[ Page 7325 ]

CONTENTS

Routine Proceedings

An Act to Amend the Vancouver Charter (Bill PR402). Mr. Mowat

Introduction and first reading –– 7325

Oral Questions

Milk Board jurisdiction. Mr. Barlee –– 7325

Western Media Institute. Mr. Jones –– 7326

Accreditation of private colleges. Mr. Jones –– 7326

Dumping of Expo soils. Mr. Cashore –– 7326

Knight Street Pub investigation. Mr. Sihota –– 7327

Committee of Supply: Ministry of Finance and Corporate Relations estimates.

(Hon. Mr. Couvelier)

On vote 25: minister's office –– 7328

Mr. Clark

Mr. Sihota

Mr. Blencoe

Mr. Harcourt

Ms. Marzari

The House met at 2:06 p.m.

HON. MR. VANT: I'd like to introduce two budding young artists who are in the gallery this afternoon. It's National Transportation Week in Canada, and in celebration of this event my ministry held a poster contest for junior secondary students throughout the province. The theme was the importance of transportation in British Columbia, and we received some masterpieces. Two posters stood out from the crowd, and their creators are our contest winners. So I'm very pleased today to introduce to the House Rodney Sanches of Terrace, in the Skeena constituency, and Bob Culver of Kimberley, in the Columbia River constituency. They are in Victoria for the very first time. Would you please give Rodney, Bob and their mothers a warm welcome.

HON. J. JANSEN: Visiting in the House today from Wageningen, Holland, are my uncle and aunt, Mr. and Mrs. A. Jansen, with their grandchild, Miss M. Roelofsen. My brother-in-law and sister, Mr. and Mrs. Vermeer, are also here from the wonderful constituency of Chilliwack. Would you please make them welcome.

MR. CASHORE: Visiting in the gallery and precincts today are 44 grade 5 and grade 7 students from Our Lady of Lourdes School in Coquitlam. They're here to learn about democracy. They are accompanied by their principal, Mr. Mike Boreham, and teachers Mr. Brian Fader, Ms. Christine Aldus and Ms. Anna Maria Cusati. I ask the House to join me in welcoming them.

MR. PERRY: I'd just like to welcome, on behalf of the House, the members of the B.C. Pharmacists' Society who are visiting today. I know the Minister of Health (Hon. Mr. Dueck) is away, and I'm sure if he were here he would join me in making them welcome.

MR. PELTON: Hon. members, in the members' gallery today we have some visitors from Ottawa, Ontario, Irmgard and Stan Jaknunas. Would you please give them a warm welcome.

HON. MR. REID: In the precincts today is a constituent of mine, a fellow I have a lot of respect for, Father Nunzio Defoe. Would this House give him a special welcome.

MR. MOWAT: I too would like to welcome the B.C. Pharmacists' Society to the House today. They really do look after the health, safety and well-being of our citizens, and I think they are some of the most underrated members of the health care team.

MR. DAVIDSON: On behalf of my colleague the hon. Minister of Agriculture and Fisheries (Hon. Mr. Savage) and myself, I would like the House to bid a warm welcome today to Mr. Steve Ferguson, Joyce Williams and Yashoda Reddy from Seaquam Secondary School, along with six students.

Introduction of Bills

AN ACT TO AMEND THE
VANCOUVER CHARTER

Mr. Mowat presented a bill intituled An Act to Amend the Vancouver Charter.

MR. MOWAT: This bill will amend the Vancouver Charter in a number of important ways. Most of the provisions are of a housekeeping nature, to bring the charter into accordance with the Municipal Act. There are some sections of note, however.

Section 5 provides that if a building inspector decides that a structure should be boarded up for safety reasons, the owner of the structure shall pay the costs of that procedure.

Section 6 gives the city the power to temporarily close streets to allow for a number of activities. Among them is the making of motion pictures and television shows, a burgeoning business and industry in Vancouver, as the members are well aware. It also allows the streets to be closed for the street celebrations often staged in Vancouver — our very many multicultural activities in the community, such as Greek Days on West Broadway and Italian Days on Commercial Drive. They will now be able to proceed more easily, thanks to this provision.

Section 7 gives the power to regulate the destruction or removal of trees. As I am sure you know, there have been some disagreements in some of the neighbourhoods when owners wish to clear their property for development while nearby residents would like to see some of their stately trees saved.

Bill PR402 introduced, read a first time and referred to the Select Standing Committee on Standing Orders, Private Bills and Members' Services.

Oral Questions

MILK BOARD JURISDICTION

MR. BARLEE: To the Minister of Agriculture. The British Columbia Milk Board just lost its court case concerning industrial production outside the jurisdiction of the Milk Board. The minister stated today that he intends to change the present law to protect the members of the milk marketing board. Can the minister assure the House that he will move quickly to change the law and once and for all stop this small band of milk producers, who by their own admission are friends of the government, from doing an end run around the Milk Board?

HON. MR. SAVAGE: As my hon. critic has reported, the court decision this morning was to not allow the Milk Board to appeal to the Supreme Court of Canada. We have looked at the Milk Industry Act itself, which will require some amendments. Al-

[ Page 7326 ]

though I share your views that we need to change it, I obviously cannot speak to the time-frame, because that would have to be in a policy decision relative to drafting amendments or whatever before they're brought forward. I can't speak to the time-frame, but let me assure you that I'll do my best.

WESTERN MEDIA INSTITUTE

MR. JONES: I have a question for the Minister of Advanced Education and Job Training regarding the Western Media Institute. On May 18 the minister indicated to this House that he had asked for a report and recommendations several weeks previously and that he was dealing with this matter very seriously. I would like to ask the minister at this time: has the report been completed and is he willing to make it public?

HON. S. HAGEN: I have not yet received the, report.

MR. JONES: To my knowledge, the students of this school showed up on June 1 to find the doors closed. I wonder if the minister has taken any steps to ensure that this situation is remedied.

HON. S. HAGEN: I'll take the question on notice.

ACCREDITATION OF PRIVATE COLLEGES

MR. JONES: A new question to the same minister. Does the minister still feel that one staff person is adequate to oversee the operations of over 400 private training institutions in this province? Is he still unwilling to bring in an accreditation process which would serve to protect the students in these situations?

HON. S. HAGEN: As I said previously, Mr. Speaker, I will deal with that when I receive the report from my ministry.

[2:15]

DUMPING OF EXPO SITE TOXIC SOILS

MR. CASHORE: Mr. Speaker, I have a question to the Minister of Environment. I'm glad to see that he has returned to his seat. On June 1, during the minister's absence, the acting Minister of Environment told this House that the province would assume complete responsibility for cleaning up the toxic soil removed from the Expo site and would seek to recover costs from responsible parties if this dumping was unauthorized. Yesterday the minister told this House that the persons who removed those toxic soils would be responsible. Does this mean that neither you, Mr. Minister, nor BCEC gave permission for the contractors to haul away and dump this toxic soil?

AN HON. MEMBER: Who's right?

HON. MR. STRACHAN: We're both right. I'm trying to sort this one through. Since we have allegations only of the soil being contaminated and that it was known to be contaminated by the person who removed it, I don't think it's appropriate for me to comment further until those allegations are proven or disproven. We're making an assumption about a mystery area at this point.

MR. CASHORE: A supplementary, Mr. Speaker. This question is not a difficult one, and I'm sure the minister can answer it. Did you or did you not give permission for the dumping of Expo soils at Westwood, at the foot of Penzance Drive in Vancouver harbour and at other locations around the lower mainland?

HON. MR. STRACHAN: No, I wouldn't have. I was Deputy Speaker during those days.

MR. CASHORE: The point is well taken. Did your ministry give permission?

HON. MR. STRACHAN: I'll take that question on notice.

MR. CASHORE: I have a question to the Minister of Crown Lands. Did BCEC give permission for the dumping of this toxic soil? What is the minister's position on whether the taxpayers should be stuck with the cost of cleaning up?

HON. MR. DIRKS: It's a little difficult to find out who should answer, because it's difficult to understand the question, and certainly the way it's worded, I object wholeheartedly. What I said the other day was that we would investigate, and if there were indeed contaminants on that Westwood site, we would clean them up.

MR. CASHORE: A question to the Minister of Government Management Services, Mr. Speaker, on the same subject. Did BCEC give permission for the dumping of its toxic soil, and what is your position on whether the taxpayers should be stuck with the cost of cleaning up?

HON. MR. MICHAEL: The question has certainly been well canvassed, as the member, I'm sure, is aware. Had he been present during my estimates — and I'm sure he was present during most of the estimates, and in those areas where he wasn't present, I'm certain he read the Blues and was kept posted of all the questions being asked and the answers being given regarding the cleaning up of the Expo site — I'm sure that the member would recall that this government, through me, made it very clear to the House and to the people in the province of British Columbia that this government is indeed very proud of the position that it has taken regarding the cleanup of the soils on the Expo site. We have undertaken without any equivocation that we will meet the standards as set down by the Minister of

[ Page 7327 ]

Environment. We will see that those soils are delivered to the purchaser of those lands to the standards as set by the ministry, and we are proud of that. Perhaps it may cost them money, but money is no object when it comes to the environment, Mr. Member, and this government is very proud of the position that we have taken on that.

MR. CASHORE: Another bad deal for the taxpayers of British Columbia.

A new question to the Minister of Environment. Has testing been completed at all the sites where soils from Expo are believed to have been dumped?

HON. MR. STRACHAN: If the operative word is "completed," the answer is no. We have been doing some testing at the Westwood site. We found some hydrocarbons and some polyaromatic hydrocarbons, but that could be from refuse asphalt, and that's the extent of it at this point.

KNIGHT STREET PUB INVESTIGATION

MR. SIHOTA: Question to the Minister of Labour. Has the Minister of Labour had an opportunity to talk to Mr. Doney with respect to his knowledge of the conversation between Mr. Hick and Mr. Poole and when he became aware of that conversation?

HON. L. HANSON: The question the member refers to was taken on notice and will be addressed in appropriate time. Mr. Speaker, in recent days this issue has been addressed thoroughly in this Legislature. Again, we have had the ombudsman's report on it; we've had the Crown counsel look at; we've had the RCMP look at it. As a result of that, a number of actions were taken by various members, and there is simply nothing to add to that. It's almost two years old; it's history.

MR. SIHOTA: I guess Mr. Doney has been in meetings seven days a week 24 hours a day.

Question to the government House Leader. Does the government intend to call Mr. Doney to the bar of the Legislature to answer questions as to his knowledge of these events?

HON. MR. RICHMOND: First of all, I doubt very much if the question is in order. I think that the young member for Esquimalt-Port Renfrew confuses this place with a court of law. Perhaps he should return to the courtroom and cross-examine people in a court of law and not in this House. The answer to his question is no.

MR. SIHOTA: If it's the government's position that they don't want to hear what Mr. Doney has to say, then it seems to me that the government House Leader wants to further a cover-up.

Interjections.

MR. SPEAKER: Order, please.

MR. SIHOTA: Yesterday the minister confirmed that he had read the report....

Interjections.

MR. SPEAKER: Order, please. Would the government House Leader take his seat for a moment. I have noticed in the last few days that members are making comments that cut a very fine line. If one member wants to make them, it's going to happen on both sides. I would ask members to take some care when they are asking questions and making accusations, and this House will function a lot better. If we're going to have free speech in this House, we have to be very careful how we phrase our questions and make sure the answers are done the same way.

HON. MR. RICHMOND: On a point of order, I find the term "cover-up" offensive and unparliamentary and would ask the member to withdraw that remark.

MR. SIHOTA: I'll withdraw the remark.

Yesterday the Minister of Labour confirmed that he had read the report prior to its issuance at a press conference and that no changes had been made by him to reflect his knowledge of conversations between Mr. Hick and Mr. Poole. Does the minister not agree that it's fair to say he chose then to cover up that matter?

HON. L. HANSON: I would again ask the member to withdraw the reference to cover-up.

MR. SIHOTA: I put it in a different vein.

SOME HON. MEMBERS: Withdraw! Withdraw!

MR. SPEAKER: Order, please. The member has asked the member to withdraw.

MR. SIHOTA: Fine, Mr. Speaker. I'll withdraw the word "cover-up." Could the minister then explain why it was that he chose not to correct the report that was issued under his signature to reflect the conversation between Mr. Hick and Mr. Poole?

HON. L. HANSON: I guess I have some difficulty in referring to the member as being old and tired, because obviously he's not a very old man, but his questions certainly are very old and very tired. The fact is, the issue has been carefully scrutinized by the ombudsman. It has been carefully scrutinized by a police investigation and by Crown counsel. Appropriate action was taken. I'd like to point out again that this is question period, not history time.

MR. SIHOTA: I guess the minister's going to become history if this keeps up.

I have a question to the Premier. We now have a confession that the Minister of Labour sat quietly through a press conference while one of his senior officials lied. We also had a confession yesterday

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from the Minister of Labour that he read this report and chose not to deal with the matter of political interference. Political interference is a very serious matter. Is the Premier now prepared to ask for the minister's resignation?

Orders of the Day

HON. MR. RICHMOND: I call Committee of Supply, Mr. Speaker.

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

ESTIMATES: MINISTRY OF FINANCE
AND CORPORATE RELATIONS

On vote 25: minister's office, $316,724 (continued).

MR. CLARK: I want to begin my remarks by canvassing a very serious matter which has come to my attention. It has to do with a breach of security that has taken place in an office under the auspices of the Ministry of Finance. I think this is something of the most serious nature, so I'd like to ask a series of questions. Will the minister confirm that on the weekend of May 13 and 14, the office of the comptroller-general was burglarized?

HON. MR. COUVELIER: I understand that there was a break-and-enter. I can't confirm the dates, but that can be made available.

MR. CLARK: Can the minister inform the House whether the police were informed of the break-in?

HON. MR. COUVELIER: I don't wish to comment any further on the matter, pending the receipt of a full report. I don't think getting into that issue in any great depth is in the interests of the citizens we're attempting to serve here.

MR. CLARK: That's a curious answer from the minister, and I want some specific answers. Will the minister confirm that computer disks containing confidential information, confidential material, were stolen during that break-in?

[2:30]

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

MR. CLARK: Is the minister aware of what was stolen during the break-in?

HON. MR. COUVELIER: I'm awaiting a report on the matter.

MR. CLARK: This happened more than three weeks ago. We're talking about a very serious security breach. The minister has refused at the moment to tell us whether the police were informed about the break-in. I want to ask him again a very simple question: did they phone the police and report the burglary?

HON. MR. COUVELIER: I've responded to the question by informing the member that there is no useful purpose in pursuing this any further. I am awaiting a full report, and when that's received, then I might feel a little more comfortable about to what degree disclosure or discussion is required in a public forum. But the member has repeatedly described this as some sort of high-profile, great, serious matter. My information is that the issue is far less than that and not worthy of the description assigned to it by the questioner.

MR. CLARK: Well, the minister can choose to define a break-in where confidential material was stolen regarding personnel matters or others that the comptroller-general is in charge of as a minor matter. I think most citizens of British Columbia would not feel that way. It seems to me that the minister has said that he knows the magnitude of the break-in. It appears — while he might be awaiting a report — that he has now confirmed for us that he is aware of it, and he's trying to rebut our remarks by saying that it's not serious. Surely he can inform the House whether the police were called regarding a break-in at the comptroller-general's office. It's a very simple question. He has indicated that he is aware of the break-in.

I assume the minister is discussing with the Premier some of these questions.

HON. MR. VANDER ZALM: We're listening.

MR. CLARK: You're listening out of one ear, I'm sure, Mr. Premier.

It's a very simple question. The minister has indicated that he's aware of the break-in. He even indicated that we're overstating the case. So I'm giving the minister the chance to clear this matter up. Were the police informed of the break-in at the time it happened?

HON. MR. COUVELIER: I'm advised that the police were informed.

MR. CLARK: Okay. Can the minister inform the House whether the police were informed that computer disks were stolen that contained confidential information?

The minister is not going to answer that question. Can the minister inform the House what type of public information was stored in that section of the comptroller-general's office?

HON. MR. COUVELIER: Mr. Chairman, as I've indicated earlier, I'm waiting for a full report on the matter. The issue is of no substantial consequence. The value of the material that the member is asking for information on is a couple of hundred dollars. You know, I don't know what more I can add until we get a full and complete report. In any event, it

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certainly is not worthy of the attention that seems to be directed to it.

MR. CLARK: The minister wants to have it both ways. On the one hand, he said that this is a minor matter, which is the kind of thing we've heard before from governments. This is a minor break-in; don't be worried about it. But on the other hand, he doesn't want to answer questions about a minor break-in, because he's concerned about confidentiality and the like, or he appears to be. It seems to me that there's an inherent contradiction in the minister's answers.

I am advised that the building was broken into and that this particular information was stolen on the third floor. The very interesting question arises: why is it that the burglars chose to bypass other floors, go to the third floor and steal computer disks in that branch of government? The minister can laugh. He has not done one thing in this House today to allay any concerns about the information that could have been stolen. Could he tell us what is stored in that branch of government on that floor so that we can maybe allay the concerns of others about computer disks containing information that were stolen?

I might add, Mr. Chairman, that a computer disk is not a valuable item in itself; you can buy them in the store for a couple of dollars. It's the information on the list that we want to know about. Can he tell us what sort of information is contained or filed in that section of the comptroller-general's office?

MR. CHAIRMAN: The Minister of Advanced Education asks leave to make an introduction.

Leave granted.

HON. S. HAGEN: Mr. Chairman, it's a pleasure for me to welcome to the House this afternoon some gifted students, grades 6 to 8, from Parksville Middle School, accompanied by their teacher Ms. D. Arnold. Would the House please bid them welcome.

HON. MR. COUVELIER: Mr. Chairman, as I've said, I'm waiting for a full report on the matter and until I receive it, I'm not in a position to respond to specific questions. The issue, as I've said, is of relatively minor importance. Had there been a higher degree of importance attached to it, obviously the report itself and the subsequent completion of discussion on the matter would have been expedited. It's not of major consequence, and we will be getting a report in due course. Until I receive the report, I'm not in a position to deal with specific questions of this nature.

MR. CHAIRMAN: Does the second member for Vancouver East have a new question?

MR. CLARK: Yes, Mr. Chairman. So far today, they have been all new questions, I might add.

Can the minister inform the House whether there were personal effects stolen during the same break-in?

The minister refusing to answer questions does nothing to allay any concerns or suspicions that people might have. It seems to me that he cannot continue to say this is a very minor matter of no consequence, which implies that he knows about it, and not deal with concerns. Will the minister confirm that staff were told by the comptroller-general's office not to discuss the fact that computer disks with confidential information were stolen?

Is the minister aware that the comptroller-general communicated with his staff about this burglary?

Is the minister aware what the content of the comptroller-general's remarks were to members of the staff?

HON. MR. COUVELIER: Mr. Chairman, I fail to understand the importance of whether a supervisor would or would not have discussed an issue of an alleged break and entry and what relevance that has to the issue. The picayune questions seem to be designed to try to elevate the issue so that all of a sudden this becomes some sort of valuable leakage of government documentation, such that the citizens of the province are placed at great risk.

I have told you repeatedly that I am waiting for a full report. Based on the preliminary information that has been made available to me, the issue is of minor consequence and not one that has any earth shattering implications. Until I receive the report, I'm not in a position to discuss details. We can go on here all day. "Did somebody speak to somebody, and what was the conversation?" The relevancy of all this is beyond me. In any event, I don't know what more I can add to it at this point of time.

MR. CLARK: I fail to see how the minister can tell the House that the public was not at risk on the one hand, and on the other hand refuse to tell us what it was that was stolen.

HON. MR. COUVELIER: I have not refused to tell the member. I have told the member that when I get the information, I'll be in a position to judge. But I have not refused to tell him, so the record should be clear on that point. As I've said, it doesn't justify this amount of attention, but if the hon. member wishes to treat it in a serious way.... And I gather he does, given the attendance of the members opposite. They're like a group of vultures perching on a telephone wire, thinking they've got something here that's worthy of all this attention. You can go back to your offices, ladies and gentlemen; there's nothing here to justify the attention you give it.

In any event, when the report is received I will be in a position to judge what should be done.

MR. G. JANSSEN: On a point of order. I take exception to being referred to as a vulture.

MR. CHAIRMAN: Perhaps the minister wouldn't mind withdrawing that.

[ Page 7330 ]

HON. MR. COUVELIER: I was looking for some sort of a winged creature. How about crow? Would that be more acceptable, Mr. Chairman?

MR. CHAIRMAN: I would still ask the minister if he would withdraw, please.

HON. MR. COUVELIER: I'm happy to withdraw vulture and substitute crow.

MR. CLARK: On a point of order. I would ask the minister to withdraw the last reference as well.

MR. CHAIRMAN: Would the minister please withdraw.

HON. MR. COUVELIER: I'm surprised that members would find offensive the name given to one of the most beautiful creatures that inhabit the planet. I happen to think crows serve a very valuable function and hardly deserve to be vilified in the House. They certainly don't deserve the assumption by the hon. members opposite that there's something dishonourable about being a crow. If that's the assumption, I'm surprised.

I am generally intrigued with the thought that they should want that reference withdrawn. Can I verify that the members find something offensive about being called crows, Mr. Chairman?

MR. CHAIRMAN: If the minister would withdraw it would bring the whole matter to rest, and we could get on with vote 25.

HON. MR. COUVELIER: Mr. Chairman, I'm always pleased to follow your instructions. I take it that you feel I should withdraw that reference?

MR. CHAIRMAN: Thank you.

HON. MR. COUVELIER: Then I'll withdraw the reference.

MR. CLARK: The minister said he has not refused to tell us what's in it, that he's awaiting a report. I assume he has had some interim report on this matter; therefore it would seem in order for him to inform the House what the substance of the interim report was so that he can attempt to convince the House that this is a trivial matter which should not concern us. Given the minister's own logic, will he inform the House what the contents of the preliminary investigation are?

MR. CHAIRMAN: I'll just remind members, as I'm sure I did once this morning, that while members are free to ask any question they wish, providing it's relevant to the estimates that we're dealing with, there's no compulsion for the person being asked the question to respond.

[2:45]

MR. CLARK: I appreciate the Chairman's remarks. The point I was making — and I'll make it again — is that the minister's logic is that he will release the report when the report is finished. Therefore it seems only appropriate, given that he has already given a commitment to let the public know what's in the final report, to let the public know what's in the interim report; in other words, what he is aware of at this point.

I know the minister does not have to respond, but the force of his own logic would indicate that he respond with what he knows while he's awaiting the final report. Could he tell the House what he knows to date about what he has mentioned repeatedly he thinks is a trivial matter, and then subsequently tell us what comes out of the final report?

MR. SIHOTA: The minister has a preliminary report, obviously, because this break-in occurred about three weeks ago. Could the minister advise this House why he's not prepared to share with us the content of that preliminary report?

HON. MR. COUVELIER: I have said I haven't got the report. How can I share something I don't have?

MR. SIHOTA: Just to help the minister recollect what he said, he advised us, to use his own words, that he had a preliminary indication of what had transpired — a preliminary report, shall we say. Could he advise the House just what the contents were of that preliminary report? If he's not prepared to do so, could he explain why?

HON. MR. COUVELIER: I'm not going to feed the flames of assumption and supposition. I'm waiting for a full report with all of the facts. It would be totally inappropriate for me to go along with this attempt to magnify the issue far beyond its legitimate proportions. I'm not going to feed that. The plain fact is that I was advised of the alleged offence.

MR. WILLIAMS: Alleged? It didn't happen?

HON. MR. COUVELIER: I understand that the word "alleged" is traditionally used in legal circles until someone is found guilty of an offence. It was in that sense that I used the phrase, Mr. Chairman.

In any event, having been informed and having been given the belief or the feeling that nothing of great import was missing, there appeared to be no particular purpose to the event. It seemed to be a random thing. A full report is being prepared, and when it's received I can consider what further steps should be taken. In the meantime, until it arrives, I'm not prepared to embark on conjecture or alleged consequences. That would be less than responsible.

MR. SIHOTA: I just want to ask the minister this. He says he doesn't want to fan the flames of suspicion here. If he looked at this, he'd recognize that it is an opportunity for him to suppress any suspicion by advising the House what transpired. If he continues

[ Page 7331 ]

to dodge the question and doesn't provide any clarity as to what was taken and the circumstances of the taking, then he simply heightens the suspicion. Quite frankly, the minister should utilize the opportunity to explain. He says that nothing important is missing. Could he then tell the House what is missing?

MR. CHAIRMAN: Hon. members, the Chair has been listening very carefully to what has transpired over the last 30 minutes or so. It seems to me that we must bear in mind our rule about tedious repetition, because even though it is being put in a different way, I've heard the same question asked four or five times.

MR. CLARK: Can the minister inform the House when he asked for the report?

HON. MR. COUVELIER: Obviously when I received the first preliminary information.

MR. BLENCOE: When was that?

MR. CLARK: The question from my colleague is one I would ask: when was he informed of the break-in? The break-in was discovered on May 15. How close to that date did the minister find out about it, and did he request a report?

HON. MR. COUVELIER: We'll check my records. I don't even know if I was in Victoria on May 15 or May 16, but I'm satisfied that when I returned to my desk, the preliminary information was there. I don't want to mislead the House as to dates, in terms of when I knew, as if this was some sort of Watergate interrogation. In any event, as I've said, I don't have any more information to provide the House until I receive the full report.

MR. CLARK: The minister is implying that he found out about it shortly thereafter, at the first possible opportunity. Could he tell the House who informed him of the break-in?

HON. MR. COUVELIER: No, I can't. I don't remember. It might have been my deputy. It might have been one of the assistant deputies. It might even have been my secretary. I'm sorry, I don't have that information.

In any event, Mr. Chairman, when I receive the information I'll be pleased to deal with it. If the members persist in trying to make something out of this, I think what I'll do is just have the staff make careful notes of the questions, and we will take them as notice and attempt to get back to them. That's about the best I can do. I don't see any purpose in me jumping up here, just telling you what little I'm prepared to share at this time.

MR. CLARK: Could the minister tell the House who he asked to do the report?

Interjection.

MR. CLARK: Mr. Chairman, that seems to me to be a pretty straightforward request, which does not require notice. The minister does not require research to answer it. The strength of his answers in the House this afternoon has totally been on waiting for a report. If he wants to rely on that as a defence, it seems incumbent upon him to tell the House when he asked for the report, who he asked to do the report and when the report is likely to be tabled, so that further questions can flow from it. Those are three elementary questions that I'd ask the minister to answer now.

MR. SIHOTA: The minister must surely have left it up to somebody. He must have provided a deadline for the report. What is the deadline for the report? That's not a difficult question.

Will the minister confirm that in the preliminary report — which he obviously got sometime in the last three weeks — was there any reference to the loss of computer disks? I don't think that is required to be on notice. The minister can just tell us: were computer disks taken? It's a yes-or-no question. Is the minister prepared to stand up and answer that very simple question: were computer disks taken?

MR. BLENCOE: I think it's incumbent upon the minister to answer some basic, fundamental questions about, in his words, an alleged break-and-enter. My colleague has asked who you requested to do the investigation or the report. I don't think you can just take that on notice. That's a very fundamental question, and we'd like to know in this chamber who the minister asked to do the report, what time-frame was given to report back to the minister and whether a break-in that happened three weeks ago.... The time-frame that elapsed between that break-in and the minister asking for a detailed report.... There may be some concern that that is far too long a period.

The question is a very straightforward one. Who did the minister request to do the report, and in what time-frame was that request made? I think the people would like to know those answers before we proceed with this issue.

[Mr. Rogers in the chair.]

MR. CLARK: The minister wishes to confer with his staff, and we want to give him every opportunity to answer the questions he's chosen not to. So if the Chair will bear with me for 20 seconds, we'll see whether their discussion bears any fruit, so to speak.

MR. CHAIRMAN: As the committee has already been advised, there is no requirement for a minister to answer a question. He may choose to answer a question, but there is also a requirement for order. If the matter has been thoroughly canvassed, there's a point in time at which the Chairman must ask you to move on.

[ Page 7332 ]

MR. CLARK: I will then move on. We've come to expect this kind of stonewalling from many members of cabinet.

HON. MR. COUVELIER: I find the reference to stonewalling offensive and unparliamentary. I have repeatedly told the members of the House that I am waiting for a full report. The members of the House are aware that the police have been informed; that implies court action.

MR. CHAIRMAN: Is the minister asking for a withdrawal of that particular word?

HON. MR. COUVELIER: Yes, Mr. Chairman, I was going to ask for a withdrawal.

MR. CHAIRMAN: When these matters come before the committee, if a minister or a member wishes to ask for withdrawal, it would be nice if we would just bring the matter to the Chair's attention and ask for the offending word.... It is offensive according to the standing orders, because it imputes an improper motive. The Chair must ask the second member for Vancouver East to withdraw.

MR. CLARK: I'm happy to withdraw if that's offensive. I'm not conversant with all the words we are not supposed to use here, so I strayed into that. I'll have to study to see which words are allowed. I wonder how the minister would characterize his remarks today, which are essentially silence in the face of questions. We know the Minister of Finance has a thesaurus in his desk which he uses or reads every day, because he's good at those words.

I will take this opportunity to move on to another issue, which is the question of Principal Trust and the government's inaction in that regard. To kick off the debate, I would ask my colleague the member for Esquimalt-Port Renfrew (Mr. Sihota) to begin debate on that section.

MR. SIHOTA: I'd still like to know how the minister would characterize his response to the previous set of questions. Perhaps the minister could tell us what word he would use to describe his actions.

MR. CHAIRMAN: I'm not so certain that's a ministerial responsibility, because it doesn't follow that it's the minister's responsibility to find what words are parliamentary or unparliamentary. However, if you're asking about his particular selection of the English language and various adjectives he may choose to use, he may choose to answer. We'll try to see if that's in order.

MR. SIHOTA: That's okay. I want to raise the matter of Principal Trust. I do so because I think it's tragic the way in which this government has dealt with people who have had their financial security stripped away from them by the collapse of Principal Trust. Many of the people involved are seniors; many of the people involved had put their money away in a rainy-day account to attend to their needs, should and when they decide to retire. In most cases, they had gone with some care to select very conservative investments to make sure that the money they had worked so hard to save in their working lives would generate some level of income later on in their lives. To others who are younger, the purpose was to make sure money was put aside now that could grow and provide them with a measure of comfort to deal with their needs in the future, whether it be kids' education, personal retirement, paying off the mortgage or whatever.

[3:00]

The government was seen as a group that would protect that investment. Many investors have relied upon the representations of the company that their funds were guaranteed and felt secure in that. Many more relied on the fact that all of this was regulated by the superintendent of brokers. Many more found comfort in the fact that the Investment Contract Act was there to protect them. Others were led to believe that the Canada Deposit Insurance Corporation would secure their funds.

The combination of those events led people to believe that the money they were saving for themselves was going to be secure. It now turns out that there was a collapse of Principal Trust and, with it, a critical failing of the regulatory process. Some governments in Canada have recognized their responsibility to deal with that regulatory failure. They have chosen to provide measures of assistance to the people who were deeply affected by the Principal Trust situation.

This government in British Columbia, in my view, has been noted for its insolence in dealing with these people. It has chosen to provide little of the kind of financial assistance that was afforded to investors in Alberta. It has been said that these people.... The Premier, who I see is in the House, is the one who made this comment. He inferred that these people are gamblers, that they risked their funds and, as a consequence of that risk, there is no need for the government to provide any assistance. This totally overlooks the nature of the investment that these people made.

The Premier has been asked on several occasions to apologize for his statements in that regard, and to date he hasn't. As I say, he is in the House, and perhaps he can use this opportunity to put forward an apology to the people he offended by those comments. I will let him be the determiner of whether he wishes to respond to what I have said.

At the same time, the provincial government — to the Minister of Finance — has said that it "does not matter a whit" what the ombudsman will find in this case, that the government will not be prepared to live by his recommendations. It is really astonishing, when you consider the role of the ombudsman in our society and the obligation that flows to government to attend to his reports and recommendations. To say in advance of his report that it does not matter a whit what he will be saying is, I think, a sad indication of

[ Page 7333 ]

the lack of sensitivity that the minister and his government are showing to these people.

Most recently, the government of Alberta paid out a number of costs associated with this to investors. It paid out the costs of the Coopers and Lybrand accounting and review of the matter. It represented a small percentage — about 2 percent — of the total money lost. This was a payment made as a gratuity by Alberta to the investors. The province of Alberta recognized that Principal Trust would have to incur some costs in the winding down of its affairs, and it felt that investors should not have to pay those costs.

It shows a gratuitous action to compensate the people in Alberta with that 2 percent of the overall costs. That was not the case in Saskatchewan and British Columbia. My question to the minister is this: is he now prepared to, in the same fashion that Alberta has, without prejudice and on a gratuitous basis, pay out those costs and reimburse British Columbia investors?

I see that the minister is occupied with a conversation with another minister, and I will follow him back to his seat and ask him now for a response to that question.

HON. MR. COUVELIER: I heard parts of the preface. I didn't catch the question. Was there a question in there somewhere?

MR. CHAIRMAN: The member for Esquimalt-Port Renfrew did have a question, but he will repeat it, I gather.

MR. SIHOTA: I think that those investors in Principal Trust, when they read this extract from Hansard, will be most disappointed to learn that the minister has chosen to walk off and talk to a colleague and not pay attention to the comments I am making on their behalf. Nonetheless my question to the minister is this: will the province of British Columbia, on a gratuitous basis, as has the province of Alberta, pay out those accounting and other associated costs incurred to Coopers Lybrand, and compensate the investors for that 2 percent loss?

HON. MR. COUVELIER: That represents future government policy. I certainly don't intend to discuss those options here in the House prior to discussing them with my colleagues.

MR. SIHOTA: I'm not asking as to future policy. The Minister of Finance knows, of course, what dollars have been put aside by the government for various needs within his budget. Is he saying that there is no money — because he is responsible for the Principal Trust situation — and that his budget does not make provision for this type of payout?

MR. CHAIRMAN: The Minister of International Business and Immigration seeks leave to make an introduction.

Leave granted.

HON. J. JANSEN: In the House today are 75 grade 5 and 6 students from Agassiz, the corn capital of the world. They are here with their teachers, Mr. Fraser and Mrs. Froehlich. Would you please make them welcome.

MR. SIHOTA: I will ask the minister again: is there no provision within his ministerial budget to attend to this need? Given the fact that Principal Trust falls under his mandate, is he saying that there is no money allocated in this year's budget to attend to this need?

HON. MR. COUVELIER: Mr. Chairman, that relates to future policy, and therefore it is out of order.

MR. SIHOTA: Mr. Chairman, I would ask that you make the determinations as to what's in order and what's out of order, not the Minister of Finance, who chooses to be both the minister who's being asked questions and the member of this House who decides whether or not questions are in order.

I wasn't asking for future policy. I am asking the minister what provision is made in this year's budget. We are in the middle of estimates. We're talking about the minister's budget, and I am asking what provision is made in his budget to attend to this need. That's not a matter of future policy, I would say, Mr. Chairman. It's a matter of asking the minister what is contained in the budget he is asking us to approve. We want to know, before we decide to approve or not approve his budget, whether a provision is made in this regard. It's a very simple question; it's not a matter of future policy.

MR. CHAIRMAN: On the matter of what's in order and not in order, that's correctly the determination of the Chair. However, when a minister identifies something as future policy, then the decision as to whether or not the minister wishes to speak on the matter is entirely up to the minister. As has been pointed out to the committee before, there is no requirement for a minister to answer a specific question.

Having said that, who wishes to speak next on vote 25?

MR. SIHOTA: I do. This is just a little infuriating. Is this now the practice of all of the ministers? The minister laughs, as if he finds some joy in not answering questions. I'm asking the minister a very basic question. The matter of future policy is whether or not the payment will ever be made. That's something that's clearly a matter of future policy, and that's what I interpret the minister taking exception to. But I have reworded my question to deal with whether or not provision has been made in his budget to attend to that need, that's all. We're just asking what's in his budget.

HON. MR. COUVELIER: Mr. Chairman, any decision to expend funds is a government decision. Insofar as there has been no announcement on spend-

[ Page 7334 ]

ing funds for that purpose, it is future policy, and therefore my objection is quite in order and appropriate.

MR. SIHOTA: Well, there is no announcement as to whether or not the government intends to meet the payroll next week, but there is a provision in the budget that deals with making sure that people get paid their wages.

Is the minister saying we can't ask that basic question? Or is he just saying that he's not prepared to state what his ministry has planned for those people? Could the minister explain, since he refused to answer the last question after I sat down again, why he is fearful of telling people what provision is made in his budget in this regard? It may be that no provision is there, and if that's the case, then we know where the minister stands. Can he explain his reluctance and fear to answer this very basic and timid question?

HON. MR. COUVELIER: Mr. Speaker, I am not fearful or afraid or timid or even, for that matter, reluctant — once all of the reports and studies surrounding the Principal Trust collapse that are presently underway have been completed.

It surely has not escaped the hon. member's attention that we have an ombudsman's report underway at the moment. There are press reports that there will be a court case in short order in British Columbia. The Code inquiry in Alberta has still not released its report. I understand that the Alberta ombudsman will possibly have a report. I think there were one or two RCMP investigations in Saskatchewan and Manitoba; I'm not sure whether they've been completed, received or published, so there obviously is much smoke and not much clarity as the issue of the Principal Trust collapse continues to get the scrutiny that it's getting.

This government's record in terms of the Principal Trust collapse is beyond criticism. I believe the record shows, if I was to research Hansard, that the member opposite was quick to leap to his feet when we were the first province off the mark by appointing the Lyman Robinson commission. I can remember comments made in this House by this very same member lauding this government's action. The record shows that we were the first to deal with the issue — the first of all governments. The record shows that the Lyman Robinson findings set the stage for any individual investor who wished to launch any action concerning possible fraud charges against individual salesmen. The result of the Robinson inquiry gave us the comfort that we had legal basis on which to freeze assets of the family of the principal shareholder of the Principal group of companies — which we did. This government moved quickly, it moved first, and it moved with proper sensitivity to the needs of those citizens who lost with the collapse of those companies, and also with due regard for the balance of B.C. citizens in terms of what would be an appropriate response in terms of public policy to this sad situation.

[3:15]

The government is sensitive to the fact that there are many citizens of the province who would not agree that government has any obligation to provide bail-outs for people who have made investments in these companies. Deposit insurance is provided for financial institutions that are In the deposit-taking business. That is deemed to be an appropriate response for governments, in the sense that governments have assumed an obligation to monitor and regulate and apply deposit insurance to deposits. I'm not aware of any government anywhere in the world that's taken any initiatives to provide insurance on lost investments, and as a consequence of that, this government is still maintaining a close watching brief on the Principal Trust situation as it unfolds.

We will deal with the options that are available to us after we are satisfied that all the facts surrounding those companies are in the public record; that obviously is not the case at the moment. The chief source of information regarding the collapse of the companies will undoubtedly flow from the Code inquiry, which has been in process for almost a year.

The record shows that we provided information willingly to the Code inquiry. We sent witnesses to the Code inquiry to assist their examination as it affected Alberta transactions. This government's record as it relates to the Principal Trust collapse, I believe, cannot fairly be criticized. What we might do in the future, with more information and data as it becomes available, is future policy, and I can't comment on or even predict how we might deal with that situation.

MR. SIHOTA: The minister says that he takes some pleasure in the fact that we supported the appointment of Mr. Robinson. We did; there's no problem about that. But we pointed out at the time — and we point out again — that the terms of reference the minister provided to Mr. Robinson precluded him from looking into the matter of the Investment Contract Act, which of course was the pivotal issue. The minister says that his actions are beyond criticism. Maybe he could explain why it was that in the terms of reference he provided to Mr. Robinson he prevented Mr. Robinson from dealing with the very pivotal issue of the Investment Contract Act and whether or not the regulatory process under that act had failed.

As it turned out, Mr. Robinson did a good job in his report, to the extent that he was allowed to do a job; but the government, through the Minister of Finance, chose to limit the job that he could do and excluded him from entering upon territory that would have embarrassed the government. Now that's history.

I want to ask the minister about another matter of history. He said last year that it did not matter a whit that the ombudsman says. He says today in the House that they are monitoring the ombudsman's report here in British Columbia as well as in other jurisdictions. Is the minister now saying that he has changed his attitude about the ombudsman's report

[ Page 7335 ]

and is prepared to retract the comment that he made last year about it not mattering a whit, and to tell this House now that the government will be paying attention to the recommendations of the ombudsman?

MR. CHAIRMAN: That may be canvassing future policy, but the minister....

HON. MR. COUVELIER: The answer to the first two questions is no. In regard to the third question, that is future policy, and we will deal with that at the appropriate time.

MR. SIHOTA: It's amazing. On the one hand, the minister says he wants to see what happens to the ombudsman's report, but then he also wants to stay on record as saying it doesn't matter a whit what the ombudsman says. Which is why, of course, you've invited litigation from your own citizens. Your own citizens of this province have to take you to court to get you to do your job, to explain why it was that you did what you did, to get you to account for the negligence, if any, on this matter.

It's a pretty sad record for this government when it comes down to Principal Trust. It's not one where the minister should stick out his chest and boast about their performance. You are forcing your own citizens....

HON. MR. COUVELIER: On a point of order, this comment seems to be leaping to a conclusion. We have already got on the record that there are examinations underway to determine exactly whether that allegation just made is accurate. Until those reports are received, we shouldn't be aiding and abetting the debate here.

MR. CHAIRMAN: But it's not a point of order. If you rise on a point of order, it should be on a point of order. Otherwise, you have to wait until the member finishes his remarks, and then you have ample opportunity to correct them. If in the process of making his remarks a member says something that is offensive or that needs to be withdrawn, that's the only time that I will be prepared to accept it as a point of order.

MR. SIHOTA: It's amazing how a senior minister of the Crown still doesn't understand some of the rules with respect to the way the House operates. You're quite correct, Mr. Chairman; there is no point of order in the minister's comment. But I see him smiling now, so I take it he figures he's made his point.

The fact of the matter is, as I was saying, that there's nothing to be proud of in the approach that he's taken, and there's an inconsistency in the approach he's taken as it relates to the ombudsman and the findings of the ombudsman.

Since we're dealing with the minister's budget, perhaps he could tell me what provisions, if any, are being made in his budget to deal with the Principal Trust matter. Just to make clear that I'm not rephrasing the question I asked earlier on, I want to know what money has been put aside to reassess the situation in light of the impending report of the ombudsman, whether or not any funds are being made available to attend to the needs of people — which is what I've already put to the minister — and what steps are being taken by his ministry this year to bring about changes to the regulatory process in this regard. I just want to see where we've gone in that regard. I'd like the minister to respond to that.

MR. CHAIRMAN: The member's first two questions are questions that have already been heavily canvassed, and the minister has already indicated that.... The remaining question's in order. The first two questions asked are just a repeat of the earlier question that the minister gave a detailed answer to. The second question is in order.

HON. MR. COUVELIER: Mr. Chairman, I wasn't keeping a count. Which particular question, then, have you considered appropriate?

MR. CHAIRMAN: The Chair is only trying to assist the committee. The committee was so disorderly this morning that it was brought to my attention that a little firm hand might be in order this afternoon, and I've endeavoured to do that. I don't wish to restrict the debate. However, the matter that was canvassed by the member for Esquimalt-Port Renfrew pertaining to what funds had been set aside by your ministry had already been discussed. I found the second question which the member put forward completely in order.

HON. MR. COUVELIER: Could I ask the member to repeat that question?

MR. SIHOTA: The Chair and I are getting the first question and the second question confused. I'll put it all back again. It would be a lot easier if the minister just sat and listened to the questions instead of chatting off.

HON. MR. COUVELIER: If you would get to the question instead of the boring monologue, it wouldn't be so bad.

MR. SIHOTA: The minister should understand that this is not boring monologue. There are a lot of people in this province who are affected by the Principal Trust fiasco, and they're angry at the government. The minister should understand that he's got a responsibility to attend to those people.

I can stand here and read all the letters I've got on file. There are two files full of letters here, if you want to hear about some of the tragedies that people are experiencing. It's clear from the correspondence that the minister sends off to these people that he doesn't take the time to read anything they've got to say. A young couple who had $200,000 to $300,000 two days before the collapse, from an inheritance,

[ Page 7336 ]

through the savings of their families, lost that money. They intended to build a future on it.

HON. MR. COUVELIER: On a point of order, the issue before us, as I understand it, is my estimates. Any letters received a year ago or two years ago are not really relevant to my request for some funding so I can pay my staff.

MR. CHAIRMAN: The relevancy determination should be made by the Chair. The tradition in this House, and especially in this committee, is that under vote 25 all of the expenditures under your ministry would be discussed, not just the expenses of your ministry office. Matters pertaining to this trust company may be of some age in terms of this discussion; it seems to me it was canvassed last year. But again, the Chair only guides the committee; I am the servant of the committee. I take some interest in the fact that the member for Esquimalt-Port Renfrew points out that only a few people know the rules. I think the number of people who know the rules is diminishing rapidly. I wish more of them did, because it says in the book, "strictly relevant." On that basis, I think I could have adjourned this committee long ago.

MR. SIHOTA: If the minister had his way, all we could talk about is whether or not he could pay his staff. He's been through estimates for the last two years, and he knows full well that we've canvassed these types of issues with him in the past. Maybe he's just getting a little upset with the fact that he has to deal with these issues. There is a level of political embarrassment that sometimes flows to the minister, not necessarily on Principal Trust but on some of the other matters that we canvass. I can hardly wait till we get to the Vancouver Stock Exchange, at this rate, and hear what position the minister takes then with respect to his estimates and what further refuge he will seek from the rules.

We've seen changes in the minister in this set of estimates. In the past we just saw bafflegab and hyperbole; now we're getting refuge behind rules. Either way, the minister just wants to narrow it all down so that he get on to his meeting and get on with the world in a somewhat arrogant way. He's coming to believe now — as I see the change over the last three years — that he doesn't have to account to this House for much. That's how he now interprets his position.

Interjection.

MR. SIHOTA: I'm not going to retort to the Minister of Municipal Affairs (Hon. Mrs. Johnston) because I enjoy doing her estimates. She's one of the few ministers who actually answer questions. I mean that. Sure, you're tempted to take a shot at some of the other ministers, but I give the Minister of Municipal Affairs this much credit: she answers her questions legitimately and gets on with the job. That's why we got through her estimates a lot quicker than we have with others. My colleague for Vancouver East talked about the glacial rate of progress, and it's true.

[3:30]

What provision has the minister made in the budget this year to review the Principal Trust situation, with respect to regulatory schemes, first of all?

MR. CHAIRMAN: The member continues.

MR. SIHOTA: The minister has thrown his head back against the desk of the minister who sits behind him. I'm sure he's awake, but I'm not sure why he sees no reason to answer this question. What provision have you made in your budget, Mr. Minister, in that regard?

HON. MR. COUVELIER: Mr. Chairman, the issues surrounding Principal Trust that will require government action are not known at this time and won't be until all of the material is at hand. Were government actions or reactions to be required, the solutions or any financial implications of remedies would be found in other accounts than my own ministry's budget. That question, in my judgment, has been answered, as you suggested earlier, in comments maybe as much as an hour ago.

MR. SIHOTA: Perhaps the minister could tell us what other ministries have responsibility for Principal Trust. Is he suggesting that Consumer Services is responsible for this matter? Since I've been around, it has always fallen within the purview of this minister. Is the minister saying that the matter of Principal Trust is now delegated to another ministry? If so, he should tell us, and we'll deal it with during that minister's estimates.

HON. MR. COUVELIER: The member opposite should be aware that in legal matters, the Attorney-General has statutory obligations under law. I thought he passed a bar exam; at least he should have learned that, Mr. Chairman. So there's one ministry. To the issue of the ombudsman's report, the costs incurred by the ombudsman in assembling his data would obviously be included in his budget. In terms of any larger issues that may or may not result in future government action, funding might come from a variety of sources, not the least of which might be contingencies account.

In any event, those are unknown future events which I can't predict with any certainty, and I certainly don't wish to now. The question was: have I put money in this budget to handle any outflow or consequential action required on the Principal Trust issue? The answer to that is no. If there is a government response, it will be found from sources other than my budget.

MR. SIHOTA: Let me just ask the minister this one question then. I certainly appreciate the role the Attorney-General played, but there are not writs filed yet. The minister knows that, and I know that. There is no legal action in front of the courts.

[ Page 7337 ]

Interjection.

MR. CHAIRMAN: Order, please. Come on, let's give Hansard a break this afternoon. Let just the ones who are standing speak.

MR. SIHOTA: It's just an amazing comment from the minister — who is not a lawyer — trying to tell me how lawyers make money. The ombudsman, I appreciate, has incurred some costs, but my questions didn't relate to that. I stand to be corrected on this. The minister can tell me: is he not responsible for contingencies accounts?

Well, is the minister going to answer that question?

HON. MR. COUVELIER: That's right, I am responsible for contingencies. But as to whether any expenditure will be required from that fund, it's future government policy, Mr. Chairman. As I've said repeatedly for the last hour, I can't predict what may or may not be done with that.

MR. SIHOTA: Fair enough. The minister hasn't offered one bit of comfort for the people who are affected. He hasn't answered the first question we asked, the most basic question: whether or not this government is prepared to do what Alberta has done now with respect to those costs associated with the windup of Principal Trust, the Coopers and Lybrand costs. He has not at all indicated that any financial provision has been made in his budget to deal with Principal's.... He has either tried to hide behind the rules or, alternatively, tried to suggest that others are responsible.

Mr. Chairman, that's unfortunate. This situation, in terms of Principal Trust, occurred because of a regulatory process, in my view. There are some fundamental questions around that regulatory process which the minister has never accounted for and to date has refused to answer. For example, the superintendent of brokers did not issue a licence to Principal Trust between April 1, 1986 and August....

HON. MR. COUVELIER: On a point of order, Mr. Chairman. I gather we're about to embark on another litany of events which occurred in past years. The issue before us is purely and simply my estimates. It seems to me to be out of order to regurgitate issues that are history — some of them going back five, six and seven years.

MR. CHAIRMAN: The Journals of the House, Parliamentary Practice by Sir Erskine May, Beauchesne, MacMinn and all of the other authorities we have should be made available to members. However, the Chair is reluctant to believe they'd actually read them and consider what is relevant and what is irrelevant. There has been such wide-ranging scope that I will endeavour to listen to what the member has to say and determine whether it's current or not. If, as the minister points out, these matters refer to some past time.... We are really dealing with the administrative expenses that take place for this calendar year. With that in mind, the member for Esquimalt-Port Renfrew can continue.

MR. SIHOTA: The minister doesn't want to hear about the regulatory failure as it relates to Principal Trust. He doesn't want to answer questions. The simple way for the minister to handle all this is to explain why the superintendent of brokers did not take the action I referred to. It's a crucial question as it relates to Principal Trust. The minister must therefore believe that it's not his responsibility to answer questions as it relates to the regulatory failure of people who come under his ministry's mandate. I find it difficult to believe that the minister doesn't want to handle it. I would suspect the real reason is that the minister has obviously been told by counsel not to refer to any of these issues for fear of litigation. I've seen the minister in the past attend to some of these issues in other forms and also to some extent in this House.

Fine. If the minister doesn't want to hear of the failings of the regulatory process, we'll put those aside for the time being. I come back to the minister and ask him this. He referred to the Robinson report on Principal Trust. The report of the commission primarily under the provisions of the Trade Practice Act had a fundamental weakness and flaw in it. But again, we'll leave that aside. The report made several recommendations, one of which was that the government will give legal advice to contract-holders with respect to proceedings against the company. Could he tell us how many requests his ministry received for that type of advice?

HON. MR. COUVELIER: I don't have that information.

MR. SIHOTA: Is the minister prepared to provide the House with that information, to table it?

HON. MR. COUVELIER: I'll take that under advisement, so I will take the question as notice.

MR. SIHOTA: I would also like to know in that regard if the minister could tell us not only the number of people who sought the advice, if any.... My suspicion is that, really, at the end of the day, what we said about the Robinson report will be true: that it didn't amount to much in terms of the recommendations the minister undertook on October 19, 1987, on behalf of the people.

Another recommendation is that his ministry will provide forms and information to investors in pressing claims. Once again, that was quite the undertaking, Mr. Minister. I'd like to know again how many people sought that assistance from you. Are you prepared to provide us with that information?

HON. MR. COUVELIER: Yes, Mr. Chairman.

MR. SIHOTA: Again, I will venture to say to the minister that very few people took advantage of that,

[ Page 7338 ]

and it will demonstrate what we said at the time — that, indeed, the offering you made to the people affected by Principal Trust amounted to a hill of beans. That's exactly what the record will show. I certainly look forward to the minister showing us otherwise.

At the time, the government indicated that it would be making some changes in legislation and regulations with respect to the words "deposit" and "guarantee." Can the minister tell us what steps have been taken in that regard?

HON. MR. COUVELIER: I am not sure that I grasp the question properly. Would the questioner repeat it, please?

MR. SIHOTA: The minister should pull out his press release. In his press release they made a number of recommendations, and the government made a number of commitments with respect to use of the words "deposit" and "guarantee, " as they relate to these types of investments. The government committed itself to making some regulatory and legislative changes with respect to the use of those words. What's been done?

HON. MR. COUVELIER: I am pleased to advise the House that much has been done, Mr. Chairman. The new Financial Administration Act will contain definitions of those terms, and we've made much progress in discussing these issues with our colleagues across Canada. Indeed, as a result of this government's initiative, other western provinces joined us in a memorandum of understanding wherein we agreed to share financial information as it relates to provincially incorporated companies. Further, we agreed to have ongoing discussions about common legislation and regulatory practices.

The government was so successful in terms of leading that initiative that we were asked to chair a similar committee that would use and incorporate all of the provinces of the country, not just those in western Canada. As a consequence, we undertook that task and were successful. Even early this year we were able to sign memoranda of understanding with all of the provinces of Canada. That initiative was led by this government, as was the issue of the Principal Trust collapse.

The consistent allegations by the opposition that this government has been negligent in regulatory practices of financial institutions is grossly inaccurate and totally refuted by the historical record. You could hardly assume that we would have been given the tasks of chairing these different organizations and completing the tasks so successfully had we been as insensitive and uncaring as is alleged by the hon. member.

The record shows that we are continuing to lead the country in introducing needed changes to the regulations and legislation affecting financial institutions. I am proud of our record. I think it stands unassailable. Indeed, if the member has any contacts in the financial community across the country, I do believe they would likely confirm what I have just been telling him. This government leads the country in that respect.

[3:45]

MR. SIHOTA: I can comment about what the minister leads this country in.

The fact is that no financial administration act is before this House. It's nice to talk about it, but it isn't here. The fact is that no new regulations have been introduced, because I am sure if they had been, the minister would have said so. The fact is that there has been a lot of talk between provinces but no limitations on the ability of financial companies to seduce and lure people into making the type of investments they did in Principal Trust and not to face any consequences for those acts of seduction. It's all talk or discussion; there's no legislation or regulation. The minister is right: this province probably has led the rest of the country in talk, but that's about it.

The minister says that the comments we made with respect to negligence on the part of the province are refuted by the historical record and are grossly exaggerated. Could the minister tell us what he relies on when he refers to the historical record and what documents and evidence he relies on for that statement?

HON. MR. COUVELIER: There will be legislation brought forward in this session as announced in the throne speech and the budget speech. There will be the financial institutions act and the complete rewrite of the way in which personal property is secured. Indeed, if you pile the legislation affecting that and brought forward by this ministry this session, I suspect it would total something in excess of six inches high. If you judge the merit of legislation by column inches, I think we win the issue hands-down. However, more importantly, you should judge those things by their content.

As I said just a few brief moments ago, we have led the country in coordinating the provincial regulatory authorities. We first of all organized the western provinces. It was deemed to be such a success that we were asked by central Canadian provinces to lead that initiative. We concluded it just a few months ago. We are continuing to have discussions on further refinements of regulatory practices. Indeed, I have a meeting set up either later this month or early next month in which we expect the federal government to join us in that cooperative venture.

I say it again: all these initiatives have been led by this government. The record is clear and unassailable.

Mr. Chairman, I wonder if I might just add to my statement a response to earlier questions raised by other speakers this afternoon dealing with the break-in.

As a consequence of the attempt at drama surrounding the issue, I have just authorized the release of a press statement, and I'd like to read it so that Hansard's record is complete as to exactly what was referred to a few hours ago.

[ Page 7339 ]

The press release will say that police are investigating — current tense — two incidents of theft from the offices of the comptroller-general.

"The offices are located on the second floor of the Douglas Building, 617 Government Street, Victoria.

"The first instance, which occurred over the weekend of April 8-9, involved the theft of two Toshiba laptop computers missing from the locked office complex. There were no signs of forced entry.

"The second theft occurred over the weekend of May 13-14. While there were no visible signs of forced entry into the building, an access door to the comptroller-general office complex was forced. Thieves searched employee desks and removed $180 in cash and a clock radio.

"In addition, government losses included less than six blank computer diskettes, a fiche file containing a list of government employees as of January 7, 1989, one diskette containing a listing of government guarantees and indemnities with supporting details for fiscal year 1988-89.

"Police noted that entry into several offices was gained through the forced entry of doors. In addition, one locked filing cabinet was damaged but not entered.

"Both instances were reported to Victoria city police by Ministry of Finance and Corporate Relations officials following discovery by employees arriving to work."

Furthermore, to another question that was asked on the same incidents, I am advised that contrary to the allegation, the comptroller-general did not give any instructions, written or oral, to staff regarding the break-in.

Mr. Chairman, I hope that clarifies the inevitable public confusion that would have resulted from the misinformation contained in the allegations earlier this afternoon.

MR. CHAIRMAN: There was a question earlier about whether the discussion on various legislation was in order. The Chair would advise the minister that if he would in fact introduce the legislation, then discussion of that legislation would be out of order because it's before the House. Because it's just something that has been mentioned in the throne speech, it's quite in order until such time as your officials decide to bring it forward as a message.

MR. CLARK: We thank the minister for responding to questions we asked earlier. I think that assists us somewhat. I will have some further questions down the road with regard to details and how the government has responded; I'll mostly leave it for now. I would be interested in the minister's response to the fact that there was a break-in on one weekend, and it appears that no steps were taken in the interim period to deal with what clearly was lax security. In the event certain things were stolen, one would think there would be some attempt to tighten up security with respect to confidential information. In the absence of tightening up that security, it's now clear that confidential information was stolen and is widely available.

The minister said this was a minor B and E, and $180 in cash was stolen. Does it not seem odd to the minister that a microfiche would be stolen at all, or that computer diskettes with information on them, like government guarantees, would be stolen? I don't wish to cast any aspersion, but if this was a penny-ante thief stealing money, it just seems odd to me that a microfiche containing confidential information would also be stolen. We'll have more to say about security matters with respect to this ministry later. I will leave it at that, and quite frankly thank the minister for at least responding to those questions in a more or less timely fashion.

Maybe we can continue with some further discussion of the Principal Trust fiasco.

MR. SIHOTA: It's interesting to see how the minister has come out with that press release. Given the statements earlier in the week about the government's concern about its lending to private companies, the loss of guarantees and backup documents — guarantees and indemnities — is information that I'm sure the government doesn't want broadly disseminated. It seems to me you would have had some concern. I certainly would not classify that as trivial information.

Going back to Principal Trust, the Personal Property Act doesn't deal with the issue. A financial administration act has yet to be introduced. The Investment Contract Act, which dealt with the issue, has been repealed by government because it wasn't working, and there's no substitute in terms of regulation. Again, it's very unfortunate that the minister chooses to give examples, which aren't germane to the situation, as some measure of government action when one statute doesn't apply, the other statute hasn't been introduced and the third statute has been repealed because it didn't work. If the minister takes that as some measure of progress, then I'm quite frankly surprised, but that's how it is if the minister would measure progress in these matters.

The minister said earlier that the comments we made about negligence are grossly exaggerated and the historical record would suggest otherwise. Could the minister tell me what evidence he points to in terms of the historical record that would refute those allegations of negligence?

HON. MR. COUVELIER: Not having been in office in the years in which these offences or discussion items occurred, I am not sure that I can add much to the record of knowledge until all of these investigations that are currently under way are completed. I just wasn't there; I wasn't party to it all.

My reference to the progress that has been made and the leadership that has been exhibited as it related to financial institutions was referring to this administration. This administration has been in office about two and a half years and we have brought forward, as I have said, a whole series of legislation dealing with financial institutions. To repeat again, the leadership we have exhibited has resulted in many similar actions being instituted across the country, and I am very proud of our record.

[ Page 7340 ]

MR. SIHOTA: You know, the minister didn't say that; he knows exactly what he said, that those allegations that we made of negligence are refuted by the historical record. Now he tells us he doesn't know what that record is. So either you retract your earlier comment and say that it's not refuted, or you give us the evidence of the historical record.

[Mr. Pelton in the chair.]

The minister was the minister responsible when these things collapsed in June 1987, so he can't say it happened before. Sure, the matter of the licence not being issued occurred between April 1, 1986, and August 26, 1986, but when the collapse occurred, the minister was the minister of record. It happened between October '86 and June '87, so you were the minister responsible, through you, Mr. Chairman. The minister knows, and this isn't a light matter that hasn't come to his attention.

I want the minister to do one of two things: either retract that comment that says that the historical record refutes those allegations of negligence, or put it on the record what it is that he refers to when he talks about historical record. It's misleading to suggest that the record would suggest otherwise and to try to say that we're exaggerating when indeed it may be the minister who is exaggerating.

So either retract your earlier comment, Mr. Minister, and admit that you don't have any evidence of a historical record, or tell us what the historical record is.

HON. MR. COUVELIER: I don't feel compelled to have any knee-jerk reaction to orders from members opposite. I suppose I have no choice but to repeat what I have been saying all afternoon: the record of this administration as it relates to the monitoring and handling of the Principal Trust collapse is one I am very proud of. We were first out of the chute in terms of dealing with the collapse of the Principal Trust companies. Indeed, if the hon. member at all has followed reports of the evidence submitted in the Code inquiry, that statement of mine is confirmed as fact. So we led the issue; we were first out of the chute; we created the Lyman Robinson inquiry.

[4:00]

The purpose of that inquiry was for the stated purpose of determining whether we should freeze the assets in British Columbia immediately. We were the first government to take that action. The second objective of the Lyman Robinson commission was to determine if sufficient evidence could be obtained to justify charges of fraud by those who were offended by any alleged fraudulent action.

Now, Mr. Chairman, the member opposite is a member of the legal profession, so he knows this better than anyone. The fact of the matter is that charges of fraud can only be laid by those individuals who claim to have had misrepresentations made to them. That, of consequence, means that it has to be an individual action, not something that the government can take on in some sort of a generic fashion. Each individual alleged person must make the claim. Therefore the Lyman Robinson inquiry served a very useful purpose: providing the evidence with which those persons who felt abused could launch their own individual civil suits.

The pressures of the moment, because we were the first one to deal with the issue, the first government to deal with it....

Interjection.

HON. MR. COUVELIER: The member laughs. Does he deny the truth of what I just said? The fact of the matter is that the record shows, Mr. Chairman, that we were the first government to deal with the collapse of the Principal Trust companies — the first government. And the member cannot deny that. He tries to make light of it. He tries to ridicule us for our failure to deal and move. We moved first; we moved quickly; we moved with conviction; and we appointed one of the most prominent legal minds in British Columbia to deal with the question. Indeed, at the time, the hon. member himself even leapt to his feet. He almost broke his leg grabbing the microphone so quickly to join the march towards dealing with this sensitive public issue. I can remember his words. It was sweetness and light.

Now, of course, when he determines that there may be more news in taking a reverse position, he chooses the opportunity to do so. In the process all he does, in my judgment, is lower the esteem in which those of us who have to work with him might hold him. In any event, that's up to him if he chooses to continue in that action.

I was also asked to give a record of performance of this government, which I'm happy to provide. I've asked the staff to go down and prepare a list of all the legislation dealing with financial institutions that this government has instituted since it has taken office. That will be impressive, and it's one that I'm very proud of. I'm confident that it will show that this government has introduced more legislation dealing with these matters than most of our predecessors, if not all of them.

Furthermore, as I say again, this government, by virtue of understanding the need to deal with the new realities in financial institutions all over the world — that is to say, the collapse of the four pillars; the erosion of the traditional independent roles of the banks, the insurance companies, the trust companies and the brokerage houses — and by having the perception to understand that these traditional fortresses were being eroded at a rapid rate by governmental action and forces of marketplace, introduced wide-ranging discussion on those issues and raised them with our peers across the country.

As a consequence of our discussions on those issues, this government was asked to chair a committee of the western governments to determine at least in western Canada that we had our act together and acted in the consumer's interest. As a consequence of our success in those discussions, in concluding a memorandum of agreement which was signed, this government was also asked to chair a national com-

[ Page 7341 ]

mittee to do the same good thing, and we delivered that early this year. The document was signed early this year, and we're going to have meetings within the month in which we'll discuss the same issue with the federal government, and we invite them to share with us the obligation to protect the consumers of Canada.

We have led that initiative from day one, and the record clearly shows it. Public comments by the financial community across the country have confirmed it. I could read into the record speeches by the investment dealers' associations, speeches by members of the different banking institutions in the country, and comments from the insurance industry. I could read all of that into the record, which would confirm what I've just said, that this government's record in relation to the regulation and management of the financial markets stands unassailable. I'm very proud of our contribution to the national interest, the provincial interest and, most important, the interest of the consumers of British Columbia.

The Principal Trust issue will have much further discussion. Once all of the detailed reports are available — the B.C. ombudsman's report; the Code inquiry report; the Alberta ombudsman's report; all the RCMP reports, which, as I say, I'm not sure have been made public yet across the prairie provinces — all that information will form a data bank with which we can assess the new realities. But until that information is received, it would be inappropriate for me to either confirm or deny that we may or may not have any continuing interest in the matter.

Certainly, it seems to me, in the interests of the public and in the interests of the taxpayers of this province, it's important that we don't act precipitously. We acted quickly to protect the interests of British Columbia investors by freezing the assets of the principal of the firm, and we did obtain information necessary so that individuals might be in a position to launch individual civil suits. We were the first government to deal with the issue, and that has been recognized right across the country. So I make no apologies for the Principal Trust issue.

The circumstances around which the issues will be settled, or at least decisions made, all deal with events that occurred prior to this government assuming office. I wasn't around in those days. I can't speak to what happened. I don't have to defend what happened. I don't have to speak to it, where there's no specific knowledge that I have on those subjects The inquiries that are ongoing will deal with those, and when they're received, then the public interest will be addressed.

Until they are received, there's no useful purpose in regurgitating, replaying, asking me what if and trying to manufacture another headline while the agony of those poor individuals who have lost, many of them, their savings in these institutions continues to be manipulated on a daily basis for the personal.... Well, I won't describe motives. But certainly the consequences of that public recounting in the pages of the newspapers across the province do no one any good, other than those whose names happened to be mentioned in the articles. I'll leave that matter lie as said.

MR. SIHOTA: Well, I read the minister's letter on the VSE too. I want to say the following things to the minister. Look, you have gone out of your way to see that the historical record shows that there was no negligence on the part of your regulators regarding Principal Trust. Those are your words, Mr. Minister. We're asking you to tell us what is the historical record that you take so much pride in. Do you take pride in the fact that your regulators in front of the Code inquiry said that they wrote memos saying that they would not invest a single penny in Principal Trust? Is that the type of historical record...?

HON. MR. COUVELIER: On a point of order, Mr. Chairman, the member refers to items that evidently occurred prior to our assumption of office. I've repeatedly said during these discussions that I can't speak to those issues and that they are being addressed. I can't respond to this line of questioning, and we are wasting valuable time. We should be getting on with the people's business.

MR. SIHOTA: There were 18,000 people in British Columbia victimized by the collapse of Principal Trust. If the minister doesn't think that's the people's business, I don't know what he thinks is.

The minister says: "Well, these things were said in front of the Code inquiry before I became minister." Did the minister not know that the Code inquiry was in place and hearing submissions from his regulators while he was in power? We were just talking about evidence. The minister himself said earlier that he understood that the Code inquiry had been hearing witnesses for the past year. Surely the minister is prepared to concede that he was Minister of Finance over the past year. They were his regulators who went to those hearings and said: "Yes, we would not invest one penny in Principal Trust." It was his ministry that was allowing for the issuance of those licences when he was in charge. It was his ministry that was aware of the fact that between April 1 and August 26, 1986, no licences were issued, and when it came to issuing the licences in 1987 — when the minister was in charge — mindful of that earlier experience, still issued the licences.

Does he forget that it was his ministry that issued the final set of licences some three months prior to the collapse of Principal Trust? Does he realize that it was his ministry that requested accounting records of Principal Trust to satisfy itself that the company was solvent? Does he realize that it was his ministry that acted on the basis of those accounting records that questioned the status of the company and still allowed for the issuance of the licences?

The minister can't pretend that he wasn't in charge. He was there. He was the minister. It was his ministry. They were his officials, and they gave evidence in front of the Code inquiry during his tenure as Minister of Finance. And he's still Minister of Finance today. If somebody else was the Minister

[ Page 7342 ]

of Finance in the intervening period, yes, they would have to answer these questions. But the minister has been there throughout. And when you look at the record.... I can't remember the name of the firm that gave the accounting record to his department at Christmas '86 and in the early part of '87, but he was there. When he says that the historical record would prove that there was no negligence, is he referring to the evidence of the accountants?

HON. MR. COUVELIER: Point of order. This member, by his shouting harangues, keeps embellishing the spoken record of Hansard. I haven't made most of the statements he's alleging that I made in the words and context that he's applying them. He's manufacturing and fabricating another argument, whipping himself into a froth, for no effective purpose other than to make his own point. I have not made those statements, Mr. Chairman, in the context that the member is using them.

MR. SIHOTA: I would ask the minister to withdraw the word "fabricating" and also the imputation of motive contained in his comment.

MR. CHAIRMAN: Would the minister withdraw those comments, please.

HON. MR. COUVELIER: Frankly I find nothing wrong, Mr. Chairman, with "fabrication" being applied to the fabrication of statements. In my judgment, that's what is going on. I believe that. If, however, in your judgment, I should withdraw the word "fabrication" in order to continue to sit here, I will oblige your interests. But surely, in the name of sanity, it should not be allowed that members make artificial statements, build their arguments around these assumptions and continue to try to make something out of nothing. I have said, Mr. Chairman, on the record that this government, when it assumed office, assumed a requirement to act on previous events, and we did act, and I have said for the last hour and a half that as evidence has been provided we have acted. Indeed, we have led the country in most respects.

[4:15]

MR. SIHOTA: The minister is rising on a point of order. I have asked him to withdraw a comment with respect to fabrication, and he's sort of charged off onto some tangent that has nothing to do with the point of order; it has nothing to do with the request for the withdrawal, but gets right back to everything that he's been saying about his government's record.

So I want to ask the minister if he will withdraw the word "fabrication?"

MR. CHAIRMAN: I believe I heard the minister withdraw the word "fabrication."

MR. SIHOTA: On a point of order, I would also rise and ask the minister to withdraw the words "artificial statements."

HON. MR. COUVELIER: Mr. Chairman, I don't think anyone has a more sensitive appreciation of the parliamentary system, but I'm somewhat at a loss to understand how simple words which of themselves are not defamatory or worthy of the kind of reaction I'm getting.... If I continue to concede that I can't use normal, inoffensive words in the English language and am forced to withdraw, I might as well withdraw from the chamber entirely.

It does seem to me that I am having questions put to me that require addressing. I am attempting to do that. I don't wish to offend the House. I certainly wouldn't wish to offend the member. But, Mr. Chairman, in all sanity, seriously.... What was I asked to withdraw?

MR. SIHOTA: "Artificial statements."

HON. MR. COUVELIER: I am at a loss to take seriously the suggestion that that's a matter of such gravity that would require me to withdraw.

MR. CHAIRMAN: The Chair thoroughly appreciates what the minister says and couldn't agree more: he does everything possible to make sure that he never offends the House. But I think that sometimes it's not so much the word as the context in which it is used. And I think that's probably what started this little conversation back and forth. The minister did withdraw, but I haven't heard him withdraw the last remark. I wonder of you would be so kind as to do that as well, and then we can proceed.

HON. MR. COUVELIER: I see: "crows" is offensive; "artificial statements" is offensive. Mr. Chairman, I just wonder, then, is it possible for the opposition to continue to take any alleged offence with any phrase that offends and require withdrawal? Is that how the system works? I would appreciate a reaction to that.

MR. CHAIRMAN: I must hasten to add that really it's not the opposition that takes offence; it's the Chair that would ask for the withdrawal. I am sure the minister would be so kind as to do that for me and then we can proceed.

HON. MR. COUVELIER: Mr. Chairman, you're a nice chap; besides, you're the boss, so I'll have to defer to your request, and I happily do so. I will withdraw the phrase, although I wonder just what phrases I might use in an opportunity to have my normal freedom of speech that I thought went with the House.

MR. SIHOTA: As I was saying before that interruption, this minister was in charge during the course of all of those events. When he talks about the historical record, is he proud of the fact that his people allowed for a licence...?

Interjection.

[ Page 7343 ]

MR. SIHOTA: Obviously the minister wants to leave; he's not going to stay here to deal with his estimates. So I'll just come back later on, Mr. Chairman, and pick up the matter of Principal Trust. He's obviously chosen, Mr. Chairman. He doesn't want to hear the government's record. He doesn't want to hear those attributes of negligence that I refer to and refute his argument that the historical record shows otherwise. So we'll just come back when the minister is back.

HON. MR. REID: I would like to know if we are still talking about vote 25, and I'll make some notes.

MR. CHAIRMAN: This debate this afternoon is concerned with vote 25, the Ministry of Finance and Corporate Relations, the minister's office, in the sum of $316,724.

Interjection.

MR. SIHOTA: The House Leader says, "since he's arrived," which reminds me of the comment by Alexander Haig when the President of the United States was shot. He said: "I'm in charge." If the Minister of Tourism is in charge of the finances of this province, we're really, truly in trouble. I'll be back when the minister is back.

MR. CLARK: An interesting thing happens when the minister leaves the House. The government House Leader — whoever that happens to be — takes his place in his absence, and this is a time-honoured tradition, when the minister has pressing, urgent, personal business to attend to for a brief period during these estimates. But what has happened on the government side is that they've relied on a critic on the opposite side to fill the void. I'm quite convinced that it's the role of the government House Leader — that's part of his job description — to fill the vacuum that exists in the event of these periods. So I think that we would like to hear from the House Leader on this.

HON. MR. REID: In filling the capacity of acting House Leader, I'm here to take notes on vote 25, and I'll certainly make sure that the minister, when he arrives back in.... If you can keep it relevant so that I can be sure to give him the questions around vote 25, we'll keep this momentum going. If the Leader of the Opposition wants to talk about vote 25, the estimates of the Minister of Finance and Corporate Relations, I'm happy to take notes.

MR. HARCOURT: I wanted to talk to the Minister of Finance, who is off on urgent business, about Principal Trust. In particular, I wanted to make clear to him that it's not necessarily his words that we're concerned about, because we couldn't possibly be concerned about all the words that we get from that minister. There are so many of them, it just numbs your senses. It's impossible for us to be able to keep tabs on all of the words that come from the Minister of Finance.

It's his actions or, more importantly, the wrong actions or lack of action on behalf of those poor citizens in British Columbia who have been done in by their investments in Principal Trust and subsidiaries of Principal Trust. That's really the issue that we're trying to deal with with the Minister of Finance. He keeps getting huffy about words that are said or that he's said. He would make a good solicitor, in terms of drafting very extensive contracts that don't mean a great deal. That's the problem we have.

We're not concerned about the millions of words that he's constantly uttering; we're concerned about a lot of British Columbians who have been severely harmed financially by Principal Trust and, more importantly here in Victoria and throughout the province, by subsidiaries of Principal Trust — two in particular — that led people to the conclusion that they were investing in two subsidiaries of Principal Trust that were covered by deposit insurance of up to $60,000 each. That is the problem. There are a lot of elderly British Columbians and other British Columbians who invested a very significant part of their life savings in these outfits in the 1980s when the Social Credit government was the government. They lost those savings because those companies were found to be misleading, in a fraudulent way, people into investing their funds that were not secured by deposit insurance. And they're now left holding the bag.

[Mr. Rabbitt in the chair.]

The province will not meet its responsibilities for their inspectors not realizing early enough that this was happening, that this advertising was wrong. It was misleading. It was leading people to make investment decisions which were going to lead to the path that it did: they lost those savings. That's the issue.

In the face of all of that, not enough of the inspectors being on top of it....

HON. MR. REID: On a point of order, can I ask the Leader of the Opposition to please define in vote 25 where Principal Trust is indicated? I want to pass these notes on; the minister is back. But I can't find it under vote 25. So since it's out of order, it's not relevant and it's very tedious, maybe we should just call closure and get it over with.

MR. HARCOURT: So a more secretive government, more closing down of debate in this House.

Mr. Chairman, it's very clear that the finances of the people of British Columbia invested in B.C. financial institutions are very clearly within the responsibility of the Minister of Finance; and if they aren't, God help us. What I am talking about are the hard-earned savings of the people of British Columbia being invested in financial institutions located in this province that misled the people of this province that their savings would be secured by deposit

[ Page 7344 ]

insurance. That proved to not be true. The inspectors of this province could see this misrepresentation. They didn't take action, and people have lost their savings. What is the response of the Minister of Finance on behalf of this Social Credit government? His words: "Sue us." What a disgraceful way to deal with the citizens of this province. That's the point we're trying to make.

We don't expect anything more than bafflegab and hiding behind a lawsuit and the endless delays that will result in these citizens not being dealt with in an expeditious and fair way by government. It should just admit that it made a tragic miscalculation, mistake, and didn't take care of the investments of the people of this province. That's what we're asking for. We're not asking for a long speech from the minister. We're just saying: "Don't put people through this agony. Settle up." Let them get on with their lives. Let them recoup some of those savings so they can get on with their lives. If that isn't part of the duties of the Minister of Finance and Corporate Relations, then Social Credit is back to their original theory of funny money and their original attitude towards the economy and finances of Canada and British Columbia.

I just want to make that point loud and clear: the people who invested in Principal Trust deserve action from this government, not millions of words of bafflegab. They deserve to be recompensed for the misrepresentation and fraud the financial institutions perpetrated on them. The inspectors and the staff of our provincial government didn't pick up on that There's an obligation on the part of the Minister of Finance and this Social Credit government to those British Columbians. That's the point we're trying to make.

MR. CLARK: I am responsible for Corporate Relations on our side of the House, and, as a result, Principal Trust. But I have deferred, as the minister noticed, to both the member for Esquimalt-Port Renfrew (Mr. Sihota) and the Leader of the Opposition to elucidate our position on this question. I might say that both are more familiar with the details than I am.

I am struck, coming to this issue somewhat fresher, and having only received the responsibility fairly recently, by some glaring omissions on the part of the government. Perhaps I could canvass briefly a few of the remarks the minister made from a fresh point of view, in terms of a new person — me. I am interested in the government's response to Principal Trust. There's no doubt that there has been some response. It's our strong view that that response has been very clearly inadequate.

It seems to me that when you peel away the layers of the Principal Trust affair, or the events as they unfolded, there are several areas where there's been regulatory failure. Some of those areas were more dramatic, I guess, than others. The one that strikes me, again looking at this issue as a relative newcomer, is that relatively short period of time when the licence was lifted — essentially not renewed — by the provincial government and the company continued to sell investment contracts, and then was subsequently renewed.

It seems to me — and I would ask the minister this specific question — that of all of the Principal Trust issues, of all of what on our side of the House one might call the regulatory failures of the government, very clearly the interregnum, or the period between the time when the licence was not renewed but the company continued to sell investment contracts.... And in the words of the government's own regulator: "They wouldn't put a penny into the project." It does seem to me that at that point, in that period, anybody who purchased investment contracts when the government knew the company was insolvent, when the government knew there was no licence given.... The government has some responsibility, at the very least, to deal with the people who purchased investment contracts when there was no provincial licence given and when the regulators knew the company was insolvent.

[4:30]

I wonder if the minister could answer that specific question. One could argue — and I certainly argue — that there was regulatory failure on the part of both provincial governments, with a range of compensation that I strongly support on this side of the House. Aside from the general question, I would ask the minister to respond to the specific period when they operated in British Columbia with no licence, in full view of the regulators and with the full knowledge of the regulators that the company was insolvent. Surely the government has some responsibility for those investors during that period. Does the minister not agree with that?

HON. MR. COUVELIER: I notice that all the members who got in for their comments have now left. Some of the comments I wanted to make address issues that they raised, which is unfortunate. Nevertheless, the Hansard record should be corrected. I repeat again, to the last question put to me, that those events transpired prior to this government assuming office.

The record clearly shows that when this government assumed office, once the circumstances and the situation of the Principal Group became known to us, we acted. We were the first government in the country to act, even though the head office of those firms was located in a neighbouring province, and even though, as a result of that, we didn't have all of the information at hand. We did have sufficient information at hand for us to determine that we should act.

As I say, we created the Lyman Robinson inquiry. The evidence obtained through that inquiry enabled us to freeze the assets — the first government to move in that respect, long before the Code commission was even created. I defend this administration's actions in respect to the Principal Group.

I take it that the members opposite and the sequence of speakers who appeared in the House for brief, flashing moments of glory take the position

[ Page 7345 ]

that somehow or other all the citizens of British Columbia should be guaranteeing investments of some of those who might have lost money on investments. If that's the position of the opposition, it's an interesting one, and it would be useful to take it to the polls and determine just how the citizens of this province felt about the suggestion.

However, I say it again: the issues are being examined by a multifaceted group of inquirers, and once all that documentation and factual material is at hand, then we can deal with it — and we will.

Earlier I told the House that I would introduce for the record the various legislative initiatives that this government has undertaken since we assumed office only two and a half years ago. I will tell the members and for the record that we have implemented the Credit Union Amendment Act (No. 1), Credit Union Amendment Act (No. 2), Securities Amendment Act, Real Estate Amendment Act, Insurance (Captive Company) Act, International Financial Business Act, International Financial Business (Tax Refund) Act, Insurance Amendment Act and Cooperative Association Amendment Act. We've had various amendments in miscellaneous statutes this session. As we announced in the throne speech and in the budget speech, we will be introducing a new financial institutions act, a total rewrite of the Credit Union Act and a securities amendment act as we continue our efforts to refine and strengthen legislation and regulatory powers in the securities industry.

The record of this government in dealing with the concerns of the financial community and the concerns of our citizens who deal with financial institutions stands unassailable. We have introduced and dealt with in two and a half short years in office nearly twice the legislation, if not more than that, brought forward by any previous government. To the suggestion that we haven't been responsible custodians of the public interest, the record shows it not to be true, and that we have consistently led the country in dealing with some of these contentious issues, issues on which other governments are now following suit in terms of addressing them.

In addition, we gave the very difficult question of how to regulate the financial planners in British Columbia to an all-party committee of this House. Indeed, we gave them that task a year ago; one of the first jurisdictions across the country to try to highlight the difficulties associated with the definition of financial planner and the regulation of financial planners.

This government has nothing to be ashamed of in terms of how seriously we view these matters. As I have said many times before, we have consistently led the country in bringing our attention to them. I am proud of our record in this respect, and I won't sit still, stand still, stand aside or move over for any suggestion that we're less than responsible in these issues.

MR. CHAIRMAN: Just before I recognize the next speaker, I would like to comment that the reply, which was full in nature, did refer to legislation. I would not want either the minister or the questioner to digress and get off on that tangent. If we could still keep it in an objective way.

MR. CLARK: I think some of the initiatives the government has taken in this field — regulatory, legislative or other — are commendable. I wonder if the minister would agree with me that the policy changes the government has brought about are an attempt to redress some of the inadequacies of the previous legislation.

HON. MR. COUVELIER: No. As the hon. member knows, these matters are the subject of inquiries. I'm certainly not going to feed inflammatory statements to those inquirers. They will be making judgments in that respect. I'm not particularly interested in the views of the members opposite on those matters. There are properly appointed individuals, and those are the answers that I'm interested in receiving. We will get them in due course, and we will deal with them when we get them.

MR. CLARK: It seems to me that the minister is somewhat trapped by his remarks. He wants to say how many changes the government has made to legislation and to policy — and I can commend him for many of those changes — but at the same time he must recognize that he's making those changes because of problems with the existing legislation or regulation. Otherwise, why would they bring in all these amendments and policy changes?

It seems to me that the crux of the matter is simply this. If the government is going to regulate, then it accepts a certain responsibility. The minister referred to the Leader of the Opposition, my colleagues and people on this side of the House as wanting to guarantee all investments in British Columbia. We have no desire to do that, but if the government regulates and people advertise that there is a government guarantee — as the government offers certain guarantees to credit unions or through the Canada Deposit Insurance Corporation — then the public have a right to expect that they're being regulated and that the guarantee means something. That goes to the heart of the matter. In the Principal Trust case there was advertising taking place that they were government-regulated operations; that they were licensed by the provincial government; that there was an Investment Contract Act in place to protect the public interest. If the government wants to wander into the realm of regulating those investments, then it must be responsible for the failure to regulate them.

That is precisely the point. It's quite clear that the government failed to regulate adequately. There were regulatory failures with respect to the provincial government. That has been admitted by the government regulators at the Code inquiry. It has been admitted that the company operated without a licence. It has been admitted that they continued to accept investment contracts while they were operating without a licence. The government regulators knew they were operating without a licence and did

[ Page 7346 ]

not shut them down. Therefore the government is responsible for compensating individuals who lost money during that regulatory failure.

The government clearly recognizes that there were regulatory inadequacies, and that's why they have moved to respond through legislative changes.

HON. MR. COUVELIER: On a point of order, Mr. Chairman, the government hasn't recognized that there were administrative failures.

MR. CHAIRMAN: That's not really a point of order, but the point has been made.

HON. MR. COUVELIER: Is there no requirement to be factual on the floor?

MR. CHAIRMAN: No.

Interjections.

MR. CHAIRMAN: All members will have a chance to get the record set straight.

MR. CLARK: It clearly wasn't a point of order.

The government has recognized implicitly that there were regulatory failures by bragging about the host of regulatory changes they've made flowing from the failure of the Principal Trust group. The evidence is absolutely clear.

It is not that members on this side of the House want government to bail out all investors. There's a certain amount of caveat emptor; we all accept that. But if the government is going to regulate and therefore give the public assurance that it is being regulated with respect to certain criteria the government has laid down, then if the company does not act according to those criteria or regulations, the government has to accept culpability in those instances. That is precisely the point we're making on this side of the House. We feel very strongly about it.

I know that all members of the House, regardless of their politics, are concerned about people who have lost money in that regard, but I think the government is being obstinate and not willing to accept a range of culpability with respect to its regulatory failure in this regard.

I might add, just briefly, that many of the people we have talked to about Principal Trust are elderly. I appreciate that the government, from what I've read, say they are going to pay attention to the ombudsman's report and to the Code inquiry report, and act accordingly, or at least act with that input. That seems to me to be a new position in the government I think it's laudable if they do act according to what transpires.

The problem is that people are dying — if I can be so blunt. Elderly people who lost their life savings are waiting for some compensation that has not been forthcoming from the provincial government. It seems to me that the provincial government should recognize and accept its responsibility, at least in certain areas of the Principal Trust fiasco, and deal with it judiciously, forthrightly and quickly in order to try and alleviate the kind of stress that I know the minister knows these investors are feeling.

We don't want to set a precedent to guarantee investment of all people at all times in British Columbia, but the facts, it seems to me, are absolutely clear in this regard, and people should be compensated because of the failure of the government to regulate.

I will leave the Principal Trust fiasco — if I can call it that — at this time, and just briefly touch upon one other relatively small matter which deals with the regulation of financial institutions.

I guess one of the problems with the failure of western-based institutions, by and large, is a real concern that people have about the regulatory capacity of government. The government has indicated that they've moved in some regards — whether the minister wants to admit it or not — to deal with inadequacies in legislation that were brought to light by some of these fiascos.

I just want to draw his attention — maybe he could help me with this — to a small credit union that went bankrupt or was taken over by CUDIC. The credit union is called the Legion Credit Union, in New Westminster. This was rather a small matter, but it certainly raises some alarm bells in my mind.

[4:45]

The credit union had an asset base of $16.6 million. The manager of the credit union, by the time he was caught, stole $7 million, and the government regulators did not know. It wasn't until there was a phone call from the bookkeeper to the superintendent of financial institutions that they were alerted to the fact. I get concerned when I realize that a small credit union with $16 million in assets had almost half of the assets stolen by the manager, and it's not found out by the superintendent of financial institutions until a bookkeeper blows the whistle on them.

Then the wheels of the bureaucracy moved very quickly, action was taken and deposits were guaranteed. I have to ask the minister whether or not it concerns him that the regulators seemed to miss fraud of the most extraordinary level. What assurance can he give us that this kind of thing doesn't exist in other credit unions? I don't want to be an alarmist. One wonders about the regulation of financial institutions when someone can steal 50 percent of the assets before being found out, and even then is only found out as the result of an employee phoning the superintendent of financial institutions.

HON. MR. COUVELIER: I'm very pleased to have the question, because it gives me an opportunity to speak to the strength of the credit union movement, and how proud this government is of the fact that no depositor in British Columbia in a B.C. credit union has ever lost a single dollar since 1958, when CUDIC was first established. Our track record, in terms of credit union operation I believe is exemplary and hardly deserves any suggestion that it's less than that.

[ Page 7347 ]

The member should be aware that action was quickly taken on the Legion Credit Union. The member should also be aware that there have been ongoing investigations relating to the matter, and that the system works. It will continue to work in the way it's supposed to. No one ever said that anybody involved in financial activities can be absolutely confirmed that work is being performed adequately.

The issue here is quite simple: do those authorities in charge exercise their responsibilities effectively? In this case, clearly we have done so, and CUDIC did so. They moved very quickly on that matter. As a consequence of this government bringing in legislation that provided deposit insurance.... During our administration, we brought in credit union deposit insurance, I should remind the House. There should be adequate comfort for depositors in credit unions that the system is strong, the deposit insurance system works and the government stands behind it.

I should also mention that we held a press conference a week and a half ago at which I announced the merging of the superintendent of financial institution's office with CUDIC, in which we're creating a new organization — a commission, if you like — to ensure that we maintain tight control over regulatory practices, and furthermore, that we avoid overlaps, duplications and confusions that might have existed under the old system. This should reduce the cost of administration.

It therefore should reduce the cost to the insurees — that is, the credit union membership — and as a consequence, that should be reflected in lower operating costs of credit unions, which is beneficial to all concerned. Most importantly, there will be considerable benefits realized by virtue of the certainty of responsibility for continuing to monitor ongoing, daily functions of the various credit union organizations.

The member is quite right in raising Legion Credit Union. It had its problems, but the system stepped in quickly. Every jurisdiction across the country and in the world has had similar examples. We shouldn't expect to be insulated from them. The system is strong and healthy. It can deal with problems when they arise, and it has consistently done so.

MR. CLARK: I agree with some of the remarks of the minister. The problem I have is not that the regulators acted quickly when they found out, but why they didn't find out prior to the manager stealing 50 percent of the assets of the credit union. On a more philosophical note than we've been discussing, it seems to me that if the government had moved, as they have, to create deposit insurance — which I agree with — then the government also has to move to enhance the regulatory structure of the government to ensure that credit unions aren't called upon to tap into that government guarantee.

With government guarantee comes a government responsibility to regulate. I simply raise the concern that reactive response is worthwhile, and in this case very speedy. But I'm concerned about ongoing regulation of credit unions when this is possible. When the superintendent of financial institutions finally moved — and as I say, moved quickly — the regulators said that the books had serious irregularities. They had to reconstruct the books of the credit union; the books were a mess. It's obvious that there were all kinds of problems with this small credit union. As I say, when they found out about it, they moved very quickly, and I think they are to be commended for that. The problem I have is, why didn't they pick up on the fact that there were these irregularities prior to being tipped off by an employee?

Can the minister give us some assurance that the regulatory structure he has talked about enhances the possibility, at least, that government regulators will be on top of credit unions and the like in the province more than they've been in the past?

HON. MR. COUVELIER: I realize that members can stand in this House and are protected by privilege from lawsuits for damage or slander or libel, but I'm offended by the thought that a person whose specific responsibility is to deal with financial matters, as my critic, should use the phrase: "Staff member stealing 50 percent of the assets." As I mentioned to the member, the matter is under investigation. In the fullness of time there might well be ensuing actions by the appropriate authorities in the appropriate medium, which in my judgment would be a legal setting.

I find it troublesome that these kinds of adventurous statements would be made. They do potential harm to any legal action that might subsequently flow, and certainly they put no credit on this House or its members. The issue is, did the system respond? The record shows that the system did respond, that the system was made whole by the existing insurance scheme. This seems to indicate to me that it works as designed.

As to any further comments about the Legion issue, I just don't think it appropriate that I as a minister responsible should get into it. I'm somewhat concerned that the member opposite would be pursuing this line, knowing as he does — as I've advised him — that the matters are still under investigation.

MR. CLARK: I don't have to deal specifically with the Legion Credit Union if there's litigation or investigation taking place. I want to deal with what flows from that.

The minister says repeatedly that the system responded quickly, and I agree with him. I'm simply asking why it is — not just in this case; maybe in other cases — that serious irregularities, fraud and everything else, could take place and no one knows about it. I just think it's not comforting for the investor in credit unions. In light of the fact that the government has moved to a government guarantee, something which I support, I would be much more comforted if the minister would stand in the House and say that the new system he's announced will in all likelihood enhance the regulatory capacity of that operation to regulate credit unions; that this is an enhancement, and therefore the kind of failure or

[ Page 7348 ]

gross theft that we saw in the Legion thing is likely to be caught at an earlier stage as a result of initiatives the government is taking. In the absence of that, it seems to me there's some problems with our regulatory capacity if we can't catch these kinds of rather startling thefts of 50 percent of the asset base of a credit union, with all kinds of irregularities — and our regulators didn't know about it.

I think the government should recognize, if they're moving into a government guarantee system, that there is an equal obligation on the part of the government to enhance the regulation to ensure there aren't credit unions that are failing to tap into that government guarantee. Would the minister accept the proposition that there is now a heightened onus on the government, it seems to me, to regulate, given that the government has moved into the guarantee field?

HON. MR. COUVELIER: It's traditional in financial institution regulation — if the hon. member doesn't know — that government doesn't regulate. That would imply the very worst of all evils: political manipulation of that very sensitive function. Regulation of financial institutions is done by arm's-length organizations, not government.

As I've just mentioned, we announced the creation of a commission; we'll be bringing in the legislation and proclaiming it this session. It will help deal with that issue. I certainly don't agree with the hon. member when he says he would want to see government performing that function directly. I'm not surprised that a socialist would recommend it; it seems to be typical of socialist belief that they can intervene. For some naive reason they seem to think they would resist the temptation to manipulate, intrude and intervene in the normal business relationships that the marketplace provides in 99.99 percent of the cases before us. The commission will do the job, and it's going to be onward and upwards. The staff is enthusiastic about it, I understand. The industry is enthusiastic about it. It's merely another indication of effective legislation brought forward by a sensitive, caring government, Mr. Chairman.

MS. MARZARI: Mr. Minister, in the course of chairing the Public Accounts Committee over the last number of years, we have watched BCEC get formed, get dissolved, get reformed; watched new programs and new entities come into the BCEC portfolio and then watched the whole thing sort of dissolve once again under our hands. It's been an interesting process, from a public accounts point of view, to try to track certain programs as lands get privatized, as loans get privatized, as BCDC, BCEC and BCBC all come together and as B.C. Pavilion Corporation comes into BCEC complete with a stadium and then walks out of BCEC with a stadium that's suddenly been paid for, leaving its debt behind. It's been a fascinating experience for those of us who try to track dollars. I don't know if I could run my household this way.

[5:00]

What we're looking at right now in the Public Accounts Committee, and what we've looked at in the last couple of days, has been the BCEC loan portfolio. The auditor-general, as you know, did track a $25 million debt package and watched it as it depreciated in value by $6 million, as a matter of fact, and then was taken to the market.

The auditor-general commented on the actual transactions and the privatization of the loan portfolio that BCEC amassed. He said that he did not feel that there was anything untoward in the actual amassing of the loans, in creating the portfolio and putting it out to market. He did, however, make constant reference to the various programs under which this money had been loaned. He made constant reference to special program goals and said repeatedly throughout his report that everything was fine, and that the actual transactions were handled reasonably well within the parameters of the program goals. He was not auditing the program goals themselves.

It certainly strikes us that it seems important for this House to know what those program goals are. At our most recent meeting — or two meetings ago — we discussed what the goals were, and how they differed among various programs. The programs on the table for discussion that incurred these loans, which amounted to about $200 million in the last few years, were: the low-interest lending agreement, called LILA; the low-interest subsidy agreement, called LISA; the industrial development assistance program, called IDAP; and the Low Interest Funding Today program, called LIFT. Aside from the rather unique and interesting acronyms that you've come up with for these programs, my question to you, Mr. Minister is: what are these elusive program goals to which you refer that incurred the debt? What are the differences, in terms of goals, among these various programs?

I'm asking these questions as process questions, not referring to the amounts of money that were lost, but around the actual rationale for developing these programs in the first place. How did these programs come into being? Why have they not been integrated long ago into one program — more recently too? What do these programs have to do with specific regions? Is there any regional planning that interfaces with the program goals? Do you look at the regions of the province? Do you actually have plans in concert with the various regions as to how many jobs, the tenure of jobs and the types of jobs that you want to encourage in each region of the province, and that you can match loans with? Is there any planning in the development of these program goals?

Where does tax expenditure come into this big picture of program goals? As we all know, a great deal of what government does is provide tax incentives to corporations that they very often lend money to. We can see the lending going on in Public Accounts; no, as a matter of fact, we don't see the lending because you haven't divulged to us, in many instances, who the corporations are that you actually lent to. To what extent does tax expenditure become a

[ Page 7349 ]

part of the picture, when you're actually lending to corporations? Is that tabulated anywhere in your books, so that we can look at a region, at a program for that region, at a lending portfolio for that region and at a tax expenditure budget for that region? I've put a lot of questions on the floor, and I'd appreciate if the minister could attempt to answer them.

HON. MR. COUVELIER: I think it's appropriate, possibly, to remind the House that I'm merely attempting to meet my payroll. I'm not responsible for setting policy goals of the Crown corporations that have been described here. I have acquired the residual assets to manage the residual loan portfolio; that's true. But I didn't make the loans. I'm just here trying to explain my own ministry's operations.

If there are queries dealing with other Crown corporations that were in the business of making loans, I respectfully suggest that they be directed to the minister in charge at the time. It wasn't me. I'm not privy to much of the information requested.

MS. MARZARI: Is not the minister interested, then, when he's sitting in Treasury Board supervising the expenditures of the government, in these rather mammoth amounts of money that move out of the provincial coffers into the hands of private corporations, in the interests, supposedly, of encouraging regional development? The minister must be involved in and aware of amounts of $25 million, for example, for Louisiana-Pacific. It must be a cabinet decision when $5 million is given to Starline Cedar Mills, or when Canadian Autoparts Toyota is given $4.6 million.

Somewhere there must be a packaging of tax expenditures and loan portfolios, and a discussion through your ministry of program goals and what these programs hope to achieve. Surely, when you're talking about loans of this magnitude, your ministry is very much involved.

HON. MR. COUVELIER: The member seems offended by my response, but my response is factual. Now she's adding some specifics. When she started her monologue, it was dealing with BCDC, BCEC, B.C. Pavilion Corporation and all of those things. I'd like to help her, but it really is beyond my capacity to do so.

It is true, of course, that Treasury Board has dealt with some of those specific instances, but not the large one she opened with. That was a previous government, and I wasn't privy to those details. On some of the others, I can remember discussions at Treasury Board, but only on those. I'd be pleased to respond to specific questions on those things that I can, if she wishes to be specific.

MS. MARZARI: Is the minister basically saying that he's not really aware of what the program goals are for these development programs, venture capital programs and loans to corporations? Is the minister telling me that he's not aware of them and he doesn't have any responsibility or accountability to this House for those goals?

HON. MR. COUVELIER: I'm not the minister responsible for them. If the member has a genuine desire to obtain the information, the request might appropriately be made to the minister responsible.

MR. CHAIRMAN: Before we go on, I would just like to review the votes that we are canvassing: votes 25, 26, 74, 75 and 76. Although vote 25 is the one before the House, the parliamentary tradition has been that the minister takes all of the votes of his ministry and canvasses those areas. The other functions acceptable to the Chair are those which the minister regulates and the regulations therefore.

MR. CLARK: Just to clarify the minister's remarks, he has said that he inherited loans from certain agencies. What I believe the first member for Vancouver-Point Grey, not to put words in her mouth.... Those loans that he inherited were granted under certain program goals. The ministry is now managing those loans. Therefore it would seem appropriate that this ministry now has an obligation to ensure that the goals under which the program was originally granted, or the terms that they were originally granted on, are fulfilled.

That's where we wander into the realm of the Ministry of Finance and Corporate Relations. Even though the loan may have been made under the B.C. Development Corporation, it is now the management property of the Ministry of Finance and Corporate Relations. Therefore the Minister of Finance and Corporate Relations, it seems to me, should answer questions regarding the terms and conditions under which loans were granted. Even though they were granted previously, they are now your responsibility. I wonder if that helps to clarify the minister's role in this regard, or whether the minister agrees with me in that regard.

MR. CHAIRMAN: The Chair would consider that the minister would only have to answer those questions regarding the time when that particular portfolio was within his jurisdiction.

MS. MARZARI: Then the minister is saying, basically, that the BCEC loans are not in his bailiwick to respond to and that in fact BCEC still operates pretty much on its own in privatizing the loans. The money does come back to the privatization fund, which the minister is in charge of. Am I right? In fact, these loans are being made on behalf of the privatization fund, and the money is supposedly coming back to that privatization fund, so I would think that quality control would definitely be within the minister's realm.

Tax expenditures, too, would most definitely be within your realm. No other ministry of the Crown, no other department, no Crown corporation can step out to a corporation and say: "You can defer your tax" or "We'll give you a special subsidy on your

[ Page 7350 ]

water rates" or "Your hydro isn't being charged this year" or "You have a no-tax situation for the next three years while you're getting started." Surely that too comes directly to you. That cannot be packaged by any other ministry; it must come directly from you, Mr. Minister. So my guess is that tax expenditures are a major item, although we no long tabulate them. We no longer refer to tax expenditures in our Public Accounts as forgone revenue of a certain amount spent each year by government. What does the minister think of that, in terms of the accountability of public funds?

HON. MR. COUVELIER: I have some trouble dealing with these questions, because they seem to be based on false assumptions. I don't know whether the member is aware that BCEC is no longer issuing loans. They're out of the loan business. Secondly, the ministries of the Crown that do examine these applications are the Ministry of Regional Development and the newly created Ministry of International Business and Immigration. They lead these issues, and they bring the disciplines of due diligence, etc.

The way our government works, the line ministry carries the issue and leads it. So I must suggest that you put those questions to the ministers in charge of those issues.

MS. MARZARI: Maybe I'm not thinking as fast as I should be, but when any one of these other ministries comes to you with a package — their budget alone, to the given corporation — surely they must come to you to ask for tax concessions. Surely they must come to the Minister of Finance to say that such-and-such a company needs 10 years' worth of tax deferral, such-and-such a company needs five years' worth of no hydro bills or gas bills, or whatever. Surely you are accountable right down the line.

When any one of these ministries comes to you and says, "What we want to do is have the province accept risk," that surely falls on your shoulders, in any one of these programs where venture capital is involved and the province decides that it's going to accept risk. Even on the BCEC loan write-downs, in this $25 million portfolio that was taken to market and written down by $6 million.... No, it wasn't that one, I'm sorry. It was another $25 million portfolio that was taken to market. Reasonably good commercial-quality ventures were taken to market. There was a risk involved, and the provincial government said it would back up that risk. If in fact these loans didn't pay off to the buyers in three years, there would be some kind of penalty that the province would pay to the buyer.

[5:15]

Surely you are involved with assessment of risk. Surely you are involved with future contracts on risk and on tax deferrals. Are you not in any way consulted on that? Do you not have a budget for that within your own ministry? Or do you delegate that, too, to your regional people?

HON. MR. COUVELIER: I really want to help here, but I'm troubled because the questions aren't, I guess, the proper questions so that I can help. The line ministry, Regional Development or International Business, has the authority to make these loans.

It's true that these loans cross Treasury Board's desk and come to my attention as Minister of Finance, but it would be an intrusion on my part were I to start telling line ministries how they can spend their budgeted amounts. My primary job is to give spending envelopes and make sure, to the best of my ability, they limit their spending to the constraints we impose. In the case of loans of a larger size, Treasury Board does get to review them and frequently the issue moves on to the cabinet level. But as to the specific terms of reference that are available to the loans, I repeat, Mr. Chairman: they must go to the line minister.

Now I do believe the last question put, if I understood it properly, might refer to the privatization of part of the loan portfolio which my ministry inherited and undertook to market, to privatize. If my assumption is correct, in that particular instance I am the appropriate one to deal with it, and I would be happy to oblige.

MS. MARZARI: These are some loans that have recently been made to, for example, Canadian Chopstick Manufacturing Ltd., a maximum of $1.1 million, and Woodland Windows Ltd., $1 million maximum. Can you tell us about the terms of these loans, or do these come under another ministry?

Okay. But the government purchased shares in Three Buoys Houseboat for $1.5 million. Have you assisted other companies in this way, by actually purchasing shares? Does it come under your purview when another ministry sets out to purchase shares and take on equity arrangements with companies? You really have nothing to do with that either.

Can you tell me, Mr. Minister, at what point these decisions do come to your attention? Is there a financial point at which the magnitude of the decision being made by the regional ministry or by the new international ministry comes to your desk, to your attention? At what point do you become officially involved when we're talking about...? At what point in millions of dollars, shall we say?

HON. MR. COUVELIER: I don't come to those issues at all as Minister of Finance; I come to them as chairman of Treasury Board. The specific loans that you mentioned, hon. member, were led and authorized by the line ministry, so you should really be directing your questions to them about those situations.

Treasury Board normally receives information and becomes aware of line ministry initiatives if the loan exceeds, I think, a million dollars; we can check that out, if you like, to tell you when the trigger point is. But the key point is that it's the line ministry that is responsible for doing due diligence and following through with all the requirements, and it's basically

[ Page 7351 ]

Treasury Board's job to ensure that the spending envelopes aren't violated by these decisions.

MS. MARZARI: I find it interesting that the point at which you become involved as head of Treasury Board is the million dollar level, when word was out not so long ago that the Treasury Board or the Premier's office — I can't remember which — was actually looking at expenditures down to the $500 level.

MR. CLARK: Yes, $500.

MS. MARZARI: Yes, the Premier was reviewing expenditures of $500 inside the administration of this House. Does the minister have anything to say about the fact that we'd have the Premier's office looking at any expenditure over $500, yet when corporations are coming to this government for loans, Treasury Board only looks at them when they're at the million dollar level, with very little control over the risk factors, equity purchases and saying yes or no?

HON. MR. COUVELIER: I don't know what the member is referring to in terms of the Premier's office and $500. Is the member suggesting that the Premier of the government of British Columbia personally examines every expenditure over $500? Well, that just goes to show what prudent fiscal managers we really are.

MS. MARZARI: There is a slight inconsistency here, as you can see. Does the minister have any thoughts about the accountability of the loans, the terms of reference and the contracts with the corporations that the other ministers are involved with? We have been told at Public Accounts, even by BCEC — and the other morning by officials from your ministry — that the contracts with private corporations by this government are in fact confidential, and that confidentiality is written into the contract very often by the provincial government.

Do you have any notion that public administration in the public sector does not call for the regulations and rules laid down by private banks? In fact, accountability demands that there be a term of reference established, perhaps by yourself, sir, to ensure that public accountability is well served and that terms of reference and contracts are made public when money is lent, when tax expenditures are made to private corporations.

HON. MR. COUVELIER: Mr. Chairman, I would like to help, but I don't know how I can respond any more fully than I already have. I can't speak to the documentation that is prepared by line ministries in terms of confidentiality. The member is suggesting that government is somehow requiring confidentiality. That stretches my imagination, but I suppose people might hold other views.

Every government that I am aware of has a policy of providing financial assistance as economic incentives to what they deem to be worthy business ventures. Our government is no exception. I think it's appropriate, given the difficult economic times that we've come through, that government should play that role — with discretion, of course. I also think that, with this government's determination to pursue regionalization, some of the less well-developed regions of this province almost must have that kind of government leadership and direction if we are to be successful in creating more diversified levels of employment around the province. I don't think there's anything inherently wrong with what we're doing. In any event, specific questions on these matters are more appropriately addressed to line ministries than to me.

MR. CLARK: We appreciate the minister's comments that government money is needed to help these disadvantaged regions. I wonder why we would give that poor, deprived little company Toyota a low-interest loan to locate in the lower mainland. We'll ask that of the line ministry, but it does seem a slight contradiction of the minister's remarks.

I thought we might spend the last half-hour on a perhaps lighter note and talk about the BS fund and how the government sets up its accounts — I don't know if half an hour will be long enough to canvass all the ramifications of the BS fund. I thought we might start by looking at Public Accounts. As the members here today know, this government and this ministry set up a new set of accounts, a general fund and special funds converted to special accounts. We had previously, of course, the consolidated revenue fund, and it was called the combined financial statements or the consolidated revenue fund. Then, of course, we have the consolidated financial statements, which include Crown corporations.

I'll deal with the auditor-general's remarks about that in a minute, but maybe we could just canvass some interesting things. I might draw the minister's attention, if he doesn't have them, to Public Accounts, volume 1. It's kind of nice to compare the general fund — I'll call it the general fund — and the consolidated revenue fund or the combined statements, because that gives us a nice handle on the difference.

Maybe we could start with just a general question, and maybe the minister could explain for the House the difference between the general fund and the consolidated revenue fund.

HON. MR. COUVELIER: I'm happy to take the question under notice, Mr. Chairman. It's a highly technical issue. We had great fun with this last year. The opposition member and myself stumbled around it. I'm happy to learn that he still hasn't got it straight. We'll put it in writing this time, and we'll take it as notice.

MR. CLARK: The minister is not going to get away that easily — without a discussion of the difference between the general fund and the combined statements. I wonder if the minister or his staff have a copy of Public Accounts, volume 1; maybe we could

[ Page 7352 ]

go through it. Do the minister or his staff have those accounts handy? If not, he could probably get them, or I could have one of my staff bring in the book for the minister. Does any of the staff have a copy of the Public Accounts, volume 1 - the most recent edition? I wonder If I could ask for the staff to bring that in for the minister. Then it'll be easy to compare the two funds so that we can try and ascertain what the difference is between them. Once we do that, we can move on to a discussion of the relative merits of both of them.

I wonder if in the interim the minister or his staff have had a chance to answer the question he took as notice, which was: "How much is the 10 percent tax on draft beer projected to raise?"

[5:30]

HON. MR. COUVELIER: Yes, Mr. Chairman, I have that information now. I'm pleased to advise the House that the revenue from the 10 percent tax on draft beer for this year is estimated to be $27 million. I should point out to the hon. member that we have the second-lowest beer tax in Canada. The tax is applied elsewhere at higher rates. It's deemed — in the minds of the government — as being about time, with liquor having paid its historic contribution towards alcohol and drug abuse, that beer should similarly make its contribution. The sum involved is $27 million for this year.

MR. CLARK: I may have to make a speech for a few minutes while we wait for Public Accounts, volume 1, to come into the chamber. I have no wish to prolong the debate.

Interjections.

MR. CLARK: I know we're moving at an incredible pace and covering such a lot. For the minister's comfort, we have canvassed quite a few of my topics here today. I know we've made great strides. I would say we're halfway through the estimates, which is quite a considerable accomplishment. I did say it would be two or three days, but I hadn't appreciated that the answers would be longer than the questions, so it will take slightly longer.

I see that Public Accounts has arrived. The reason I asked for the book is that it makes it a lot easier to go through with the minister the difference between the two. If you'll turn to A5 and also keep open B5, we can see the difference between the general fund and the combined balance sheet, or the consolidated revenue fund. If the minister turns over the page, he'll see that these are the three most important public accounts — I'm sure he would agree with me: the statement of revenue and expenditure, the statement of the balance sheet and the statement of changes in cash and temporary investments.

Maybe we'll start with the last one. It's the easiest one, I think: the statement of changes in cash and temporary investments. If you look at A7, at the top it says that the net operating expenditure for the year — i.e., the deficit — is $790,933,000. But if you flip over to page B7, the same table exists. It says that the net operating expenditure for the year is $48,028,000.

HON. MR. COUVELIER: I just want to make sure we're dealing with the same issue. I gather that the member is referring to 1987-88. I thought the issue before us was the '89-90 estimates of the Ministry of Finance.

MR. CHAIRMAN: In reviewing this subject, Mr. Minister, the Chair is aware that the public accounts have been referred to a select standing committee of the House, and it would appear that the present line of questioning is actually outside the rules.

MR. CLARK: I simply wanted to ascertain the difference in a general sense between the two accounts. The minister is responsible for tabling public accounts. The fact that the industry and the minister have tabled the accounts of '87-88 means we can only deal with that which he has tabled to date. We don't have the public accounts for future years.

The form of the public accounts is really what I'm discussing, and the form of the public accounts is within the purview of the Ministry of Finance. I have no wish really to go into the details of these public accounts; that's for the Public Accounts Committee. I want to ask questions regarding the difference between the two sets of public accounts.

MR. CHAIRMAN: Proceed.

MR. CLARK: Thank you, Mr. Chairman.

I might say, for the minister's edification, that it's easier to refer to these only to.... After we do this and we agree on some general differences between the two sets, then to be quite honest, I can take the budget and refer to current differences between the two funds to try to ascertain some information which will be forthcoming in public accounts in the years to come.

I appreciate that I'm looking at detail, but I'm really just interested in the general principles. I note, for example, that in the general fund it says the deficit is $790 million and in the consolidated revenue fund it says the deficit is $48 million. I wonder if the minister would care to explain the difference between the two numbers. Why would there be a deficit of $48 million in one set of books and a deficit of $790 million in another set of books?

HON. MR. COUVELIER: The numbers referred to deal with '87-88 numbers, and I'm still at a loss to understand. Given the fact, I assume, that the member is getting at the basic issue of how we report public funding, why doesn't he just give us his questions and I'll respond to them at the end, rather than trying to deal with each individual one? Otherwise we'll go on here accomplishing no useful purpose.

MR. CLARK: Mr. Chairman, that's not acceptable on my part, because I want the government and the

[ Page 7353 ]

minister to explain the different forms in which they present the public accounts of British Columbia. That's something that surely the minister can explain. If he doesn't want to go through the current public accounts to explain the difference in how they present them, then we can talk about the auditor-general's report and how he discusses the difference between them. Then I could talk about the budget, to explain the difference between them. But it seems to me easier to go through Public Accounts with the minister, so that he can give some understanding to the public as to why it is that there are two sets of books, one showing a different deficit than the other. It may be a simple question that the minister may be able to answer without taking it as notice. We're trying to ascertain why one set of books has one deficit and the other set of books has a different deficit. Maybe if I keep the questions general rather than specific, the minister can respond.

HON. MR. COUVELIER: Mr. Chairman, the member alleges that we have two sets of books. We have many, many accounts, but there is only one set of books. To suggest otherwise, I think, is inappropriate and out of order. I'd like the member to reconsider that ill-advised comment. The issue of the terminology of the accounts was gone into last year when we made a change. If the member is referring to the fact that we had a different reporting system in '87-88 than we have in '89-90, all right, that's a fair comment. But to make the allegation that we have two sets of books is most inaccurate and unfair.

MR. CLARK: Could the minister explain which set of accounts — the consolidated revenue fund or the general fund — accurately reflects the true financial position of the province?

HON. MR. COUVELIER: As the written word shows, the general fund is the main operating account, and that's the fund to which we refer when we normally talk about government operations. As the member knows, the general fund plus the privatization fund plus the budget stabilization fund will give us the consolidated revenue fund. But, Mr. Chairman, the member, I think, is trying to fabricate an argument.

I just wondered if that was going to be offensive again — an argument that somehow we've got two different reporting formats. And we did change....

MR. CHAIRMAN: Order, Mr. Minister. "Fabricate" would not really be considered a parliamentary word in that context.

HON. MR. COUVELIER: What have I got — the Chair asking me to withdraw a word?

MR. CHAIRMAN: I'm just advising the member.

HON. MR. COUVELIER: I see. Well, thank you, Mr. Chairman. It's useful to grow and mature in this arena.

Anyway, the thrust of the comments appears to be, as I said, that we changed the reporting system when we decided that we would create and preserve for all future generations of British Columbians the benefits of privatization. We're unique in that respect, and I'm very proud of it. Other governments have taken those assets and spent them; in meeting the obligations of the current year, we have not done that.

Because we wanted to set those funds aside, we had to change the accounting presentation. We can't have it both ways. If you're objecting to us isolating the privatization fund the way we did and not spending it, then I'd be interested to hear that. I think it's appropriate that we decided to introduce this kind of mental discipline to managing public money, requiring a change. If it's the change itself — that is to say, the Isolation of these funds — that the member finds objectionable, we can have a really good philosophical debate.

MR. CLARK: I just wonder what the minister takes exception to. I'd like to clarify this. Does the minister agree that there are two sets of reporting accounts?

HON. MR. COUVELIER: Even after the change, there are still three reporting accounts: the general fund, the special funds, and Crown corporations and agencies. All of those are accounts as described by the member.

MR. CLARK: Can the minister explain which set of accounts most accurately reflects the financial position of the province?

HON. MR. COUVELIER: I think I answered that question before. The general fund is the main operating account of the government.

MR. CLARK: Could the minister explain why he thinks the general fund is the most accurate reflection of the books of the province as opposed to the consolidated revenue fund that the auditor-general thinks is the most accurate reflection of the financial picture of the province?

HON. MR. COUVELIER: The member is attributing comments to the auditor-general. I wonder if he could give us the source, the reference, of that comment.

MR. CLARK: I'd be very happy to go through the auditor-general's statements, and I will in a minute, but maybe we could just continue on here first to try and get through some of the public accounts differences, so that we can get to the bottom of the difference between the two funds. Once we do that, I can go through the auditor-general's report to demonstrate, I think conclusively, that the consolidated revenue fund more accurately reflects the true balance.

In referring to pages A7 and B7 of Public Accounts, one shows a deficit of $790 million and the other a

[ Page 7354 ]

deficit of $48 million. But if you go down the page, you see the total financial requirements. I wonder if the minister would agree with me that the amount given in the statement of changes in cash and temporary investments for the fiscal year, where it says "total financial requirements," is the borrowing that the province must undertake in order to fulfil its obligations for that year.

Interjection.

MR. CLARK: The minister can refer to page A7, B7 or probably C7, because we're dealing with changes in cash and temporary investments which, in my view, reflect essentially the borrowing requirements that the province must undertake in any given year. I want to ask the minister, with particular reference to the line that says "total financial requirements," whether he agrees that it reflects the total borrowing requirements of the province in any given year.

[5:45]

HON. MR. COUVELIER: No, Mr. Chairman, I don't. The member is referring to what in effect is a cash-flow statement. My job, as I perceive it, is to manage the public expenditures effectively and administer the revenue collection services that are under my purview effectively. The consequences of delays in receiving receivables or advance payments on payables or the decision to prematurely retire bonds all affect the cash flow. The member seems to feel that it's the more significant statement of operations of government. I don't agree. I think the cash flow is the natural consequence of how we manage our daily affairs. The important issue or statement, as far as I'm concerned, is general revenue.

MR. CLARK: I wasn't trying to say that it was a more accurate picture of the debt. What I was trying to draw the minister's attention to is that on page A7 and on page B7 — in other words, under the general fund and under the combined statements - the total financial requirements are the same: $190,660,000. One of the set of statements in the general fund says there's a deficit of $790 million, yet the borrowing required is only $190 million; but the other one says that there's a deficit of $48 million, and the borrowing is still $190 million. I wonder how we can have a deficit of $790 million in that year and only have to borrow $190 million, whereas in the other set of accounts we have a deficit of only $48 million and yet we have to borrow $190 million.

HON. MR. COUVELIER: Mr. Chairman, I really would have expected this sort of discussion to have occurred in Bookkeeping 101 or something.

The member seems to believe that there's something inappropriate here. The fact of the matter is that we record in the operating statements of the government and in the budget our annual requirements, and they result in either a deficit or a surplus or, in this case, a balanced budget. The daily management of cash does result in varying cash requirements — sometimes a surplus, sometimes a need to borrow — and all of that is reflected in the consolidated statements that the member's referring to.

The fact of the matter is that by virtue of this government managing public money as effectively as we have, we have been able to reduce borrowings. We're even going to reduce the accumulated debt this year. We're reducing debt payments, debt costs, all as a consequence of our managing the general fund effectively and making sure that we stay within the budgeted allotments.

The system is appropriately recorded. I'd still like to see the reference the member claims the auditor general made, because we're not aware of it here; at least we can't find any reference to it here. The accounts are properly recorded. I'm not aware of any discomfort arising from the presentation.

MR. CLARK: The minister has confirmed that this is essentially a cost of government that's required — a daily cash-flow management and a range of initiatives that the government undertakes. There's nothing wrong with that. I'm not suggesting there is anything wrong with that. I'm suggesting that it's curious that in one set of books, the general fund, it says that the total financial requirement of the government is $190 million, and yet we have a deficit in that set of books of $790 million. In the other, the consolidated revenue fund, the total financial requirements are the same, and we only have a deficit of $48 million. Clearly, Mr. Chairman, the presentation of the facts.... I don't disagree that these are duly constituted accounts, but I wonder if the minister might agree that the general fund is a subset of the consolidated revenue fund,

HON. MR. COUVELIER: In the sense that the consolidated revenue fund is the addition of the general fund, the privatization fund and the budget stabilization fund, I suppose it's part of it. I don't know exactly what definition the member ascribes to the word "subset."

MR. CLARK: What I'm saying is that the general fund is not the complete picture of the government's financial position. The consolidated revenue fund is. The difference between the two is essentially the BS fund. By using the general fund, the government is not accurately portraying the true financial picture of the province. That's essentially what the auditor-general says on page 18. You may have that now. He says: "...we are concerned that financial statements portraying less than the whole of the consolidated revenue fund are being presented and referred to in various government publications as the government's main financial statements." And we've had the minister say here today: "Yes indeed, the general fund is being used as the government's main financial statements."

It goes on to say:

"We recommend that the government reconsider its method of presenting its financial position and operating results. While we still believe that the consolidated financial statements best reflect the

[ Page 7355 ]

overall position...at the very least, the government's reporting to the Legislative Assembly on its stewardship of public resources should clearly reflect the significance of the consolidated revenue fund as portrayed in the combined financial statements."

The auditor-general said the consolidated revenue fund is the more accurate reflection of the government's financial position, not the general fund.

I wonder if the minister could then agree with me that the more accurate reflection of the government's financial picture is the consolidated revenue fund, and that the general fund is a less than complete reflection of the government's financial picture.

HON. MR. COUVELIER: We're not aware of the auditor-general saying that. I think the hon. member is leaping to conclusions and making assumptions. Mind you, there's nothing new in that, I suppose.

The auditor-general has issued a pretty thorough commentary on the statements for last year, which I think the member is referring to. He's selectively extracting comments. If he's doing it, let me also, tit for tat, extract comments for Hansard. The auditor general, in his report, says:

"Nothing in these comments is intended to imply that any set of these financial statements is incorrect. The notes to each set of statements clearly describe, in the "Significant Accounting Policies" section, what the statements are meant to portray. The auditor-general has examined these financial statements and has expressed his unqualified opinions on them."

It's true that the auditor-general from time to time makes comments about what government is doing or not doing, and that's useful. We always recognize those sorts of comments, because clearly that's his duty. We appreciate his valuable contribution in that respect. But I have to come back to something I said earlier this afternoon; that is, there is great discussion going on around the country about how public bodies and provincial governments shall report their financial statements.

I'm proud that our presentation of financial statements and our manner in presenting that material has received many compliments. The variation in how provincial governments report these issues is wide. It makes comparison between provincial governments' financial data almost impossible. As a consequence, I can well understand how someone without the experienced staff would have some difficulty putting it all together. The member may be interested to know that were we to have used the accounting practices extant in some other provinces, I think we would have had a deficit in only one of the early 1980 years. Clearly, there is a wide difference. Therefore I've come to believe that when you're comparing what is happening in various provincial government budgets and financial affairs, you really have to look at change year to year, limiting your view to that particular provincial jurisdiction. Comparing across the country is an extremely difficult thing to do.

In our ministry we've come to just trying to assess change year to year, and in that sense get a feel for how we compare to other provinces. I am very proud of how we compare to other provinces. I think that the record in that respect stands uncontested, in the sense that we're managing the people's business very efficiently.

I look forward, Mr. Chairman, to receiving the budget of our sister province, Alberta, this evening and will be most interested to see how they manage public finances. The challenges facing the province of Alberta's minister of finance in this respect are indeed awesome, and I wish him well in his presentation this evening. Our sister province has long been proud of the fact that they have a heritage fund; it has provided them with a very useful insulation against the year-to-year vagaries that exist in federal transfer payment programs. Nevertheless, I suspect that the difficulties in the oil industry in recent years will require my colleague to bring forward a budget this year that might be somewhat different than normal.

In any event, Mr. Chairman, I notice the time, and therefore would suggest that the committee rise, report progress and ask leave to sit again.

The House resumed; Mr. Speaker in the chair.

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

HON. MR. RICHMOND: Mr. Speaker, just before we adjourn for the evening, I would advise the House that next week we will sit at all the normal times, plus Monday evening from 6 to 10 p.m. and Thursday evening from 6 to 10 p.m.

Having said that, I wish everyone a very pleasant evening and move that the House do now adjourn.

Motion approved.

The House adjourned at 5:58 p.m.