[ Page 7607 ]

CONTENTS

Routine Proceedings

Tabling Documents –– 7607

Oral Questions

Hazardous waste storage in Cranbrook. Ms. Edwards –– 7607

Privatization of family court counsellors. Mr. Sihota –– 7608

TRY campaign. Mr. Jones –– 7608

Vocational services for TRY clients. Mr. Jones –– 7608

E&N Railway. Mr. Lovick –– 7609

Privatization of family court counsellors. Mr. Harcourt –– 7609

Ministerial Statement

Knight Street Pub investigation. Hon. L. Hanson –– 7610

Mr. Sihota

Estate Administration Amendment Act, 1989 (Bill 33). Second reading

Hon. S.D. Smith –– 7614

Mr. Clark –– 7614

Mr. Lovick –– 7615

Mr. Sihota –– 7615

Hon. S.D. Smith –– 7617

Health Professions Amendment Act, 1989 (Bill 40). Second reading

Hon. Mr. Dueck –– 7618

Mr. Perry –– 7619

Hon. Mr. Dueck –– 7619

Assessment Amendment Act, 1989 (Bill 48). Second reading

Hon. Mr. Couvelier –– 7619

Mr. Clark –– 7621

Hon. Mr. Couvelier –– 7621

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

(Hon. Mr. Couvelier)

On vote 76: new programs –– 7621

Mr. Clark

Mr. Davidson

The House met at 2:06 p.m.

Prayers.

HON. MR. PARKER: Visiting us today from Kitimat are some 26 grade 7 students from St. Anthony's Catholic School. Accompanying them are their principal, Ann Herz, their teacher, Cathryn Bolton, their physical education teacher, Troy Greenfield, and one of the parents, Maurice Michaud. Would the House make them welcome, please.

MR. SERWA: On behalf of my colleague the second member for Okanagan South (Mr. Chalmers) and myself, I would like to introduce three constituents from that beautiful constituency: Chris Schandl, Teresa Schandl and their daughter Tara Schandl. Chris is promotion manager with CKOV, the oldest radio station in Kelowna, and of the Lizard, CKLZFM. Teresa works as a producer for the Barrie Clark talk show. Would the House please make them welcome.

MRS. McCARTHY: In the precinct and later in the House today will be Sir John and Lady Swinson from Belfast, Ireland. They are here on a mission for business for British Columbia but also to tour British Columbia and take advantage of our tourism facilities. I'd like the House to give them a warm welcome.

MR. JACOBSEN: On behalf of our Minister of Finance and Corporate Relations (Hon. Mr. Couvelier), it's a pleasure for me to introduce to the House two distinguished guests who have come to the Legislature this afternoon to observe our deliberations. Here on a brief visit to Victoria is Mr. Brian A. Smith, a financial counsellor with the Canadian Embassy in Tokyo, Japan. Accompanying Mr. Smith is Mr. Phil Halkett, Deputy Minister of Finance and Corporate Relations. Will the members of the House please join me in bidding our visitors a warm welcome.

HON. MR. REID: In the gallery today is Mr. Bill Goldie, who's sitting close to Mr. Phil Halkett. I hope they're talking about how they can help fund activities in the province of B.C. Would the House please make Bill Goldie welcome.

MR. PETERSON: Mr. Speaker, in your gallery are Harry and Frieda Fassbender from Langley, their daughter Heide Bell from Port McNeill, and a very good friend visiting them from Germany, Brigitte Hoene. I should like to mention that Mr. Fassbender is a seniors' counsellor for Langley; in addition, just last Friday night he was awarded the Langley Senior Citizen of the Year award. Would the House please join me in congratulating him and in wishing them all a very warm welcome.

MR. JONES: Joining us today in the gallery are two educational leaders from the college community:

Paul Ramsey, current president of the College-Institute Educators' Association, and Mr. Ed Lavalle, president-elect of that organization. Would all members join me in making these two gentlemen welcome.

HON. S. HAGEN: I too would like to recognize Paul Ramsey and Ed Lavalle. I've appreciated my relationship with Paul Ramsey over the last year in his term as president, and I look forward to continued meetings with Mr. Lavalle. Please join me in making them welcome.

MR. RABBITT: I'm very pleased today to have some constituents visiting Victoria, Mr. Speaker. In your gallery are Dave and Sharon Keyser and their son Gordon. They're free-enterprisers and supporters of the free enterprise system, and category 2 small business sawmill operators. Accompanying them is Mayor Bob Baird of Merritt. Would the House please give them a warm welcome.

MR. SIHOTA: In the gallery today are strong trade unionists and strong supporters of the provincial ambulance service. I'd like to introduce to the House the president of the union, Robin Jones, vice-president Bill Murray, and Adrian Kroll, Geraldine McGuire and Joe Donofreo who are with them. Would all members give them a warm welcome,

Hon. Mr. Reid tabled the Public Service Commission annual report for 1988-89.

Oral Questions

HAZARDOUS WASTE STORAGE
IN CRANBROOK

MS. EDWARDS: In the absence of the Minister of Environment (Hon. Mr. Strachan), I would like to address my question to the minister of the Kootenay region. The Minister of Environment has moved against a municipal bylaw by giving a permit to Kelly Douglas and Co. to store dangerous PCB wastes in a warehouse in Cranbrook. Given the intense local opposition to the storage of these PCBs from other areas of the province in the centre of the city, does the minister agree that these hazardous wastes should not be returned to the Cranbrook warehouse before the Environmental Appeal Board has held public hearings on the matter?

HON. MR. DIRKS: I would be pleased to take that question on notice.

MS. EDWARDS: A new question to the minister. Will the minister advocate on behalf of the citizens of the city of Cranbrook to the Environment minister, so that they do not allow the movement of the waste back into the city before the appeal process is complete?

HON. MR. DIRKS: I think that that question relates to the first question that I took on notice.

[ Page 7608 ]

PRIVATIZATION OF
FAMILY COURT COUNSELLORS

MR. SIHOTA: My question is to the Solicitor-General, and it relates to the privatization of family court counsellors. The province announced some time ago that they would privatize them right across the province. There were no contracts; no one was interested. It was then announced that it would take place April 1 on Vancouver Island — no contracts; no one bid. Is the minister now prepared to tell this House and to tell family court counsellors in British Columbia that there will be no privatization of those very important services?

HON. MR. REE: Mr. Speaker, no.

MR. SIHOTA: The government has not been hiring any family court counsellors, because of its ideological bent in terms of wanting to proceed with privatization. Obviously, there is no interest there. Is the minister now prepared to tell the House that the government would now begin to proceed to fill some of those vacancies with respect to family court counsellors in British Columbia?

HON. MR. REE: The same answer, Mr. Speaker.

MR. SIHOTA: Could the Solicitor-General tell this House, then, why the government is not prepared to end its stated intent of privatizing the family court counsellor program?

HON. MR. REE: Mr. Speaker, yes.

[2:15]

MR. SIHOTA: Could he answer the question and tell the House why the government is not prepared to reverse its decision?

HON. MR. REE: The matter is still under considerable study, Mr. Speaker.

TRY CAMPAIGN

MR. JONES: I have a question for the Minister of Labour and Consumer Services, the minister responsible for the TRY campaign. That campaign was established to increase awareness of the problems of alcohol and drug abuse and also to encourage people who have that sort of problem to do something about it. Can the minister confirm, as a result of two factors — the growing demands on the alcohol and drug treatment program and also a tremendous lack of staff — that counsellors have been led to limit treatment to individuals in need?

HON. L. HANSON: Mr. Speaker, that is just not true. There certainly has been an increase, as a result of the TRY campaign, in the awareness of the public and of family members and others associated with people who may not have recognized that they do have a problem. We have increased the funding tremendously to the alcohol and drug treatment section of the ministry. I don't have the figures in front of me, but there are almost double the number of out-patient counselling centres. We have more in-patient treatment centres. We are continuing to develop programs in all of the communities as a result of the community action plan.

While the member may be able to point out a situation where someone should have had treatment and was delayed a day or so, the people who phone the 1-800-TRY line are put in touch within 24 hours with someone who will counsel or give them advice. It's interesting to note that calls to the TRY line continue to increase, and we continue to increase the number of people who are there to respond. The proof that the program is working is quite simply in the number of people who have now become aware that a friend, a relative, an associate or someone else may have a difficulty, and they are able to get the advice they need to start on the road to recovery.

MR. JONES: The minister has indicated that there is definitely an increased need for these kinds of services. I'm wondering if the minister has decided, as a result, to expand the number of drug and alcohol counsellors to meet that increased workload.

HON. L. HANSON: I thought that's what I had said. Obviously the message doesn't get through. The fact is, Mr. Speaker, that through the TRY program and community assistance programs there has been a tremendous response from the public and from the government-funded agencies. The response to the various community programs that have been put in place for counselling in almost every part of the province — some on a volunteer basis, some on a partially funded basis, some on a totally funded basis — has just been tremendous. We should be proud of our community's reaction to that.

VOCATIONAL SERVICES FOR TRY CLIENTS

MR. JONES: I have a supplementary for the Minister of Advanced Education and Job Training. It's my understanding that there has been a cutback in the eligibility for vocational services for people on this program. Can the minister confirm that the clients of the alcohol and drug program are no longer eligible for vocational services?

HON. S. HAGEN: No, I cannot confirm that.

MR. JONES: Has the minister then decided to set a provincewide policy making it clear that people with drug and alcohol dependency problems are eligible for vocational programs?

HON. S. HAGEN: My ministry is working very closely with the Ministry of Labour and Consumer Services on this particular item. If the member is aware of some specific problem, I'd be pleased to discuss it. Otherwise, things are progressing the way they should.

[ Page 7609 ]

E&N RAILWAY

MR. LOVICK: My question is to the Minister of Transportation and Highways. It has been widely reported everywhere now that the federal government has decided to scrap Via Rail's Esquimalt and Nanaimo rail line. I'm wondering if the minister can inform this House what specific steps this government has taken to save the E&N.

HON. MR. VANT: I can assure the first member for Nanaimo that the future of Via Rail and its operations in this province are of great concern to this government. The continuation of rail service in every corner of the province — not just the Esquimalt and Nanaimo Railway — is of concern to us, and we have certainly indicated that to Ottawa. We are not jumping to any final conclusions of any adjustments to the service until we get the final official report, which is currently underway.

I have had meetings with officials of Via Rail. Indeed, this was quite some time ago, and I have since followed up with a very strong letter to my federal counterpart, the Hon. Benoit Bouchard, in Ottawa. I am very pleased that the initial report, which was leaked through the Globe and Mail, that the daylight Rocky Mountain run — which is a primary tourist run.... That initial, unofficial report indicated they were actually going to expand that service.

MR. LOVICK: Well, I'm pleased to hear from the minister that this is of great concern. I would remind him, however, that that's the answer he gave me almost a month ago. I would also remind him that he told me almost a month ago that he had written to Bouchard. Have you written subsequently to Bouchard? Have you spoken with him subsequent to the newest announcements that clearly put the E&N in jeopardy? I refer specifically to the E&N railroad.

HON. MR. VANT: To be specific about the E&N, the manner in which that line has been operated has been of concern to me for many months. It doesn't seem to make an awful lot of sense to me that whenever they have difficulties with one of their Budd cars, they have to ship it all the way to Montreal for repairs, whereas right here in the province we have excellent facilities operated by our own railway, B.C. Rail, which has considerable experience at rebuilding Budd cars. Indeed, I communicated directly at a one-to-one meeting with the federal Minister of Transport regarding that particular issue and some concerns I had about the lack of quality service currently offered by the E&N Railway

So I'm not only just concerned, Mr. Member, about the future operations, but about the quality of that service. I have communicated that directly on a one-to-one basis with the federal minister.

MR. LOVICK: It's interesting to hear those reassuring words, and I'm sure all your predecessors have said the same thing, though it hasn't made one whit of difference in terms of the operation of that railroad.

A simple question designed, obviously, for all those other members there so they can understand, too. Has the minister made any formal representation to the National Transportation Agency regarding the continuation of the E&N service?

HON. MR. VANT: As the Minister of Transportation and Highways for the province, I like to deal with the minister responsible at the federal level. I like to deal with the organ-grinder, not just the monkey.

Interjections.

MR. HARCOURT: That's does leave an opening. What a way to start a week. I will try and get you off to a good start and pass that one up, Mr. Speaker. The Minister of Highways does leave himself open, but we want to move into a much more mellow spirit than that answer would provoke.

PRIVATIZATION OF
FAMILY COURT COUNSELLORS

MR. HARCOURT: My question is to the Solicitor General. I found his response to the member for Esquimalt-Port Renfrew (Mr. Sihota) very unfortunate. I worked in family court for my first five years in practice. It's the court where the more vulnerable members of our society go, and I have seen the government bring in moves to save money on welfare, to save money for the government. When will the minister end this privatization fad in family court and address the real issue, which is the women, children and families in crisis in this province and resources for those families?

HON. MR. REE: I don't think concern for the unfortunate people of this province is any greater on that side than it is on this side, and the Leader of the Opposition knows that, because most of these services have been put in place by this government. There was very little done during the period of '72-75 by the NDP — there was nothing. It's like the concerns that the people on the other side have with respect to education: not one college or one university was put in by the NDP during its three years, or anything else like that. This province went backwards instead of forwards between '72 and '75, the same way it would go if the NDP were elected as government here in B.C. — and Lord help the province if it ever happens.

Our concerns with the family, Mr. Member, are every bit as great, and that is one of the reasons we are looking to possibly putting it to privatization. We have not made a firm decision about it at this time; we will decide in due course which action we'll take.

[ Page 7610 ]

Ministerial Statement

KNIGHT STREET PUB INVESTIGATION

HON. L. HANSON: During my ministry's estimates and the subsequent question periods, the members opposite — specifically the member for Esquimalt-Port Renfrew and the Leader of the Opposition — have repeatedly raised questions with respect to the Knight Street Pub, my ministry's investigation and allegations involving myself and others. The purpose of my statement is to respond to those questions and to demonstrate my belief that the opposition has sought only political sensationalism instead of truth in a responsible way.

[2:30]

During the opposition's questions, it was my intention to respond at a later date and at one time to all the questions posed by the opposition. You will appreciate that these specific dates, times and events required close scrutiny and confirmation where possible. However, Mr. Speaker, the opposition has chosen to pose the same question each day. They have not been in pursuit of the truth but in pursuit of the media.

Accordingly, I advised the House on Thursday last that I would advance my response today. I chose to respond not because of the vexatious comedy of the member for Esquimalt-Port Renfrew but because I believe the public deserves the truth. The opposition does not represent the truth.

MR. SPEAKER: The Leader of the Opposition rises on a point of order.

MR. HARCOURT: A point of privilege. I think that colouring of individual members — let alone the whole opposition — as not representing the truth should be withdrawn.

MR. SPEAKER: I would remind the minister that ministerial statements are not to be debate and not to be political argument. I would ask him to continue.

HON. L. HANSON: I would now like to respond to the questions which have been raised. I wish to remind the opposition of information which I willingly made available last year and to indicate that the information that the opposition now seeks was in fact available to them and to the public some time ago. The opposition has a memory of convenience: it's a failing memory held by a failing opposition.

MR. BLENCOE: On a point of order, Mr. Speaker, you have requested the minister to reflect on his statement in terms of accuracy in making a ministerial statement. He has already accused the opposition, and should have withdrawn, in terms of reflection on truth. Now he's making further reflections Mr. Speaker, I ask you to take this minister to task.

HON. MR. RICHMOND: On the point of order, Mr. Speaker, I would just remind the House and you that day after day after day in this House, the opposition got up in a most political fashion and made allegations and asked questions in the most political manner possible. I would submit that since ministerial statements are not provided for in our standing orders, and have evolved over the time of parliament, the minister should be allowed to answer the endless allegations that came from that side of the House.

MR. SPEAKER: I might refer the minister, before he continues, to the second edition of Parliamentary Practice in British Columbia, pages 50-51, where it says:

"The limitations placed on ministerial statements and replies....

"'General arguments or observations beyond the fair bounds of explanation...are out of order....

"It has long been the established practice of this Legislature for ministerial statements to be made upon the Orders of the Day, and it is traditional that cabinet ministers should, as a courtesy to the House, if the House is in session, make any major policy statement or announcement in the House, prior to announcing the same outside the House. Each of such statements should be brief, factual and specific."

It must also be understood that a debate cannot take place.

I would ask the minister to continue to the specifics of the issue.

Interjections.

MR. SPEAKER: Order, please.

HON. L. HANSON: Mr. Speaker, I would like to respond as follows.

On Wednesday, May 31, the member for Esquimalt asked whether Mr. Doney knew of the telephone call from Mr. Poole to Mr. Hick prior to the writing of his report. The answer is yes. The information was public in the media last year. If the members opposite need assistance with their clipping service, I would be pleased to provide that from my office.

Interjections.

MR. SPEAKER: Order, please.

HON. L. HANSON: It appears we must not only do the research for the opposition but that it requires some help with its reading.

On Thursday, June 1, the Leader of the Opposition, in one of his periodic visits to this House, questioned why I did not, and I quote, "expose the truth last year" and why I only admitted I "knew that Mr. Hick lied" when questioned by the opposition. His voice rose hysterically when he asked why I did not expose it last year. Mr. Speaker, I did, last year.

The Leader of the Opposition further questioned why I did not report Mr. Hick's statement of June 6, 1988 — of the press conference — to the police. I reviewed that matter with Mr. Hick after the press conference and considered that the ombudsman, who worked cooperatively with the ministry, would deal with the matter in his general investigation. When

[ Page 7611 ]

that investigation was completed, I could determine what action should be taken. I wanted all the information available, including the ombudsman's report, before proceeding formally. The appropriate personnel actions were taken in short order.

Mr. Speaker, the Leader of the Opposition asked why I did not advise my deputy minister about the phone call between Mr. Poole and Mr. Hick. I was first asked about the referendum and Delta Media Services by BCTV somewhere in the period May 16 to 19, 1988. I immediately contacted the general manager of liquor control and licensing, who advised me of the process of adding Delta Media Services to the approved list of firms to conduct referendums.

On that occasion Mr. Hick indicated for the first time that he had discussed the matter with Mr. Poole almost a year before. His explanation to me of this conversation with Mr. Poole was that of a casual and informal contact and was very different than the discussion and meaning of the call as it was subsequently reported by the ombudsman.

My discussion with Mr. Hick was followed on May 20 by a memo from him which expanded on our conversation respecting Delta Media Services and made no reference to the telephone call with Mr. Poole or its effect, if any, on his decision. That memorandum, Mr. Speaker, is reported in the ombudsman's report.

I was aware of the call, but at the time I had no reason to believe that the call weighed directly or in any way on Mr. Hick's decision. It was my understanding that Mr. Doney subsequently became aware of the call in a meeting involving ministry staff and Mr. Hick in the period of May 23-24. Mr. Doney and I did not directly discuss this information at that time because we both honestly believed that it was not relevant in the decision that was ultimately taken in respect of Delta Media Services. In retrospect, this may have been an error.

Inquiries and telephone calls to staff of the liquor control and licensing branch are not uncommon. It is the occasional practice, perhaps unwise, that MLAs will contact the general manager or other senior staff with respect to licensing issues generally, and in some cases on specific licensing or appeal issues. I would suggest that perhaps the opposition House Leader would like to canvass that matter with his members and discuss with them such contacts, as well as recent telephone calls which may have been made. I can tell the members opposite that I respect their right to make inquiries and to fairly represent constituents, and I will stonewall any attempt to give out that information.

The Leader of the Opposition asked whether I had contacted Crown counsel respecting what was discussed with the Premier. Mr. Speaker, this is the worst form of innuendo and untruth, and that's because I had no discussions with the Premier at all on this issue.

The Leader of the Opposition has inquired whether waiting to correct the public record was consistent with ministerial responsibility. The public record was correct a year ago, as was reported many times in the press. It is apparent that the opposition leader's prolonged absences from the House prevent him from having any sense of time.

On June 6 the member for Esquimalt-Port Renfrew again asked whether I was advised of the telephone conversation by Mr. Hick or Mr. Doney. As I previously indicated, I was advised by Mr. Hick. The member further asked if Mr. Doney was present when I was advised. The answer is no.

The member for Esquimalt-Port Renfrew considered it a revelation that I would read the report by Mr. Doney before it was issued, and that knowledge of the telephone conversation between Mr. Poole and Mr. Hick was relevant to Mr. Doney's investigation and subsequent report. Mr. Doney's report was focused on the specific allegations respecting the conduct of the referendum by Delta Media Services.

The reasons Delta Media Services was added to the approved list of referendum companies were not part of Mr. Doney's terms of reference. Neither I nor my deputy had any reason at that time to suspect that Delta Media Services was authorized to conduct a referendum other than through the normal approval process. It is extremely relevant in this context to note that while the ombudsman found serious deficiencies in the ministry report, the ombudsman did not think it relevant. The issue of a telephone call was not raised in the ministry report, and the ombudsman did not think it was relevant. Why could that possibly be? Because I know, the ombudsman knows and the public knows. Everyone seems to know but the members opposite. They seem to know that the issue of Delta Media Services being put on the list was not the issue being investigated at the time and was not relevant to the ministry report. The member for Esquimalt-Port Renfrew reports this as an omission, Mr. Speaker. The omission is that of the member in his research and his questioning.

The member for Esquimalt-Port Renfrew asked why I did not correct the report to reflect the conversation between Mr. Poole and Mr. Hick. I have already stated that I did not honestly believe that the conversation was relevant to the decision to have Delta Media Services undertake the referendum.

The member for Esquimalt-Port Renfrew asked who had advised the Attorney-General with respect to the telephone conversation. Mr. Speaker, I cannot attest to the original source of information to the former Attorney-General. Indeed it may be inappropriate for me to have such information, as the member for Esquimalt-Port Renfrew should certainly know. It is my understanding that the former Attorney-General discussed this matter at some time with a member of his legal staff, who was also advising the Deputy Minister of Labour at the time in the conduct of his investigation. Mr. Speaker, I cannot be sure that this was the first awareness of the issue by the former Attorney-General. In any event, the former Attorney-General would have, and did, discharge his duties in the independent way required by his office.

It is my recollection that at approximately the same time, I discussed the telephone conversation between Mr. Poole and Mr. Hick with the former

[ Page 7612 ]

Attorney-General, but in an informal way, leaving a cabinet meeting. Again I honestly did not believe that the telephone conversation constituted a problem, and therefore did not pursue the matter.

[2:45]

I certainly did not raise the issue with the former Attorney-General in a formal way requesting any action by him. At approximately the same time, I had written to the Attorney-General on the subject of the licensing of the pub in response to a letter received from a concerned citizen.

In closing my statement, I would like to add some facts surrounding these issues. During the course of this questioning — this mock inquisition by the opposition — I have been very concerned with respect to the casual and careless use of facts and the skilful use of near-facts employed by the opposition. Mr. Speaker, they do no credit to this House, and I think the record must be clear.

There were deficiencies in the ministry's report. I acknowledge those, and I take some responsibility The public interest was well served by the ombudsman's thorough study of the issue. The opposition, however, has not been as thorough in its reading of the ombudsman's report. I accepted the ministry's report, recognizing that the deputy minister and a number of his staff had attempted to honestly and fully analyze the specifics of the referendum.

In my view, the findings of that report represented an honest effort by my staff. Indeed, as the ombudsman's report noted — and this is critical — if testimony had been given truthfully to the ministry investigators: "...the ministry's investigation would have taken a different tack." When the report was revealed by the ombudsman's subsequent investigation to be misguided, incomplete and in some cases inadequate, my deputy minister approached me and tendered his resignation. In my view he was prepared to meet the highest test of the public service required by senior staff. I chose not to accept that resignation, because it was my view that the ministry report had been — and not in a minor way — compromised by the testimony which was falsely given to the ministry investigators. I determined that I could not hold staff members accountable for the untruths of others. The opposition, however, does not seem to have such a standard.

I have attempted during the course of my term as minister responsible for liquor licensing to bring improvements to that process. That has included a significant study on liquor licensing policies and, most recently, the announcement of a commission under Mr. Bazowski. He is to develop policies which will ensure that liquor licensing decisions enjoy the confidence of the public through a public process separated from the administration of this branch. We will continue in our efforts to improve that system.

Thank you, Mr. Speaker.

MR. SPEAKER: The Minister of Labour.

HON. L. HANSON: Mr. Speaker, I rise on a matter of privilege.

On June 15 the member for Esquimalt-Port Renfrew alleged that the government, and specifically the former Attorney-General and I, conspired to fabricate "a two-track strategy," including an internal report by the ministry to indicate "that there was no problem"; and secondly, an arrangement with the former Attorney-General "for a matter of fixing the dilemma."

I have already pointed out in my statement to the House that the former Attorney-General discharged his duty in the independent way required by his office. I have also indicated the basis of my ministry's internal report and my honest belief in these matters.

Mr. Speaker, the member for Esquimalt-Port Renfrew has maligned my office and that of the Attorney-General. He has done so wilfully and has discharged his duties to this House in a dishonourable fashion. I demand an apology to this House, to the former Attorney-General and to myself.

MR. SPEAKER: Is the member for Esquimalt-Port Renfrew rising on the point of privilege?

MR. SIHOTA: On the ministerial statement first.

MR. SPEAKER: I would first advise the minister that I will take his comments under advisement and report to the House later.

MR. SIHOTA: The obvious strategy, I guess, for the minister is to go on the offensive against the opposition and try to blame the opposition for the government's woes.

I find it particularly insulting — and somewhat orchestrated — that the Minister of Labour would now decide that he wishes to leave the chamber and not hear the reply.

Interjections.

MR. SPEAKER: Order, please.

MR. SIHOTA: It's astonishing that the minister would make the type of statement that he has made in this House, put out the matters that he's put out before the House and then not stick around to hear the reply.

HON. MR. RICHMOND: Mr. Speaker, I point out that it is inappropriate for a member to comment on the presence or absence of another member in this House. I further point out to the member, Mr. Speaker, that you cannot argue with facts.

MR. SPEAKER: Order, please. The minister makes a good point, and I would suggest also that the opposition had concerns about the minister keeping his statement relevant. We've been going a few minutes now. If the member was to look at May, twentieth edition: "A reply to a ministerial statement must relate to content of the statement and not constitute debate." I would ask him to reply to the statement.

[ Page 7613 ]

MR. SIHOTA: In response to that point of order from the government House Leader, the Minister of Labour made comments about the attendance of the Leader of the Opposition.

In any event, let me continue. The point that I was making is that we on this side of the House, in the opposition, have an obligation to Her Majesty, to you, to the political process and to the public to ask critical questions of the government. In terms of our criticism of the government, we focused on the fact that the government, through its ministers, ought to be here to listen to those criticisms in order to react to them.

Interjections.

MR. SIHOTA: I listened carefully to the Minister of Labour's response. The Minister of Labour made a number of cheap shots — I think that is the best way to describe them — towards various members of this House. I used to say that the Attorney-General (Hon S.D. Smith) was the Ron Hextall of politics. I think the Minister of Labour has now become the Ron Hextall of politics.

I want to deal with the comments the Minister of Labour made. First of all, on the matter of whether or not members of the opposition should be raising these types of issues. Mr. Speaker, I say that we should be raising these types of issues. That is particularly so mindful of what has transpired here This was a case that began at the doorstep of the Premier's campaign office, involved his campaign manager and took us to the doorstep of the Premier's office here in Victoria, and it involved several of the closest advisers of the Premier, let alone the Minister of Labour and his ministry. There remain, in my view, a series of unanswered questions which the Minister of Labour still has not attended to in the course of his comments today.

The first of those is his failure to respond to what I raised during the course of estimates vis-à-vis the relationship between Mr. Toigo and the owner of the Knight Street Pub, Ms. McRobbie, and whether or not any investigations were carried out by his ministry with respect to any financial arrangements that existed between the two. That must be addressed in light of the government's policy that only one person can have a liquor licence in this province.

Left unanswered by the minister's response today was the question that I raised during estimates as to the matter of whether or not Mr. Toigo continued to lobby with respect to that licence after he purportedly sold it off to Ms. McRobbie.

Left unanswered as it relates to some of the players in this entire scheme is why it was that someone would decide to build a pub of this nature during a time when there was a moratorium on pub licences and then get the licence shortly after that moratorium was lifted. It is true that the opposition has a responsibility to ask those questions in the face of the type of suspicion that those actions raise.

The minister says that Mr. Doney was aware of the conversations between Mr. Poole and Mr. Hick. He ought, from my point of view and from the point of view of this side, have referred to that during the course of his internal report. It is a critical failure on the part of Mr. Doney not to have recognized the importance of that call. That critical failure is compounded by a minister who failed to recognize the importance of that call. The ombudsman, in the course of his report, recognized the importance of that call. The ombudsman recognized it. The former Attorney-General, to his credit, recognized the significance of that call. I want to come back to that call in my closing comments as well.

Left unanswered by the minister's response is the role of the Attorney-General's lawyer, who sat through the internal investigation, and what information he provided to that ministry and to the Ministry of Labour. Left unanswered by what the minister had to say today was the whole matter of the police investigation and his role in the investigations of the RCMP and the Crown counsel. I note with interest that he says that he chose not to or did not discuss the matter with the police. That, of course, warrants further questions, and I'll put the minister on notice that we will continue to ask some questions in that regard. There are a number of issues that remain outstanding with respect to what the minister had to say.

He accuses the opposition of having a memory of convenience, yet he himself sat through a press conference on June 6, 1988, a year ago, and listened to an official of his lie and did nothing about it at that time. If there was ever an example of a memory of convenience, that was it.

Mr. Speaker, I didn't have the benefit of the minister's statement in advance, unfortunately but I guess not surprisingly. The minister, to some extent, relied heavily on the report of the ombudsman in trying to suggest that it lent support and comfort to his position. Let me state what the ombudsman said on page 65 of the report: "While this office may agree with the substance of the majority of the ministry's conclusions vis-à-vis the 63 allegations, it cannot commend the process by which those conclusions were reached. The ministry's investigation was inadequate and too narrowly focused; irregularities were either not noticed or not questioned." The minister, in his reply, still has not told us why that report was narrow in its scope, and we will continue to ask questions in relation to that.

If the Attorney-General keeps this up, maybe he'll get back the title of the Ron Hextall of politics.

[3:00]

On page 66 of his report the ombudsman says: "It was the inherent responsibility of the ministry to be thorough and exacting in the investigation of complaints concerning its past administrative actions. In these circumstances, it is concluded that the ministry failed to meet this standard." We have a minister who failed to recognize the responsibilities that are put on his shoulders as a minister of the Crown. We as the opposition say that with pride, and the ombudsman said it as well with some dignity.

[ Page 7614 ]

We have a minister in this House who fails to recognize political interference when it occurs, fails to appreciate the consequences of that call. On August 27, the Vancouver Sun said as follows in dealing with that call: "At the least Mr. Hanson was apathetic or blind, if not irresponsible, in failing to act on what he was told by Mr. Hick. Such poor judgment ill qualifies him for a major cabinet position. He should carefully consider, and so should Mr. Vander Zalm, his effectiveness after this episode."

MR. SPEAKER: I would remind the member that he does not use members' names in this House.

MR. SIHOTA: I apologize for that, Mr. Speaker. I'm just quoting what the Vancouver Sun had to say.

MR. SPEAKER: It doesn't matter. The member knows he cannot quote and use a member's name.

MR. SIHOTA: I apologize for that. I didn't mean it in that sense. The point here is that the Vancouver Sun was bang on in terms of its analysis of the situation. They were correct in saying that the minister should resign. We're going to continue to ask for the minister's resignation in light of the errors in critical judgment that he has demonstrated throughout this whole fiasco.

Orders of the Day

HON. MR. RICHMOND: I call second reading of Bill 33, Mr. Speaker.

ESTATE ADMINISTRATION
AMENDMENT ACT, 1989

HON. S.D. SMITH: I have today the distinct honour to move second reading of Bill 33, the Estate Administration Amendment Act for 1989. In moving second reading, I wish to describe to this House very briefly some of the background and major features of this bill.

As members of the House may know, the official administrator function exists for the purpose of ensuring that the estate and other affairs of deceased persons are concluded in a timely fashion and in the interest of any of their heirs and of the public. This bill will enable the official administrator of the province to exercise a more precise monitoring role over the activities of deputy official administrators and other agents appointed for that purpose. It is intended that the public trustee will be appointed to that position. This bill will thus complement the Public Trustee Amendment Act, 1989, which changes the public trustee's financial affairs.

This bill provides that the official administrator can delegate his responsibilities as official administrator to others, while at the same time assuming a more exacting role in the monitoring of deputy official administrators' activities. This will ensure greater protection for heirs and for the public. In addition, the bill provides for authority for the public trustee to deal with moneys from estates now paid to the Minister of Finance. It expands the power of the Attorney-General to ensure that appropriate accounting practices are followed in respect of estates administered by private official administrators.

This bill further provides that rather than several official administrators reporting directly to the Legislature, all reporting of finances respecting estates of deceased persons will flow through the official administrator in the person of the public trustee. Since the public trustee is subject to the Financial Administration Act, financial controls on the operations and reporting of the deputy official administrators will be more stringent than they are presently.

It has been said by one member of this House that this legislation privatizes existing functions. That statement is false, deliberately misrepresents the existing structure and discloses a very real ignorance of the current system we have.

Since improving the system with the current changes, we've added up to 20 new staff members to improve service. As well, currently there are 12 private sector official administrators in place, each of whom has a separate reporting role.

What this bill does is create one official administrator for the province. That person also happens to be the public trustee, who will then name deputies, several of whom may very well be the people now serving in that role. The changes will harmonize the official administrator side of our trust responsibility with the public trustee side and will enable all areas of the province to benefit from expanded service levels unrestricted by the old county designation.

I hope that in debating this bill, members will not be moved by any false statements that deliberately misrepresent the facts of the situation.

At present the public trustee is the official administrator for most areas of the province. Because of the size of populations, in some areas of the province remuneration calculated on a percentage base has not been sufficient to attract official administrators in all areas. By removing the reference to counties and establishing the areas for which a deputy official administrator will be appointed, and by providing flexibility on the setting of remuneration, it is intended that firms and individuals will be appointed to deliver service throughout the province, either as a deputy official administrator or as an agent.

The bill will enable the public trustee, as official administrator, to delegate the responsibility to competent firms or individuals who will contract to carry out the official administrator tasks in designated areas of the province.

This bill will provide for more localized service to clients, more carefully safeguarded interests of heirs and beneficiaries and more stringent accountability to government.

Mr. Speaker, I move second reading.

MR. CLARK: Unaccustomed as I am to speaking on these legal matters, I may, for a few minutes, while my colleague re-enters the House.

[ Page 7615 ]

On behalf of this side of the House, I do take exception to some comments the Attorney-General made which I believe were unparliamentary. But we didn't at the time ask for his withdrawal, so I certainly won't at the moment. I must say, though, that it seems to me not very good protocol for the Attorney-General to engage in that kind of debate.

The Attorney-General and the previous Attorney-General in this House have at great length talked about the office of the Attorney-General, and I think, in keeping with that office, it might be more appropriate for the Attorney-General to deal with the specifics of the bill at hand rather than engage in a kind of critique of the member for Esquimalt-Port Renfrew (Mr. Sihota). It's kind of interesting that his critique and the velocity of his critique generally indicates that on this side of the House we may have landed a few blows with respect to the Attorney-General's concerns. It's clear that the intensity of the remarks from the Attorney-General meant that he was stung by the criticism of the member for Esquimalt-Port Renfrew.

But at this point in the debate I might defer to the first member for Nanaimo, who I'm sure is more learned on the question of estate administration and the privatization of the public trustee than I am.

MR. LOVICK: I think all of us were listening rather carefully to hear what the justification for this particular measure was, and we heard reference to the fact that this measure would perhaps enable the business of estate settlement to be done in a more timely fashion. We also heard an allusion to a more precise monitoring role and we heard that this particular measure complements the Public Trustee Act.

What didn't get mentioned in all of that, of course, is what certainly appears to be the real reason for this particular measure: namely, the simple and straightforward fact that the government is still embarked upon its ideological quest to privatize the entire province — or as much as they can.

I'm suggesting that the absolute, first, primary and, indeed, only reason for this thing is an ideological crusade. The reason behind this is clearly to try and take yet more workers out of the public sector. There is no other explanation, Mr. Speaker.

Interjection.

MR. LOVICK: The Attorney-General is making some blustery kinds of comment from across the way, Mr. Speaker, and I can't quite hear it.

HON. S.D. SMITH: Sit down and I'll tell you.

MR. LOVICK: We can't sit down; it's second reading, Mr. Attorney. You ought to know the rules a little better than that. But don't worry, Mr. Attorney, you and I will have a chance in committee to perhaps interact on some of those kinds of questions.

The essential issue here is that the bill deletes section 41 of the existing Estate Administration Act. It doesn't explain that. It just takes it away. And what is section 41 in the original? Well, section 41, of course, says that the official administrator is a public service employee, and the rest of the section simply outlines the implications of that about public employees.

What I want to do is tell the Attorney-General just a little bit about the existing branch, because, with all due deference, I don't think he knows much. If he did, he would know that there have not in fact been problems in its administration, that there isn't in fact any kind of good evidence on the face of it to suggest privatizing that operation. The average length of service in the branch is 15 years. The newest employee has been there 10 years. And the question is obviously: what's wrong with the existing operation? Why do we have to suddenly change it all? What's the point?

Interjection.

MR. LOVICK: My, you are feisty today, aren't you? You're really practising.

What we are dealing with here is, as I say, merely another manifestation of the same kind of mindless commitment to downsizing the state and to doing something about the government employees' union; the same kind of thing, by the by, we picked up in listening to the response to the question raised earlier in question period from the Minister of Transportation and Highways (Hon. Mr. Vant). Do you recall what he said, Mr. Speaker, when I asked whether this government had made representation to the National Transportation Agency? The response was: "Well, I don't talk to the monkey; I talk to the organ-grinder." In other words, all of the bureaucrats, all of those people charged with carrying out policy, are perceived somehow to be either stupid or public enemies, rather than servants of the public. And that, regrettably, seems to me precisely the logic behind this particular measure. Certainly, from listening to the Attorney-General's introduction, one can see no other.

I have considerable difficulties with this. It will take a great deal to persuade me that my colleagues and I ought to support this particular measure, Mr. Speaker.

MR. SIHOTA: Mr. Speaker, I should actually thank you for letting me stand all the time. I didn't mean to do that in any disrespect; I hurt my back over the weekend.

I want to respond to the comments I heard from the Attorney-General, and to the bill that's before us. I'll make a number of comments. First of all, I was at a meeting over the weekend, and an individual from Penticton came up to me and gave me a copy of a story featuring the Attorney-General and the speech that he made in Penticton to the local Social Credit constituency association. The headline was: "NDP Has Secret Agenda, Says A-G." I don't actually have that here.

I had an opportunity to read the press release that accompanied this bill, which emanated from the

[ Page 7616 ]

Attorney-General's office. During the course of coming out with the press release on this bill, the Attorney-General talked at some length about the need to provide service around the province with respect to estate administration. I'd say that's a laudable goal. It's one that we, of course, agree with as well; there ought to be full opportunity for individuals in the Kootenays, as much as people in downtown Vancouver, to engage in the good services of the public trustee's office.

[3:15]

What was not mentioned during the course of the Attorney-General's press release on this bill was the fact that the objective of this legislation is to bring about the privatization of a public trustee's office that has served us so well. If there ever was a secret agenda that was not revealed in the course of a press release, that was it; no mention of the intent of this legislation. That's what the purpose is: to further the ideological bent — the obsession — that government has with respect to privatization.

The Attorney-General, of course, is a booster of privatization. He thinks we should privatize highways maintenance in this province, despite the fact that most people recognize the lack of wisdom in doing that. He supports the privatization of the environmental labs when most people have a sensitivity to the environment and realize that air and water quality testing ought to remain in the public domain; the same with things like milk-testing laboratories. Now we see that ideological obsession being exercised in the case of the Estate Administration Act, particularly in the role of the public trustee.

I for one think the public trustee's office has served this province rather well over the years. It performs an important function. As a lawyer practising in Esquimalt I've had dealings with the public trustee's office, particularly with respect to comity applications. To be honest with you, I had a frustration at the time with the public trustee's office, because I thought it took a fair bit of time for that office to fulfil its mandate in terms of looking after these types of applications. But as I studied the matter, it became apparent to me just why that has transpired, and in itself it's an example of the kind of mindset that we see within the Social Credit administration.

We have, first of all, a well-functioning public sector activity, whether it be the public trustee's office or the contracting of highway maintenance in the province. The government then comes along and, under the banner of cutbacks — so-called restraint, but under the banner of cutbacks — cuts back so that the quality of the service suffers. When the quality of the service suffers, the public begins to complain about the nature of the service: how long it takes, how it's not so efficient. Then the government says: "Well, the answer to that is to privatize it."

[Mr. Pelton in the chair.]

This is the modus operandi of this government in terms of its justification for privatization. It takes a well-established, well-functioning public sector realm of responsibility, slashes it so that it can't do its job, gets complaints from the public and says: "Look how bad it is. The only thing that can occur here is to allow the private sector to do it better." The new Attorney-General of this province has embraced this modus operandi with great vigor. This is the true secret agenda of the government.

The Attorney-General should know better than to go around the province saying, "There's a bogeyman somewhere off yonder," when the person delivering the speech is the bogeyman. It's the Attorney-General himself when he makes those types of comments in Penticton, when he engages in activities and tries to blame somebody else for his failings in his responsibilities. If this Attorney-General had true commitment to the type of historical, vital service provided in this province by the public trustee's office, he would take concrete steps to expand the activities of that office throughout the public realm. He would expand them more than he alluded to when he made his comment earlier on. He would expand it so that people in Kamloops, Prince George, Penticton, Smithers, Terrace and Cranbrook have the type of publicly run service that they deserve.

We're not dealing here with just a nominal activity. We're dealing with an office which I understand.... I stand to be corrected on the actual number, but the last number I heard, it has under its possession $57 million in trust funds, at least in Vancouver. We established the public trustee's office in this province because as a society we thought — and so did the Social Credit administration that brought forward the establishment of the public trustee's office — as a society that the funds of those people who are incompetent and incapable of managing their own affairs ought not to be left to the private sector. They ought to be in the domain of the public trust, so that public officials — accountable through this Legislature and responsible to the Attorney-General — would engage in the type of investment and monitoring that's required when you are dealing with the funds of people who are least able to make judgments about their own financial well-being.

The public trust is placed in the public trustee's office for good reason. The Attorney-General has forgotten the historical reasons for establishing that. He has forgotten the potential for fraud that exists in the private sector; he would prefer to allow this to be invested under an act that allows for investments on the Vancouver Stock Exchange. We'll have more about that when we deal with the Minister of Finance.

If there ever was an example of how far this government has come from the Social Credit Party of W.A.C. Bennett, this bill demonstrates it — ideological considerations paramount to safeguarding the public interest and to looking after the public trust.

I wonder, when the next Social Credit leadership convention occurs, if the Attorney-General will go around the room and point to this as one of those hallmark pieces of legislation that he introduced, which allows the private sector to get its hands on the $57 million worth of trust funds that exist there. Will

[ Page 7617 ]

he point to this with a level of pride as one of the things that he's done? I say not. He'll point to the Access to justice, but he'll put aside those types of ideological motivations that are inherent in his actions.

Mr. Speaker, this is a regressive piece of legislation. We will be voting against this piece of legislation, and we will be dealing with it in some more detail during committee stage.

HON. MR. BRUMMET: The Attorney-General had to step outside for a moment, and I see his moment is up. He had asked me to take notes of the brilliant dissertation of the member opposite, so that he could respond if necessary. I have taken these notes and am now apprised, through mental telepathy, that the Attorney-General is prepared to respond or pass second reading of this bill — whichever is most appropriate.

DEPUTY SPEAKER: Hon. members, pursuant to standing order 42, the minister closes debate.

HON. S.D. SMITH: One of the things that most characterizes debate — or should, in a parliamentary system — is an attempt to speak honestly and to try to do the public's business in a way that gives credit to the notion of veracity, and that gives credit, in some way, to an attempt to inform the people.

There are a number of ways to do that. One of them is to try to apprise yourself of the facts and to do your research in such a way that you can go ahead and serve the public, your community, your constituency and this House. The other way is to set up straw men and then knock them down with untruths. That is another way of doing business.

When I introduced this legislation the other day, I noted a statement in the Times-Colonist which contained a number of things which are simply untrue; I suppose one could claim they were untrue because of inadvertence. But having listened today, Mr. Speaker, I think there is no inadvertence involved whatsoever I think they're untrue because they are deliberately undertaken to not correctly inform the people of British Columbia about the essential facts of this legislation.

MR. BLENCOE: On a point of order, Mr. Speaker, I bring your attention to the Attorney-General's comments about truth and making reference that my colleague's statements are untruthful. Perhaps you could remind the Attorney-General of the honourable rules of this House.

DEPUTY SPEAKER: The hon. member makes a good point, and I would just remind the Attorney-General that we are dealing with second reading in principle of the bill, and we are closing second reading at this point.

HON. S.D. SMITH: I am too, but one of the things that it behooves all of us to do in this institution is to make certain — particularly people who are covered by this kind of legislation and who need the assistance of the public trustee's office.... I will not stand idly by and watch members of this Legislature crawl up on the backs of the elderly, the sick, the unhealthy and the lame who need this, in order to score their cheap little juvenile political points. I will never let that happen. If there are members in this Legislature who are so consummately immature and smart-alecky that they are going to continue to do this kind of thing on the backs of the elderly in this community, that's for them to do. But I won't do it; nor will I let it go by without mentioning it.

To address the principles of this legislation one more time, a great deal was made of moving into the private sector. Mr. Speaker, the official administrator moves out of the private sector and becomes the public trustee and can deputize deputy administrators. We now have 12 of them around the province. Most of those will be redeputized to continue to do the work they now do. Section 41, which was referred to during debate, is a section which has not had anyone under it within the public service since early in 1950. To hold that up as some example of moving people outside of the civil service is just consummate claptrap. It is fatuous untruth, and it ought not to go unmentioned in this House. Mr. Speaker, we have added 20 people to the public trustee's office in order to do more service around the province of British Columbia.

This could be done in committee, but the reason it is being done here is because I'm not going to let the falsehood of a straw man stand unchallenged. I am not going to allow that to stand unchallenged, because the people deserve better.

MR. BLENCOE: We have continued to see this Attorney-General abuse the rules of this House — the honourable rules of this House — and I ask you once again to bring this member to order, Mr. Speaker. We're tired of the rules being abused by this member. My colleague the House Leader quite accurately says that this member has become quite a bully in this Legislature. We're tired of you abusing these rules.

HON. MR. REE: Mr. Speaker, on a point of order, I haven't heard the Attorney-General identify any member in this House with reference to his comments, and I notice that member for Victoria standing up objecting. Do the shoes fit that member?

HON. MR. BRUMMET: I guess the point has been made by the Solicitor-General, Mr. Speaker, in that I distinctly heard the member talk about the falsehood of a straw man. I didn't know that anybody was going to identify themselves in that category.

DEPUTY SPEAKER: It might be an appropriate time to once again remind hon. members of the necessity for parliamentary language in this House. I would just remind hon. members that good temper and moderation are the characteristics of parliamentary language. Parliamentary language is never more

[ Page 7618 ]

desirable than when a member is canvassing the opinions and conduct of his opponents in debate.

The minister closes debate on second reading.

[3:30]

HON. S.D. SMITH: Mr. Speaker, I agree with you wholeheartedly. The most parliamentary of all language is the truth, and that's what I'm asking be spoken in this place.

To go back through the principles of this legislation, to enumerate them so that even the first member for Nanaimo (Mr. Lovick) can understand them, this legislation parallels legislation which we brought in with respect to the public trustee's office. In both instances we have provided a situation where the moneys that are paid into the public trustee's office are directed not through general revenue but back to the services for the people who most need them. We have enhanced the service level in the public trustee's office greatly this year as a result of that. We have added more people to provide service, we have added new technology to provide service, and, in all, we have greatly improved the service.

We have identified an area under the official administrator's situation where the standards for administration are not evenly applied all across the province of British Columbia, and the authority for that application does not rest in anyone who is responsible directly to this Legislature. We are going to change that around by making the public trustee the official administrator for the province of British Columbia. That — if these screaming great twits who have been debating this thing could understand it — is the opposite of privatization. That brings the responsibility into the hands of the official administrator, who is the public trustee. Then that individual will be able to appoint deputies from around the province of British Columbia who, not coincidentally, will likely be the people who already have been doing that.

Why are we dealing with section 41 in this bill? Because it is redundant; it has not been used since early in 1950 in the province of British Columbia, so it makes no good sense to leave it there and let it clutter up. That's why it has been done, and that was answered as well. So any one of these people could get this information, instead of building this phony straw man in order to alarm the aged and the infirm and crawl on the backs of people who least need this abuse, in order for them to score some cheap, fatuous, political points by that member for Esquimalt-Port Renfrew. Mr. Speaker, I move second reading of this legislation.

Motion approved.

Bill 33, Estate Administration Amendment Act, 1989, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

HON. MR. BRUMMET: Mr. Speaker, I call second reading of Bill 40.

HEALTH PROFESSIONS
AMENDMENT ACT, 1989

HON. MR. DUECK: The principal item being dealt with in this bill is the authority for professional groups — chiropractors, optometrists, podiatrists and physiotherapists — to regulate the use of corporations by members of the respective associations. While there are no objections to the use of corporations by these professionals, there has previously been no authority to make rules about the use of such corporations.

The earlier concerns of respective licensing bodies about such matters as professional liability of individuals and shareholdings within the corporation have been addressed in these amendments. The actual provisions are the same for each profession, with the exception, of course, of the name of the profession and the type of corporation.

Included in the amendments are the following items: delivery of professional services is restricted to either a member of the professional group or a person supervised by him or her; corporations will be approved by each regulatory body using a permit system; voting shares can only be held by licensed members of the profession; all directors of the corporation must be licensed to practise that profession; no professional corporation may engage in any activity other than that profession that gives rise to income from business; no person other than a licensed professional may use a proxy voting, trust or other type of voting agreement; the personal liability of a professional for negligence is not affected by the use of a corporation — in particular, the professional will continue to be subject to the laws relating to judiciary, confidential and ethical relationships.

Improper use of a corporation or contravention of various sections of the act or rules may result in a reprimand or fine or in suspension or cancellation of the permit. A standard rule-making power is conferred on the board to deal with the procedural requirements related to these amendments.

The amendments related to corporations are the only amendments that are being made to the Optometrists Act and the Podiatrists Act. In the case of the Chiropractors Act, there are two additional matters being addressed with these amendments. Firstly, the chiropractic association is being converted to a college. The effect of this is that the licensing body will now be restricted to matters related to regulatory concerns. That is, the British Columbia College of Chiropractors will deal with registration and discipline of chiropractics and chiropractic corporations. It will not be involved in economic or other professional interests — for example, negotiation with the Medical Services Plan over annual payment schedules.

Secondly, amendments are being made to the act that would permit the establishment of a school of chiropractic in British Columbia. If a decision is made to establish such a school in the province, these amendments will ensure that students and teachers at such a school will be able to carry on with the study

[ Page 7619 ]

of chiropractic without being required to register under this act.

In connection with the Physiotherapists Act, changes in addition to the corporation provisions relate to the means by which remedial gymnasts can be registered under the act. Amendments made late in 1987 were discovered to have been based on incorrect information and as a result were never brought into force. These amendments will repeal and replace the incorrect provisions. Because of the more limited training that has been received by these individuals, there is provision for limiting the scope of practice of remedial gymnasts at the time of registration. One further matter in this act relates to the authority for physiotherapists, under the direction of a medical practitioner, to either administer drugs or treat a fracture of a bone.

The last item of this bill relates to the Psychologists Act. There are two basic aspects to the amendment. Firstly, as with the chiropractors, the association is being converted to a college. Again, this will have the effect of limiting the licensing body strictly to regulatory issues. Secondly, the college has had very inadequate provisions relating to discipline These provisions are being replaced with much broader, more comprehensive provisions. For example, the college can now deal with former members Previously a person charged with incompetence or misconduct could resign at any time prior to a hearing and avoid any blemish on his or her record As well, there will be new authority to attach conditions to a licence or suspend a licence prior to a hearing if the board considers that there is sufficient risk to the public without such action. Such an order can be appealed to the Supreme Court.

Mr. Speaker, these amendments strengthen the authority of the licensing bodies to regulate their respective members, and I am pleased to have the opportunity to propose them to the Legislative Assembly.

MR. PERRY: I had a very pleasurable walk with the Minister of Health last Friday, and it's a nice situation to be able to rise to support one of his bills.

We've reviewed the bill, and I'm pleased to thank the minister for the courtesy of the briefing by his officials. That was greatly appreciated. His officials took extra time out of their schedule at short notice and enabled us to study the bill more comprehensively and, I think, to prepare a more intelligent response than we might otherwise have been able to do.

I think the minister has really stated for the House the intents and purposes of this bill. There is not really anything terribly controversial in it. I would simply note that in section 19 the definition of "psychologist" is repealed, and none is substituted. I might ask the minister to respond to that later.

On section 22, I might simply serve notice to the minister of a question that I may bring up in the clause-by-clause reading: the bill as written appears to imply the ability of the College of Psychologists to compel attendance by a patient as a witness. I have some concerns about whether this might violate patient confidentiality, and I suspect they can be answered. Having said that, we have the delight to announce our support for the bill.

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

HON. MR. DUECK: Mr. Speaker, I move that the bill be now read a second time.

Motion approved.

Bill 40, Health Professions Amendment Act, 1989, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

HON. MR. BRUMMET: Mr. Speaker, I call second reading of Bill 48.

[3:45]

ASSESSMENT AMENDMENT ACT, 1989

HON. MR. COUVELIER: This bill makes a number of amendments to the Assessment Act. First, appeal procedures are improved by enabling the Assessment Appeal Board to become the registrar of board appeals. This means that the board will assume the administrative responsibilities for accepting appeals to the board, scheduling the hearing of appeals and ensuring that the necessary people are notified about the filing of the appeal and the hearing date. Presently the assessors assume these responsibilities, which could be seen to be in conflict with their role as a party to the appeals.

In general this amendment makes the procedure for appealing to the Assessment Appeal Board simpler, easier to understand and therefore more accessible to members of the public. Additionally, specific statutory dates are now set for the filing of appeals and the notification of parties, to prevent surprise appeals and to ease scheduling difficulties.

Secondly, Mr. Speaker, this bill introduces an objective method for setting rates used to value improvements owned by utility companies such as cables, towers, pipelines and railway tracks. Utility property has historically been assessed on the basis of rates set by the assessment commissioner. The Assessment Act provides that these rates are subject to appeal, but it does not set out the manner in which the assessment commissioner is to establish the rates. Consequently the B.C. Assessment Authority and concerned utility companies have spent a great deal of time in court arguing about the proper method for setting the rates.

[Mr. Speaker in the chair.]

The method of setting the rates used to assess improvements on utility-class properties needs to be clarified. Only by establishing an objective method of setting these rates can we maintain the stability of

[ Page 7620 ]

municipal tax bases. Generally the new rates will be based on the present cost of constructing or installing the item being valued. Once these rates are set at the beginning of each assessment cycle, they will continue to remain effective for the full two-year assessment cycle.

The bill also provides that appeals to the Assessment Appeal Board may be made with respect to the rates set by the assessment commissioner if a taxpayer believes the assessment commissioner did not follow the required methodology in setting the rates. If the appeal is successful, the board shall require the commissioner to review his rates for the purpose of setting new rates.

The sections of the bill dealing with the setting of rates for utility properties by the commissioner will be effective beginning with the 1987 taxation year. This validates the methods actually used to establish the commissioner's rates for utilities properties since that time. Appeals already in progress against the rates shall be heard and decided only on the basis of the methodology set out in this bill. If the assessment appeal board has already heard and made a decision on an appeal of utility rates between 1987 and 1990, the appeal may be remitted to the board for reconsideration. Retroactive validation of the commissioner's rates for utility class properties is necessary to prevent the possibility of large tax refunds and to ensure the future stability of municipal and rural area tax bases.

Recently, pipeline companies unsuccessfully appealed the rates on their pipelines to the assessment appeal board for the 1987, 88 tax years. That decision has now been appealed to the B.C. Supreme Court. The companies argue that the commissioner's rates for these improvements cannot be validated. The same companies have also appealed the commissioner's rates applicable to their pipelines for the 1989, '90 tax years. In addition, other rates for railway trackage and power lines have also been appealed by various companies. If the pipeline companies' appeal against the 1987, 88 rates for pipelines is successful, significant tax refunds will be required to be made to those companies by affected municipalities. The appeal of the 1989, 90 rates increases the potential for further large tax refunds. This bill also provides that unless the rates are successfully appealed on the basis of the rate methodology set out in the bill, they are validated.

Thirdly, this bill deals with two further court decisions which may also create property tax instability. This is a perennial problem. The Assessment Act is vague and unclear in many parts and provides ample opportunity for legal dispute. These disputes can often have effects that ripple through the system causing disruption for municipalities and taxpayers not involved in the initial disputes. The government is determined to deal with this problem through a comprehensive administrative rewrite of the Assessment Act. However, in the interim, we must once again deal with particular current problems. To do this, the bill introduces legislation to validate a number of orders-in-council and regulations passed since June 30, 1984 in respect of classification, valuation or eligibility for exemptions for assessment purposes. This is being done to overcome the effects of a recent B.C. Court of Appeal decision which held that where a regulation was passed after June 30 in any year, it could not be given effect so as to change the value of a property for the next assessment roll. The Assessment Act sets the valuation date for the purposes of the assessment roll at the immediately preceding July 1. It had previously been thought that changes could be made between July 1 and September 30 issuance of the assessment roll.

It also takes action to validate the classification of churches and church halls for 1989 taxation. This is necessary because a court decision resulted in this classification being changed last fall. Subsequently, the government made an amendment to the property classification regulation to specifically reinstate a previous classification of churches and church halls. However, there was some question that this may only be effective for the 1990 and following tax years. This bill validates the regulation to ensure the correct classification of churches and church halls for the 1989 tax year.

Fourthly, this bill also addresses several concerns of taxpayers, such as those owning mobile homes who suffer the destruction of their mobile homes late in the year. The present Assessment Act has no provision to permit their assessment to be changed quickly to reflect the reductions in value caused by the loss of their mobile home. This means that in the following tax year, a taxpayer must pay taxes on his property as though his mobile home still existed. In the event that a new mobile home was moved on to the property before the end of the year, the Assessment Act requires that it be assessed. This can result in double taxation. This amendment provides that in these circumstances, assessments can be immediately changed to prevent tax hardship in the following year.

Similarly, where B.C. Hydro — which is entitled to a partial tax exemption — buys or sells property late in the year, there was no provision in the Assessment Act to change property assessments to show a change in the exemption status for the following tax year. This bill provides that this change can be immediately made to the assessment roll and therefore be applicable for tax purposes in the following year.

Finally, the bill makes several small administrative changes. For example, it grants the Minister of Finance and Corporate Relations the ability to replace members of the court of revision who have become unable to complete their term on the court. Until now, the Lieutenant-Governor-in-Council was required to make all appointments to the court of revision. This amendment should ease the administrative burden on the Lieutenant-Governor-in-Council by also allowing the minister to make appointments which are necessary to complete a term. The Lieutenant-Governor-in-Council will continue to make all full-term appointments.

Mr. Speaker, Bill 48 is an attempt to improve administration of the assessment appeals system,

[ Page 7621 ]

maintain property tax stability, address concerns of taxpayers with respect to inequitable assessment and tax treatment and improve administration. I move second reading of this bill.

MR. CLARK: As the minister said, it appears that virtually every year there are amendments to the Assessment Act, and they're generally reactive in nature to particular court cases. I suppose that in a perfect world that wouldn't be necessary, but it's always been the case, and I think it's necessary, by and large, in many jurisdictions.

On this side of the House we look forward to a comprehensive rewrite, as the minister suggested, which would clearly be a more desirable way to deal with the changes necessary.

I have a number of questions regarding specific changes with respect to valuation of utility property, which I think is of great interest to some rural areas, small towns and communities that I've dealt with in B.C. The questions are really simple ones: who wins, who loses by the new valuation methods and the like; and some other queries regarding specific sections. But in general, on the surface, I don't see anything in this bill which would cause concern, or at least opposition, on this side of the House. Some of the concerns we'll deal with in committee stage.

MR. SPEAKER: Pursuant to standing orders, I advise the House that the minister closes debate.

HON. MR. COUVELIER: I move second reading of the bill.

Motion approved.

Bill 48, Assessment Amendment Act, 1989, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

HON. MR. BRUMMET: 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 76: new programs, $45,000,000 (continued).

MR. CLARK: I would appreciate it if Mr. Hyndman, who I'm sure is here or on his way here at the moment.... The minister nods his head. It's not that the minister isn't fully aware of these issues, but it would be desirable to move into them with his staff here. As the minister knows, I will continue for a while yet raising concerns about the Vancouver Stock Exchange and particular players.

I might say, though, in Mr. Hyndman's absence, that I have been much impressed with attempts by Mr. Hyndman, Mr. de Gelder and others. They have clearly been moving in the right direction with respect to the regulation of the Vancouver Stock Exchange. Having given kudos to Mr. Hyndman before he got here, now we can proceed with the less desirable aspects of my remarks.

We left off with matters relating to Ferdinand Marcos and the Vancouver Stock Exchange, and I will proceed with those in a few minutes.

[Mr. Rogers in the chair.]

I think I will just recanvass, very briefly, Juan Carlos Schidlowski, because more dealings of Mr. Juan Carlos Schidlowski have recently been brought to my attention, and I thought I might canvass them with the minister. As I stated before, Mr. Schidlowski is involved with Zurfund on the Vancouver Stock Exchange through subsidiaries of Zurfinanz. I might note that the newspaper reports of that account, I think, are wrong, and I don't think that was my fault, but they may well have been, because I think Mr. Schidlowski owns 96 percent of Zurfinanz and not 98 percent.

It's come to my attention that Zurfund has also been involved with another company on the Vancouver Stock Exchange called Kap Resources. This is an interesting one. I know it's not appropriate before I do that to show pictures in the House, and I won't do that. I know that Mr. Hyndman and probably the minister are aware of these rather spectacular graphs from Napa Resources and Zurfund. I just might make note that Napa Resources had 2,115,001 shares and shortly thereafter, when it was renamed Zurfund International Ltd., after the RTO, it had 12,974,228. As I said in the House the other day, Mr. Juan Carlos Schidlowski received in exchange for the RTO about 7.6 million shares, which would have made him — just crudely — about 60 percent owner of Zurfund International Ltd. on the Vancouver Stock Exchange. So very clearly Mr. Schidlowski, at least at that time, was, and I'm sure remains, a major player in that VSE company, albeit currently through the subsidiary.

In terms of the major Zurfund International Ltd. on the VSE, I don't know how many shares Mr. Schidlowski continues to hold. He may well have got out at $3, which would have been rather worthwhile for him to do, I'm sure. He probably got rid of a few shares at that time.

Anyway, Kap Resources was brought to my attention this morning as a result of newspaper accounts on the weekend. Kap Resources is quite interesting. The company, Kap Resources, went from 60 cents to $4.50, and it was a rather interesting VSE deal. I'm just reading from Stockwatch — I'm sure the minister and his staff know about Stockwatch — where it says that Mr. Donald Busby, who is with Kap Resources, reports: "An agreement in principle has been reached for the company to participate in a joint venture project in South America. The participants in the joint venture will be Zurfund International Ltd. and the company. The company has agreed to acquire its interests from the previous joint venture partner" — and so on.

[4:00]

[ Page 7622 ]

Kap Resources, partly as a result of this announcement and the involvement of Zurfund, soared in price from 60 cents to $4.50. I'd like to give a little pat on the back to the Vancouver Stock Exchange, because on June 9 the VSE halted share transactions in Kap Resources at $4.85, which was a little bit late. Nevertheless, they did seem to catch that this was a perfect shell company with which Mr. Schidlowski could undertake his normal activities. Of course, nothing has happened to Zurfund, who participated in Kap; so it might twig some regulator's attention that Kap has been frozen in terms of its actions and to this day is not allowed to be traded. It might cause regulators to look beyond Kap and at Zurfund International.

While doing that, I think it would be important to draw to the minister's attention that private placements, of course, play major roles in these kinds of shell games, and private placement Kap Resources was with Charterhouse Bank and Trust — 175, 000 shares. The minister might be aware of Charterhouse Bank and Trust, because it's the phony Bahamas bank used by Carter and Ward and their companies. It's the bank used by Capital Reserve, which was Bobby Schlichter's. It was also the bank used by Macrotrends, which was the subject, of course, of the Barron's article on Norty Cooper. So Charterhouse Bank and Trust is a perfect laundering vehicle and has in fact been, I submit, a laundering vehicle in connection with previous issues on the VSE.

What happens — just so that the minister knows — is that dirty money ends up going to the Bahamas, which is through Charterhouse Bank and Trust. It then purchases shares through private placements on the VSE. It's an exempt institution, so as an exempt institution it can trade in those shares immediately Dirty money is placed in the Bahamas in the Charterhouse Bank and Trust, and that money is then used to buy private VSE placements. Given the track record of Charterhouse Bank and Trust, given the fact that it has been involved in the most notorious VSE deals in the last few years, might it not be appropriate that Charterhouse Bank and Trust not be allowed to be an exempt institution and not be allowed to buy private placings on the VSE? I wonder if the minister has any comments before I proceed.

It's certainly possible that the reason Kap Resources trading was halted on June 9, just a couple of weeks ago, is that it came to the attention of the VSE that Charterhouse Bank and Trust was involved. If that's the case, I commend them for reacting to the presence of this notorious phony Bahamas bank, but I'm not sure of that. Perhaps the minister could tell us whether he shares our concern about Charterhouse Bank and Trust and whether he realizes it has been involved in many of the major scams in the last little while and is now involved with Kap Resources, which incidentally is connected by way of joint participation in a project with Zurfund International

HON. MR. COUVELIER: If the member has specific evidence that there is wrongdoing, the Securities Commission, of course, would like to hear of it. As I mentioned on Friday, it isn't sufficient for a regulator to be reacting to mere innuendo or suspicions. Hard evidence must be obtained. That is a longstanding principle of law, and one that I think most British Columbians would like to see remain in place.

I'm not in a position, as I've said before, of confirming or denying the state of current investigations, so as you know full well, hon. member, I cannot speak to the individuals you have mentioned here today. I can't add much to the level of knowledge in a public forum. I repeat my offer to you, which I've made to the previous critic: if you have a genuine desire to obtain updates as to the state of investigations and the obtaining of evidence on any specific allegation, we would be pleased to share that with you on the assumption it would be treated confidentially. Because of my statutory responsibilities, I am unable to deal with your innuendoes in this public forum.

Dealing with the issue of the holding-period for some of the promoters' stocks, you might be interested to know — if you didn't notice — that we brought forward an order-in-council in recent weeks which had the effect of requiring those people to hold their stocks for a minimum of 12 months.

MR. CLARK: I wonder if the minister could clarify that. I was asking about exempt institutions such as Charterhouse Bank and Trust. Does this order-in-council deal with them?

HON. MR. COUVELIER: This would put a 12-month hold on private placements to exempt purchasers.

MR. CLARK: That's indeed commendable, although it may have been easier to deal with the exempt institutions like Charterhouse Bank and Trust than to deal with all exempt institutions by such an order. It's simply a question of whether it might be administratively easier to say that all exempt institutions must do X — which is what it appears the minister has said, and that's fine. It may also have been that there are several clear... The minister might agree that Charterhouse Bank and Trust — and I'll get to some others in a minute — has such a notorious record with respect to the Vancouver Stock Exchange that it would have been extremely easy to simply say that Charterhouse Bank and Trust no longer can purchase private placements. It seems to me that their record is so notorious....

I don't necessarily expect you to confirm this, but my great suspicion is that the reason the VSE halted the trading on June 9 was that it was brought to their attention that Charterhouse Bank and Trust was involved. That may well have been the trigger with which they came to realize that this shell company was being manipulated by Juan Carlos Schidlowski, and the Charterhouse Bank's involvement may have twigged them to that. If that's the case, that's certainly worthwhile.

I won't deal at great length with Mr. Schidlowski. I am sure things are proceeding on that. I might just

[ Page 7623 ]

say that the Kap Resources experience is also a classic case, given the share.... They start out with tight shell companies essentially — or tight companies, as Napa Resources was — and then they move on to issue shares to themselves. So they go from 2 million to 12.9 million, and then the cycle starts proceeding. They keep deluding the investors about the quality of the shares, and they keep moving money through.

Kap Resources is another classic example of a company that was at 1.8 million shares, and the process was just beginning, while the Vancouver Stock Exchange has now halted trading. Again, I want to make it clear that it is certainly worthwhile that they have moved to deal with that.

Mr. Chairman, I'll just be one moment; I've got so many tips — as they say in this business — that I've got to think and look at the same time.

The second member for Delta wanted to contribute, so I'll defer to him at the moment.

MR. DAVIDSON: Mr. Chairman, I'd like to make a few comments regarding the VSE, and they're very much along the lines of what I said last year. I think there's a growing tendency for the minister's staff to forget that the VSE is a venture capital market, and that we don't need the same rules that exist in Toronto, and we don't want the same rules that exist in Toronto. When you have a venture capital market, it's not the same as an established market in Toronto. You don't need quarterly reports. It's very unfortunate that your staff has inflicted on the Vancouver Stock Exchange some of the toughest rules that little venture capital companies have to deal with anywhere in the world. If you add the costs of the legal fees, the accountants' fees and the need to send out quarterly reports, you can't....

MR. MILLER: All those details.

MR. DAVIDSON: They are little details when you're dealing in a venture capital market, Mr. Member, because you can't.... You don't understand You see, Mr. Chairman, this is the unfortunate part of the opposition; they don't understand the difference between a venture capital market and a market that has to be closely regulated and scrutinized.

It's really sad that Vancouver has such a golden opportunity, and I must say to the minister that we're losing it. We are losing the venture capital market that Vancouver always had; we're losing it to Toronto. It wasn't an isolated incident when Barron's and that other famous magazine, Forbes, happened to come out with an attack on the VSE at the very same time They're supposed to be two separate magazines What a strange coincidence that these two eastern dominated magazines would suddenly come out and attack the VSE. Mr. Chairman, we have been trying to keep a marketplace in Vancouver that's unique; it's called venture capital. You don't put money into a venture capital market the way you put it into stocks, bonds and other securities. It's venture capital.

It's unfortunate, but I believe one of the problems is that some of the members of the commission have been listening too much to the IDA. The problem there is that they want our market to be like the Toronto market. It's not like the Toronto market; it's a totally different market.

MR. CLARK: You've got that right.

MR. DAVIDSON: Again, Mr. Member, you have to understand that the Vancouver marketplace has performed a vital service to many companies which otherwise would never have gotten started. You know the list. Yes, we've had scams; yes, we've had problems, and those problems have to be corrected. But we're not going to correct them if we simply abolish the Vancouver Stock Exchange as we've known it.

The idea of the eastern-control people is to put Vancouver out of business. That's simple: "Hey, what we'll do is keep feeding ammunition to the opposition. Let them keep the smear, the slur and the innuendo going." Make statements in the House that you wouldn't dare make outside; one or two members have made statements outside which they may yet regret.

Mr. Chairman, there are some very serious shortfalls in the Vancouver marketplace right now, and they can be corrected quite easily. We have two separate markets. We have a need, however, for a curb exchange to be developed in Vancouver.

AN HON. MEMBER: Does that mean penny stock?

MR. DAVIDSON: That means penny stock. It means that when you invest your money in the curb exchange, don't expect a quarterly report, because there's not a stock out there that, by the time the quarterly report is finished, hasn't significantly changed from when it was printed. The cost factor of some $50,000 a year to keep a little company in the venture capital fund going is becoming ridiculous. It's outrageous that this kind of money has to be put forward. It has no particular value, except to drive our legitimate companies to the Toronto exchange and leave those of less substance here in Vancouver.

There are a couple of other things that could be done. We need to put in some different rules for the directors who are currently in place. We need to make directors of companies responsible for actions. We need to say to these people: "If you are going to mislead the public deliberately and intentionally, and you're doing so by any manner of fraud or whatever, we have a place to look after you. It's called the courtroom system." We put those people into court.

[4:15]

MR. CLARK: You know all about that, Walter.

MR. DAVIDSON: Yes, I know all about that. So do you, and you'll find out.

You know, it's just not enough to simply say that Big Brother government can do it all, because it can't. Right now the Vancouver Stock Exchange, to a large degree, is a result of its own actions. It has failed to address some of the basic needs their responsibility

[ Page 7624 ]

charges them with. We must have directors of the Vancouver stock market who will give full disclosure of their own personal holdings. It's not enough to sit as a director of the Vancouver Stock Exchange unless you too are prepared to give full disclosure. What's wrong with that? Why shouldn't the general public have access to the disclosure forms of the members of the Vancouver Stock Exchange, so that when actions are taken or not taken, the general public and others can judge those actions accordingly? These same directors must also be responsible for their staff, their own brokers and their floor traders.

If we are going to make some positive change in the Vancouver market, we need to accept the fact that the Vancouver market is not the Toronto market. It simply will not function with the rules you've imposed — the minister has imposed — on the marketplace. It's not fair or reasonable or financially possible for some of the smaller companies to conform to the rules and regulations which the minister's office has put forward at this time.

It's not enough that we have a situation where we have an overregulated exchange. We have our own special animal called the assessment board, made up of a group of engineers who actually pass judgment on whether a property has any value or not. I don't know of any other exchange in the world that has a group of people who actually pass judgment on the property coming forward in any particular prospectus. There are engineers in other jurisdictions who check the authenticity of the statements being made, who reflect it on the engineering reports, but to pass judgments on an actual piece of property sitting in a board room? That's not their role. That's yet one other hurdle for the Vancouver exchange.

I say to you, Mr. Chairman, that the Vancouver Stock Exchange is as much in trouble today because of the ineptitude of the exchange to direct its own activities as it is by our regulators to try and put us onto the same course and same plane as the Toronto Stock Exchange. It isn't going to work. Toronto has a long history of firm, major companies. It's connected to the London exchange and the NASDAQ exchange; it's got direct dealings with Boston.

We are a venture capital exchange, and when we start to make the Vancouver Stock Exchange sound like all the other exchanges in the world, it's not fair. When the IDA and others put forward suggestions for rules and regulations, they're not saying that this is to try and make Vancouver better; it's to try and make Vancouver weaker, so that the rest of our business goes to Toronto.

I say to you, Mr. Chairman, and to the minister, that if we don't seriously re-evaluate the kind of rules and regulations we've forced onto the venture capital companies in this province, in this exchange, we jeopardize the entire Vancouver Stock Exchange and the venture capital market that we've relied on.

I'm not taking away for one moment the points being made by members of the opposition or members of the public who say that there are glaring examples. But we're not alone. It's not just Vancouver that has the glaring examples. Wherever you're going to have a market like Vancouver, Toronto, New York, London, Singapore or Australia, you're going to have people who try and circumvent the rules and try and come in for the quick dollar. But to try and broad-brush the entire industry — as some members of the opposition are doing in this chamber — is not fair, not responsible and not what is needed right now if we are to turn the Vancouver Stock Exchange around and make it the venture capital exchange it deserves to be.

HON. MR. COUVELIER: I enjoyed that little dissertation. It cast my mind back to about a year ago when the tenor seemed to be coming from a different direction in the sense that at that time, the member — if I remember rightly — was of the view that the Vancouver Stock Exchange might not have any useful long-term purpose. But the member does us a valuable service by dealing with the points he raised this afternoon. There's a delicate balance that must be struck between the contributions that the Vancouver Stock Exchange has made over the years to the development of emerging new companies, principally in the resource sector — although hopefully with the technological focus that's being brought to new listings these days.... We might in the future be able to talk about technology-related companies who have graduated to senior exchanges like Toronto.

I do believe that it's true as a general statement for us in British Columbia that about 20 percent of the volume on the Toronto exchange is attributable to companies that started in Vancouver. As they grew and developed, they migrated to where there were larger sums of capital available to them. They became more investment grade as they grew, and as a consequence, needed that larger market to distribute their shares in.

Let's not lose sight of the fact that — as the hon. member points out — the Vancouver Stock Exchange has had many successes. It is a high-risk exchange, of course, because it's dealing basically with companies with no track record. As a consequence, there will be a higher preponderance of losers on the Vancouver Stock Exchange as opposed to other exchanges dealing with senior stocks. A corollary of that is that when a venture is successful, having started on the VSE, the potential for huge gain is there. As a consequence of the great potential for gain, the Vancouver Stock Exchange continues to attract a certain unique type of investor: an investor looking basically for short-term gain, who moves pretty quickly and plays the market much more aggressively than what you would find on a more senior exchange. That's not negative.

I hear the member of the opposition laugh. I don't see that as a negative function at all. It seems to me it's a very necessary, useful device which ensures that there's volatility in the Vancouver market and that the opportunities that might be inherent in a stock are quickly appreciated. So there's quick action and reaction all the time. That's a dynamic that's normal with junior exchanges.

[ Page 7625 ]

The second member for Delta (Mr. Davidson) mentioned what he called the assessment board — I believe he was referring to the mining evaluation committee — and spoke in less than complimentary terms about its performance. My information is that that committee has done yeoman-like work, and has prevented the sale of much "moose pasture" in British Columbia, and so it does seem to me an appropriate agency, and I've not heard it criticized in terms of the quality of their judgments. It's not to say that the people they reject aren't disappointed. Nevertheless, I've generally heard complimentary remarks about their performance.

The great potential in the Vancouver Stock Exchange, of course, is something that the member and I are ad idem on, and therefore we have determined that we certainly don't want to throw the baby out with the bath water, and we certainly don't want to destroy the viability of North America's only regulated junior market. You think about that. If Vancouver cannot perform properly in the interests of the consumer and the marketplace, then no regulated junior market will be able to perform anywhere. Vancouver has got a long lead in terms of managing its operations. We, of course, since we took office, have only had the Securities Commission for two years, so we don't have yet that vast historical experience in the commission. But the record since the commission has been in place, I think, illustrates the value of its judgments. They have been successful in taking at least 60 players out of the Vancouver market, and they continue to have something in the order of 1,200 active files under investigation. So they are performing a useful work, and they're making good progress.

The member also made the point, which has troubled me now for a year and a half, that the Toronto Stock Exchange seems to have been jealous of the successes in Vancouver for financing junior companies. Principally, as I understand it, Hemlo, that tremendous Ontario find, was financed on the Vancouver Stock Exchange, and prompted the concern of the government of the day in Ontario that they should not be financing their junior companies in Vancouver but should rather be doing it at home in Toronto. It's interesting. The Vancouver Stock Exchange is presently where the Toronto Stock Exchange was about 40 years ago: basically junior resource listings, and with the image that junior companies attract.

Those who watched Toronto attempt to move into junior markets were critical, and suggested they couldn't do both: that is to say, run Canada's premier senior exchange and at the same time attempt to put together a venture capital exchange. The jury is still out on their success, but I do advise the hon. member that my information is that within recent weeks, if not the last month or so, there seems to be a waning of interest in central Canada in terms of their ability to deliver a venture capital exchange, notwithstanding they would much prefer to do so.

In any event, we are extremely sensitive to the possibility that we could be over regulating the Vancouver Stock Exchange, and thereby could damage its long-term viability. At the same time, we are of the view that there's much more that we must do if we are to provide the consumers of the information they disseminate with some modicum of comfort that the players have been investigated and the project is deemed to have a possibility of success. Sometimes those attributes haven't been evident in the past.

[4:30]

I could get into a little discussion about the future of the Vancouver Stock Exchange, but I think I won't get into that subject at the moment. There are many different directions that might be pursued by the exchange in fulfilling its future and its opportunity. Let me just tell the House that we as the regulators of the exchange are aware of those options, in terms of future direction, and are discussing them actively with many of the players.

MR. DAVIDSON: I thank the minister for those replies. I would like to enlarge a bit or maybe get a response to the aspect of creating a secondary or a curb exchange.

There's no question when the minister says that the public wants certain information and they want it in a timely manner, etc. On an established company, that's certainly understandable — a company that would be a long-term success and would qualify for a full listing on a Vancouver Stock Exchange. But there are many others that don't have that track record, the asset picture, the growth record and the dividends. They are, in fact, an idea — a big idea — that starts from an idea that someone has. They put forward a prospectus and get some of their friends involved, etc. But I say to the minister that to expect these companies to comply in the same way as a major company which has at its disposal an accounting firm and a legal firm to look after all the requirements, to say to even the little companies: "You too must follow these rules; you too must submit these quarterly reports...."

In a small company, the fact is that from quarter to quarter there may be dramatic changes or no changes, but the cost doesn't change. They still have to make their same payments to the Vancouver Stock Exchange for their quarterly listings. They still have to pay the accountant, the lawyer, and all the other costs incurred, and in some cases that's a real hardship.

I don't think that there are many companies on the Vancouver Exchange today who, if they comply with all the rules and regulations using the lawyers and the accountants who charge the necessary fees, plus pay their fees, can stay in business for less than $40,000 to $50,000 in a given year. That's a tremendous amount of money for a venture capital company.

All I'm saying is that I would hope that as we examine where we can go and what possible changes we can make, one of the avenues we can look at seriously — and which was done before — is the establishment of a curb exchange, which basically says one very simple thing to the people who invest.

[ Page 7626 ]

Interjection.

MR. DAVIDSON: Exactly. Buyer beware. We're saying: "Venture capital of the highest nature." But if you want to put your $500 or $1,000 in and possibly lose it all, you know what you're getting into.

MR. MILLER: You could buy lottery tickets.

MR. DAVIDSON: You could buy lottery tickets. You could go to the racetrack. You could go to Vegas or Reno. You could do all these things, or you could say: "I believe that this little company has a real future. I believe that this little company, which has identified this little piece of ground, this little process or this little machine has a real chance of success, and I'm prepared — instead of buying lottery tickets — to put $500 or $1,000 into that company." But again, the rules can't possibly be the same for this company as they are for the larger company. All I'm asking is that instead of forcing the same regulations as exist with the major companies who have the financial wherewithal to comply, we simply say: "Yes, we will establish a curb exchange with different rules, because it's a different scene."

[Mr. Rabbitt in the chair.]

HON. MR. COUVELIER: The fact is that we do have quite a few special rules for VSE-listed companies. We have local policies that allow special capitalization rules for start-up companies. There are special exemptions for private placements by VSE companies at lower thresholds than Ontario allows, and our listing requirements permit start-up companies to trade on the only regulated stock exchange for venture capital in North America, if not the world.

As I understand it, the member is referring to curb exchanges in the sense that they would be unregulated. Of the prominent curb exchanges that I'm aware of, Denver has collapsed and no longer exists; it has basically been discredited to the point that investors lost confidence in it.

The Vancouver Stock Exchange board of governors is intending to create two boards, at least — a junior and a senior board. It would be our hope that the senior board would attract more and more investment-quality listings and that the junior board would remain the venture board for start-up companies.

I place a high degree of hope in the VSE growing as the world's premier venture capital market. In order to capture the growth that I believe is inherent in the potential, I believe that it has to be regulated. I believe that we have to acquire and exhibit our ability to regulate effectively, given the nature of a high-risk market, in order to attract offshore companies to list on the VSE for their start-up ambitions. I believe we'll have to give consumers around the world some comfort that we are able to regulate those entities. I believe we're doing it, notwithstanding the Forbes and Barron's articles and notwithstanding the criticisms of the members opposite.

As the second member for Delta would know, the increase in foreign trading on the VSE is significant

There's quite a bit of European capital attracted to the VSE. As a matter of course, they understand the nature of the market, they understand the opportunity for a big gain, and they also understand that the law of averages being as it is, there will also be a majority of losers.

If we do our job effectively as regulators — that is, if the Securities Commission does its job effectively — we should be able to continue to attract more and more foreign interest, and that will build up the knowledgeable infrastructure in the financial community in British Columbia which is one of the key elements of this government's economic strategy.

MR. CLARK: I might say that the comments from the second member for Delta are similar to those of a lot of my friends who operate on the Vancouver Stock Exchange. It's interesting that there are a lot of east-enders who find their way down as promoters on the Vancouver Stock Exchange, and they're constantly regaling me with remarks that the exchange has become overregulated and bureaucratic, and it's defeating the purpose of promoters. It's an interesting question which we could get into: whether we want a stock exchange equivalent to the Toronto Stock Exchange, with government money invested in it and the like, or a venture capital exchange such as we have had over the years.

People who lose money in the exchange legitimately can all accept the caveat emptor notion. The problem is that we're really dealing with international criminals, fraud, wash-trading, high sales and the like. As the second member for Delta says, that's a different matter. I know the minister doesn't agree with this characterization, but it's my intention very strongly to support the notion of caveat emptor within a game that doesn't have rigged rules, within a game that screens out notorious criminals, international swindlers and the like.

It's with that in mind that I raise questions about people like Juan Carlos Schidlowski and how it is, with their track record, that they're allowed anywhere near the Vancouver Stock Exchange. It's in the same spirit that I raise questions about banks — phony banks, essentially — like the Charterhouse Bank and Trust and how they are allowed to participate on the exchange, given their track record. Contrary to what members may think, the second member for Delta and I share some of the same concerns. We may differ in our approach, but I recognize it as legitimate debate regarding the role of the Vancouver Stock Exchange and how it participates in our financial structure.

It's very clear that the government's intention is to emulate the Toronto Stock Exchange and — we'll get into this debate in another bill — to use public money, in addition, to elevate the Vancouver Stock Exchange to compete with the Toronto one. That appears to be the intention.

I will now leave Juan Carlos and Kap Resources and Zurfund for a bit, and I'd like to turn again, if I can — because I didn't get any answers from the minister — to the firm First Vancouver and its

[ Page 7627 ]

association with Ferdinand Marcos or people connected to him. I don't want to recanvass all that I said the other day, but it seems to me there are very serious questions remaining about the ability of the stock exchange and the Securities Commission to screen the type of individuals who become involved in the Vancouver Stock Exchange — again in this case not just a company listed on the exchange but a company buying a seat on the Vancouver Stock Exchange. I see a seat was sold today for $35,000, which was less than First Vancouver paid, but then again, they had lots of money from other sources.

Maybe we could deal with some specific questions with respect to First Vancouver. As I said the other day, the two individuals involved — three really, but two directly involved — in lining up the funds for First Vancouver were Mr. Delmas and Mr. Mabanta. I want to ask some questions regarding why the Securities Commission took no action against those two individuals, particularly in light of what Mr. de Gelder very clearly said in evidence before the Securities Commission regarding Mr. Delmas. He said:

"There's one person in Vancouver who's supposed to be running the day-to-day operations but who doesn't really have effective control of the firm, because his capital is small and he depends on major capital infusions from these other sources. He didn't know who these people were, either, or else he did and wasn't telling anyone, and either of those is a rather alarming prospect."

Can the minister tell me why, in light of Mr. de Gelder's comments, no sanctions have ever been taken to this day against Mr. Delmas and he continues to operate for the successor firm on the Vancouver Stock Exchange?

HON. MR. COUVELIER: I'm advised by the chairman of the Securities Commission that Mr. Delmas brought this whole issue to the commission's attention. As I mentioned on Friday to the hon. member when he raised the same issue, Mr. Delmas no longer has the company. Mr. Delmas seems to have not benefited from the consequence of his actions. Indeed, it might be said that Mr. Delmas, having been the one who brought it to the commissioner's attention in the first place, is the one who seems to have suffered a large amount.

As I mentioned to the member before, it's not for the government to explain these things. It is for the Securities Commission to respond to them, and if the member has any criticisms in that respect, we invite him to discuss them with the Securities Commission.

When I said this same thing last week, there were howls of criticism across the floor. Admittedly, the gallery was larger at that time than it is at the moment, but nevertheless, the suggestion seemed to be that political interference in this process was a desirable thing. At that time I went to some lengths to explain to the members opposite that it's important that the regulatory body be removed from political interference.

I realize that socialists might have a hard time understanding that as a philosophical attitude, but they shouldn't. The record of government manipulation of regulatory bodies is a record basically of abuse. It's a record which doesn't give much comfort to the average citizen of impartiality and lack of bias. It's very important that we politicians don't have a reach that exceeds our grasp. If the socialists wish to run the world from some centralist ivory tower, and if they truly think they've got the wisdom to do that without fear or favour, then I challenge them to make that the plank in their next election campaign.

Clearly it's in the interests of the industry and of the consumer to set up an agency which is at arm's length from government and is not in a position of having government or politicians manipulate it.

The credibility of a securities commission will be built by its performance. We believe that they are off to a good start. We're very proud of the accomplishments in the short year and a half that they've been in effective operation, and the comment from the street and from regulators across North America confirms that assessment. It isn't just this government saying that our creature is doing well; it isn't that at all. The contributions of Mr. Hyndman, Mr. de Gelder and their crew is recognized nationally. We've come a long way, and we've got more distance to go. But in the opinion of this government, the interests of the consumer are best protected by allowing the Securities Commission to do the job we created them to do, which is to regulate the marketplace. To do that, they must build their credibility. One of the prime requirements in that respect is to ensure that they don't act on smear, innuendo or that kind of thing, but rather on hard evidence that can be supported in a court of law.

As I mentioned earlier, they have 1,200 active cases at the moment, so you could hardly make the point that they're not active in attempting to regulate this market; they are. They have taken at least 60 players out of the market in the short time they've been in existence. Given that kind of track record, I've no doubt that they will take more out in the future.

[4:45]

MR. CLARK: The minister is right that the Securities Commission should be removed from political interference, but he's incorrect in not recognizing that the minister is held accountable for its actions at this time.

The questions I'm asking are not smear and innuendo. They relate specifically to actions that happened a few months ago and specifically to comments made by the regulators. I'm reading a comment from Mr. de Gelder regarding an individual on the stock exchange. I can read you comments from the lawyer for the superintendent's office. I can read you comments from the lawyer for the VSE. All of them say that Mr. Delmas and Mr. Mabanta.... One of them said: "...nothing more than a 5 percent front."

In light of that fact — not innuendo, but fact — it seems strange that there was no action from the regulators. Mr. Delmas, it says, "...brought it to the

[ Page 7628 ]

attention...." He brought it to the attention of the Securities Commission after the bank account was frozen, and they were forced. Mr. Garrod removed the money to a different bank account. It was only then that he informed the regulators. Again, if he was ignorant of the fact that this money came through an associate of Ferdinand Marcos, then he's not fit to be a director or player in the Vancouver Stock Exchange. If he knew, he's not fit; if he didn't know, he's not fit. Those are essentially the words of Mr. de Gelder.

That's why we're asking questions today: why Mr. Mabanta and Mr. Delmas received no penalty — no regulatory sanctions whatsoever — in light of the fact that it was revealed that this money came from Ferdinand Marcos. Either they knew and didn't tell the regulators or the VSE, in which case they're not fit to be active on the VSE, or they didn't know the money came through a Ferdinand Marcos association, in which case they're not fit to be players on the Vancouver Stock Exchange. Either one, as Mr. de Gelder said, is an alarming prospect. Can he tell us why it is the Securities Commission chose to take no action against Mr. Mabanta then, or Mr. Delmas, in light of these rather dramatic statements from their own regulators.

HON. MR. COUVELIER: I realize you keep on searching for a headline, hon. member. I don't know that there's another one in there.

The fact of the matter is that Mr. de Gelder is making the points that you read into the record — I think for the second or third time in the debate on whether I should get my salary or not. The very quotes you read into the record were to support Mr. de Gelder's request that registration be withdrawn.

The fact of the matter is that the Securities Commission withdrew the registration. So here you are, going on at great length, reading into the record, creating the innuendo that somehow or other justice wasn't done. The fact of the matter was that justice was done. The very arguments Mr. de Gelder made, who is, I might add, the superintendent in charge of these kinds of investigations in pursuing justice, requested that the commission take action, which they did. They did exactly what Mr. de Gelder requested that they do. So it's improper for you to be suggesting that somehow they didn't follow Mr. de Gelder's request.

Not only did the Securities Commission withdraw the registration, but as a consequence of shutting the company down they appointed a receiver to wind it up. Clearly the record shows that Mr. de Gelder's request was agreed to by the commission members who heard the case, and furthermore that the action taken wound the issue up, as was contemplated when the action was first started, or at least when the allegations were first proven to be of substance.

MR. CLARK: Can the minister inform the House why — let me just back up.... They either did not know that the money came from Ferdinand Marcos.... Just to be charitable, they did not know, even though Mr. Mabanta refers to Mr. Zita as his uncle, and even though all of these funds come by way of the Philippines through Ferdinand Marcos and are well known to people who indicted Mr. Marcos.

HON. MR. COUVELIER: You're lucky you're in the House.

MR. CLARK: I will say — and have said — that outside the House.

Even though Mr. Mabanta's uncle is connected to Ferdinand Marcos, can he tell us...? They either didn't know it was Marcos or they did know — either one is not acceptable.

Let's assume they didn't know. Can you tell me why they were allowed to purchase a seat on the stock exchange, why the regulators or the Securities Commission or, more appropriately, the Vancouver Stock Exchange, did not get to the bottom of who held the capital in the firm?

HON. MR. COUVELIER: I am advised that, first of all, the purchase of a seat on the VSE is something under the control of the Vancouver Stock Exchange board of governors. If you have a genuine desire to obtain the answer, maybe you should ask them. But throughout all of this dialogue I sense that you don't really have a genuine desire to learn anything other than try to get some attention from others. In any event, the issue of the seat is something that you can address to the stock exchange.

You have repeatedly made the statement that this was somehow money coming from Marcos. I am advised that while that seems to be a common suspicion, there was no evidence provided during the hearing to sustain that point of view. I say again what I said on Thursday or Friday or whenever we discussed this the last time: if you have evidence, hon. member, bring it forward. People would like to see the evidence rather than merely the slur and the innuendo. I can agree that that's street talk, but it's unproven street talk, and in the absence of proof I don't know what you would expect the government or any agency created by government to do other than to look for proof. If no proof is provided, then I suggest to you that it would be improper for them to manufacture it, which is what I seem to sense in your line of questioning.

MR. CHAIRMAN: Before we proceed, I would like to remind the minister that remarks which do impugn the motives of the member are not acceptable. I'd also like to remind the member that this has been canvassed at length. Some of the questions are appearing to become tedious and repetitious, and I would ask the member to move on in a positive way. Please proceed.

MR. CLARK: Thank you, Mr. Chairman. These are new questions, I might say.

The minister says that it's up to us to provide evidence. Very clearly, what happened in this case was that the bank account was frozen in Vancouver by the American indictment — or they attempted to

[ Page 7629 ]

freeze it — and then Mr. de Gelder called people together and said: "Prove that this is not money from Ferdinand Marcos." They could not prove it, and it was on that basis that the registration was lifted. I'm saying that if someone is purchasing a seat in the stock exchange and they list as their two principal shareholders a company controlled by someone named Leandro Vasquez and someone else named Thomas Zita of New York, why would they not call before the regulators of the VSE Mr. Zita or Mr. Vasquez to prove in fact that they are real people with real money? That's how it's normally done when it's a local transaction.

I want to remind the minister that the reason the VSE was allowed to sell to a foreign company was because of B.C. government changes, relaxed ownership rules that this government supported. So it's not simply a question of the VSE. It's a question of government policy which allowed a foreign sale of a seat on the stock exchange; the first foreign sale to go to people who appeared to have capital coming from anonymous sources. That's the question I have. After the fact, when they were called to prove that it was not Ferdinand Marcos money and they couldn't prove it, how did they get on there in the first place, and why did no one ask where the capital came from and who these people were and have them come before Vancouver to see in fact if they were real?

HON. MR. COUVELIER: The hon. member keeps saying he's asking new questions. The fact of the matter is that he isn't. He asked exactly the same question the last time we discussed it. I told him then — and I say it again — that the U.S. Department of Justice froze the assets pending an investigation. They have still not proven the truth around any of those allegations. The funds are still frozen. There has been no trial held yet. So the member seems to be assuming that allegations mean proof, and somehow or other guilt should be attached. I wouldn't know any of those individuals If I bumped into them. So I certainly can't speak from personal knowledge. But certainly, as I said the last day we debated my estimates, the allegations by the U.S. Department of Justice are still not yet proven, and the freeze is still in place. Unlike the Americans, we didn't just freeze; we acted. I think that's something that the Securities Commission should be commended for.

Furthermore, let me advise the member that in terms of those individuals whose names you mentioned just a minute ago associated with the acquisition of the seat on the exchange, I'm advised those names were checked out by Interpol and found to be clean. That's not, I suspect, an uncommon occurrence But in the sense that there may be some with particular knowledge who haven't yet shared that information with the international organization, this type of thing should be run through. Nevertheless, those normal precautions, I'm advised, were taken. That's not to say, as I say, that something else might have been done, although what that might be, I'm sure I don't know.

We did canvass this at length last week. The hon. member seems to be trying to kill the clock by repeating these questions. You pointed out to him, Mr. Chairman, that we had canvassed this issue at length last week. Why must we continue to do it again today when he's not going to get any different answer from me than he got then?

MR. CLARK: Mr. Chairman, these are new questions — the minister knows — regarding the VSE screening procedures. I've moved on, you might notice, to those screening procedures rather than dealing with the inadequacies or failure of the regulators to take stronger action against people who clearly are not competent or worse and should not be dealing with the Vancouver Stock Exchange.

[5:00]

In light of the fact that the government changed the rules to allow foreign ownership of seats on the stock exchange or brokerage houses in B.C., and in light of the fact that the first company to so take advantage of those new rules turned out to be money which appears now to be connected to Ferdinand Marcos, can the minister tell us what steps the government has taken to ensure that this doesn't happen again? What mechanisms has he directed the Vancouver Stock Exchange to take? How can he assure the House and the public through this place that this won't happen again by some other international criminal?

HON. MR. COUVELIER: Mr. Chairman, when we allowed that change of ownership regulation, so did Ontario at the same time. So we weren't doing anything unique or different in that respect. I'm certainly not in a position to guarantee that the good Lord stopped making fast-buck artists. For all I know, there are some more lurking out there in the bushes. So I can hardly give any sort of certification in that respect. All that a regulator can do, in my judgment, is attempt to ensure that the investments being traded on the Vancouver Stock Exchange suffer the risk of business failure only, not the risk of failure because of individuals' malfeasance or misrepresentations. That's all that can be expected. There will be failures. There will be failures on every stock exchange of the world for as long as they exist, I suspect. Vancouver, by virtue of being a junior market — a market dealing with companies without a track record — will have more than its share of those failures compared to exchanges that deal with senior stocks. On the other hand, Vancouver will have more than its share of big winners than stock exchanges that deal with senior stocks.

We're repeating ourselves. I said the same thing a good hour or hour and a half ago. I'm getting a little bit tired of repeating myself. Maybe, Mr. Chairman, in the interest of moving this along, I'll just sit here and make notes of the questions put to me, and I'll deal with them at the end. This is getting a bit tedious, I'm sure, for everybody.

[ Page 7630 ]

MR. CLARK: The minister can do what he likes. If he wants me to extend the debates on this subject for several more days, we'll do that if he chooses not to. By the way, if the minister wants to know how long we will take, we'll take a long time on that bill which allows government pension money to be invested in the VSE. He should think about that when he's planning his vacation as well.

HON. MR. RICHMOND: Is that a threat?

MR. CLARK: The threat wasn't from me, Mr. House Leader. It seemed to be coming from the minister.

As you can appreciate, Mr. Chairman, I have lots of material to canvass on the subject. But what I thought I would do is follow up from the Ferdinand Marcos one and move on to new ones. What I've been doing is looking at Mr. Mabanta, who clearly is connected to the Marcos thing. I thought to myself, what has Mr. Mabanta been doing in Vancouver for the last ten years on the stock exchange, and what is he doing now with respect to the stock exchange? If he was connected and arranged the funding from his Uncle Zita and Mr. Benedicto, who are both connected to Ferdinand Marcos, then maybe he's been around in Vancouver doing other things. As we know, of course, the regulators did nothing. There were no sanctions against Mr. Mabanta, so he continues to operate.

If I might say, Mr. Chairman, I started the discussion on Friday because the minister said I had no evidence with respect to international criminals, and I've given him one — Juan Carlos Schidlowski. He also said I had no evidence of money-laundering, so I thought I'd give him one as well. In tracking through Mr. Mabanta's connections in Vancouver, it's very easy to.... I won't go into all of them, and certainly it's not my job to do that. It's clearly the job of the regulators. But I will go into one of them, because it is rather interesting with respect to looking at money laundering in Vancouver. As we know, the RCMP has said this is a major area of money-laundering.

In looking at Mr. Mabanta's deals and at his connections in Vancouver, I came across someone named Rosario Abraham. Ms. Abraham is the president of a company called North American Fire Guardian. As we'll see, North American Fire Guardian and some of the principals have rather shady backgrounds and clearly should be investigated. The Securities Commission should be familiar with North American Fire Guardian. It was listed in July of 1987 for 35 cents per share and immediately rose to $4 based on a series of false claims through the Vancouver Stock Exchange news releases. A Texas investor named Jo Stockmeyer blew the whistle in mid-1987 on the false claims that the Vancouver Stock Exchange news releases were showing.

This is an interesting one. It started in July 1987 at 35 cents. It rose to $4 a share as a result of these false claims. A Texas investor blew the whistle in mid-'87, but nothing was done for about a year, until June or July of 1988, when the company was forced to clarify some of their releases. It was commendable that they were required to change their press releases, but it really was.... There were minor fines associated with this transaction. But it's another clear example of where the regulators didn't go far enough. It took them about a year to react, and then the penalties were tiny and the investigation superficial. The company still trades on the Vancouver Stock Exchange, despite having made false claims and despite admitting that they made false claims. Had your regulators looked a little further, you would have found that some of the directors — in my view — may not be suitable for a public company.

Rosario Abraham's father was a wealthy Filipino businessman named Alfonso Garcia Blanco and, I might say, he was a partner with Antonio Garcia Blanco. What I've come across — and it didn't take very much investigation — is that Ms. Abraham is being sued for divorce. If you look at one of the documents filed in her lawsuit....

Interjection.

MR. CLARK: It is like the National Enquirer, but that's what happens when you're trying to deal with the VSE.

If you look at her ex-husband's lawsuit, she files in court a document by her psychiatrist, Roy O'Shaughnessy. I have it here before me, and on page 3 the document says:

"During the course of my interview, the patient described that in fact there are a number of other issues behind her concerns regarding going to court which relate to her concerns that Revenue Canada does not know about a great deal of the money that has been left to her by her father and is being held in companies outside of Canada" — for example, Panamanian companies. She said she was distraught by this, very unhappy. "They...fear disclosure regarding undeclared income and the attendant legal pitfalls that will ensue. She's frightened of going to court and fears that she will be exposed to criminal sanctions in...Canada" — if people find out that the money came from the Philippines and is held in undisclosed places in offshore companies.

She's worried about her husband blackmailing her and requesting that her assets become news. And she's worried that she will be liable for back taxes in Canada, and the like.

Mr. Chairman, here we have a woman admitting in a court document that she has money in offshore bank accounts from her wealthy Filipino father, who made the money during the time that Ferdinand Marcos was the dictator in that country. So what does she do in Vancouver? She starts a company on the Vancouver Stock Exchange named North American Fire Guardian. If that's not prima facie evidence that she has money that was ill-gotten from the Philippines, that she's using that money to help float a company on the Vancouver Stock Exchange, and that the Vancouver Stock Exchange is being used to launder some of that money, then I don't know how much closer you can get, Mr. Chairman.

It's abundantly clear that in this particular case we see the regulators convicting Ms. Abraham of filing

[ Page 7631 ]

false claims for her company. They actually had some minor sanctions against the company, but they did not do any further investigation to find out the source of this woman's money. Of course, as I said earlier, the reason that I've come across this woman is because of her connection to Mr. Mabanta. Mr. Mabanta is an active player in Vancouver and has been for some time; he helped arrange the financing for First Vancouver. In fact, he was the principal person who arranged it. The money came from associates of Ferdinand Marcos. He walks around Vancouver with no regulatory sanctions whatsoever. Not only are there no regulatory sanctions, but now one of his associates, Ms. Abraham, is very clearly involved in money laundering on the Vancouver Stock Exchange.

I'd like to ask the minister some questions regarding this case, but the minister has clearly seen fit to walk out of the House. The minister can do that. He's quite welcome to act in that manner all he wants. If he wants to do that, it just means that the debate on this subject will go on and on and on. I'm not going to stand here — with the kind of work that I've done investigating these deals — and not have the minister respond to detailed questions put forward in areas of his jurisdiction.

Mr. Chairman, I'll simply have to review for the record a whole series of other questions with respect to Ferdinand Marcos and his involvement in the Vancouver Stock Exchange.

We know that José Campos lives in Vancouver. José Campos is listed in Newsweek magazine — you know, that journal of investigative reporting, that magazine of great repute that breaks news all the time — as living in Vancouver and as one of Ferdinand Marcos's principal associates, one of his so-called cronies. We know that he stole hundreds of millions of dollars from the Philippines. We know that he lives in Vancouver. We know that Dewey Go Dee lives in Vancouver. That's a very interesting story. He has been operating in Vancouver, and stole millions of dollars from the Philippines — again, a very close associate of the deposed dictator, Ferdinand Marcos. Dewey Go Dee lives in Vancouver. We know that Simeon Dee, who is a relative.... I'm not quite sure what the relationship is.

[5:15]

Interjection.

MR. CLARK: I'm not sure whether it's the mother's side or the father's side, but we know that Simeon Dee actually lives in Richmond, in the lower mainland. He's another associate of Ferdinand Marcos.

I might say that Simeon Dee is now involved in land deals of hundreds of millions of dollars in the United States, from his base in Vancouver. When I talked to the Philippine embassy in Washington, they told me that Vancouver is a principal source and port of entry for Marcos's money. They mentioned to me people like José Campos, First Vancouver Securities Inc., Dewey Go Dee and Simeon Dee, and they also mentioned people like Adnan Khashoggi.... The whole source of business for Adnan Khashoggi for the two years he was in Vancouver was laundering Marcos's money; of course, we know that he was heavily involved in the Vancouver Stock Exchange laundering money for Ferdinand Marcos.

We know — and the Chairman may be interested to know — that when Chuck La Bella, the prosecutor looking at indicting Ferdinand Marcos, Roberto Benedicto and Adnan Khashoggi, talked to Adnan Khashoggi about the investigation with respect to Ferdinand Marcos, Mr. Khashoggi said that he did not want to be interviewed down in the United States. He suggested that he be interviewed in Vancouver. He said that Mr. Khashoggi suggested they meet on neutral territory for their investigation of Ferdinand Marcos, and the neutral territory he suggested was Vancouver. If that doesn't tell you that these individuals see Vancouver as a place where money can be laundered for Ferdinand Marcos, then I don't know what does.

We very clearly have a fact pattern established with respect to Marcos's involvement not only in the Vancouver Stock Exchange but in Vancouver in general. I have listed several names. I could list several more, and I probably will before the day is out. It seems to me very clear that we have a fact pattern — more than that, we have evidence — which tends one to believe that Ferdinand Marcos and his cronies are active in Vancouver.

The question with respect to money-laundering is very clear. North American Fire Guardian is a shell company that has not produced anything. It has been convicted of filing false statements on the VSE with virtually no sanctions. It continues to operate, and Ms. Abraham is in fear of prosecution because of money stolen from the Philippines in offshore bank accounts, and that fear of prosecution is evident in the psychiatrist's report filed in her divorce case in Vancouver.

So the questions are very clearly why the regulators in Vancouver failed to see that illegal money was behind a company, why they failed to see when there were questions raised by a Texas investor, and why they failed to investigate even further than the very cursory investigation the Securities Commission undertook.

Mr. Chairman, the fact that there is money-laundering in Vancouver is, of course, no surprise, but the fact that Ferdinand Marcos appears to be using Vancouver — or his associates are using Vancouver — to launder money should be of concern to all members in this House. If the minister....

MR. CHAIRMAN: I regret to inform the member that his time has expired, and I recognize the Minister of Tourism and Provincial Secretary.

HON. MR. REID: It's getting tedious and repetitious, but that's not why I stood. I am standing in my place to make a special introduction on behalf of the member for Chilliwack (Hon. J. Jansen) and also on behalf of myself. A former school friend of mine, and a very close friend, Mrs. Marie Weeden....

[ Page 7632 ]

MR. CHAIRMAN: Shall leave be granted to the minister?

Leave granted.

HON. MR. REID: I'm sorry, Mr. Chairman. I was so enthusiastic in making this introduction. I should have got leave. She's from Sardis, B.C., and she's here representing the group that she works so diligently for, the Friends of Schizophrenics. So would this House give Marie Weeden a special welcome, please.

MR. BLENCOE: I would like to hear more from my colleague on the intricacies of the stock market. He clearly has done some major investigation, and I think the public of British Columbia wants to know more. I hope he continues.

MR. CLARK: It's indeed unfortunate that the minister refuses to answer questions on this. The minister says that we shouldn't smear people with innuendo, that we need specific facts. When we bring specific facts, he says: "I can't deal with specific facts. That's the regulators' domain." Then he engages in some kind of defence of the exchange at every opportunity.

I think I'll spend the rest of the time dealing with the money-laundering by the Marcos people. As I said, we now have evidence. I have presented evidence in the House that a Vancouver Stock Exchange company, whose president is Rosario Abraham.... She has at her disposal money which she has kept from the authorities, both in British Columbia and in the United States. We know that the money comes from the Philippines, and we know that she uses North American Fire Guardian as one way to use that money.

We also know that North American Fire Guardian shares an office with a company called Morris and Grey. We know that Morris and Grey is also connected to Mr. Mabanta, and we know that Morris and Grey is applying to be an investor immigrant fund — which is kind of interesting, given its connections to the Philippines.

As a matter of fact, we know that through Mr. Mabanta we can track other people involved in Vancouver Stock Exchange firms and connected, almost always, with the Philippines — and almost always of questionable origin.

So far I have canvassed only the ones that I am absolutely sure are involved in illegal activities. We know, as I said, that Josh Campos was involved in illegal activities; that's not news. We know that Dewey Go Dee is involved in illegal activities. That's not news; that's been canvassed at great length. We know that Simeon Dee was involved in illegal activities. We know that Mr. Mabanta was involved in illegal activities, essentially, by arranging this kind of financing. And now we know that Ms. Abraham was involved in illegal activities, or at least her father was, and that she has hidden that money from the authorities in Vancouver.

There are lots of other associates of Ferdinand Marcos in Vancouver. At this time I hesitate to go on a great deal about them, but there are more. I'm sure the Securities Commission, with its staff of investigators, would have found them had they looked very hard. I'm sure that with North American Fire Guardian, if they had done a little more work — not very much, just a little more — they would have found very suspicious activity regarding the trading and that fund. I'm sure that if they had looked a little farther, they would have found that North American Fire Guardian shares an office with Morris and Grey, and that they could investigate Morris and Grey as well. I'm sure they'd find other people of Filipino descent who may or not be associated with those people.

Interjection.

MR. CLARK: No, Mr. Chairman, what I have suggested to you, just for the member's edification, is that there is a company on the Vancouver Stock Exchange which has already been the subject of, essentially, a lawsuit or at least blowing the whistle by a Texas investor, Jo Stockmeyer. As a result....

HON. MR. VEITCH: Is it before the courts now?

MR. CLARK: No, it's not. As a result of that, in June or July of '88, the company was required to correct false press releases. The stock went from 35 cents to $4, Mr. Chairman.

Interjection.

MR. CLARK: The difference is that we're not listed on the VSE and we don't accept money under those circumstances.

The Texas investor, Jo Stockmeyer, blew the whistle in '87. What I'm trying to ascertain is how a Texas investor can blow the whistle, in the interim nothing happens, and then a year later the company is forced to clarify some of their press releases, even though it was on the basis of those press releases that the stock went from 35 cents to $4 a share. The company is required to clarify press releases, and yet nothing really happens to them and no investigation ensues us to the principals and how they got their money, where their money is and what their product is. The whole range of questions which you might think regulators would pursue, they don't appear to have pursued in this case.

Of course, if you really wanted to do some work and you found that there's a network of people connected to Mr. Mabanta who's been active in Vancouver for some years you'd find lots of questionable dealings.

Gold Torch Resources is another one: clearly nothing there, not a company with any legitimate assets, a company arranged by Mr. Mabanta. The minister suggested that I send a letter, and I did; he passed it on to the Securities Commission. It was a list of the underwritings of First Vancouver.

[ Page 7633 ]

If the capital for First Vancouver came from Marcos associates, then the question is: why are they here? Clearly they're here not simply to make money but to launder that money through vehicles. When you investigate, you find there were only 12 underwritings. Thank goodness the American indictment came through and the whistle was blown on this company before they got involved in all manner of ventures. But if you look at the 12 companies that were underwritten, you see that Mr. Mabanta was connected to all of them, you see that there were Filipinos put on the board of directors of most of them, and if you investigate a little further — like Gold Torch — you find, as a matter of fact, that there is nothing to some of those companies.

Some of them do have assets, and I'm quick to point out that in many of these ventures on the VSE — even the shadier ones — there is this kernel of truth. Remember Joytec and the simulated-golf machine? There were six simulated-golf machines. The fact that they weren't ready for production or they hadn't made any sales, and the fact that the stock was trading at extremely high values and people were duped into thinking that there was a real venture there.... There was something real there; that's what makes these games go. There was a simulated-golf machine: you could show it to people, you could touch it. Six of them were made, if I recall correctly. They weren't anywhere near the claims. Likewise with many of these ventures: there is a kernel of truth to them. That kernel of truth is what enables them not just to list the company but to move it up the ladder and up the stock exchange manipulation.

It might be appropriate, since we've moved onto that territory, to talk a little bit about Archer. Actually, before I talk about Archer, maybe I'll talk about Interaction Resources. I don't know if the Securities Commission and the minister are familiar with Interaction Resources. It's not really my intention to go after them, because they're really very small. But it's a nice prelude to Archer, because Interaction Resources uses a technique which used to be called upticking. I like the sound of that — upticking. It's more commonly referred to now as "high sales." I was looking at the graphs for Interaction Resources in the last day or two, actually this weekend.

Interjection.

MR. CLARK: No, it's something I researched. It's actually pretty easy, because Mr. Woods puts out a pretty useful magazine called Stockwatch, which has all the graphs, and it doesn't take a genius to see the ones that are trading wildly and whose prices are rocketing to the top. It's usually those that one can look to. Not all of the cases, of course; sometimes they're legitimate ventures. But it's usually those which trigger your curiosity.

[5:30]

I'm certainly the first to admit that I don't have a lot of history on this, but Interaction Resources is the best example I have ever seen of upticking. That's clearly against the rules — clearly illegal in British Columbia — but it's one they've been practising. I just looked at the records; the minister could clarify this, but I think only two people, at least in the last 15 years, were ever convicted of upticking, or high sales.

Essentially, it works like this. Say a company is trading at 90 cents and it goes down to 80 or 85. The last two or three or five minutes of the trading day — 1:30 or whatever — just before the bell rings, a trade is arranged which is 5 or 10 cents, or 2 or 3 cents, above the range in which it's been averaging, or at least has been trading at, so that it always closes at the end of the day 5 or 10 cents higher than the value it was trading at immediately before. So what that does, of course, is that anybody looking at a stock would see trading at 90. and $1, say, at the end of the day, and would think the stock is moving up. The next day it starts off at $1 and then goes down to, say, 80 or 85 or 90 cents, and every day, just before the bell rings at the end of the day, a small trade is made. It's always a small trade, because no one wants to lose a lot of money on it. They're little trades.

Interaction Resources. I was struck by the number of trades made just before the bell. I was looking at the 1981 conviction — I think that's the last conviction — with respect to high sales, and that was one where it was alleged there were high sales at the end of the day, I think, once a week for a few months. That was enough to get a conviction. If you look at Interaction Resources, you find that almost every single day of the week — it's just uncanny — 100 or 200 shares are purchased just before the bell rings, and always at 5 or 10 cents above what it's been trading at. Then I looked at who was buying. It's always No. 52, McDermid St. Lawrence. In more sophisticated upticking deals or high sales, you see, they spread around the people buying, so it doesn't look quite so obvious. Yet with this particular deal on the Vancouver Stock Exchange, the same brokerage house every day of the week buys 100 or 200 shares just before the bell goes.

It gives, of course, this false sense of stock movement. You can see the sales. What you look at as an investor, clearly, is not just what the stock is trading at, although that's important, especially if you've bought. But if you're looking to buy, you want to see where the stock is going. If you want to see where the stock is going, you're going to look at the sales at the end of the day. So this gives a rather dramatic and false sense of the stock movement, just before the closing bell.

As I said, Mr. Chairman, I only look at Interaction Resources because it's a particularly unsophisticated stock manipulation. It's one which, if you look at the chart, is so dramatic that it's beyond belief they haven't been caught yet. I suspect the regulators are on to them. I would be really disappointed if they're not. I would really be surprised if they're not, because this is a really small company, and I don't think it's particularly significant. But it's pretty unsophisticated. It's a nice textbook example of this thing called upticking, and it's a nice prelude to getting into Archer, which we'll maybe get into in a minute.

[ Page 7634 ]

But I see my time is elapsing, so I'll need a small break.

MR. BLENCOE: Once again I have to compliment the member for his excellent research and his description of upticking. Perhaps he would like to continue and move into the Archer example.

MR. CLARK: I think it was appropriate to do the Interaction Resources example before we move into Archer, because Archer is really quite a fascinating case. It has gone from 50 cents to $20. It would be nice if all members of the House were tipped off, as in Japan, that it was trading at 50 cents, before it went to $20. But I don't know if anybody in the House was; I doubt if they were. The problem with going to $20 is that they're going to have to split the stock pretty quick, because you've got to get it down, you know, to get those sales volumes up.

As I said, there's a kernel of truth to what Archer is doing. It's three-dimensional sound. It's a kind of interesting concept. Stereo is essentially two different dimensions; this is a third dimension. Apparently it's real. I don't want to discount it. They're working on it.

Interjection.

MR. CLARK: It's high tech, that's right. The fascinating thing, of course, is that they haven't got a dollar of sales volume. They haven't sold anything, not a single dollar's worth.

Interjection.

MR. CLARK: That's right. They have not a dollar of sales volume, and yet the stock went from 50 cents to $20 a share. Actually, Mr. Chairman, the press release which helped it out, I think, was the one where they say that RCA is interested in the 3-D sound. It started out as a very small company on the VSE. The VSE issued a press release last week, essentially cautioning people about buying shares in Archer. I must say that I think it's commendable that they issued that press release. It's clearly too late; it's clearly not very much. But I think it's encouraging that the VSE saw fit last week to issue that press release, to say that the company has no sales volume and is trading at $20 a share, and one might be careful about investing in it. It's interesting, because if you look through the history of Archer, I think it's clear — and I would be interested in the minister's comments — that there are at least three or four things that could have been done to stop the share from rising to $20, that would have probably intervened and would have resulted in the stock stopping at around $4. If it had been handled in a different way, we wouldn't be faced with what we have right now, which is really an unrealistic share price that has vaulted it into new areas of revenue enhancement, such as NASDAQ and others. I think it clearly has the capital base now to move on as Chopp did before it. In fact, the Chopp parallels are clearly there.

Just to show how the company started out, originally they were going to go into hotels in China. This is before the 3-D sound. I'm sure that all of the investors in Archer are really happy that they didn't pursue that, in light of current happenings in China. Clearly, even though they listed and their sole purpose was to invest in hotels in China, moving into the 3-D angle was quite an adroit move, because they avoided the pitfalls of the Chinese instability.

It is quite interesting. They started out, as most VSE ventures do, with one thing; then very quickly, after they raised the money, they moved into something else. In this case they were going to move into hotels in China. Then two years ago, in April 1987, a different bank, much like the banks I was talking about earlier — in this case Handelskredit-Bank of Zurich.... Members may know Handelskredit-Bank, it's now called Anker or something like that. They're the ones who handled North American Fire Guardian; I just talked about them.

HON. MR. VEITCH: Handels handles that.

MR. CLARK: "Handels handles that." That's right. Handels is the bank of North American Fire Guardian, which is quite convenient if you're trying to launder money stolen from the Philippines. They also handled Happy Resources — in the notes that I made a while ago. Happy Resources is Bobby "The Slick" Slichter. That is the bank for those two ventures, and it's also the bank that originally did the private placing of $600,000 at 60 cents a share in Archer.

As I said before, what happens is that exempt institutions — and I'll credit the minister for the order-in-council which clearly limits this activity — would use money.... They're perfect laundering vehicles, because you can deposit dirty money in them, and then they pick up private placements on the VSE and quickly sell them. That's one way of assisting in money-laundering.

In this case, two years ago they started the ball rolling with 600,000 shares in Archer. That's quite interesting, because it seems to me that if the regulators had said not only that Charterhouse Bank, the other bank I talked about, was stopped from engaging in this activity, but that they would also stop Handelskredit-Bank of Zurich, now Anker.... They would have prohibited that. If the regulators had been sharp and said, "These banks are used for different purposes than we might like, in many cases for illicit purposes, and we won't allow this," then it's quite clear that Archer probably wouldn't have got off the ground at that stage. That's at the early stage. That's what started it.

So there's the 3-D sound they're working on.... Oh, by the way, this is an interesting little aside. Handels is where David Winchell.... David Winchell is one of maybe four or five top money-launderers in the world, and they were connected to some VSE ventures. So Handels has really quite a notorious.... David Winchell has actually had to move. They

[ Page 7635 ]

changed the name of the bank, I think in part because of bad PR with respect to people like Mr. Winchell. So it's quite clear that Handels has been involved not just in some money-laundering here on the VSE — or at least one would suspect money-laundering, given the nature of the deals — but also in money-laundering at an international level through people like David Winchell.

First of all they got their money, or got private placing, through Handelskredit-Bank of Zurich. I would submit that if the regulators were on their toes at that time, they might have caught it at that very early stage. But if they didn't catch them then, what they should have caught was the upticking, or high sales, because it's quite clear that Archer, although much more sophisticated than Interaction Resources.... It's quite clear that there's a weekly pattern, if not daily — particularly Friday, which is quite significant going into the weekend — of last minute sales just before the bell, which was always the pattern, and 5 to 10 cents above that which the stock was trading.

One would think the regulators would be alarmed to see a pattern of stock-buying just before the bell, always 5 or 10 cents above what the stock was trading at. That was the pattern and has been the pattern with Archer. If they had caught it, first of all, with Handelskredit-Bank, they might have been able to deal with it. Secondly, if they had caught it when they saw the high sales taking place, then we might have not got to this point.

[5:45]

There are other things happening with respect to insider trading. No insider trading registered until, I think it was, David Baines wrote some articles about Archer. Then, suddenly, there was a flurry of six months of back-issued insider trading. We had hundreds of thousands of shares trading hands that no one knew about at the time. The new act that the minister brought in — which members on our side certainly commended him for and which dealt with questions of late filing of insider trading — was broken with respect to Archer. No penalties for insiders who were late filers with respect to Archer took place.

If they had caught Handelskredit-Bank early, then we wouldn't be in the situation we're in today. If they had prosecuted for clear high sales taking place or upticking taking place, which is against the rules, we wouldn't be in the situation we're in today. Thirdly, if they had enforced their own insider-trading-reporting regulations, which were just brought in a year ago by this government — and I think they're commendable regulations — then we may not have been in the situation we're in today.

I want to say that except for the insider trading — and I could be wrong on this — it seems to me that most of these are VSE responsibilities and not ones which directly rely on the Securities Commission. I don't want to suggest that the Securities Commission has been to blame with respect to the activities — at least the early activities — of Handels. I think the insider-trading regulations are the Securities Commission's responsibility, and I would be interested to see what the response is as to why they broke the new law last year and nothing transpired.

The stock has been manipulated through high sales and upticking, and that technique has been successful. All kinds of things have happened. There have been no penalties with respect to that upticking, no penalties with respect to the insider trading. Now we have a situation where the stock has gone from 50 cents a share to $20 a share, yet there's not been a penny of sales volume; just an idea — three-dimensional sound — after they jettisoned the idea of going into hotels in China.

The Securities Commission has probably had many calls on this. I certainly have had lots of calls with respect to Archer, especially from brokers who sold short on it, which we won't get into. But it seems to me that real questions remain about this stock, questions which I think should have been dealt with at an earlier stage and questions which I think the new act was designed in part to deal with. I certainly do give the minister and the government credit for the new act, and I give credit to Mr. Hyndman and the Securities Commission — I really do. However, if they want to take credit for that, then they must explain why, in this very high-profile example, no penalties were levied as a result of breaking those rules.

With that, I see my time  has nearly expired. I'll ask the minister to respond, if he cares to respond. I would appreciate it. If he doesn't, I'll continue after an interjection.

HON. MR. COUVELIER: I notice the clock is winding down, so just prior to the House rising, I would like to deal with a few points raised by the member, as I told him I would. He quickly lashed out, after I said that, with some sort of a threat that he was going to keep us here all summer, or some such comment. He then proceeded to read into the record the fact that I was refusing to answer questions, none of which I said. I merely told him I would take these questions and respond to them once, and once only, rather than the repetitive thing we have been going through for the last two hours.

The hon. member clearly has shown his style in terms of the points he attempts to make. He spoke at some length about a number of individual situations. As I've told him repeatedly, I cannot confirm or deny ongoing investigations, whether they exist or don't exist. I certainly can't deal in a public way with that kind of information. But as I have said repeatedly, ad nauseam, if he has a genuine desire to learn about the state of progress of some of these matters, he is welcome to discuss them with the commissioner or with me, and we would be pleased to oblige on a confidential basis. His steadfast refusal to accept those invitations indicates to me, for the record, exactly what he is attempting to do by the repetitive approach that he's taking here during this debate.

He said that he has provided all kinds of evidence with specific individuals and firm names in his presentation. Mr. Chairman, he hasn't provided a

[ Page 7636 ]

whit of evidence. He has provided allegations. Most of the allegations are street talk. They're not new or different, merely street talk, said for the first time in this House, and so for the vast majority of lay people, like most of the members in the House, it would have been new matters. But they certainly were nothing that could be described in any way as evidence. The regulatory authorities need evidence, not allegations. Allegations you can pick up by walking down Howe Street any time of the day.

He went on to talk about upticking. Upticking, Mr. Chairman, is something that can be embarked on, and indeed is embarked on, in every exchange of the world. The member seems to be suggesting it's unique to Vancouver. It isn't. It's a practice that is frowned upon. It's a practice that is very difficult to prove. It's a practice that market players will tell you occurs on every exchange. Vancouver is not unique.

Then he talked at some length about Archer. The fact of the matter is that the VSE stopped trading. They issued a statement, which was a unique thing to do in the absence of any evidence that there was wrongdoing. Nevertheless, they issued a statement despite the fact that 80 percent of the trading in the Archer stock occurs on NASDAQ, the American exchange, not the VSE at all. The member seems to imply that somehow or other the VSE is peculiarly liable here. If there is an injustice done by traders in that stock, then 80 percent of that injustice must be occurring on exchanges other than Vancouver's, but there is no evidence that such an injustice is the case; and despite the fact that there was a stop-trading order and despite the fact that there was a press release, the stock still appears to be very volatile.

Then the member opposite gets away with a slur: "Well, of course, they should have acted sooner. Finally they acted. They should have acted...." When should they act, Mr. Chairman — before the stock rises? Surely you would have to wait for the event before you would have a cause to act, and the record shows that the Vancouver Stock Exchange board of governors did act very quickly in this case. The socialists, I know, having this perception that they are the unique judges of who is right and just in this world, would apparently intervene — boom! — when there's no reason to intervene other than suspicion or innuendo.

All in all, I found it to be a tedious and repetitive exercise this afternoon and would have hoped to make more progress marching towards the completion of the issue before us. Notwithstanding the threats that the hon. member made about how long he wanted to keep this House sitting listening to him droning on, he should remember the issue that is before us. The House Leader might want to comment on that.

Mr. Chairman, I am happy to move 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.

MR. SPEAKER: Hon. members, earlier today the hon. Minister of Labour and Consumer Services (Hon. L. Hanson) rose on a matter of privilege relating to remarks attributed to the member for Esquimalt-Port Renfrew (Mr. Sihota) and reported in the debates of this House on June 15, 1989.

The hon. minister suggested that the member for Esquimalt-Port Renfrew had maligned his office and that of the Attorney-General and that he had done so wilfully and had discharged his duties to this House in a dishonourable fashion.

Firstly, the Chair must observe that a member rising on a matter of privilege may not use language which if employed in general debate would be out of order, and I find it unparliamentary for one member, in any guise, to suggest that another member has discharged his duties to the House in a dishonourable fashion. I caution all members to bear this in mind when raising points of order or matters of privilege.

Dealing with the merit of the matter of privilege itself, the Chair notes that the matter complained about occurred in the House on June 15 and was not raised until today, and accordingly does not meet the earliest-opportunity requirement. In this regard, I refer all hon. members to the decision of Mr. Speaker Lamoureux contained in the Journals of the House of Commons of Canada, June 9, 1969. Mr. Speaker Lamoureux clearly states that it is fundamental to the matter of privilege that it be raised immediately and without delay. The same position is adopted in Sir Erskine May's seventeenth edition, at page 378, and in our House in the British Columbia Journals, March 15, 1968.

In the absence of an explanation as to why the matter was not raised when it occurred, the Chair has no alternative but to rule that the matter does not qualify under the exacting rules applicable to a matter of privilege.

For the general guidance of members, I might further note that the member raising a matter of privilege must also table at the time the matter is raised a copy of the motion the member would intend to move should the Chair find that a prima facie case of privilege has been established. In this latter regard, I refer all hon. members to Parliamentary Practice in British Columbia, second edition, at page 36, which outlines the technical requirements which must be observed in raising a matter of privilege.

For the above reasons, the matter raised by the hon. minister does not qualify as a matter of privilege.

HON. MR. RICHMOND: Mr. Speaker, I would just remind members of the extended sitting hours tomorrow, and wish everyone a pleasant good evening. I move the House do now adjourn.

Motion approved.

The House adjourned at 5:57 p.m.