in terms of labour matters in British Columbia. I do this for two purposes: one, for putting them on the record and to be positive about where we're coming from as a caucus and where I'm coming from as a critic; also I do it to kind of give the minister notice of where I'm going to be going in the estimates, so that both he and his staff are prepared when we get into these issues, so that the people know what we're going to be raising. I think that's only fair, because it lends itself to a thorough debate and it helps to expose those areas where we might be wrong or where the minister might be wrong.

[4:00]

Other areas of importance to us: employment standards in British Columbia. Both of us, I think — the minister and I — recognize that there's a huge segment of people in British Columbia who are non-unionized and have few protections, very few protections, and rely on the instrument of the employment standards legislation for the procurement of those advantages and protection which that legislation provides.

[Mr. R. Fraser in the chair.]

I was reading last night a very interesting paper on representational issues by Paul Weiler. It's a very interesting thought-piece — if the minister hasn't seen it, I'll make sure he gets a copy of it — which talks about the presence of legislation to cover many of those things which trade unions have fought for to include, through legislative reform as opposed to trade unionism, the implementation of basic minimum rights in society. Mr. Weiler looks at the experiences of the Reagan government and the Thatcher government in terms of how they deal with trade unionism and how they in some way supplant trade unionism with the introduction of strong workers' rights — if I can put it that way — legislation. It's an interesting piece of work.

It's flawed, I think, by one thing. It's flawed by the notion that even when you get to the use of legislation like employment standards, it's only, unfortunately, legislation of last recourse. Very few people use employment standards legislation, or have the need to use it, when they're working. They use it, of course, after they've had a negative experience in the workforce. So there will be a lot of discussion, I want to tell the minister, during the course of debate on the employment standards legislation.

There's going to be discussion, I want to tell the minister, on human rights, because I think this is where we part company. I think that the human rights situation and the legislation and the delivery of that legislation and the nature of the system that the province has right now are inadequate. Again, I would have preferred to have seen an announcement from the minister that there is consideration on the side of government to begin to deal with the human rights problem.

In question period today, my colleague from Vancouver East had a very interesting point with respect to a race-relations problem in Vancouver. I was glad he made it, quite frankly; in some way, I'd prefer that he would make it, rather than me from a visible minority. I think it was important that that point be made in the House, and if he wasn't going to make it, I would have been quite happy to make it. But the point here is that we have significant problems with respect to human rights in British Columbia. It's sad to see that the government is not moving to deal with that problem in an affirmative way. Part of the responsibility falls with the Minister of Culture (Hon. Mrs. Johnston), part of it with the Attorney-General (Hon. S.D. Smith), part of it with the Minister of Labour, and part of it in the Ministry of Municipal Affairs. Actually it's across the board, but to the extent that it falls within the purview of the Minister of Labour, we're going to be canvassing that. I feel strongly that there are tremendous gaps in protection and, more importantly, gaps in promotional things like race relations that the human rights commission should be doing yet is not doing.

Interjection.

MR. SIHOTA: Some of the comments that that colleague makes cause me some concern, too. I read with a tinge of sadness what the member for Burnaby-Edmonds (Mr. Mercier) had to say about multiculturalism. He doesn't understand the nexus which can exist between multiculturalism and patriotism. Bordering on bigotry is the way I would describe his comments.

MR. MERCIER: You or me?

MR. SIHOTA: If he wants to get into the debate in this House on that matter, I would be happy to do so.

[ Page 6896 ]

MR. CHAIRMAN: Pardon me, Mr. Member. We will avoid personal approaches when talking to the minister's estimates, please.

MR. SIHOTA: Thank you, Mr. Chairman. It was the member who started to heckle. It's the member who advocated his views; it's the member who can account for them.

Another area where we are going to part company, which I want to spend a fair bit of time on during the course of estimates, is farmworkers. I raised this in passing during a question period and a statement period that we had in the House a couple of Fridays ago. The minister can expect some questions from me on the absence of protection for farmworkers in British Columbia and the need for government, through legislative intervention, to provide these people with the most basic of rights that really....

MR. CHAIRMAN: Mr. Member, we don't discuss legislation when we are talking about the minister's estimates.

MR. SIHOTA: I understand that, Mr. Chairman. I am in a broad way — as the minister was laying down in a broad way where his ministry was coming from — letting him know where we are coming from on the agenda. I am not talking about legislation; I am talking about farmworkers and Workers' Compensation Board protection for them. That falls under the purview of this minister: the funding of appropriate programs for farmworkers in British Columbia. I don't think that's out of the scope of what is discussed here.

The point I want to start on is workers' compensation, and I listened with interest to what the minister had to say. I chuckled when he said that there is a backlog of 663 cases. I don't think the minister heard me. I was wondering if they were all in my riding, because most of us tend to get the feeling that the problems with the Workers' Compensation Board are far greater than what was suggested during the minister's comments. We will explore that sometime later on during the estimates.

Dealing with financial matters, last year the Workers' Compensation Board announced that it had accredited back to employers in this province some $99 million. I think the minister knows that at the time the move was harshly criticized, and appropriately so. I don't think that that quantum of money ought to have left the purview of the board.

I want to ask the minister whether this year there were further credits provided to employers through the Workers' Compensation Board, in the same vein as the $99 million the previous year.

HON. L. HANSON: I appreciate the member opposite giving me some indication of where the questions are going to come from, and that is probably helpful for good debate from both sides of the House.

The $99 million that the member refers to, which I believe is his question, was given as a result of an overage in a particular classification and was not rebated but credited so that the assessment had a credit on the account. Then as charges were added to it, it eventually balanced. As the member said, that is within the purview and mandate of the commissioners of the Workers' Compensation Board. There are none contemplated this year that we have knowledge of at this point.

I think the member would be aware that each year as the various categories' experiences are looked at, there are assessments of payroll reductions and increases as per the experience of whatever that particular segment of industry is being referred to. While there aren't — I believe this is the question — any cuts at this moment for that same sort of thing to happen this year, there have been at the start of the year different rates established for different classifications according to the experience.

I would point out to the member, and I am sure he would understand, that the legislation we have brought forward will change some of the ways that the policy is formed through the board of governors. The determination of that policy for a credit in the case of the assessment would be one the board of governors would deal with when they are in place. I guess the short answer to your question is that that isn't anticipated this year.

MR. SIHOTA: The $99 million came out of various categories, as the minister said; "various occupation categories" is the way they defined it last year, if my memory serves me correctly. I think that was in the 1987 annual report. Will the minister agree with me then that in the 1988 annual report there is a $14.8 million credit to employers through various categories as well?

HON. L. HANSON: I think my statement was that that is not anticipated this year.

MR. SIHOTA: I take it that the minister is confirming that in 1988, in the annual report filed this year — in 1989, but for the year 1988 — there was about a $14.8 million credit in about eight employer categories. I could be wrong in terms of the number of employer categories, but I don't think there is any dispute that there was $14.8 million.

I don't quite understand the policy of the ministry in that regard. I know that last year my colleague from North Island raised the matter that under section 67 of the act, surpluses had to be fed back into the trust funds that were established. That section, as the minister said at the time, deals with all surpluses, not a portion of surpluses, and I take it again that the argument will be the same this year: that we are dealing with a portion of the surplus. That being the case, I think it's really taking advantage of the wording of the legislation.

From a policy point of view, is the minister saying that the determination of the rebating or crediting of any further surpluses would be left to the new board to resolve as a matter of policy, assuming that the legislation goes through?

[ Page 6897 ]

HON. L. HANSON: It has certainly been my instruction to the acting chairman of the Workers' Compensation Board not to make any significant policy changes until we have the structure in place.

I think the member would agree with the philosophy behind the classification of the various industries. Those classifications are dealt with as individual ones. The assessment made at the start of the year is simply a very educated intelligent guess, if you will, about the amount of claims that are going to be experienced by that particular segment of industry. There are, from time to time, requirements to adjust that assessment rate.

[4:15]

1 look forward to the new administrative process when the board of governors will be in place. They will have a number of issues to deal with that relate to policy very early in their mandate. I expect that I am going to get a number of recommendations from that committee that would look at a lot of the aspects of the Workers' Compensation Act as it exists now.

It is difficult for me to comment on what might happen in the future, because the process is that we are going to have the representatives of that community of interest — the employers and the employees — sit in on that policy-making process to thereby get a consensus on how all of the parties of interest see that the process can be bettered for all of the people covered by it.

MR. SIHOTA: Just in case the minister thinks I am sending some very clever note to get something from a researcher down below, all I did was send down for throat lozenges.

I was looking at the fiscal 1988 financial highlights of the Workers' Compensation Board, and I noticed that — I don't know if the minister has them there for 1988 — the assessment income for 1988 was about 36 percent higher than, for 1987. What I was trying to determine when I was reading was whether or not the 1988 figure reflected the $99 million credit — if you can call it that — that was paid out. The '87 credit, sorry.

HON. L. HANSON: I think that's what you are referring to. The assessment in '87 was less because of the almost $100 million credit that was issued That same credit wasn't there in 1988; therefore the assessment income was that $100 million difference. I think that accounts for the majority other than some small increases in assessments for different rate classifications.

The employment levels in 1988 were much higher than they were the previous year because the economy of British Columbia and the number of people working has been higher than it has in the past Those two factors are the 36 percent difference that you are referring to.

MR. SIHOTA: I'll tell you what concerns me. if you factor in that $99 million for 1987, and if you actually look at it — I don't have the 1986 figure; it would be in the '87 report — the assessment income for 1986 was $421 million. For 1988, according to the numbers here, it was $441 million. It would seem to me that over that time period between '86 and '88, the actual increase in assessments has really been about 5 percent. First of all, would the minister agree with that reasoning? The minister nods, yes.

If you take a look at the information with respect to claims, in 1988 the claims rose to $369 million. In 1986, those claims stood at $290 million. Over that two-year time-period, the actual claims increased at a rate of 27 percent, which of course is a faster rate of increase than the assessments. That's the nub of my point in terms of my concern.

Again, if on one hand you're having assessment income going up about 4 percent and the cost of claims going up 27 percent, they are going almost — I wouldn't say opposite, but they aren't keeping up with one another. That's what causes me a lot of concern in the sense that you're rebating or crediting back some money. You're not keeping up with the increases through assessment. It seems to me that in the long run, you may end up inflicting some type of economic harm on yourself by not keeping some greater level of parallel increases between the two items. It would be interesting to hear what the minister has to say about that.

HON. L. HANSON: That's an interesting comment. I suppose that the bottom line of an operation such as the Workers' Compensation Board is the fact that they do an actuarial study of the liability that the Workers' Compensation Board faces from claims and so on. At the end of the year, they measure that against the assets or surplus that is reserved for that coverage to determine if the Worker's Compensation Board do have the financial ability to look after what they see as the claims potentials that are developed over the years.

I guess about five or six years ago the Workers' Compensation Board was determined to have an actuarial deficit in that liability of some $500 million. Through changes in the assessment and through changes in the benefits that they've received from the investment income, that liability is determined by an independent outside audit and is fully funded in the reserves that the Workers' Compensation Board have. As the statement and the member would certainly agree, the unappropriated surplus as of December 31 was still $60 million. That was a slight decline of $18 million or $20 million from the previous years. I suppose, in that sense, it's gone down a little bit. It's still an unappropriated surplus that was not needed to look after the liabilities that the WCB had or as determined by that actuarial auditing of the WCB's liabilities. I think that the WCB, in the 1988 year, in the amount of assessments and so on, and its income — and the bottom line showing that there still is an unappropriated surplus — has been well managed and well administered.

I suppose the member could argue with the method of determining that outstanding liability, but far be it from me to argue with that method, because

[ Page 6898 ]

there are professional people who make that determination.

MR. SIHOTA: As the minister correctly notes, that unappropriated surplus actually fell. If I can use the BS fund analogy as perhaps another way of looking at it, you as government have set up a BS fund to try to help you through rainy days. It seems to me that you could have done the same through the Workers' Compensation Board. Instead of crediting back to employers $99 million two years ago and $14.8 million in the 1988 fiscal year, you could have been putting that aside to deal with increased costs of claims or building up your reserves for rainy-day years, if I can put it that way, when you're going to have some type of unanticipated difficulty. You could have used that money to eliminate some of the capping that you did some years ago on awards made to workers. All sorts of other options existed.

I don't understand — and if I'm wrong on this, I'd like to hear where — why the Workers' Compensation Board did not choose to take that type of approach here and instead chose to credit the money back to employers. Or are we just talking about apples and oranges here?

HON. L. HANSON: Well, that's an interesting theory. I suppose somewhere inherent in that theory must be an assumption or a suggestion that there was something not done in the WCB as a result of shortage of funds, because, obviously, the $99 million credit that was given.... The member is suggesting it was used for more benefits, or whatever. The policy of the WCB, I would reassure the member opposite, was lived up to 100 percent. There was no indication of a shortage of funding in the year.

Also, the member would have some difficulty in arguing with the philosophy that the various segments of WCB, or industry, as they are classified, that stand on their own two feet.... And there are different rates of payroll assessment for different classes of industry, simply because there is more danger in certain things than there are in others. With that philosophy in mind, if one particular segment of industry does have an assessed rate that proves to be in excess of the actual experience, it seems to me that it's only a fair process that there be some sort of credit for that.

The Workers' Compensation assessment establishment, at the start of each year, is done on the basis of what is expected to happen during that year. It's done on the basis of the amounts of settlements that may come forward in that year that happened in prior times. I think that in an organization that had some $700 million in income, to come out with a change in its financial position of less than $18 million is not a bad estimate for the start of the year. I think that's made before the actual experience is felt.

So I think the WCB does an excellent job of setting those rates. Those adjustments that come up from time to time to the various industry rates are the proper way to be fair in industry paying the cost of the claims that are attributable to its operations.

MR. CLARK: I want to be absolutely clear about this. Are you saying that the only people who received rebates on the WCB were people who had improvements in their safety record? There was no across-the-board forgiveness or rebate or reduction in their rates, except for those who enhanced their standing as an industry, and that's where the rebate went?

HON. L. HANSON: I would be wrong to stand here and say to the member that there wasn't some individual operation within a class who had a record that was better than the previous year, but it's on a class basis, and the class encompasses a number of different operations. Generally speaking, that classification would have had an improvement in their safety record, but not necessarily measuring each individual operation.

MR. CLARK: You're saying that no class of employers received a reduction unless that class claim rating went down. Is that what you're saying?

[4:30]

HON. L. HANSON: Maybe we're talking about the same thing; I'm not sure. The classification of industry and the collection of the payroll amount that was assessed against it was in excess of the actual experience, so there was a surplus — if you will — within that classification as a result of that assessment.

MR. CLARK: Well, that's a little different. You're saying that the class therefore exceeded the expectations of the actuarial consultants who rated that class. It doesn't mean that they've improved their safety record; it means that they did better than was anticipated by the consultants. Is that correct?

HON. L. HANSON: I think, generally speaking, that's correct. The overall class record was better than anticipated. As an example, take the forest industry — one we all know about. If it was anticipated that there would be ABC dollars of claims, and an assessment on payroll to raise that sort of money proved that it was higher than the actual experience, then there would be a surplus created. That particular classification would get the benefit of that in the rebate procedure.

I might point out to the member, though, that I don't think that the $99 million, which is the subject of this discussion, was necessarily created over a one-year period. It was a surplus that had been gathered in a particular classification for a period of time.

MR. CLARK: So how many classifications saw increases in their costs as a result of not meeting actuarial estimates?

HON. L. HANSON: I'd be pleased to get that information for the member. I don't have it at my fingertips — or the individual classification.

[ Page 6899 ]

Interjection.

HON. L. HANSON: I can't actually answer that but I would be very surprised if there weren't some increases.

MR. CLARK: I appreciate that the minister is going to get that information, but I just want to know whether there were any classifications of industry in British Columbia that saw their WCB premiums increase in the last year because the injuries or the claims exceeded the actuarial estimates. Were there any?

HON. L. HANSON: I'm pleased to provide that information. I can't say to the individual here now that that is exactly the case, but I'd be really surprised if it wasn't, and if there weren't some classifications that didn't have an increase. As I said, the assessment that starts at the first of the year is a very educated, scientific process that they go through to come to that, but it's still an estimate. When that estimate falls short, there is the requirement for change in rate.

MRS. BOONE: Mr. Minister, I would like to go on to something slightly different. While claims are being worked out, and if there's some question on the claims, and employees have medical expenses, those medical expenses are paid by both B.C. Medical Services Plan and by private insurance companies at times. Once the claim is settled and it is acknowledged and the claimant has had their claim recognized, it is my understanding that private insurance companies are reimbursed for the moneys they paid out on behalf of that person while the claim was being settled.

But it is also my understanding that B.C. Medical is never reimbursed for the costs that are paid out, for example, for physicians or what have you. My question to the minister is: is it true that private insurance companies are repaid moneys paid on behalf of people while their claims are being worked out, and B.C. Medical is not paid?

HON. L. HANSON: If I understand the question correctly, the private insurance companies — if it's a case of disability insurance or something that kicks in during this process that you're talking about — are reimbursed. But the health care system is reimbursed also. As a matter of fact, it's reimbursed by the WCB at a rate that has a larger figure than the actual Ministry of Health pays, because it includes administration costs. I'm not sure of the exact figure, but it's higher than the per them rate paid by the Ministry of Health to a hospital or whatever it is. It's reimbursed to the ministry at that higher rate.

So yes to your first question: private insurers are; and no to your second question: they are reimbursed. It's not true that they do not get reimbursement — the Ministry of Health.

MRS. BOONE: Are they reimbursed then for not just the hospital care but for physician's care as well, so they are entirely reimbursed — B.C. Medical — for all procedures, for all care that is given to an employee during that time?

HON. L. HANSON: The member may not be aware that the doctors generally bill directly to the Workers' Compensation Board. In most cases it never even enters the health care system. If it should enter the health care system, then the health care system is reimbursed where the WCB accepts liability.

MRS. BOONE: Would the minister be able to provide me — not today, but at some point or other — with the dollars that have been reimbursed to B.C. Medical from WCB?

MR. CLARK: I missed some of the earlier discussion, and I don't want to go over some of the ground my colleague the member for Esquimalt-Port Renfrew (Mr. Sihota) has, but the numbers intrigue me, given the minister's answers to my questions. If I understand it, the cost of claims went up this year 27 percent. The premiums went up 4.9 percent. It doesn't seem possible to me that those increased premiums could have not only covered the 27 percent increase in claims but covered it to such an extent that reductions to companies were warranted or justified. In other words, a 27 percent increase in cost of claims and only a 4.9 percent increase cost of assessments to pay for the claims. That 4.9 percent increased cost of assessments not only paid for the 27 percent increase in cost of claims but also paid for a rebate of $14.8 million to certain classifications of employers. Intuitively, those numbers don't make sense to me. I wonder if the minister could explain what appears to be a variance.

HON. L. HANSON: I think that the member, who is also the finance critic.... Maybe I'm sparring with an accountant here. I'm not sure what the qualifications are.

In any case, I think the member would recognize that investment income is up about $30 million. The WCB is a very well-funded organization. It has done well on its investments; they've made some very astute investments. I don't think the member would argue with the statement — I'm sure he has it in front of him — that shows an $18 million decline in the unappropriated surplus after the 1988 year operation. While I wouldn't want to get into a long technical argument — I'd bring an accountant here — I assume that that audited statement is an accurate account of the operations of the WCB. My layman's interpretation is that the operation had a small loss of $18,000 or something along those lines in terms of income and payments.

MR. CLARK: I assure the minister that in these matters I am a layman as well.

I understand that the minister's argument is that investment income is $30 million, plus you dipped

[ Page 6900 ]

into your surplus. That doesn't jibe with what you said, which is that certain companies' claim ratings were down. I don't quite understand. It seems to me you've paid back money to certain classifications of employers out of your accumulated surplus and investment income. It still doesn't quite fit that the cost of claims would be up 27 percent when you're arguing that claims must have been down for certain industries to warrant a reduction.

Let me put it another way. Your actuarial statement would take into account investment and the assessments. On that basis, they estimated a 4.9 percent increase. It seems to me that if they estimated a 4.9 percent increase, they must have either assumed there would be greater than a 27 percent cost of claims — that must have been in their assumption — or you're playing a few games and essentially giving a bit of a subsidy or a break to certain classifications out of your surplus revenue; not out of the assessment revenue, but out of accumulated surplus over time. They don't quite match.

HON. L. HANSON: The operations of the WCB are an ongoing thing. The credit of $14.8 million after the year-end is complete.... I can see how the member would make that interpretation, but that $14.8 million was based on particular classifications of industry that did have a good previous experience. The WCB auditors, the actuarial people, made the determination that, as an example, if the rate was $1.80 per $100 of payroll, they only needed $1.60. Therefore there was a reduction from the previous year's experience.

Again I go back — and I'm not an accountant — to the bottom line on the statement that.... I think the member would have some difficulty in arguing that the Workers' Compensation Board did not collect from the employers in the payroll program the amount of money it needed to satisfy the claims it experienced in that year, with a very slight difference in the real amount, which it could tell after the year's business was complete, as opposed to the amount it estimated at the start of the year as being correct.

MR. CLARK: But to use the minister's own words, the bottom line is that the cost of claims was up 27 percent, and premiums were only increased 4.9 percent. It seems to me that giving a rebate to certain classifications doesn't seem warranted by the net result, when the net result is a 27 percent increase in the cost of claims. That's pretty dramatic: a 27 percent increase in the cost of claims last year. I would assume that a lot of that has to do with the fact that the economy has picked up, and that means there were more claims; but the reality is that something doesn't quite jibe.

The minister said: "Well, nothing has happened at the WCB. Nothing has gone for want because of lack of money." I would dispute that, by the way.

I think almost every MLA — I certainly speak for Vancouver East — gets dozens of WCB complaints. I know the member for Vancouver South must get complaints about the WCB in his constituency office.

Given that, with respect to dealing with that very important agency, it seems to me that money could be used to improve services to injured workers and to cut down the waiting time for appeals on any variety of matters. In spite of that, I can't escape the conclusion that what you've done is to take money out of the surplus and give it, essentially as a tax break, to certain classifications of industry.

[4:45]

One option, by the way, would have been not to do that, but to increase it dramatically on those who have found the reverse. In other words, those who have done well in their injury rate would see no increase, and those who have done worse would see an increase. It doesn't matter how you cut it. It's a $14.8 million tax break to certain classifications of industry that doesn't seem to be warranted, based on the 27 percent increase in the cost of claims, and it is really taken out of the WCB surplus.

I appreciate the logic that the minister is trying to convince us with, and I understand the logic that those who have more injuries should pay more. But it seems to me that at the current time, the money could have been better used for other things. In fact, there is clearly a dramatic increase in the cost of claims and no corresponding increase in premiums; therefore the money had to come out of the surplus. Eventually that means that money is going to continue to come out of the surplus. If costs of claims continue unabated — and presumably they will — there will have to be some adjustment down the road, to use the bottom line as the bottom line. You can't continue to take out of surplus to pay back to employers. I think it would have been more prudent to keep the money, penalize those whose injuries have gone up, and use that money to improve services to injured workers than to give rebates to certain classifications of industry.

HON. L. HANSON: That's certainly an interesting argument that the member puts forward. I'm not sure if the member is saying that we should have kept that $14.8 million in there and somehow distributed it among the claimants. In the scope of the volume of dollars the WCB goes through, I think their assessment of what the rate should be at the year-end was pretty darned accurate.

I hope the member is not suggesting that any worker got less in the settlement of his claim last year because the $14.8 million....

Interjection.

HON. L. HANSON: I'd point out to the member that there is about a $140 million reserve for stabilization of rates, plus that $60 million there, so I have some difficulty in accepting your argument.

MS. MARZARI: I would like to address for a moment the problem of domestic workers. It is a problem that domestic workers have. These are a class of workers who are almost exclusively women and often go under the name of "nanny, " meaning

[ Page 6901 ]

that they basically raise children and tend other people's houses in our communities.

They have largely been ignored by the legislation that we presently have in place, and it is important to note that there are a goodly number of them in B.C. It's not a number that we can readily identify or tabulate, but the Canadian Advisory Council on the Status of Women suggested that in 1983 there were 35,000 women in Canada who came to Canada under temporary work permits, and more than half of these were destined for some kind of service occupation. That would make them live-in domestics in private homes.

Based on '81 census data, we can extrapolate that 48,000 women were employed as domestic workers, and that would suggest we take one-tenth of that number for B.C. That very often is the case when we are extrapolating other social service expenditures, costs, population and demography of the country; we should be looking at one-tenth of that number. That would suggest that we have as many as about 5,000 domestic workers — overseas and local women — working in B.C. as domestics and nannies.

What is interesting is that their jobs are so invisible and that very often they suffer serious harassment, a serious, chronic shortage of dollars and poor working conditions. Poor working conditions are hard to imagine in the lovely homes in my own riding, but it is true. The complaints have piled up in an invisible working population. These complaints, although they are there and I have heard them, are few and far between because the women themselves are very reluctant to take complaints against their employers for fear of losing their status in this country as landed residents or for fear of losing their jobs for good, because they are largely untrained.

They are excluded from protection under the employment standards legislation largely, although they do have some minimum rights. In British Columbia I am told that provincial legislation distinguishes between live-in and live-out domestic workers. Live-out domestic workers are entitled, I gather, to the protections of all the regulated areas in provincial employment centres legislation. Domestics who live in are defined specifically as persons who reside in private residences, or they are persons employed by an agency engaged in providing homemaking services on a 24-hour basis.

These workers are excluded from the hours of work and overtime pay provisions and are covered by a special minimum wage which happens to be lower than the general minimum wage. A nanny who is hired exclusively to care for children and who has no housekeeping or cooking duties is classified as a baby-sitter, and she is completely excluded from all provincial government labour standards regulations.

It's an appalling thought. As a result, the minimum wage for foreign live-in domestics is set at about $635 to $735 per month, and the deduction for board and lodging comes to about $175 to $200 a month that they pay back.

Because the majority of domestics are women — virtually all of them — and because these women are very often immigrants who can be classified as members of a visible minority, it's very important that they receive some protection. Are you willing to move protective measures through the cabinet so that the regulations to the Employment Standards Act can be amended to include live-in domestics and homemakers; in other words, to cover the nannies that many people rely on to help raise their children? Are we going to give them the protection that they deserve?

Second question. Are you going to ensure that they receive some kind of a minimum wage that accurately reflects the work they do? What steps do you want to take, or will you be taking, to ensure that the standards pertaining to overtime and maximum hours of work should be applied to domestic workers?

Third question. In 1983 the Committee to Advance the Rights of Domestic Workers presented a brief to the B.C. Human Rights Commission. They recommended the coverage of domestic workers by all provisions of the provincial minimum wage act, including compensation for overtime. In situations where room and board are provided as partial remuneration for labour performed, the amount charged for room and board should be equal to no more than one-third of the total wage. Currently there aren't any regulations written down regarding the costs of room and board. Consequently I suggest that this is another area you should be addressing and regulating.

Lastly, what do your staff intend to do to familiarize themselves with these conditions? I should think to this point it has been invisible.

The whole issue has become very visible in the last little while because of day care policy in this country. The federal government has just recently decided that it will forgo building new non-profit spaces in communities. It basically has decided that the money that used to be spent on day care by the federal government will be spent on nannies, by allowing tax deductions to upper-middle- and upper-class families to provide for child care, a deduction which amounts to $4,000 per child under the age of 6 and $2,000 per child over the age of 6.

It means that there is an incentive for middle-class parents not to seek day care for their children in licensed spaces in the community, because there aren't any. This legislation says: "Go hire a nanny." If you have two or three children, even better. Hire a nanny for about $8,000 to $9,000 a year — if you can get away with it — and then you can recoup the total on a tax deduction for your nanny. Well, you can recoup 50 percent of the total if you are in the 50 percent tax bracket.

This is really, in my opinion, a giveaway to middle- and upper-class families. It's cheating the children, but for the purposes of this discussion it's cheating the women who will be expected to come in and work for these families for anywhere between $8,000 to $10,000 a year, with no protection from us, the government, with very few regulations, and with no safe place to complain.

[ Page 6902 ]

I think it is going to be a growing problem for our community. As I said, this country and this province have forgone the opportunity to do child care in more constructive, positive, licensed, safe ways. We are creating a new underclass of female servitude, a new class of immigrant women — from the Philippines, very often — who are coming to Canada looking for a domestic-nanny job, getting it, moving to another job when it doesn't work out, and basically — sometimes illegally — being here with no recourse and nowhere to go when things turn rough or when things are bad for them.

I would ask the minister to address this question. I don't know if it has been addressed before in this House. I think it's going to become an urgent problem. It's just a question of when it's going to surface and in what form. I would like to surface it right here, and I would like to hear some comment from the minister and get some understanding of what we can do on this with our employment standards legislation, with our minimum wage legislation. Most important, I would like the minister to commit himself to actually putting some staff time into researching the nature of the dilemma and to coming back with a quick response within the next three or four months to solving some of these problems in the short term, and then looking forward to some longterm solutions that will make these women's lives a bit easier.

HON. L. HANSON: I'm sure the member didn't mean, when she referred to homemakers.... There is a service provided here in British Columbia by people who go into people's houses to provide homemaker service, and I know that isn't what you were referring to.

MS. MARZARI: I meant domestic.

HON. L. HANSON: I just wanted to make that absolutely clear.

It is a very difficult problem, and I do recognize that. One of the largest difficulties is the policing and enforcing of it. It's so hard. I think the member would admit that in many cases the nanny who lives within a household — I guess in the proper circumstances — really becomes part of the family and is accepted as such. But there are exceptions; I will acknowledge that.

[5:00]

We are always reviewing that. There is a minimum wage: that's eight hours times the rate of the minimum wage that is there. There isn't any determination of what is fair and reasonable for room and board. There are a number of different statutes or regulations in the various jurisdictions across Canada. Alberta and Saskatchewan are different than Manitoba, which is different than Ontario.

Some very recent issues have been brought to my attention, and it's appropriate that the member has raised this here today. Most recently I asked my director of employment standards to meet with some of the organizations which have in-depth knowledge of the issue, and I hope that within a reasonable length of time I'll get a report from the director and that decisions will be made as a result of that report. I can only say to the member that we have commissioned the director of employment standards to look into this with some of the organizations that are involved. I have to say, quite frankly, that until recently very few complaints had come forward, but in the last short while there's been a number, and for that reason we have done this.

MS. MARZARI: I'll take the minister's word that there's a report coming back. I would like to see a copy when it does come back, and I would like to know if the minister will make that available.

It's one of those issues that simmers on the back burner. It's one of those situations which deals with women's labour. It doesn't explode in mammoth demonstrations out on the front steps; it doesn't occur in the forests of the province, where a great deal of attention is paid to highly organized workforces. It's a quiet issue, one that therefore deserves even more of our attention, and it's an issue that has to do with women who don't earn a great deal and are, I must say from my own experience with the women who have come to me over the last few years, quite frightened of authority. So it is a quiet issue. It's not politically explosive, although it could be if the day care business in this country is left to the nanny and that nanny's job is not properly regulated.

Would the minister contract with me that I will be able to take a look at this paper and suggest some way to work together towards the necessary regulations, possibly by taking this to a committee so that we can properly receive requests from the public, so that many of these workers can come and speak with us? Would the minister be prepared to go that far?

[Mr. Pelton in the chair.]

HON. L. HANSON: The report I have asked my director of employment standards to issue is an internal report, and I'm not going to stand here and make a promise to the member that I'm going to table that report to her. I really have difficulty in thinking there might be any reason why I wouldn't, but I'm not going to. Certainly I'll be pleased to discuss the report with her later. I would encourage the member to make sure that her views are given to the director of employment standards so that he might benefit from whatever knowledge she has of specific difficult situations that he could use as part of his investigation.

I would imagine that the report might take a couple of months to develop — maybe a little longer — but certainly it will be done with haste. I will have no difficulty in discussing it with the member once I am given that report. At this point I can't make a promise to table it as a public document.

MR. ROSE: There was a request to have the subject matter referred to a committee, although that wasn't quite answered. I just want to be helpful and point

[ Page 6903 ]

out to the minister rule 60A: "At any time after the estimates have been referred to the Committee of Supply, the government House Leader may refer votes within the estimates to a select standing committee upon motion without notice. Such motion shall be decided without amendment or debate." So it's clearly possible, and it can be done at any time on the advice of the minister. I'm sure the House Leader wouldn't want to act independently of the minister in this matter. But it's certainly possible, and the rules give us ample opportunity for this type of investigation.

HON. L. HANSON: While I certainly appreciate the member's comments, I'm not sure I ever made any suggestion that it was not possible. Certainly it is. But in fairness, as I have commissioned an internal report from my director of employment standards, I think I should have the benefit of that report before I make a decision on it.

MS. MARZARI: I want to thank my colleague for reminding us of the House rules and the possibility of very easily taking this to a committee. I know the minister is very sensitive about reports that he's working on, because in the past, these reports have been superseded by other reports being worked on by the Premier. So I can see that you'd want to receive this report in the sanctity of your own office, Mr. Minister.

I just want to repeat: taking this particular small problem to a committee would be a good test of the committee system. It's not a huge, volatile issue in our province. It affects 5,000 women possibly, many of whom don't vote for either side of this House, and there's no benefit to be gained politically for either of us. But to take this issue to a committee would go a very long way towards working together — which this government says it wants to do — and towards open government and the ability to call some witnesses and find out what the facts are and perhaps come to a quick and expedient solution to a problem that seems to have some pretty easy solutions, if we put our minds to it. Let me leave that with you. Would the minister, once again, be prepared to send this to a committee?

HON. L. HANSON: I certainly thank the member for her comments. It is most appropriate. It's within the last few days that we have done this, actually. But I have to say to the member that as minister responsible for that particular area, it's something that I have to consider when I get that report. I will certainly consider the member's suggestion.

MR. SIHOTA: I was out attending to my throat, so I missed the conclusion of the debate between the minister and my friend from Vancouver East. But in talking to him briefly, I understand now that the bottom line is that the money that came out of the surplus made up for the discrepancy between the increase in assessments and the increase in the cost of claims. I don't think that's particularly appropriate. I think that the government.... Hopefully a new board will pay attention to addressing what may in the long run prove to be an anomaly, in terms of funding. Having said that, he's canvassed it, and I don't really see the need for me to go beyond what he had to say.

To continue then with other matters in respect to the Workers' Compensation Board, I noticed when I was reading the annual report of the WCB that the board said on page 6, talking about penalties in the occupational health and safety division: "Penalties assessed by the division also increased to 517 from 332 in 1987." That struck me as rather peculiar, because when I was reading the 1987 report, it said that the penalties assessed by the division increased to 568 from 428 in 1986. In other words, there's an anomaly here. The penalties assessed by the division obviously increased one year, but not the other year. In fact, if you take a look at the 1987 report compared to the 1988 report, one would be led to believe that the penalties actually declined from 568 in 1987 to 517 in 1988. Or alternatively, the figure provided in the 1987 report was inaccurate — it should really have been 332 instead of 568. That would mean that there was quite an increase in penalties this year for occupational health and safety. Both reports are on page 6 in the 1987 and 1988 reports. I don't know if the minister's officials have had a chance to take a look at that, but it struck me as rather peculiar, and I don't know if there's an explanation for that anomaly.

HON. L. HANSON: That's a very astute observation, Mr. Member. That has never been pointed out to me. I haven't compared 1987 against 1988. The knowledge that I was given through the statement process is that there was a considerable increase. There was an increase in inspections and in compliance orders, and there was also an increase in the number of assessments. But I'll certainly look at that 1987 report and see where that difficulty comes. It may be a printing error. I wasn't aware of it. But I thank the member for pointing it out to me.

MR. SIHOTA: I just want somebody at the Workers' Compensation Board to know that someone actually reads all these things. Yes, if there's an explanation, I'd like to hear it at some time. It is an important area; I think both of us agree on that point. I'd just like to know whether we've made some progress or not. It's obvious from the information provided the minister that there was progress made. So probably the 1987 report is inaccurate. I'll await the determination of that.

Within the confines of the Workers' Compensation Board, I want to raise another matter now with the minister, and that is the matter of regulations. The minister is aware that we've had this rather peculiar process over the years in terms of drafting new industrial safety regulations. It's gone from a sort of joint process to the hands of the committee. I don't remember exactly what was happening in what particular year. I have notes somewhere in my office that will remind me of it, and if need be, I can go down there and get them. The question I really want to ask

[ Page 6904 ]

the minister is: given the Munroe recommendations that the government has brought forward already, would he not consider it more prudent that these regulations, in light of Bill 27, be developed by the new board as opposed to internally, as they are now?

The minister knows that there is quite a bit of concern — both in management and in labour, from the input I got when I was going around the province - that these regulations were being drafted. People aren't convinced that it's going to be the consultative approach that they would like to see, Given the spirit of the legislation that's come forward and what the government is trying to do — and given that, I would suggest that what they've done in that regard is commendable — I am just wondering if the minister would agree with me that the drafting of those regulations really should be put aside until such time as the new board of governors has a chance to deal with them, to allow the new board, through that consultative process, to deal with them, as opposed to the process we have right now. Is he prepared to allow the thing to be shelved?

HON. L. HANSON: That's an interesting comment, and I recognize the member's issue; it has been raised with me a number of times.

The WCB commissioners and staff members have spent a lot of time developing the regulations to this point. It would seem to be a shame to abandon that completely. But I have, in fact, had a communication from the acting chairman of the WCB, and he is suggesting that the advisory committee that we have in place is still agreeable to meeting and giving us its opinion on certain things.

[5:15]

We are going to go to that advisory committee to make a recommendation on the development of the regulations. It is the recommendation of the acting chairman of the WCB that he should continue to hear the public's input to provide the second draft of that legislation, but he has asked me to consult with the advisory committee to see if they feel it is an appropriate approach to the development of the regulations.

If the advisory committee's advice should be that it's completely held in abeyance until there is a board of governors in place, that would probably be what was adopted. Concern about the development of those regulations has been expressed to me. There has been a lot of time and effort spent on developing them. It doesn't seem appropriate that it be abandoned completely without some investigation as to the opinion of the advisory committee and their opinion of the appropriateness of the method being suggested.

I don't think there's any question that before there's any adoption of the regs in a final manner, the board of governors should play a part. While there may be a continuation of the development of those regs, we certainly would anticipate that the new policy-forming body would have an opportunity to review those regs as well as provide their recommendations and maybe direction as to how it should be handled.

MR. SIHOTA: The minimum assurance should be that no regulations should be in place until those structural changes at the board have taken place. They may want to do some incidental work between now and then. I would expect, depending on when the government calls the legislation — it's a fairly speedy process with the legislation — you can get on with the job of setting up the process. But I would take the view that no regulations ought to be proclaimed — if I can use that word — until the new structural changes are complete and the new board of governors have taken their seats.

It's my belief and my recollection — I could be wrong on this, because I don't have the report here in front of me — that the Munroe report actually suggested that to be the case. It may have suggested — I'm functioning from memory here as well — that the whole process be put on hold until the legislation and the new structure of the board are in place and proclaimed respectively. At that time, the board of governors of the Workers' Compensation Board would set up a new regulatory advisory committee to deal with the task of developing new regulations.

I take it from what the minister is saying that it is being reviewed. I also assume from what he is saying that no new regulations will be in place, proclaimed or enacted until such time as the new board of governors is in place, that they would still be the ultimate authority to give it their blessing. Am I correct in that understanding of what the minister had to say?

HON. L. HANSON: I suppose that the member would agree that if there were an emergency situation where a regulation was needed to handle an issue of very high and immediate priority, a regulation might have to be developed. But I can certainly give the member opposite the assurance that no major change in regulations will happen until the board of governors is in place. How quickly that happens.... I would suggest that maybe the member on the opposite side has some influence on when the board of governors can be put in place. In any case, I'm pleased to give the assurance that there will be no major regulation changes, other than those of an emergency nature. I think that's what the member was looking for.

MR. SIHOTA: Thank you, Mr. Minister. If you want my views on who should be on the board of governors, and if I'm to be one of the players who can tell you who ought to be the five, five and two, I'd be very happy to give you names. I know other ministers have asked me, particularly the Attorney-General (Hon. S.D. Smith), for my suggestions on various appointments, and I'll be more than happy to comply. In fact, maybe on my own initiative, I'll give you some names in confidence.

I was reading the annual report for 1988, and another item — it's quite an easy item to pick out —

[ Page 6905 ]

that I wanted to ask some questions on was the percentage decrease in research grants from 1987 to 1988, which was, I believe, around 14.5 percent. That caused me some concern, because I was surprised that the Workers' Compensation Board would seek to decrease the research grants. In particular, the grants are down in the area of health and safety regulations. More specifically, the grant money to UBC for health care and epidemiology was reduced from $273,000 to about $150,000. The UBC occupational disease research unit was cut from $276,000 to $192,000. The UBC health care and epidemiology facility, as I understand it, is well known for its research and deliberation on many of these matters. I'm just wondering why that reduction was provided for by the Workers' Compensation Board?

HON. L. HANSON: The member is quite correct. It's pretty obvious and easy to see that there has been a decrease in the funds appropriated for research. I have some difficulty in suggesting that the funding in 1987 was the appropriate amount or that the funding in 1988 was the appropriate amount or that it should not be doubled or whatever. I think that determination is best made in the area of the responsibility of the WCB commissioners.

I have no knowledge of any indication that they wished to do research and did not have the funding to be able to do that research. When the board of governors are in place, I hope they — and I would so direct — would pay serious attention to the role of the WCB in research by providing the appropriate grants. The determination of what that appropriate level is would best lie with the commissioners that are in place and certainly with the board of governors when they are given that authority.

There has been a fair amount of funding in 1988 Again, I acknowledge that it's less than it was in 19871 have some difficulty in making a measurement that 1987 was the appropriate amount. I suppose there was more spent in 1985. 1 think the board is the right place for the determination of what research should be done and so on. Research should be done for the reason that information is needed on some particular issue, and the funding should be provided for the research.

I can't comment. I think the responsibility lies with the board and will lie with the board of governors. I as minister will make them very aware of their responsibilities in continuing with appropriate amounts of money for research purposes.

[Mr. Rabbitt in the chair.]

MR. SIHOTA: I don't know if I mumbled something that the minister misinterpreted or what. I'm not suggesting that 1987 was adequate; I'm not suggesting 1988 was adequate. I don't know what the amount was in 1985. Like the minister, I was busy in municipal politics in those days, looking after the municipality of Esquimalt much as he was looking after the city of Vernon. I'm sure other things were occupying our minds at the time.

I'm not intending to get into some great rant about more money. That's always easy to ask for, and I'm sure that everybody would agree that in this important area, as well as a lot of other important areas, there's a need for more money. It's surprising that there would be a reduction, overall, in a critical area, particularly when the minister lets it be known that he thinks it's an important area. I can accept that as well.

My question really dealt with: why that one facility? I wonder if the minister's got any information as to why the funding for epidemiology and health care at UBC was cut to the extent that it was.

HON. L. HANSON: I could investigate and bring some information to the member. Again, it's difficult to comment on those specifics. The WCB do determine where those things should be directed, and I would certainly hope that they would spend some time considering what information they need and appropriate a proper amount of money. But I will do some research on the question and report to the member.

MR. SIHOTA: I appreciate that from the minister, so I won't pursue the issue until the minister comes back with that information, as well as the information on the occupational disease research unit at UBC, which also received a significant decline in funding. If his officials can make note of that, I'd appreciate it. I know they will work busily over the long weekend and will be back here briskly on Tuesday morning to tell us the reason that transpired. If not, I guess I will have to ask again.

As I work my way through the annual reports, things jump out and make me wonder. I notice that the 1987 report I was reading — I don't know if anything turns on this or not, but I think it's worthy of a question, in any event — was signed by the WCB commissioners. The 1988 report was not; at least if they did, I can't see where. If the minister and his assistants over there can show me that, it would certainly put an end to my query. Why was that?

[5:30]

HON. L. HANSON: Again, the member opposite is very astute in his observations or comparison of the two reports. The report for 1988 that I have in front of me.... I guess when we resume this debate next week, I'd better have the 1987 report here so that I can have the benefit of the member's knowledge. I think the member would admit, though, that there is a transmittal letter which in effect endorses the report, on behalf of the board, by the acting chairman. Even though he may be the acting chairman, he is in charge of the WCB commissioners as such, and that transmittal letter is there.

Why there was a change in format I can't honestly answer. If it is of major significance, I certainly will find out the thinking that changed the endorsation by the commissioners.

[ Page 6906 ]

MR. SIHOTA: The transmittal letter is actually there for both reports, but the signatures of the commissioners are not. I'd like to know why. I hate to give people work over the long weekend, but if someone could ascertain a reason for that.... One of the thoughts that comes to mind is that when the commissioners did not fully agree with something.... I don't know if they did or didn't, but it just struck me as noteworthy that it hadn't been executed by their signature. I'm just asking the question for the record, and the minister says I'm astute to notice that.

I should tell the minister it's kind of peculiar when you're on this side of the House: when you've been used to doing a set of estimates, as I have, with the Attorney-General's department, you probably gloss over a lot of things. But when you're doing one for the first time, you tend to look at it fairly carefully, and that's really the only reason I caught it. I just wanted to make sure I didn't screw up when asking questions in here. Usually I can handle it if I do it in justice, but I don't have the experience yet to be able to say that I can handle it if I do it in Labour, so I just wanted to make sure that in my first go-around on these estimates, I was careful in my preparation.

Later in the estimates I will be raising other matters as they relate to the Workers' Compensation Board and individual situations. When I raise individual situations, I want the minister to know that I'm not really expecting any lengthy answers from the minister with respect to individual cases. I want to pick out cases that come to my attention over and over again, areas where I think there is a need for greater work, where there seems to be a flaw in the reasoning — not, of a particular case in terms of appeal, but just a basic policy that seems to govern with a view to having those reviewed as well. Later I will be doing that and returning to the Workers' Compensation Board.

I'm not going to leave it in its entirety now. I want to ask the minister a question in another area. Mr. Nielsen was chairperson of that board until relatively recently, when he left. Could the minister tell me whether there were any severance arrangements made with Mr. Nielsen when he left the board?

HON. L. HANSON: Mr. Nielsen was at the board about two years. I can't comment on the details, if there was any settlement. A settlement may have been reached, but that is totally within the responsibility or the purview of the WCB commissioners Personnel issues are confidential, as I think has been said a number of times. I would imagine, or I would be almost certain that he.... I'd be very disappointed if he received any different treatment than would anyone else who left the board under those circumstances.

MR. SIHOTA: The minister said "under those circumstances." Under what circumstances?

HON. L. HANSON: I think the circumstances were pretty simple. Mr. Nielsen chose to leave the board and resigned after he had served the two years. That was the circumstance. Again I say to the member that the policy of the commissioners leaving the board or severance packages of any kind for all members of the WCB are generated by the commissioners. When the new board of governors is in place, I imagine they would take on the responsibility of reviewing whatever policy exists now. I would certainly ask them to do that review.

Again, personnel matters are confidential between the board and the employee, and that's where they'll stay.

MR. SIHOTA: I was going to make a comment on merit, but I won't.

The question then is: what is the policy of the board with respect to severance payments and people like Mr. Nielsen? Is there a board policy? Has the minister inquired to see if there is a board policy? Does he care whether or not a board policy exists? Is it his position that it's not for him to ask? What is the minister's position on this?

HON. L. HANSON: The policy is developed by the commissioners. I don't happen to know exactly what it is. It is their purview to develop that policy. I suppose the member could ask that question of the commissioners, but I would certainly doubt that it is a public policy. The act very clearly delegates that responsibility to the commissioners, and that's where it will stay until we have the new board of governors in place and looking at all policies.

MR. SIHOTA: Mr. Justice Nemetz this past week made some fairly notable recommendations in terms of what government policy ought to be on matters of severance. It's obviously a topical concern in light of that report. It seems to me that report canvasses all matters within government. I can't remember now from the report whether or not it attaches itself to Crown corporations and boards and commissions that are adjuncts of the government, but he has made it very clear what he thinks the policy should be.

That being the measuring-stick, I don't think it would be imprudent for the minister to ask the board what their policy is. I am wondering, then, whether the minister would be agreeable to asking the board for that policy — if one exists — and bringing it forward to the House on Tuesday.

HON. L. HANSON: Again, personnel matters are confidential and I will not give that undertaking. I certainly will give an undertaking to refer to the board of governors, when they are in place, the report the member referred to, by the former justice, with a recommendation that they look at that and review whatever severance policy is in place.

MR. SIHOTA: I am not asking for the disclosure of the arrangement between Mr. Nielsen and the board. I am asking what the policy of the board is. Those are two totally different things.

If the minister wants to take the position that the matter of the agreement with Mr. Nielsen is one

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thing, we'll get to that. But the matter of the policy of the board is another. I don't think there is any reason to deny access to the policy of the board; I am sure there are other policies of the board that we often ask about. For example, is it a policy of the board to engage in affirmative-action hiring policies? That's an employment-related policy that I'm sure is a legitimate question to ask, and it's legitimate for the minister to ask the board what their policy is in that regard. I certainly wouldn't mind information on that.

In a similar vein, I am just asking if he would be willing to share with us the policy — not the agreement with Mr. Nielsen, but the policy — of the board. Now that I've made that clear, is the minister willing to reconsider his statement?

HON. L. HANSON: No, I am not willing to reconsider. I certainly have no difficulty with the member opposite making that request of the WCB commissioners. The policy they have in place is developed within their mandate. There is no question that they have that authority. I think that if the policy was to be developed by government, the WCB act would say that was the policy.

I guess the member is aware of the recent disruption that happened at the WCB as the result of negotiations. That clearly lies within the mandate of the WCB and its commissioners. The various details of the settlement.... I don't think there is any question that that responsibility lies with the board. If the member wishes to ask the board what their policy is on that and they choose to reveal it, he is at liberty to do so.

MR. SIHOTA: I take it that the minister himself sees no need to inquire whether or not the severance policy of the board is exorbitant or out of touch with common accepted practice. The minister sees no reason to inquire if it is on the other end of the spectrum — wholly inadequate. It seems to me that it would be more than a matter of simple passing interest for the minister if a board he is responsible for would not be prepared to pay severance in accordance with generally accepted principles, or would pay it beyond generally accepted principles or below those principles.

What payments were made to Mr. Nielsen last year? Has the minister got any information, not in terms of wages or severance or whatever...? What was the total packet of payments? Can that information be provided to the House?

HON. L. HANSON: I am sure the member was made aware of the order-in-council that appointed Nielsen as chairman. Detailed in that was the salary he was to receive. The benefits that accrued to him as a result of his employment at the WCB are very clearly the purview of the WCB commissioners. They adopt that policy themselves. Through an order-incouncil of the Lieutenant-Governor, we appoint the chairman and set the salary that he is to receive.

I would point out to the member, too, that funding for the WCB is a product of payroll assessment. It is not a product of government providing, through taxation or whatever other sources of revenue it has, for the board to run its affairs. I suppose, in that sense, the act was generated the way it was generated. I don't think the member is arguing that it wasn't the responsibility of the board, and again I reiterate that if the member wishes to ask that question of the board of commissioners, I would hope.... As a matter of fact, I would be very disappointed if, in the new administrative process we are talking about in the recent bill that was tabled, it was not one of their priorities to look at the various policies that relate to all the staff members. I am prepared to give them the benefit of the report that was recently done for government, and I'm sure they will deal with that issue very early in their agenda.

[5:45]

MR. SIHOTA: I have one final question in that regard. The minister refers to the order-in-council and the provisions established in that order-incouncil. He's saying that he's not prepared to give the House any indication of any sums that were allocated over and above that which was stipulated in the order-in-council. Maybe I'm wrong in assuming what the minister had to say there. I don't have the order-in-council. Am I wrong in assuming that a sum as to payment was stipulated in the order-in-council? I took the minister's comment to say that, but I may have been wrong in jumping to that assumption.

HON. L. HANSON: I'm not sure that we're confused. But to make it completely clear, the order-in-council stipulated the amount of salary the individual would receive for performing his duties as commissioner of the Workers' Compensation Board. The exact amount slips my mind, but it's easily determined.

MR. SIHOTA: Just to get back to the question I was trying to ask, I take it if there were any payments made over and above that salary amount, the minister's position is that it's for the board, not him, to reveal. I see him nodding. That's fair enough. We'll leave it at that.

I wanted to get on another topic, but it might be an appropriate time now to rise and report progress.

The House resumed; Mr. Speaker in the chair.

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

HON. MR. RICHMOND: Mr. Speaker, I would like to take this opportunity to wish all the members a very pleasant long, long weekend. The House will sit again Tuesday at 2 p.m. I move the House do now adjourn.

Motion approved.

The House adjourned at 5:47 p.m.