[ Page 10177 ]

CONTENTS

Routine Proceedings

Ministerial Statement

National Access Awareness Week. Hon. Mr. Reynolds –– 10177

Mr. D'Arcy

Private Members' Statements

Preventive health care. Ms. Pullinger –– 10177

Hon. J. Jansen

Working with the Charter in the 1990s. Mr. Chalmers –– 10180

Mr. Sihota

The changing world. Mr. Bruce –– 10182

Ms. Pullinger

A strategy to improve health care in British Columbia. Mr. Perry –– 10184

Hon. J. Jansen

Electrical Safety Amendment Act, 1990 (Bill 10). Committee stage.

(Hon. L. Hanson) –– 10186

Mr. Blencoe

Third reading

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

(Hon. Mr. Couvelier)

On vote 28: minister's office –– 10187

Mr. Clark

Mr. Barnes

Mr. Perry

Mr. Sihota

The House met at 10:03 a.m.

Prayers.

HON. J. JANSEN: Mr. Speaker, I would ask this House, on your behalf, to welcome the federal Minister for Veterans' Affairs, Hon. Gerry Merrithew. The minister and I signed an agreement between the governments of Canada and British Columbia to provide an additional 200 extended-care beds for veterans in British Columbia. Would you please make him welcome.

HON. MR. VEITCH: In the members' gallery today are the mother and father of my executive assistant in Burnaby. I'd like to introduce to the House the Rev. Bob Ratzliff and his wife Margaret from Saskatchewan. I'd ask the House to bid them welcome.

MR. BRUCE: In the gallery today are 24 grade 10 and 11 students from a school in Cowichan, Duncan Christian Secondary School, which is a growing and expanding school. With them is their teacher Mr. Douglas and several adults who have brought them down here today to see how this Legislature works. Would you please make them welcome.

Ministerial Statement

NATIONAL ACCESS AWARENESS WEEK

HON. MR. REYNOLDS: Mr. Speaker, I and the second member for Vancouver–Little Mountain (Mr. Mowat) would like to bring to all members' attention National Access Awareness Week, which is from June 10 through June 16. A number of events will be held across British Columbia and Canada to raise the profile of persons with disabilities.

The concept of access has two facets. First, buildings and public facilities must be made physically accessible to persons with disabilities. Second, disabled individuals must have access to all aspects of society and participate as full citizens. This is why the Committee for National Access Awareness Week has identified a five-star approach to integration. The community areas of transportation, housing, employment, recreation and education will be the focus for Canadian municipalities throughout the week. Communities throughout British Columbia are finding ways to promote and participate in Access Awareness Week.

On Sunday, June 10, from 11 until 3, the Vancouver Parks Board will have a display at Queen Elizabeth Park and Bloedel Conservatory, and B.C. Transit will be there to demonstrate their new lift-equipment bus.

In Kamloops, at the Aberdeen Mall, there will be displays by organizations for the disabled and a wheelchair basketball demonstration. There will be many other projects right across the province.

Today Dr. David Strangway and Rick Hansen are hosting a reception to unveil plans for the UBC disability resource centre. The centre will find ways to make the university's buildings and programs more accessible. University faculties will be encouraged through the resource centre to introduce courses that have a particular focus on or benefit for persons with disabilities. For example, students in architecture might study barrier-free design. Our government is supporting this breakthrough.

These are just a few of the many events taking place. Our government continues to support the disabled through our programs and the Premier's Advisory Council for Persons with Disabilities.

It was the courage of Rick Hansen and his accomplishments through the Man In Motion tour which inspired the government of Canada to create National Access Awareness Week. Prime Minister Mulroney signed the declaration which brought it into being in June of last year. A new understanding of the great potential and contribution of persons with disabilities is being adopted throughout Canada. I invite and challenge all hon. members to seek out the events scheduled in their home communities and participate in some way in the National Access Awareness Week.

MR. D'ARCY: I welcome this initiative on the part of the provincial and federal governments. However, I have to let it be known that it sounds a whole lot as though the minister and the provincial government are encouraging access awareness and the addition of more disabled accesses to be done by someone else.

There have been great strides made in this province in the last few years in the provision for disabled access, but virtually all of it has been done by municipal government, by private property owners and by other areas of local government. In other words, the taxpayers of B.C. have funded this either as private property owners or in their capacity as municipal or school district taxpayers. Certainly in my own area there have been great strides made in this field by both the school districts and the city and village governments.

While I very much appreciate the effort at increased public awareness by the provincial and federal governments, we on this side of the House would like to see a little more substance in the provincial government's initiatives, and perhaps that will be forthcoming. We would like to see the province be a partner with local government and the school districts in a greater way than they have been. But the initiative and the awareness of the government is welcomed on this side of the House, and let's hope it expands and continues.

Orders of the Day

Private Members' Statements

PREVENTIVE HEALTH CARE

MS. PULLINGER: I think we're all agreed in this Legislature — in fact, I suspect that there's a general

[ Page 10178 ]

consensus out there at all levels of our society — that the focus of health care ought to be wellness care. I think we all agree that preventive health care, or wellness care, is the best way to ensure both the best quality of life for the people of B.C. and the most effective and efficient use of our health care dollars.

What I want to talk about today is the whole area of preventive health care. I want to talk about the kinds of services we should be providing and the way we should be spending our health care dollars if we're going to promote wellness rather than merely treating illness. I want to argue further that in spite of all the rhetoric, the government seems to be unaware of the fact that where we ought to be focusing and spending those dollars is in wellness care.

Let me establish at the outset that, contrary to popular belief and what we hear from the Minister of Finance (Hon. Mr. Couvelier) and some of the members opposite, health care costs in British Columbia are not out of control. The facts are quite clear that health care spending in British Columbia is below the Canadian average. In fact, it ranks fifth in the country among the provinces.

Hospital costs in B.C. are also well below average. We rank eighth for hospital costs, with only Saskatchewan and Prince Edward Island spending less than we do. We have the lowest number of staff hours per patient in western Canada. Health care costs as a percentage of our budget are not rising; they're stable and in fact have decreased slightly over the past few years. However, I think it's fair to acknowledge that health care is the single largest budget expenditure and must be closely- monitored. Health care dollars must be spent wisely, and I think there is agreement on that.

Clearly we all ought also to agree that the less expensive forms of care — care that works to keep people out of hospitals — ought to be encouraged. What I'm going to argue is that this is not the case with this government, in spite of all the rhetoric and claims that we hear. We are not giving preventive health care the kind of priority and emphasis it ought to have in this province. The problem is that this government's actions speak so loudly that they're drowning out its words. Let me give you three examples from my own community to exemplify that.

The first one I'd like to talk a little bit about is the Nanaimo Regional General Hospital. It has had a significant shortfall in its operating budget for a considerable length of time now. Members of the board visited the ministry and declared very clearly what the problems are. My colleagues and I have written to the minister and we've told him about the impact of this continued shortfall of funding. We have, sadly, seen no relief provided. It is documented and is part of a brief presented that the Nanaimo Hospital is spending its money wisely. In fact, for its population size and the type of facility it is, it's outstanding in its efficiency and effectiveness.

The board members and my colleague the first member for Nanaimo (Mr. Lovick) and I have simply asked for equity with other hospitals. We are, by comparison, underfunded by something like 17 percent. Sadly, we haven't seen any response. The consequence of that is that last week the Nanaimo Hospital was forced to cut over $600,000 in services.

What that meant, among other things, was the elimination of the entire mental health out-patient program. The counselling service and what is known as day care psychiatry in the hospital are gone, eliminated. Contact House, which is a lifeline for more than 30 people in the community, people who have diseases such as schizophrenia or are survivors of suicide, is also gone. We have insufficient resources now in our community to deal with mental health care needs. We're left with mostly a volunteer sector for mental health care.

What we've seen here is a relatively inexpensive program eliminated. There's no doubt that those who need those services are going to suffer. We have a number of letters from those people pleading for the re-establishment of those programs. The long-term costs, both human costs and economic costs, will be significantly more.

[10:15]

If the government is serious about preventive health care, and I hope it is, and if it's serious about keeping people out of expensive institutions, we ought to ensure that these important services in Nanalmo are restored immediately.

The second example I would like to speak about is the ministry's approach to funding and supporting community and public health services. First, it's clear that we are facing a crisis in staffing in community health. If the nurses in public health continue to see a decline in their wages and working conditions relative to nurses in hospitals, we will soon not be able to get nurses at all to work in these vital areas. These are people who provide things like home nursing home diabetic care, palliative care, long-term care at home, post-surgical care and all types of care that keep people out of hospitals and in their homes. This is obviously more effective spending of our health care dollars, as well as a more comfortable way to deal with illness for these people.

I see I'm running out of time, so I'd just like to read into the record that there is an awful lot of room there, and the government was served notice last year in the auditor-general's report, which in its discussion of health care states: "Provincial spending on preventive services makes up less than 2 percent of the ministry's budget. The size of the budget belies the importance of public health, since many of its programs prevent disease, thereby reducing demands on programs such as hospitals that make up the majority of the health budget."

Mr. Speaker, preventive health care and out-of-hospital, at-home, in-the-community kinds of care are far cheaper and far more effective in terms of health dollars and prevention of illness.

I would just like to wrap up my comments by saying that I hope the government and particularly the Minister of Health (Hon. J. Jansen) begin to recognize this fact, because for the long-term it's an Important one.

[ Page 10179 ]

MR. SPEAKER: Just before recognizing the Minister of Health, I would ask members to refer to standing order 25 (a)(v). When the Chair sees the private members' statements, which appear on the orders of the day, we only have a title by which to guide us. Yet on occasion the member today skated very close to being out of order. We have no idea what the subject matter is.

Where the subject has been previously canvassed in the House, it's not permissible to discuss it in private members' statements. The subjects that we've discussed today have been previously discussed in the House, but you occasionally skated into areas that we hadn't previously discussed, so I allowed it to proceed.

HON. J. JANSEN: I too was listening to the comments from the hon. member opposite, and I too had some problem focusing on what she was saying. She was wandering somewhat with her topic. At one point she very much encouraged preventive health care and then moved on to deal with specific problems of the Nanaimo Regional General Hospital. I should point out to the member that funding for that hospital has been substantially increased by 9 percent and included two adjustments: a retroactive one-time adjustment of $0.5 million and another $929,000 demographic adjustment, which placed this hospital very high on our list in terms of funding adjustments

I also inform her that staff are meeting with ministry staff in terms of looking at the budget. Such a meeting was held recently, on May 23, and there will be other meetings to deal with what they perceive as their budget shortfall.

Mr. Speaker, the topic that the member wanted to speak about was wellness. Wellness is a program that instead of placing people in an institution such as a hospital environment, encourages people to stay out of hospitals. So the two areas of her presentation to this House are somewhat at odds with each other.

Preventive health care is an area that I as minister have placed a significant priority on, given that unless we in the province — and indeed all Canadians — come to grips with the rising cost of health. The rising cost, as the member indicated, is very significant — about an 11.2 percent increase in our budget this year. Somehow the member is tying it into the amount of money that is spent as a total percentage of the provincial budget. I'm not quite sure why that type of logic or reasoning is being used.

I feel it's very important that if programs are cut, the health care budget is not cut proportionately. If other programs are increased, I think that they should be done without tying them into health care. Health care should stand alone as being fundamental to our society. We're very pleased that our government increased the budget dollars by the significant amount that was permitted this year.

We have a number of initiatives in terms of preventive health care: Heart Health, which reduces and controls the risk of heart disease; Smoking Cessation, for reducing tobacco use and related lung cancer — a healthy community program. Perhaps the member should take some time and update her knowledge about all these issues. We have a very significant native health program underway; vision screening, a family health initiative; speech and language; hearing; mental health; radiation projects; dental health. Choosing Wellness is a major program. Recently we introduced a publication called Your Better Health, which has received outstanding support from a number of agencies that are saying that the government is focusing on preventive health and encouraging wellness rather than placing its emphasis on illness. Food Safe is a great program that encourages and gives an educational program for food handlers to prevent food-borne illnesses. Water quality assurance, on-site sewage disposal programs, the health hazard assessment program, community care facility licensing.... You'll see a new act brought into this House very soon. During the estimates debates we'll be talking at length about initiatives in the community health part of our budget which focus on wellness.

I would have hoped that the member opposite had spent more time talking about this issue, because I would very much appreciate the opportunity to explain in more detail what this government is doing to achieve its objectives of wellness.

MS. PULLINGER: At the beginning of the minister's response he suggested that perhaps I was wandering in my comments. I would like to suggest that perhaps his mind was wandering, because it was a very clear statement that we need preventive health care. The government is not providing preventive health care other than in a whole lot of rhetoric and pamphlets. What I showed were two very concrete examples of a contact house — a community care facility for mental health — and out-patient day care psychiatry in the hospital that keeps people out of the hospital. These two programs have been cut because of chronic underfunding.

So on the one hand we hear all sorts of rhetoric about the importance of wellness and preventive medicine and out-of-institution care; on the other hand we see actions by this government that are eliminating that kind of care in my community.

I would just like to mention one other example of what I mean. My colleague the first member for Nanaimo (Mr. Lovick) and I have led a campaign in this province to include diabetic-testing equipment under Pharmacare. I see that we've managed to take a first step towards that. The government has allowed testing strips under Pharmacare, and I commend you for that. It's good; it's a step in the right direction.

HON. J. JANSEN: The only province in Canada.

MS. PULLINGER: Well, I'd dispute that. In any case, they're covered under Pharmacare. But what we get is a new program and no money behind it, because....

Interjections.

[ Page 10180 ]

MR. SPEAKER: Order, please. The member for Rossland-Trail on a point of order.

MR. D'ARCY: Mr. Speaker, is it possible that the Minister of Health could allow the second member for Nanaimo to compliment his government without interrupting her?

MR. SPEAKER: That's not a valid point of order, but an amusing one.

MS. PULLINGER: It's a rare occurrence, and not to be let happen; I must agree.

In any case, in Nanaimo we have this new program of the government whereby people can receive testing strips; however, they must be trained or retrained, in spite of the fact that some of them have been using them for 20 years. This has increased the load on our resources, and there's no funding for that. There are no resources behind this program. Diabetic day care used to have two requests for service per day; now it has eight. In Nanaimo it's been chronically underfunded.

What we're seeing is a three-month backlog. Other hospitals of comparable size have three or four staff and are open five days per week. In Nanaimo we are running one day a week, with one registered nurse and one nutritionist. Ergo we have a three-month backlog, which is simply not a commitment to preventive medicine, as we see diabetics who are not able to monitor their glucose ending up with other illnesses and often in the hospital.

WORKING WITH THE
CHARTER IN THE 1990s

MR. CHALMERS: Mr. Speaker, the reason I gave my statement this title was because I believe that we must work with the Charter of Rights and Freedoms to incorporate a fundamental right that is currently missing from that document.

I speak, of course, of the question of private property rights; for make no mistake, it will take a lot of work to have them enshrined in the Charter along with the other rights covered under section 7. It will take a lot of work to convince the members opposite that constitutional protection should be given to the right to own property.

We believe individuals should have this protection; they believe that this right should be secured Moreover, it's important to recognize that all of us as individuals are now working within a relatively new constitutional framework that's very different from the system this country was founded upon.

Some time ago in this House our own Attorney-General (Hon. Mr. Smith) pointed out that in the past, the Charter of Rights and Freedoms fundamentally altered the legal framework that determines the nature and scope of the protection relating to our fundamental rights.

Prior to 1981 our rights were protected under the British parliamentary system, where it is assumed that the individual has those rights that parliament doesn't specifically take away or restrict. Property rights were protected, as all rights were, by the force of common law and the weight of history and culture.

The Charter changed that system. In fact, it stood it on its head. Now we have a system where all the rights are supposedly enumerated and written into the Charter. That's why the members opposite were rightly concerned about Meech Lake's distinct-society clause as it affects the quality of rights. That's why they want native rights included in the Charter, because they realize that in our Americanized approach to constitutional rights, real protection of any right is only guaranteed if it is specifically written into the constitution.

Even then, we still have the notwithstanding clause to worry about. But notwithstanding the notwithstanding clause, the NDP also know that enshrining property rights into the Charter will make it much more difficult for them to have control over people's property in the event that, heaven forbid, they ever form another government in this country.

The concept of private property is, I guess, foreign to the socialist mind-set. I suspect that the democratic socialists aren't much more favourably disposed to the idea. Indeed, we need only look as far as their party constitution to see how they view private property rights. They speak about a mixed economy today and their commitment to respecting private property rights. But does anyone believe them when they say, for example, that the settlement of native land claims will not affect private property? Does anyone believe them when their own constitution declares that, as democratic socialists, they are bound to reject the motive of profit as a major determinant of the production and distribution of goods and services? Is it any wonder they don't want property rights in the Canadian constitution, when their own constitution declares that their avowed goal as socialists is to modify and control private enterprise through the extension of social ownership?

[10:30]

[Mr. Lovick in the chair.]

The former leader of the NDP, Mr. Bob Skelly, I guess you could say was honest when he said that in this House the governments have traditionally restricted the unfettered enjoyment of property rights through zoning, land use, minimum wage and labour standard rights. That's what governments tend to do: restrict people's rights.

Indeed, the esteemed House Leader opposite was also right to note in a previous debate on this very subject that whenever there is concern about private property or private power, it's the power of the state that worries people most. That's what worries me about what they stand for and why we need to say yes to the protecting of our land, personal property, pensions, intellectual property and seniority rights.

The NDP said yes before putting property rights into the Charter. Remember, you agreed back in September 1982, when Garde Gardom made a motion

[ Page 10181 ]

to include the right to the enjoyment of security of property under section 70 of the new Constitution Act. The first member for Victoria (Mr. G. Hanson) voted for it, notwithstanding his position today that that would somehow negatively impact on the native land claims issue. The main member for Vancouver Centre — their leader's current seatmate — voted for property rights at that time. The NDP leader of the day and his successor said yes to putting property rights in the Charter.

Even the member for North Island (Mr. Gabelmann) voted in favour of this basic right that is so intrinsic in our concept of freedom. Bear in mind that the last individual that I mentioned is the same one who made all those wild statements about denying people their right to even own property back in the early 1970s. Free-enterprisers will never forget those gems from the member for North Island. We can't forget that there are still people in that party who continue to subscribe to the hard-line beliefs the member expressed. I'll quote from that member: "Maybe we have to say that land can no longer be owned privately. No one ever suggested air should be owned privately. There's no real difference between land and air, and we would think it absurd and insane if air were owned privately. I think it's the same situation for land." That was the member for North Island in September 1973.

That's the point. We can forgive the member for those words perhaps, but we should never forget that our rights are vulnerable to the beliefs of ideologues under the system we have with the Charter, a system where rights must be codified to prevent their abuse by well-meaning politicians who believe that some sort of Utopia exists for all in a place that is foreign to the very concept of private property.

This explains why the right to property was included in the United Nations Declaration of Human Rights. Why else would it have been put into the Canadian Bill of Rights prior to the Charter? Moreover, why else do you suppose Mr. Trudeau included this right in Bill C-60, the original draft of the Charter back in 1978? Why else do you suppose that the same right dates back to Mr. Thomas Paine's Rights of Man in the French and American Revolutions? I'm sure the member for Nanaimo....

Interjection.

MR. CHALMERS: Sure, that's right. I'm sure you could give us a lecture on pain, but it's not in the neck, Mr. Speaker. He's the one....

DEPUTY SPEAKER: Excuse me. I must inform the member that his time has now expired.

MR. SIHOTA: It's amazing to hear what the member opposite has had to say. If he wants to engage in political rhetoric, that's one thing. If he wants to engage in a decent, philosophical discussion about property rights, it's another. I'm sorry to say that the purpose of that little diatribe we've heard is just for some sort of mail-out that he wants to send to some of his constituents. Hopefully, when he does that, he'll include the comments that I'm making in the House now.

First of all, let me say that when you are taking a look at property rights and the incorporation of property rights into the constitution, you have to be mindful of a number of things. The first thing that one ought to be mindful of is that over the last 200 to 300 years in this country, under a British Commonwealth system, there have been all sorts of commonly protections provided for property. The argument that those protections are there through our common law has persuaded people not to put a provision in the Charter with respect to property rights.

In addition to that, the member should be mindful of the fact that there are all sorts of statutory interventions by this legislature and others to ensure that private property ownership is not threatened. Let me give the member some examples that came off the top of my head as I was sitting here listening to him. We have the Personal Property Security Act which was just introduced last week; copyright legislation, both federal and provincial; the Land Title Act; the Mobile Home Act; the mortgages act; the Flood Relief Act; the Expropriation Act — all legislation that's designed to ensure that property is protected.

In addition to that, the member should be mindful of the Charter of Rights. He has quoted what doesn't exist in the Charter, but on the other side of the coin, he hasn't talked about what exists in the Charter, including a provision that talks about use and enjoyment of property, the right to maintain a residence and the right to security of the person. Surely many have argued that security of the person protects many of the concerns that he has articulated.

Let me go further. There are all sorts of other questions that arise if we are to have a property rights provision in the Charter of Rights. The member himself comes from a riding that has a huge agricultural belt. The agricultural land reserve would never withstand a challenge under the Charter under the provision that allowed for ownership of private property. I want to ask the member this: what is the trade-off? He wants to have that provision within the Charter. Is he prepared, on the other side of the coin, to lose the agricultural land reserve?

MR. G. JANSSEN: Yes or no.

MR. SIHOTA: Yes, it's a simple yes or no question.

It seems to me that the members opposite would love to see the agricultural land reserve go. All of our zoning laws and provisions that exist within our municipal acts will be subject to challenge under that type of provision. In the United States, we've seen a number of zoning provisions tossed out because of that kind of provision in their Charter of Rights.

I don't think I'd like to see the ALR go. I don't think I'd like to see our municipal legislation and zoning system under attack as they would be if that provision was incorporated under the charter.

Let me also say in conclusion that I think all of these reasons are compelling as to why one should be

[ Page 10182 ]

cautious about the inclusion of these rights in the Charter. I suspect that is the reason why neither the Premier of this province nor the Attorney-General right now, in the middle of constitutional debate in Ottawa, has even suggested the incorporation of property rights into the Charter. Even they understand that there is more method in attending to the problem in the fashion that we have as a society than going the American route and bringing forward litigation that only serves the interests of lawyers and does little to advance the interests of property owners.

Consequently, in a funny sort of way, I think that their leader and the Attorney-General are quite correct in taking the posture that they are, and not demanding the inclusion of this in the Charter of Rights as part and parcel of the negotiations that are going on with Meech Lake right now.

I say to the member that making those politic rhetoric comments and trying to suggest that there is some kind of socialist bogeyman out there Is not going to work. You want to deal with the basic philosophical....

DEPUTY SPEAKER: Excuse me, Mr. Member. I must advise you that your time has expired.

MR. CHALMERS: I'm going to be very brief now, but I guess the question that I was asking in my statement today of the members opposite was.... Eight years ago they thought it was a good idea. They voted for Garde Gardom's resolution on this floor saying that it was okay. Today they're suggesting that we shouldn't have that basic right to own property. I guess people could let their imaginations run away a little bit as to why they would now take that stand.

I think it's time that the people of British Columbia had that answered by people who hold themselves out to be the alternative to the free enterprise system in British Columbia. They've got the leader; he's never here; he's running around the province in a three-piece suit and that briefcase in a rented car meeting with every chamber of commerce group trying to say: "We're okay. We won't touch your property rights. Don't worry about us." No, don't worry about you.

Yet today the one who would be the Attorney-General will stand up and suggest that they're not prepared to make the statement now that they don't want us to have those basic rights in British Columbia. If you were for it in 1982, have the nerve to stand up there now and say that you're for it in 1990.

THE CHANGING WORLD

MR. BRUCE: Today is a historic day in the development of the world. For those of you who perhaps are not aware, Czechoslovakia is going to elections today for the first time in more than 40 years.

Most of you know that I had the opportunity to visit Czechoslovakia a little while ago, and indeed the spirit and the determination of the people there is something for all of us to take to heart and to understand what they are doing.

They have fought long and hard to free themselves of the communist rule. They've fought long and hard for the freedoms that we take for granted and enjoy here in this country.

One of the things specifically they are looking at doing is moving to a free-market system. This is happening not only in the eastern bloc countries of Hungary, Czechoslovakia and Poland but in a number of other countries that have had, over a period of time, socialist types of government.

It's a changing world, and if I could quote for just a moment....

AN HON. MEMBER: It's an improving world.

MR. BRUCE: It is an improving world, my friend.

I would like to quote an article out of the Financial Post, and I think this is fairly apropos to what Is happening around the world. The quote is from Paul Roberts, and he says: "The collapsing image of the Swedish welfare state coincides with the collapse of communism in eastern Europe and massive economic failure in the USSR."

There is no doubt about it; that is indeed what is happening. There are a few other excerpts that I wouldn't mind reading to this House on Sweden, because the opposition often uses Sweden as an example of what they would do if they were government. God forbid!

I would like to quote to you a few other things about what has happened with Sweden's social democrats. That's a term that's spoken quite often by the Leader of the Opposition as a social democrat. Their tax-and-spend philosophy resulted in the government — this is the Swedish government — absorbing 56 percent of the gross national product. They now admit that has damaged their economy.

Swedes — and you can feel for them, the people of Sweden — encounter a 72 percent tax rate at an income of $35,000. High tax rates and the rapid expansion of government have left Sweden mired in one of the lowest economic growth rates and one of the highest inflation rates in the industrialized world.

HON. J. JANSEN: How's the GST?

MR. BRUCE: Excuse me, I'll come to that.

But what does the finance critic of the opposition say that they would do if they became government?

HON. J. JANSEN: What did they say?

MR. BRUCE: The first thing he said he would do would be to raise the tax rate.

But let me come back to Sweden. The Finance minister declared recently in Sweden: "We don't believe we can get this economy to function if we increase the tax burden." That is from a social democrat minister of finance in Sweden who is now saying: "We don't believe we can get this economy to

[ Page 10183 ]

function if we increase the tax burden." It might be something we want to keep in the back of our heads.

The final thing that comes out in all this — and I think that my colleagues opposite would be interested — is that some of the architects of the Swedish welfare state who have worked over the years to put this together are going further today. They are saying that privatization may ultimately be required to revive the economy. Isn't that incredible? How the world does change.

A few other snapshots of socialist-style governments around the world might be worth reading into the record just to see how they've doing, and especially on this eve today — it will be the eve there in Czechoslovakia now as the people demonstrate themselves to move to a free market economy.

[10:45]

In France, a socialist government elected in 1980 tackled labour legislation as its first priority — something that I think I've heard our colleagues opposite say would be one of the first things they would do. In its first 30 days of office it cut the length of the workweek, it raised the minimum wage by 10 percent — I think I've heard that quite often — and added a fifth week to the minimum paid vacation for all workers. Do you know what the result was? It was absolutely devastating for the French economy. Not only did productivity and capital investment drop, but by 1983 the unemployment rate had grown from 6.9 percent to 10.2 percent.

Interjection.

MR. BRUCE: That was a socialist government.

Let's take a look at New Zealand. Since World War 11, National Party governments in New Zealand have consistently kept unemployment under 2 percent. However, my friends, since the election of the Labour Party in 1983 and the implementation of blatantly pro-union labour legislation.... Would you believe this? Listen to this. The unemployment rate has risen steadily, and today it sits at an historic high of 7.4 percent. It was 2 percent prior to the Labour government being elected in New Zealand; since the Labour government took power, it has risen to 7.4 percent. That's a socialist government.

Let's take a look at Denmark. The social democratic government in Denmark resigned in 1982, after its labour policies witnessed a rise in unemployment — listen to this — from 1.3 percent in 1970 to 9.8 percent, and they were finally rooted out. Absolutely incredible!

HON. J. JANSEN: What kind of government was that?

MR. BRUCE: That was a Labour socialist government in New Zealand.

DEPUTY SPEAKER: I must advise the member that his time has expired.

MR. BRUCE: Oh, how unfortunate!

MS. PULLINGER: I listened with fascination to the current member for Cowichan-Malahat. What he has done is to show us an incredible ignorance of what socialism actually is. It's a very broad concept. For him to ramble on about all these countries and socialist governments, and to make comparisons between communist governments and social democracy in British Columbia, is absolutely ludicrous. I thought that the members opposite had learned something after the Minister of Transportation and Highways (Hon. Mrs. Johnston) did her famous tanks-and-guns diatribe in the Oak Bay by-election and was laughed right out of the riding. I am simply astounded that we're going at this silliness again. It's quite amazing.

If we're going to compare left and right, let's compare what these people are doing to what's happening in Argentina or Peru, for instance. Maybe that's what we're doing here. Or we could even look at Margaret Thatcher's fiasco in Britain, where they have widespread, massive unemployment and widespread poverty. They've shut down manufacturing in all of the country pretty well, other than a little bit at the southern end. Margaret Thatcher has centralized power in a terrible way, undermining the democratic process. We now have riots on the streets of Britain. That's neo-conservatism; that's what we have here in Social Credit.

I would simply say that the member for Cowichan-Malahat may want to go back and learn a bit about social democracy and the growth of the social democratic movement in Canada and British Columbia, which has been very much a movement of the people and has had its roots in the social gospel movement — that should please the members opposite. It has grown out of a uniquely Canadian movement that is representative of the interests of the vast majority of people in this country. Again, I would like to suggest that the member simply should go back and learn a bit about what social democracy is in British Columbia and in Canada.

MR. BRUCE: Well, indeed I've tried to learn as best I can. I think it would be important for this House and for British Columbians throughout the province to understand what socialism is. Probably the best way to do that is to read into the record Webster's Dictionary's definition of "socialism." I'd like you to listen to this, colleagues: "socialism: any of various economic and political theories advocating collective or governmental ownership and administration of the means of production and distribution of goods; a system of society or group living in which there is no private property; a system or condition of society in which the means of production are owned and controlled by the state. . . ."

It's really quite interesting. They stand and say they are social democrats, as if there is a difference between socialism and social democrats. Let me quote for you, just in case you've forgotten what the Leader of the Opposition says he and his party are. I think it's important that the people of British Columbia clearly understand what they are, by any other name.

[ Page 10184 ]

I quote the Leader of the Opposition: "When did I ever sound like a socialist? I've never been a socialist. I've been a social democrat all my life, and I'm proud of it. They're throwing socialism out of eastern Europe and the Soviet Union because of its bureaucratic centralism and collectivism." Isn't that interesting? That's what he says they are.

Well, let me tell you what social democrats are. I think this is really important for the people of B.C. to understand. Social democracy is a political movement advocating a gradual and peaceful transition from capitalism to socialism by democratic means. Who does that? Social democrats do that. What does the Leader of the Opposition say he is? He says he and his party are social democrats. So I say to you my friends: it's not a question of tanks, guns and armour — I'm far from suggesting that. What I'm trying to get on the record is just what the opposition actually stands for and represents. They represent socialism. They may try to use another name. They may try to move into the term "social democrats, " because they think that has another ring to it. But the fact is that whether they call themselves socialists, labour or social democrats, one only needs to look around the world at the countries that have experimented with either labour governments, socialism in its true and pristine form or social democracy....

DEPUTY SPEAKER: I'm sorry, Mr. Member, I must advise you that your time has expired.

MR. BRUCE: How unfortunate.

A STRATEGY TO IMPROVE HEALTH
CARE IN BRITISH COLUMBIA

MR. PERRY: Mr. Speaker, may I say how distinguished you look today. I asked my colleague from Oak Bay–Gordon Head (Ms. Cull) to remind me of the appropriate salutation from Little Red Riding Hood. She said it's: "My, what big teeth you have today." But I say you look distinguished. With all respect, Mr. Speaker.

I've set myself a daunting task today to address a health strategy for British Columbia. In looking over my notes, I decided I will attempt to take a relatively philosophic view of this question. I asked myself in preparing: what are the most serious long-term problems we face in preserving health care and maintaining a high-quality system while controlling costs in this province?

Obviously the most immediate concern must be preventable illness, a topic touched on by my colleague the second member for Nanaimo (Ms Pullinger). But I'd like to elaborate briefly on some of the key challenges in illness prevention. Obviously the greatest of these is smoking. Suffice it to say that our record in British Columbia is far from enviable. In this province we continue to see an increasing population of young women and teenage girls smoking. Although I'm told that something in the range of 80 percent of British Columbians — if I'm not mistaken — no longer smoke, we still have 20 percent addicted to tobacco who are progressively condemning themselves to early illness and often premature and very unfortunate death. We need to set goals in this direction. I spoke at length about those last year in a statement, and I will not elaborate on them now. But I think we can be doing much more.

With alcoholism, I am pleased to say that the TRY program has been a good start, but I feel we need a commitment to a much-longer-term and coordinated approach. For example, the movement of alcohol and drug programs in a bureaucratic shuffle a few years ago from their logical home in the Health ministry to Labour has been of no apparent benefit. Recently we've seen the system increasingly struggling to meet the needs of those British Columbians who have come forward, partly through the success of the TRY program.

The Ministry of Health is aware and acknowledges the difficulty in meeting those needs, but I have to question where we're going in the long term, when recently the Ministry of Labour failed to renew the contract of its senior medical adviser on alcohol and drug programs, provoking the resignation of the executive director of that program in protest. We need a very clear, coordinated, long-term strategy that will see us well into the next century in this area.

The problem of drug abuse continues to worsen, as you know, Mr. Speaker, and although I'm encouraged by the progress in educational efforts, we are still facing a serious shortfall in treatment facilities for those people who wish to cure themselves of their addiction.

This brings us to the problem of AIDS, where we continue, in my view, to face educational and treatment programs which fall short of what is necessary and where we have a relatively modest attempt at planning for community care and hospice needs of patients. There is great room for improvement in dealing with long-term costs and alleviating the long-term suffering of British Columbians.

Recently I was apprised of the case of a young woman who requires home intravenous treatment for an AIDS-related disease and who found it all but impossible to set up treatment facilities which could not only improve her quality of life but also save the taxpayer money.

This takes us into native health issues which increasingly involve all four issues that I've just referred to: smoking, alcoholism, drug abuse and AIDS — a problem now beginning to strike into our native population. It prompts the following question: how can we ever seriously deal with the unique burden of these problems on native people in B.C. without addressing the issue of poverty, land entitlement and the human dignity of the native people in B.C.? This is an area where I see the admirable goals of the Health ministry in direct conflict with the rest of government policy in its refusal to acknowledge the legitimacy of native land claims.

Let us turn to women's health issues. Here is an area where I find that the first chapters of a famous book, Second Opinion, by Dr. Michael Rachlis and Carol Kushner.... The first chapters are often cited

[ Page 10185 ]

by the government, but the subsequent chapters are never mentioned.

I find, for example, in chapter 10 of this book the following admonition: "The Canadian Advisory Council on the Status of Women estimates that one million women are beaten, at least to some extent, every year."

Further in that chapter they say: "The real answer to this society-wife problem rests with the community approach. We need economic policies that promote equality between the sexes. We need a society that values mothers and children. We need a society that will not tolerate violence in intimate relationships. In short, we need healthy public policies."

[11:00]

A recent letter — that I will not have time to refer to at length today, but perhaps I can later in our debates — from Dr. Romayne Gallagher, a physician who has great ethical difficulty with abortion, makes the same points in dealing with those measures that would be necessary to support single women with children, if they were to choose to continue their pregnancy and give birth to the child.

Let us consider the issue of people with disabilities. Today is the first day of the National Access Awareness Week, which reminds me of how people with serious disabilities, particularly children in this province, are often second-class citizens in terms of health services. Their mothers and fathers often have to fight for the basic rights to surgical treatment, to physiotherapy or to rehabilitation services that we would take for granted as members of this assembly.

I see a need for social commitment to the equal rights of disabled people as full citizens in society and for a real social commitment, not only by government but also by society, that such people are the equal of any of the rest of us and entitled to those rights.

HON. J. JANSEN: Mr. Speaker, it's indeed a pleasure to respond to the member. I had hoped that I'd have some good, substantive comment on the other side of the House that I could respond to.

Many of the issues that the member is addressing in his member's statement today we addressed some time ago, and they're all issues where we have resolutions being developed or resolutions already in hand.

I'm surprised at him criticizing our non-smoking initiatives. We in British Columbia have one of the lowest rates of tobacco use in Canada. I have asked our office of health promotion to put together a strategy with a goal of less than 20 percent of the population being smokers. Also, Mr. Speaker, just recently, as you are aware, we put in place a program to have a smoke-free workplace in provincial buildings.

Alcoholism. I guess the member has been aware of the TRY program, an acknowledged outstanding program, which is internationally recognized as a commitment for this government to address the seriousness of alcoholism. As you're aware, the problem of alcohol abuse spreads into the family home environment and causes many, many more problems. In fact, it was estimated at one time that alcohol abuse costs the economy approximately $5 billion a year.

I have had much work done on alcoholism, as your member is also aware. I was commissioned to review alcohol policies in British Columbia and to identify that alcohol abuse programs are a very fundamental aspect of dealing with alcohol abuse.

We're also taking a significant leadership role on drug abuse. We have established a cabinet committee chaired by the Premier to deal with the problem of drug abuse. We are also taking a number of very strong actions in that regard. I have personally dealt with people who are treating drug abuse. I've talked to those who have problems with drug abuse. I've been on street walks. I'm very much aware of the problem.

We recently became the first in North America to have a new technology called TIP-DART, which is being used to assist our young people in making informed choices.

AIDS has been raised by the member. I was listening to his comments, and I couldn't quite understand what he was saying, because there was a lot of rambling going on in his comment today. The strategy we have put out just recently for AIDS has received outstanding support. Dr. John Blatherwick from the city of Vancouver praised it as a document that puts us in the forefront of dealing with the AIDS problem in North America. It's incredible to listen to some of these things. The member isn't informing himself of some of these things that are happening.

Native health. We are now on a strategy, working with our federal counterparts. We have employed a consultant, Mr. Doug Wilson, who is a native. He is working with my colleague the Minister of Native Affairs (Hon. Mr. Weisgerber). We are showing leadership in dealing with native health issues.

Women's health issues. We are working with Shaughnessy Hospital to put in place a program that shows how much vision this government has in terms of dealing with these issues. The member talked about abuse. We will very soon be announcing an interministerial program. It can't be just one ministry; it's a problem that is across our entire society. In order for us to address it, I believe it should be an interministerial initiative. We will be bringing forward a very extensive program in the next few weeks that deals with family violence, abuse and the whole spectrum of concern in terms of family violence.

MR. PERRY: I'm glad that the minister recognizes that there are some interrelationships between social problems and health problems. Perhaps he would then agree on the roots of the problem. At present only 14 of the 140 women in B.C. thought to be infected with the human immunodeficiency virus are on AZT treatment, the optimum medical therapy, which reflects the poverty and the abused backgrounds from which most of those women have probably come.

I want to briefly mention the problem of the mentally ill in this society. I feel we still do not

[ Page 10186 ]

regard them as full and valued members of society. Again, to quote Dr. Michael Rachlis' book:

"When it comes to the third constituency, the mentally ill, we face a problem. These people aren't as well organized as seniors and women's groups are. They have little political clout. Yet this is a group whose rights are systematically denied and whose urgent needs are frequently ignored. Chronic mental illness is a devastating condition made worse by an uncaring society."

We see that again in the problem facing the triage centre in Vancouver on Main Street, a facility for the most-desperate mentally ill street people that faces imminent problems as its lease expires due to redevelopment.

I could talk about elderly people and the demographic change, but I want to come back to one problem affecting our sickness-care system and the continuing and increasing difficulties we have in retaining the kind of skilled people we need in the system. We've discussed this often, but one thing which disturbs me is the gradual denegation of those helping professions in our society. We seem to have become obsessed with materialism and the uncritical worship of the entrepreneurial ethic.

Don't misunderstand me. Entrepreneurial spirit is essential to a vital economy, but in many ways it is antithetical to the underlying philosophy of the health professions which is, and must remain, selflessness. We were reminded of that recently by the eminent medical ethicist, Dr. Pellegrino, when he visited Vancouver. While selflessness is not a very popular concept these days, I think it's disturbing that even in the health professions we've seen some erosion, however slight, of the ethic that the patient always comes first. We need to arrest that trend and reverse it.

I think we've seen one example of how we can do that with the Registered Nurses' Association's recent videotape. The RNABC has released a video explaining to the public the exciting possibilities for personal self-fulfillment in self-sacrifice and selflessness for a highly skilled and humane health professional, the nurse. I think we need more of that ethic in our society, and I see some role for government in strengthening, for a change, the morale of the health care professions and the system, because health, after all, is everyone's most precious asset.

DEPUTY SPEAKER: Before proceeding to call on the government House Leader, the Minister of Labour and Consumer Services has asked leave to make an introduction. Shall leave be granted?

Leave granted.

HON. MR. JACOBSEN: Today we have 60 students from Mission Central Elementary School. I think half of them are in the gallery now, and the other half are going to be in the gallery in a few minutes. They are here today with their teacher, Mr. T. Watkinson, and some accompanying adults. On behalf of the Deputy Speaker and myself, we'd like the House to give them a good warm welcome. We'll be meeting with them a little later.

HON. MR. WEISGERBER: I call committee on Bill 10, Mr. Speaker.

ELECTRICAL SAFETY
AMENDMENT ACT, 1990

The House in committee on Bill 10; Mr. Pelton in the chair.

Sections 1 to 7 inclusive approved.

On section 8.

MR. BLENCOE: There's only one area. Since second reading I have had the opportunity to talk to a number of people about this bill. It seems to be fairly non-controversial, but I think it was referred to as "housekeeping." Of course, when we hear the word "housekeeping" we tend to do a little extra checking. We've heard this before. I don't know if we've heard it from this minister.

This section amends section 18(3) and says: "The council of a municipality shall ensure compliance with this act...." I think I brought up these concerns of the UBCM executive in second reading. They feel there may be some problems with this section. It places a mandatory duty on the municipality to enforce, and a liability perspective does arise. Of course any question of liability perspective does create some concern, and UBCM, I understand, has communicated its concern with this section to the minister and staff. I wonder if the minister has anything to report on that, and whether he can alleviate the concerns on local government.

HON. L. HANSON: Yes, the concerns have been communicated to me. I would point out to the member opposite that there really is little change in the responsibility or the liability that may be perceived from the old act. The old act....

MR. BLENCOE: This section has changed.

HON. L. HANSON: I would have to disagree with the member. The wording in the old act, under that section, said: "The council of a municipality, concurrently with and in addition to the exercise by the inspectors of the powers conferred on them by this act, shall see that this act and the regulations are complied with within the limits of the municipality." My legal advice is that that says the same as the wording in the new act, except that it is clearer. But I might point out to the member that the issue of liability is an issue that has been raised a number of times as a result of some recent court decisions. It is a subject of review within the ministry, but on a broader basis than within the concept of this particular section of the act.

[ Page 10187 ]

MR. BLENCOE: I refer to a statement by the UBCM executive. It may have changed since this was made. The UBCM executive requested that section 8 of Bill 10, section 18 of the Electrical Safety Act, be amended to reflect the wording currently being used in this section and to introduce wording that will make sections 18(3) and (4) apply only to those municipalities and regional districts who offer electrical Inspection. Am I misreading this whole thing?

[11:15]

HON. L. HANSON: On the response from UBCM, I think the member is correct, although I do question their interpretation of that. The position of my ministry is that the municipalities — and in this case the regional districts are being added — do have a responsibility, even though they have not adopted an electrical inspection bylaw, of reasonably ensuring that there is an inspection done and that there is compliance with the act, even though they may not be directly responsible for the actual inspection. The act, as I'm sure the member knows, does confer that responsibility also on regional districts, and that was missing in the past. The interpretation of the liability in the new wording and the interpretation of the liability in the old wording are identical, on the advice from our legal counsel.

Sections 8 and 9 approved.

Title approved.

HON. L. HANSON: Mr. Speaker, I move the committee rise and report the bill complete without amendment.

Motion approved.

The House resumed; Mr. Pelton in the chair.

Bill 10, Electrical Safety Amendment Act, 1990, reported complete without amendment, read a third time and passed.

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

The House in Committee of Supply; Mr. De Jong in the chair.

ESTIMATES: MINISTRY OF FINANCE
AND CORPORATE RELATIONS

On vote 28: minister's office, $329,702 (continued)

MR. CLARK: I'd like to begin today with some discussion of taxes and then perhaps we'll move on. In many ways the tax structure in our society is a reflection of the values of the government. Taxes, and more appropriately, who pays them and how much they are, are in some ways a question of public morality. It's a philosophical question. It's a conscious decision made by government which reflects their values. It's possible to determine the philosophy of the government and the underlying value system of the Social Credit Party in power by looking at the tax system in place in British Columbia today.

What are those values? What have we seen under Social Credit? Under this particular administration we've seen a shifting of the tax burden away from corporations and the wealthy and onto the backs of working people, the middle class and the poor. Let's look at the shifting burden. On the personal tax side, in 1972 British Columbians paid 30.5 percent of the basic federal tax. In 1989 and today, British Columbians pay 50.5 percent of the basic federal tax. While it's true that all provinces have increased over time their share of the federal tax, five jurisdictions in Canada have a lower personal tax rate than British Columbia.

On the corporate side, the provincial share of federal corporate income tax is almost exactly the same now as it was in 1972, while federal corporate income taxes have been decreasing. What has happened is that the federal corporate income tax rate has been decreasing and the share of federal corporate income tax claimed by the province is about exactly the same today as it was in 1972.

In 1975 taxes on personal Income comprised 21 percent of B.C.'s revenue and corporations 10 percent. Today, personal income taxes comprise 25 percent of B.C.'s revenue and corporate income tax only 5 percent of B.C. revenue. In Ontario, for example, this year corporations paid 10 percent of revenue in corporate income tax to the province of Ontario, and the average in Canada is about 6 percent of provincial revenue. So we are below the average in Canada in terms of the revenue generated by the province from corporate income taxes.

Taxes are a zero-sum game. If you cut taxes somewhere, then you have to raise them somewhere else. In British Columbia, what the government has done very consciously is cut corporate income tax and raise personal income tax. They've cut the corporation capital tax, raised user fees.

In fact, members might be interested to know that 693 fees have been increased under this administration. In many cases, those fees have been increased by over 100 percent, dramatic fee increases across the board in British Columbia under this particular administration. We of course have a $5 fee now on Pharmacare for senior citizens. We've a $5 fee in chiropractic services and physiotherapy services, again predominantly for senior citizens. Medical services premiums have gone up dramatically. In fact, they've more than doubled under this administration.

At the same time, the government has cut the wealth surtax which was a 10 percent tax put in place under the Bennett administration, a very modest tax on the wealthy which under the first budget of this administration was eliminated.

So under Social Credit we've seen a $500 million annual tax flip, an annual change in the burden. A $500 million tax cut to corporations, $500 million in tax increases for the average citizens of British Co-

[ Page 10188 ]

lumbia; that is a conscious decision by this administration that represents a philosophical view, a moral judgment in many ways. It's a judgment that income from capital should be taxed more favourably than income from labour.

In my view, and in that of Linda McQuaig, Neil Brooks and others, who discussed this as well at some length, the provincial government, along particularly with the federal Conservative government, by their tax changes are in many ways not rewarding the work ethic. This is something which I think many British Columbians would like to see. It's a value that I think most British Columbians share. In fact, they're penalizing the work ethic. In other words, people who work for a living have seen their taxes go up and up and up. People who receive investment income get favoured treatment by our tax system.

The tax system more and more passes a moral judgment on people, in my view. The so-called "sin taxes" are the first to be raised. It's bad to smoke, so let's tax smokers; it's bad to drink, so let's tax drinkers. This administration has in place a 10 percent tax on draft beer. Gasoline is taxed because we want to theoretically promote conservation. junk food is taxed. So those are judgment calls by the administration.

I'm not arguing necessarily against it. I'm making the case that the tax system reflects a moral judgment by the government of the day. Gasoline, junk food, cigarettes and liquor are taxed. At the same time, if you give money to charity, you get a tax break; if you save for your retirement, you get a tax break; if you insulate your home, you get a tax break; if you convert to natural gas, you get a tax break.

So the tax system is very puritanical in a way. What it does is clearly reflect those kinds of moral decisions by government. All the time, those moral decisions are made by government in a way which clearly identifies the value system in place. I think objectively it is a fact that it reflects those moral judgments, yet in such a system we see the government constantly deciding to shift the burden.

The tax system views working for a living the same way we view alcohol or tobacco. All of the breaks now go to corporations, investors and even speculators and inheritors. It reminds me of a quote by W.O. Twaits, the former president of Imperial Oil, who argued fairly recently that it was unfair to tax entrepreneurs at the same rate as "the drones in society."

MR. CHAIRMAN: Order, please, hon. member. I would like to ask you a question. Are you debating the administrative actions of the ministry or the actions of the House in terms of taxation?

MR. CLARK: I'm debating the Ministry of Finance estimates, Mr. Chairman.

Even the language we use now reflects the morality of the tax system. I would like to quote Thomas Walkom, who was a columnist in the Globe and Mail and is now a columnist for the Ottawa Citizen. He said:

"When I was a kid in South Porcupine, a creative person was an artist, an interior decorator or someone who worked for the CBC, and a risk-taker was a person such as a hard-rock miner or a steeplejack who paid high life insurance premiums. No more, The creative person is now the capitalist, the risk-taker someone who risks money. When the government says it is committed to rewarding risk-takers, it doesn't mean it will give bonuses to hard-rock miners; it means it will give tax breaks to anyone who has capital."

In British Columbia, of course, you could substitute a faller — which has one of the highest death rates of any profession — or a fireman for a hard-rock miner. When the government says it's going to reward risk-takers, it doesn't mean there's going to be a tax break for fallers. It means a tax break for someone who has capital.

The government has a choice. It chose to make moral decisions — those tax choices — in a way that in my view penalized the middle class and the poor and helped corporations and the wealthy. The cuts in corporate income tax are particularly galling. Why cut corporate income tax? Why do we have one of the lowest, if not the lowest, corporate income taxes in Canada? In many respects it's the worst possible tax to cut, even for corporations, because it's a profit-sensitive tax. Corporations are making record profits. No company has moved to British Columbia because their corporate income tax rate is 1 or 2 percent lower than the rest of Canada.

The highest corporate income taxes in the world are in West Germany and Japan, the two countries which arguably — not arguably; factually — are the two most successful economies in the world.

"We cut corporate income tax to create jobs, " the government says. In a 1985 federal study conducted by the Mulroney government — hardly a progressive administration — the Department of Employment and Immigration said that dollar for dollar, a cut in personal income tax would create five times as many jobs as cutting corporate income tax. Direct government spending creates six times as many jobs as cuts in corporate income tax.

The reason for that is rather obvious: not all of the money that corporations receive from this government largesse through cuts in taxes is passed on into the economy. Some of that is saved, some is spent on trips around the world — not paid for in this case by Siemens Electric.

Clearly the point that I am making is that the government by its tax system reflects a moral judgment. This administration has made those tax choices which penalize working people, seniors and the poor, and hasn't made a decision to shift the burden onto corporations and the rich. That is a trend that we see in this administration and across Canada in other conservative administrations, and it's one that I think is not representative of the values that British Columbians or Canadians can hold.

I think British Columbians believe that the work ethic should be rewarded, and people who make their living off other people's sweat or who speculate in real estate and those kinds of things should not be

[ Page 10189 ]

rewarded by the tax system. We have an unequal tax system which benefits those who put the least amount into our system and our economy. It penalizes those....

MR. CHAIRMAN: Hon. member, I would remind you that the taxation system is the result of legislation, not of administration.

[11:30]

MR. CLARK: Tax policy is clearly within the scope of the Minister of Finance, Mr. Chairman. In any event, I've concluded my remarks. For the record, I wanted to discuss the policies of this administration in terms of taxes and the fact that they have reflected a moral or philosophical position of the government, which I think is not in concert with the values held by British Columbians or Canadians. With that I would like to turn it over to the second member for Vancouver Centre who wants to pursue the question of the Financial Institutions Commission and its interpretation.

HON. MR. COUVELIER: Before the hon. member for Vancouver Centre rises, I just wanted to respond to some selected comments by the member opposite.

First of all, the issue of personal income tax rates across Canada is a complicated one by virtue of many provinces having flat tax increases and surtaxes on the personal income tax rate. The only credible way you can compare tax rates across the country is to look at a category or tax class and calculate the personal income tax paid. On that basis there's only one province with a lower personal income tax rate than B.C., and that's Alberta. The member said that there were four; the fact is that there is only one — for a family in the $40,000 bracket.

Secondly, the member talked about the corporation income tax rate and tried to develop an argument that this government has been inattentive in taxing corporations. Nothing could be further from the truth. The fact is that over the period '86 to '91, the annual rate of growth of corporate income tax has been 25.9 percent, as opposed to the annual growth of the personal income tax rate of 13.2 percent. At least during this administration, the facts clearly rebut the remarks made by the hon. member.

In addition, those figures do not include resource taxation. Over that same period, during this administration's term of office, we have increased resource taxation on corporations in this province by an annual rate of 10.5 percent. So the member is clearly misstating the facts.

There is another angle here that I think I should put on the record, which is the influence of corporate income tax rates on decisions of corporations about how they report their income by province. One only has to look at the Quebec corporate income tax rate, which works out to a general rate of 6 percent, and that of most other provinces — in our case it's 14, while others run up to 15 and 16 percent. One only has to compare those and wonder what effect that low corporate income tax rate in Quebec has had on corporate decisions to define which province they've earned their income in. We've looked at that question often and wondered to ourselves whether, by such an artificial device, you n-tight capture the reporting techniques of corporations.

During that same period, it might be appropriate for me to mention now that the contributions we've received from the federal government have increased at an annual rate of only 1.7 percent during this term of administration, which clearly shows that the federal government isn't even keeping up with inflation. They are holding on to more of our dollars every year than they're giving every year. And that's rising at a steady pace in terms of their holdback.

The member conveniently forgot to mention that this administration is the only one in Canada that has cut the sales tax. We now have the lowest sales tax rate in Canada. We did that in the first year of our administration. So for the member to try to fabricate a fallacious argument that this administration is somehow penalizing the personal taxpayer is absolutely out of order. Not only did we cut the sales tax; we've cut property taxes. Every year we have brought forward increases to homeowner grants and looked at the assessment practices in a way that reduces property taxes for individuals.

Mr. Chairman, I just wanted to get that rebuttal on the record in case the two or three people who read Hansard might be misled by the comments of the previous speaker.

MR. BARNES: Mr. Chairman, I want to ask the minister if he would be good enough to bring the assembly up to date on the situation of the Vancouver food bank and the role being played there by the Financial Institutions Commission, which launched an investigation into allegations against the director Sylvia Russell at the end of last year or about six months ago. I realize that this is a matter that I have no knowledge of as far as the details are concerned, and I'm not asking the minister to judge the value of the charges or whether they are correct or incorrect.

First of all, this person was providing a very valuable service by helping the food bank to acquire sufficient resources in order to fulfil a critical need in the community. In other words, there are a lot of people in this province who are hungry, and her role, primarily, was to facilitate efforts by those who were trying to fill the gap due to the voids in the social assistance program of the provincial government.

It is with some urgency that the matter be resolved. We all know full well that at this point in time the food bank has suffered tremendously due to the lack of this person's involvement in the solicitation of resources, not to mention the fact that she has personally suffered as a result of no clear charge being laid. There have been quite a few allegations in the newspapers and the media which are not being substantiated — not being proven or disproved — but just left there for public consumption. It's an extraordinary and flagrant example of lack of due process and disregard for fundamental human rights and respect for the individual.

[ Page 10190 ]

I'm not suggesting there were ulterior motives behind her being in this predicament, but some people have suggested that perhaps the actions were politically motivated. My question then, Mr. Chairman, to the minister is: would he please advise the House why, after six months, this person remains in limbo and unsure of whether she's going to be charged or exonerated. Could the minister indicate whether he feels justice is being done and whether it is fair? How much longer is this charade going to continue? When is the matter going to be resolved?

HON. MR. COUVELIER: I appreciate the question. I, like you, have been much troubled by the delay in these proceedings. It raises and illustrates a philosophical problem here. I think the member would concede that It was the individual herself who made public the fact that there was an investigation. It was not Intended by the investigators to make that issue public knowledge.

Investigations are conducted based on allegations that are received during a business day at a fairly large rate. To the best of our ability, we look into every one of those allegations. We don't make them public. They are conducted with attention to due process, confidentiality and to the prospect that someone could be unfairly pilloried by someone with a personal vendetta.

Nevertheless, it's part of the process, and it goes on every day. Our staff are accustomed to dealing with these kinds of things. It was the person herself who made public the fact that there was an investigation.

It would be helpful for the member to know, in answer to his specific question, that the investigation was extensive. It involved interviews, I'm told, with over 50 persons. It involved the obtaining of numerous search warrants. It involved a voluminous report, all in the interest of ensuring accuracy and fair treatment.

The philosophical question that I put to you, hon member, is the appropriateness of political interference. I trust that you would agree with me that on any issue involving a British Columbian citizen, it would be inappropriate for government to interfere with the process which is administered by the professional staff.

Like you, I have been very concerned about the delay. It smacks of almost a deliberate and wilful attempt to drag it out. I'm sensitive to your concerns But it raises the philosophical question of what you would expect the government to do about it. I have been very careful not to interfere with the case. I can tell you that I have passed to staff numerous times' over the last months, my concern about how long the process is taking. I've had the response each time: "Mr. Minister, matters are in hand. We are dealing with them professionally, and in our judgment, they cannot and should not be rushed. We've got to be very sure that every propriety is recognized and followed."

Hon. member, I can only say to you that you raise a valid point. I have been concerned about it, but I have deliberately not interfered to the point of giving specific instructions to staff to rush it or to deal with it in anything other than a thoroughly professional manner.

MR. BARNES: Mr. Chairman, I very much appreciate the candour and the tone of the minister's response. I certainly have no desire to extend this matter, but I just want to ask a couple of brief questions for clarification. It's my understanding that the FIC was under the minister's responsibility, and that he did, with all respect to the political interference possibilities, have a responsibility nonetheless to ensure that they understand their responsibilities as an investigating commission and will be guided by fairness and by traditions of due process. Clearly this is a matter the public is very much aware of. Hardly a day goes by when there isn't an editorial or some comment about this unusual situation that the former food bank director finds herself in, where she is basically, as you say, being pilloried on the public stage. She is being hung out to dry, is clearly suffering a personal loss of credibility and has been suggested as being unemployable, at least for the immediate future. A very tragic situation. I would think that she deserves at least an expeditious result, something that she can relate to.

As things stand now, it is a most unfortunate end for someone of clearly demonstrated and dedicated commitment to public service. I've known her for many years and feel very saddened by the predicament she finds herself in. I would like to think that the minister would use the authority vested in him to at least insist that this matter be addressed. Now this doesn't mean interfere. But she deserves to know what the charges are as soon as possible so that she can deal with them and defend herself one way or the other. Six months seems to me to be an incredibly long time for someone who was clearly doing a valuable service. As a result, this delay seems to have been the death knell for the food bank. It may recover, but it certainly has suffered as a result of this situation.

MR. PERRY: I listened very carefully to my colleague, the second member for Vancouver Centre (Mr. Barnes), and also to the minister's response. I also appreciate the tenor of his response. Because the incident has caused so much embarrassment and financial difficulty for the food bank, I would simply like to put on the public record that the food bank has been and remains a highly respected public institution in Vancouver. As far as I am aware, the food bank has received nothing but compliments from the general public, from the public media and from those people in a position to know how important its services are. It's also a matter of public record that the food bank has recently experienced difficulty in meeting the needs of people who depend on it to alleviate the difficulty of their poverty.

[Mr. Pelton in the chair.]

[ Page 10191 ]

I think it's also important that we record, as my colleague did a few minutes ago, the distinguished contribution that Sylvia Russell made in establishing the food bank and directing it for many years. It's also a matter of public record — and it's appropriate to record it — that she was widely lauded for those efforts and tremendously respected in her community. Therefore I share my colleague's view that it's extremely painful to see the current experience continue.

I don't want to put the minister on the spot, but I wonder whether he'd be willing, because of the importance of the food bank to the Vancouver community, to reassure the public, on the record today, that he also regards it as an important institution and one which is serving the public interest faithfully.

[11:45]

HON. MR. COUVELIER: Mr. Chairman, I've no reason to think otherwise, but I trust the member would appreciate.... I haven't seen the report, and I'm not aware of the substance of the allegations, other than what's been reported in the press or released by the individual herself. So I'm not in a position to endorse the operations of that entity.

MR. CLARK: I think this is an important topic Anyone in public life certainly has some sympathy for the plight of Ms. Russell. Regardless of the substance of the allegations, the kind of public profile that investigation has attained has not done anybody any good. It's unfortunate that these things transpire.

I would like, Mr. Chairman, to turn now to the Vancouver Stock Exchange — a favourite subject of the Minister of Finance. I want to this year, not as I and my colleague from Esquimalt–Port Renfrew have done in the past — which is to expose new scandals in the Vancouver Stock Exchange.... Mr. Chairman knows that that's rather easy to do, and we could with fairly little work expose, Mr. Chairman....

HON. MR. WEISGERBER: Didn't you go for dinner with those guys the other night?

MR. CLARK: It's true, Mr. Member, we did. And I think it's true that we're more well informed now after that discussion.

Rather than expose a new scandal on the Vancouver Stock Exchange — which, I submit, is fairly easy to do, and we may do that later — I'd like to now do something rather lengthy, and I don't apologize for that. I'd like to talk about the Carter-Ward affair, which was the largest scandal in the history of the Vancouver Stock Exchange and is still going on. We know there have been lots of scandals on the Vancouver Stock Exchange, but this is by far the largest.

I would like to spend some time dealing with the role of Mr. Peter Brown, who continues to be an active player on the Vancouver Stock Exchange and who, I think, has been thoroughly discredited by the events that have transpired and by court cases. What I would like to do, with the indulgence of the House, Mr. Chairman, is canvass the entire Carter-Ward affair — I don't think that's been done anywhere — and particularly Mr. Brown's involvement, and expose the inconsistencies, to be polite, in his remarks.

The handling of the players in what's known as the Carter-Ward case shows what has been wrong with the Vancouver Stock Exchange. David Ward and Ed Carter are the two stock promoters who have been notorious for their fraudulent VSE dealings with the United Services' Prospector Fund, one of a group of mutual funds based in San Antonio, Texas. Carter and Ward, with the help of the Vancouver investment community, sold shares in over a dozen worthless VSE companies to the Prospector Fund after bribing its manager. There is evidence that the pair continued their manipulations with the assistance of Howe Street brokers and traders long after the '84-85 period that resulted in the court cases against them.

In fact, even with the new regime and the new regulations that have taken place under this administration, there is evidence — and I'll present evidence — that Mr. Brown and others continued to trade in these fraudulent companies, even after the court cases were filed. VSE brokerage houses continued to profit from the Carter-Ward trading for years after the whistle was supposedly blown and the scam was said to have ended. The funds stopped buying in May 1985, but Carter-Ward and their accomplices here in the brokerage community continued without them.

Remember what has been exposed so far by a civil action in 1988 and a criminal trial earlier this year. Numerous VSE brokers and regulators — and regulators — worked together to allow the systematic defrauding of the Texas mutual fund of more than $22 million. What has the VSE done since the fact of the Carter-Ward violations with respect to the Prospector Fund first came to light in mid-1985? Firstly, they allowed the fact of the violations to be covered up while stockbroker Peter Brown arranged with the fund to buy back their VSE stocks without informing the public. Then they allowed the Carter-Ward VSE stocks to continue trading, with their tainted principals, until my colleague from Esquimalt raised this in the House in 1988. They allowed the various individuals involved in the scam to continue trading stocks and allowed the VSE brokers to continue earning commissions off the pair years after their most well-known crimes surfaced. Perhaps most significantly, apart from just one firm, they have failed and continue to fail to act against any of the brokerage houses or chief brokers who enabled the fraud to take place on the VSE.

The superintendent of brokers office, the Securities Commission and the VSE have dealt with only one of the offending brokerage houses, fining Richardson Greenshields $250,000, plus $10,000 investigative costs. Richardson is the one Prospector Fund went after in its civil suit because it was the main house buying shares for them on the VSE. Therefore that's who they had to go after legally, after they lost money. There were numerous other VSE brokerage houses that bought as well, and of these, local firms like Canarim — now LOM Securities — and West Coast were also sellers to the fund.

[ Page 10192 ]

Finally, after all the public disclosures in this House and in the media, after all the bad publicity and widespread involvement of the Vancouver brokerage community in the Carter-Ward affair, it appears the VSE decided to do something. This past April, VSE regulators planned to take on the now defunct firm of West Coast Securities and its then senior floor trader Chris Wahlroth and former senior VP Jim Thomas, who's now employed by Peter Brown at LOM.

We'll see, of course, in the first Vancouver case that I raised last year — you'll remember the Ferdinand Marcos involvement — that dubious members of the VSE brokerage community have a way of sort of gravitating to Mr. Brown and Canarim, now LOM. In the first Vancouver instance, two lead brokers in the scandal, Tod Mabanta and George Delmas, are now both working for Peter Brown. Neither of them had any sanctions taken by the VSE or by the Securities Commission, in spite of the fact that they clearly appear to have arranged funding from Ferdinand Marcos.

Nothing has happened to the individual brokers in that case. In the Carter-Ward instance, we'll see that when the VSE finally did get around to going after their own members, they singled out the West Coast group rather than other, more prominent individuals. After all, West Coast no longer exists. That might make it easier for the VSE to say: "Well, these problems were all done by firms in the past." The problem for the VSE is that the West Coast principals, Wahlroth and Thomas, were being called into hearings for having sought to use the VSE's own regulatory delinquency to get themselves off the hook.

Two months ago, in April 1990 — and this is interesting, Mr. Chairman — the date was adjourned because the two individuals charged asked the Supreme Court to quash the hearing for a number of reasons. The basic theme was one that shows that the VSE today, despite improved rules and penalties, is still failing to properly regulate the market.

West Coast, in their petition to the court, point out: "Other than Richardson, the VSE has not instituted disciplinary proceedings against any other member or approved person in respect of the issues raised by the civil and criminal proceedings and the investigations conducted by the superintendent of brokers, the VSE and the RCMP." They go on to say that they believe an examination of the case certainly makes this belief appear reasonable — that the VSE and the superintendent of brokers have singled them out as the only member and approved persons to be penalized for all that went wrong in the Carter-Ward stocks.

In other words, they finally got around to charging one company that's now defunct, and their defence is: why are they picking on us; why are they only charging us, when Peter Brown, Canarim and others were clearly very active? They were at least as active as them and yet they only singled out one firm. It is likely, Mr. Chairman, that that company will get off on those charges, because clearly there is an attempt to single out only one firm.

I would like to examine some of the activities of Peter Brown, just to point out how the West Coast players appear to be correct in suggesting that they have been singled out. Instead we get arbitrary investigations and penalties that occur when enough public pressure is put on the VSE and they have to act. Even then, they still act in a very narrow and limited way.

We've had Adnan Khashoggi, Ferdinand Marcos, Juan Carlos Schidlowski and now David Eaton — which I might talk about later if we get a chance. We know that there are unethical brokers in Vancouver, and as long as there are, those kind of individuals will keep coming to the VSE.

Promoters come and go in markets; it's the brokerage community itself that determines the character of the marketplace. The Carter-Ward affair, the role of Peter Brown in it and the inaction of the VSE regulators in 1989 as much as in 1985 show the system isn't working as well as it should. While great strides have been made, clearly it's not working as well it should.

I will revisit some of the events. Peter Brown has publicly stated that his firm Canarim "ranks something like fifteenth out of 17 brokerage houses who dealt in these stocks." In the United Services Fund court documents it was revealed that there were actually 21 brokerage houses operating 179 separate Carter-Ward and Prospector Fund-related accounts. Of these numbers, Canarim. ranked first, running 36 accounts. West Coast Securities was close behind with 35, Richardson placing third with 23 accounts, and on. Of the personal accounts, Brown's Canarim led again with three.

It is acknowledged that Richardson was the number one trader overall in the Carter-Ward affair, and that involved the Prospector Fund deals. But enough evidence has been presented in the court documents to indicate that Canarim, in terms of volumes, was one of the other top traders and that Canarim, and , Brown personally, sold shares in the scam companies to the fund. Later in 1986 and beyond, after the fund and Greenshields were exposed, the trading was done more by firms like Canarim because Richardson had nothing to do with them after '85. So in fact, after it was exposed and Richardson had nothing to do with them, Canarim in some respects picked up the slack.

In addition to revealing these trading accounts, Peat Marwick, in its two- and 17-volume reports as reported in a 1988 civil trial, determined that there were other people with trading accounts who had direct friendship or business associations with David Ward, Ed Carter and Carter's son Colin, one of the brokers involved in the manipulation. Among these 21 persons or accounts that were closely related to the group — and listed, by the way, by Peat Marwick, for easy reference, as closely related — are Peter Brown and his wife Joanne's Conmere Estates. Two others who make the royal distinction are brokers Roger Shallow of Continental and Bob Randall of Canarim. So here we have the evidence of the civil trial which clearly documents Mr. Brown's direct

[ Page 10193 ]

friendship and business relationship with David Ward and Ed Carter. As well, during the civil trial, five primary brokers were named as closely aiding the efforts of the promoters: the late Gus MacPhail, Tammy Patrick — you might remember Tammy Patrick, Murray Pezim's on-again, off-again wife — Jim Thomas, the VP of West Coast, along with Canarim brokers Bob Randall and Cheryl More.

In Brown's own words, he has claimed that in a scheme that began in February '84, Canarim had no dealings to speak of at all until March '85. Mr. Brown states: "The bulk of the phony deals were made in '84." The public evidence, however, indicates the Carter-Ward deals accelerated in early '85, as they wound up their promotions. Regardless, Canarim was involved earlier as well as later in deals with the pair, in direct contrast to his stated testimony.

[12:00]

The following partial list compiled from VSE and government files provides a brief summary of Brown's and Canarim's professional involvement with Carter-Ward VSE stocks in the period prior to March '85, when Brown claims he first got involved with the swindlers.

First, Midnapore Resources. In the very first Ed Carter VSE deals, Midnapore shares rose from 35 cents in '82 to $8 in mid-'83, with the addition of Marshal Lundy, E. Carter and Ron Bieber, the former VSE listings officer who acted as the lead scout for Carter-Ward to its board. Canarim, in contrast to Mr. Brown's testimony, assisted the group's initial entry into the VSE sweepstakes with a 100,000-share financing of Midnapore in July '83 — exactly the opposite of what Mr. Brown testified. The offerings were $8.90 a share. Within a year of Mr. Brown selling at $8, the price went to 40 cents. It went from 35 cents in 1982 to $8 in 1983 to 40 cents at the end of 1983. This dramatic price-change pattern was repeated, with variations, on all the Carter-Ward stocks.

Score Resources. In May 1983, Canarim financed this Carter-Ward deal by selling 300,000 units — shares plus warrants — at $2.12. The next month, Score shares jumped to $5. Carter-Ward sold for $2.12. The next month, the shares jumped to $5, and then in April 1984 they were $6.25, before collapsing to 50 cents in the next few months.

The next one is Flow Resources. On March 7, 19841, Canarim...200,000 shares, and West Coast Securities, 100,000 shares — 300,000 shares of Flow distributed on a best-efforts basis at 52 cents each. On June 28, 1984, Brown, Carter and Ward began to purchase Flow in their three-way partnership account at Canarim called Troika, which ironically means threesome.

MR. CHAIRMAN: Hon. member, your time has expired.

MR. SIHOTA: Mr. Speaker, this reminds me of days gone by. This is a fascinating report from the second member for Vancouver East. I think all members of the House would benefit if we heard more before we hear from the minister.

Interjection.

MR. CLARK: I'll say it outside. This is all on the public record. Flow shares hit $1.70 in the summer, and then by the end of 1984 had sunk to 11 cents.

Retlaw, renamed Tarnavack Resources. Canarim was a sponsoring broker for its original listing on May 17, 1984. Retlaw shares traded up to $3.60 in 1984 and then disintegrated in 1985 to 35 cents.

Preferred, renamed Shallow Resources. Canarim, again through best-efforts financing, underwrote 300,000 of the company's shares at $2.26. Preferred went up in 1984 to $3.85 and then plummeted to 25 cents.

Nu-Start Resources. On December 17, 1984, in a firm underwriting 650,000 shares, Canarim acted as the lead underwriter selling 300,000 shares of the company at 45 cents. Nu-Start never quite managed to equal the dramatic heights of Carter-Ward or other VSE listings. Still, in the final two weeks of 1984 it went to 86 cents per share. In 1985 the stock gradually slid back to 25 cents. Both Nu-Start and Shallow are among the Carter-Ward stocks that continue to be traded for them by Canarim and other brokerage houses, well after the news of the United Services ripoff had become public knowledge.

Brown's firm was still trading for Carter and Ward in 1988, despite the fact that Brown has always tried to make out that he stopped dealing with them once he knew of their violations. He says that he blew the whistle, but he was still dealing in their stock in 1988.

Longboat Resources. Canarim sponsored the company's original VSE listing on January 11, 1985. After one million shares were distributed at 20 cents, Longboat stock ran as high as 80 cents before gravity returned again and Carter-Ward, as all these deals do.... The 1985 resting-place for Longboat was 16 cents.

All of this goes into documenting the fact that Brown and his firm had a relationship with Carter and Ward and were instrumental in helping the two fraudsters establish themselves on the VSE and set up their bogus companies here. In addition, Carter documents attest to the fact that Canarim was managing Carter-Ward accounts and even selling directly to the Prospector Fund well before March 1985. There appears to be some question as to why the whistle was supposedly blown by Brown and his clients. We get to the more relevant parts, now that we've laid the case out.

According to the testimony of the former superintendent of brokers, Rupert Bullock, Brown was called to a meeting on April 23, 1985. 1 have the minutes of that meeting here. It was St. George's Day. Bullock expressed his concerns in this matter. This date being almost two years after Canarim financed the first Carter-Ward deal, Brown made every effort to convince regulators that the Carter-Ward stocks were not being manipulated and that their unusual buying-and-price pattern was coming from Europe. Seemingly, VSE and government officials were satisfied with Brown's explanation that the unusual trading pattern was caused by unnamed buyers from Europe.

[ Page 10194 ]

Why Brown was called in to handle the matter was also questionable. Why would Rupert Bullock call in Peter Brown to discuss this unusual pattern? It makes it clear that not only was he responsible for having helped to establish Carter and Ward on Howe Street, but his defence of the phony companies enabled them to continue selling. After he defended them at this meeting in 1985 with Rupert Bullock, he continued to sell. Brown provided the credibility for Carter and Ward's VSE manipulations.

The story Brown wanted people to believe, once the scams became public, is that he phoned the Texas funds chairman, Clark Aylsworth, in late May of 1985. As soon as he found out about the violations, he stated that he should be awarded the Order of Canada for blowing the whistle on the scarn. We now know, through the court trials and other disclosures since he made the statement he should get the Order of Canada, that it was actually the fund that called Brown and not Brown who called the fund — after the fund had learned from a dubious penny-stock hustler, I might say, that Brown had information on trading irregularities. So at the criminal trial last spring in Toronto, the funds manager testified that prior to this call, the one that Brown says was whistle-blowing, the fund had been blackmailed by two VSE promoters. Together with the minutes of the Prospector Fund's meeting giving a more detailed picture of the question of Brown's events, the reality is that his testimony at the two trials, the civil trial and the criminal trial, means, in my view, that Mr. Brown should be awarded an Oscar rather than an Order of Canada.

Brown has publicly claimed to have known little or nothing about the USF trades and investments. But when the scam collapsed and he arranged what he called a "rescue operation, " thereby earning rescue profits, he told the fund's managers that he kept a very close eye on their portfolio. Brown, it's clear, was able to profit from both sides of the manipulation. When the stocks rose he profited; when they collapsed he profited. Brown met with Doug Garrod, former VSE VP of listings and a key regulator in the exchange during this period, and Mr. Bullock to inform them of the problem.

My colleagues want me to ask questions, and I could do that, but I wanted to lay out the key elements for the record, because it hasn't been done. I will interrupt my flow of remarks to put a question to the minister, Mr. Chairman. A few months ago Peter Brown testified what was clearly at variance with the facts. Can the minister explain why Mr Brown has had no sanctions by the regulators in this matter whatsoever? He has not been rebuked; he has not been discussed; to this date he has not been charged by anybody with respect to the superintendent of brokers or the Securities Commission.

HON. MR. COUVELIER: I'd like to ask the hon member whether he agrees that the regulations have been significantly enhanced and improved and that conditions in terms of the operation of the exchange have dramatically improved since the events of 1984 to which he alludes.

MR. SIHOTA: It's funny; the minister woke up there and asked a question, and didn't deal with the question that the member... It's 12:10 p.m., so you've got about 50 minutes yet, and then you can go home and go to sleep.

Mr. Brown has repeatedly said on this matter that he blew the whistle, and that's his position. There have been subsequent events which my colleague from Vancouver East has outlined in some detail. Given the fact that this has been the largest scam on the VSE, I'm sure the minister must have taken more than simply a passing interest in the matter and must obviously be well informed as to the Carter-Ward case. Was there a deal, Mr. Minister, with Mr. Brown along the lines that if he blew the whistle on this, no matter what came out later, there would be no proceedings taken against him?

HON. MR. COUVELIER: I'm not certain I understand the question. What is meant by: "Was there a deal?" Between whom, Mr. Chairman?

MR. SIHOTA: Were there any assurances given by security regulators to Mr. Brown that no actions would be taken against him in light of his initial reporting of this matter?

HON. MR. COUVELIER: This has been a great exercise in consuming the clock. We could have just saved time by referring to Hansard over the last year or the year before that; the members haven't said anything new or different. I find offensive, frankly, the question put by the last member. It's typical of him, of course, so I suppose we all should be inured to it.

Nevertheless, I have no specific knowledge of discussions between the investigators and those being investigated. They are independent bodies. The Vancouver Stock Exchange is an independent body, as is the Securities Commission. I find repulsive the suggestion that such an event could have occurred. But if that's the member's wish, to stay down in the gutter, then I suggest he might put that question in writing to the Securities Commission. I've no knowledge of any such event, and I can tell the member that I would be offended personally to find out that such an event might have occurred. But I've no reason to think it did. To suggest that it might have, it seems to me, might get a headline for the hon. member over the weekend, but it doesn't do the integrity or reputation of the stock exchange or the Securities Commission any good and, as a matter of fact, might well do a great disservice.

I think the member might remember, Mr. Chairman, how a couple of publications published in the United States.... Every once in a while they look for sensational issues that they can reproduce in their monthly editions. The kinds of comments I just heard could — and would — be used by those slanderous

[ Page 10195 ]

publications to the detriment of the B.C. and Vancouver financial communities.

[12:15]

I'm disappointed once again in the socialists opposite, who seem eager and keen to grab every short-term political advantage they can, absolutely ignoring the damage they do not only to individuals but to institutions that are key parts of B.C. It strikes me that we are elected to represent the people and different points of view; that's fair. It's appropriate that the government should be criticized by the opposition from time to time on policies they find difficulty with, but I can't stretch my mind to encompass a responsibility which would incorporate destroying reputations. It seems to me that you, hon. member, and your colleague — the other chap who comes from the forestry capital of B.C., Vancouver East — consistently ignore the normal proprieties that we would like to think are associated with being elected to represent people and to discuss heavy issues.

The events you have described occurred in 1984-85. They obviously had an impact in terms of what this administration did to deal with the problems when it took office in the fall of 1986. We brought in a Securities Commission act. We were able to have the Vancouver Stock Exchange revisit some of their practices. We have added considerable resources to the Securities Commission. We're fortunate to have some very bright, dedicated people applying their intelligence to the issue of monitoring and protecting the public's interest in the operation of the stock exchange and in the monitoring of the performance of the individuals who are active in it. There can be no question of the dramatic progress made since the fall of 1986 in this respect.

I had a visit from the senior officials of the Investment Dealers' Association of Canada. All of them were from central Canada and certainly had no apparent interest in handing tributes out to British Columbians, locked as central Canada is in a battle with Vancouver and Montreal for financial activity. They had no reason or motive whatsoever to tell me that in their opinion the British Columbia Securities Commission is leading the country in terms of their integrity, their thoroughness of application, and their creativeness and ingenuity in bringing forward amendments to make sure that every conceivable loophole is captured and headed off.

We all know that you're not going to legislate crime out of existence; all you can do is legislate penalties for violations. Unfortunately it will never be a perfect world in the sense that crime will disappear. Therefore the best we can expect our staff members to do is to make very sure that we catch as many violations as we can — and that when they're caught, they're prosecuted.

I find it ironic that here's an institution that's only two and a half to three years old, and already it is perceived by those involved in the financial community as being the best in the country. This is an institution which took an ex-Premier of the province through the process in order to determine if there was any violation. I can't imagine any government-created institution that would have exhibited that degree of integrity and maturity in this short space of time. To suggest, therefore, that there's more work to be done or that there are serious defects to be addressed in this respect does a great disservice not only to the staff members who are applying themselves to the problem but to all of us who want to make Vancouver a significant player in the international financial community.

I think we've made dramatic progress; we're going to continue to make more progress. The staff will continue to apply themselves diligently to the tasks we've given them, and I'm very proud of what they've accomplished in this short period of time. It would be nice once in a while to have the members opposite also concede the tremendous progress that has been made by individuals who work their hearts out developing policies and assisting to develop policies and monitor performance, and who every year are subjected to humiliation and unfair criticism from the members opposite, who could have no other purpose than grabbing a headline. After all, we're talking about events in 1984, before this administration took office and before the commission was created. One has to wonder what possible purpose you could have in this exercise. You canvassed it thoroughly in 1986; you canvassed it thoroughly in 1987, 1988 and 1989. Now it is 1990, and you want to canvass it again. What are your motives?

MR. CHAIRMAN: The Minister of Health seeks leave to make an introduction. Shall leave be granted?

Leave granted.

HON. J. JANSEN: Mr. Chairman, I would ask this House to make welcome 28 grade 5 students from Sardis Elementary School, who are accompanied by their teacher. Would you please make them welcome.

MR. SIHOTA: Mr. Minister, you've commented on the fact that there have been some changes in the past few years. I know that you found it "repulsive" when we raised Joytec in this House, but we were right on Joytec. You found it repulsive when we raised International Tillex in the House, and we were right. You found it repulsive when we raised Technigen in the House, and we were right. You found it repulsive when we referred to Starfire Resources in the House, and we were right. I'll tell you something. None of the changes that you speak of would have happened had it not been for the efforts of people on this side of the House in going after you and your ministry to clean up the Vancouver Stock Exchange.

There are still problems. One of them relates to the Carter-Ward trial. If you want to know why we're still raising it in 1990, all of the facts that we referred to in the House today have come out over the last couple of weeks. Surely the minister must be concerned about some of the revelations that have occurred.

[ Page 10196 ]

I take it the minister says that he has not inquired to determine whether or not what I suggest is true. That's fine. Let me rephrase the question and perhaps put it in a more direct way. Could you explain, Mr. Minister, why the Securities Commission took action against West Coast but failed to take action against Canarim?

HON. MR. COUVELIER: The hon. member wasn't listening, I guess. I pointed out that these are independent institutions, thankfully outside the realm of political interference. And they should be. God help us if you turkeys ever got into office, where you could start to interfere to the extent that you're suggesting we should — God help the country. The arrogance that is exhibited with the attitude that politicians should continue to involve....

HON. MR. VEITCH: There are no red turkeys, you know that.

HON. MR. COUVELIER: We'll have to develop a new species of turkey, a red one.

The member makes the same mistake they've made consistently when they like to beat this subject as an annual event. They make the assumption that because there has been no definitive comment by those independent institutions, nothing is in progress or nothing will follow.

I would suggest that a more fair way of looking at it — mind you, I know they don't want to be fair — would be to complain when there has been an announcement that an issue was dead. In the absence of that kind of announcement, I think they make a false assumption when they leap across this chasm of doubt to say that the institution is not performing its role properly.

One of the problems we've got in B.C. and in other jurisdictions is the difficulty of getting things into courts. That seems to be a function of lawyers, primarily. I note the last questioner is a member of that profession, so he might have a unique appreciation of the difficulty there is in getting matters dealt with quickly through the court system. However, I'm sure he would quickly leap to his feet to defend the rights of all of those who might be involved with it for the protection of due process and careful examination of all their options and facts. But for the narrow political purposes he's using today, I suspect he might take the reverse argument. Once again, that shouldn't surprise us. They seem to flip-flop on either side of a philosophical issue, depending on how they feel at the moment and how likely they are to get a news story out of the accusation.

In any event, back to where I was. They are an independent body. If the member has any question to put to them, I suggest he put it to them.

MR. CLARK: Mr. Chairman, for the minister, we raised these questions this year because of the evidence that has come out of a criminal trial a couple of months ago and a civil trial a few months prior to that, and that evidence clearly contradicted the statements made by Mr. Brown. The evidence clearly shows that Mr. Brown's comments are at variance with the facts.

I could spend a lot more time, but I want to just talk about a couple of other things that came out of the trial, which brings us to this point. There is a pattern of large share purchases made personally by Brown immediately prior to public disclosure of material changes.

What happened is that Peter Brown purchased shares, and then at a subsequent time a public disclosure was made of material changes, which increased the value of the stock, and then Mr. Brown sold the stock. A month ago I requested the daily trading information with respect to several companies to prove that point, and that point has come out of public documents and also the documents of the VSE that I requested.

I won't go into all of them, but I'll just give you an example. In Endatcom Ventures — renamed Borkin Industries — trading records show that Brown purchased a total of 68,850 shares for between 35 cents and 85 cents for his RRSP account on March 18 and 19, 1985. On March 18 Endatcom announced to the public that there was no material change in the company's affairs. So he buys stock, and there's an announcement of no material change in the company's shares that would account for the recent surge in trading activity in its shares.

It wasn't until three days later, March 21, 1985, that trading on the VSE was halted, and Carter-Ward associate Ron Bieber was appointed to the board. That was disclosed three days later. By the time of this public announcement, Endatcom shares had risen to $2 each. So they were purchased by Brown personally for his RRSP account for between 35 cents and 85 cents. Three days later an announcement was made which impacted on the share price to $2. It's either a remarkable coincidence, Mr. Chairman, that he would make this lucrative profit on this one share, or else he had inside information. I suspect that it was a violation of the Securities Act; in fact, I know It was. There are three other stocks that I could mention where Mr. Brown purchased shares, and material fact which impacted on the price was publicly disclosed after he'd purchased the shares, at which time he sold for a profit in Carter-Ward shares. These are personal accounts by Peter Brown.

[12:30]

I think the reality is that this brings a question about the Securities Act. This evidence was alluded to in court trials a couple of months ago. I researched these directly on these four companies. He admitted having knowledge of the facts prior to his purchase. He admitted on the stand to certain things. I think this brings a question about the Statute of Limitations and a range of questions about the Securities Act.

The question is: is Peter Brown's role being investigated in this affair in light of the revelations that have come out of the trial just a couple of months ago and the fact that his position at the trial was completely different from the facts? Is there, in the Securities Act, the wherewithal to prosecute an indi-

[ Page 10197 ]

vidual five years later? Evidence has come out at a trial five years later which clearly shows him to be in violation of the Securities Act. Is he being investigated for that violation now? Is it possible to pursue charges against Peter Brown now, in light of the fact that the Securities Act clearly prohibits it? In other words, Peter Brown was not caught at the time. He is one of the major players in this Carter-Ward scandal. He has taken positions in court which are now proven to be untrue. Is it the intent of the superintendent of brokers and the Securities Commission to pursue an investigation in light of the new evidence which came out at these trials?

HON. MR. COUVELIER: In the opinion of the hon. member for Esquimalt-Port Renfrew (Mr. Sihota), you probably have in your caucus an expert lawyer who could give you the legal opinion you seek, Mr. Member.

MR. CLARK: Do you not think that Mr. Brown should be investigated if has taken positions in the trial which show him to have been in contravention of the Securities Act four years previously?

HON. MR. COUVELIER: The member knows full well that I can't and should not make comment about specifics that are being potentially looked at by entities that report to the House through me. That would be inappropriate.

However, the member seems interested in the legalities of the matter. I merely point him to one of his own caucus members who, at least in his opinion, is fully capable of rendering judgment on nearly every issue of moment.

MR. SIHOTA: The Minister of Finance has in the past confirmed investigations taking place with respect to companies. In fact, if memory serves me correct, he — once in this House for sure — advised the House of an investigation that was taking place with respect to a question I asked around one of Mr. Brown's companies. That was about a year and a half ago. Why is the minister not prepared to confirm an investigation in this case with respect to Mr. Brown? Secondly, does he not think there ought to be an investigation of Mr. Brown, given the facts outlined by my colleague?

HON. MR. COUVELIER: I've answered the question. I don't see a whole lot of point in rising every time to tell the member I've answered it. I will save wear and tear on my tired old knees and hold my chair.

MR. CLARK: With that, I move the committee rise, report progress and ask leave to sit again.

Motion negatived on the following division:

YEAS - 11

NAYS - 27

HON. MR. VEITCH: On a point of order, Mr. Chairman, I notice in Standing Orders that it's the responsibility of each member to be present in committee as well as in the House. I note that the hon. Leader of the Opposition has not been here for several weeks, except perhaps on one occasion. I would like you to ascertain where he may be.

MR. CHAIRMAN: That is not a point of order.

MR. CLARK: I notice some empty chairs on the other side, but I won't....

Interjections.

MR. CHAIRMAN: Order, please.

On vote 28: minister's office, $329, 702 (continued).

MR. CLARK: The minister said that he didn't want to answer any more questions on the VSE, so I thought we would take an opportunity to adjourn five minutes early and come back next week and discuss other matters. But I am certainly quite prepared to talk for another five minutes on the Vancouver Stock Exchange. If that is the wish of the members opposite, I would be quite happy to do that.

I discussed one of the deals that it has now been revealed that Mr. Brown made a personal profit on.

AN HON. MEMBER: Say that outside the House.

MR. CLARK: I will be happy to say it outside the House.

Interjection.

MR. CLARK: Well, that's an interesting question. We know he made $120,000 for introducing Mr. Carter and Mr. Ward to somebody. Madam justice Southin said that the behaviour bore no resemblance to common decency — words to that effect, Mr. Chairman.

[ Page 10198 ]

MR. D'ARCY: Is he a member of the Top 20 club?

MR. CLARK: I think he is a member of the Top 20 club. I don't know if he's a member of the new Top 20 club, but he probably is.

We know that some of that money probably made Its way into Social Credit coffers. We know that he referred to his profit from the Carter-Ward affair as "rescue profits." Those were profits that he made after the skulduggery and illegality of the Carter-Ward dealings with the Prospector Fund had become public. So we know that he has personally profited a great deal by this scandal. But what I don't think is as well known is his own personal trading at the same time, as I've mentioned, in Endatcom. I could mention others.

I wouldn't mind actually mentioning Bart Resources, because that was another one that I did a little research on. Mr. Brown said he found "a hell of a property" — those were his words — for one of the pair's deals, and that was Bart Resources. That's a joint venture with Lacana Mining on a property in B.C.'s Toodoggone region. According to Brown's chronology, he had just arranged a deal in the same camp for two other VSE listings, Energex Minerals and New Ridge, which is a Pezim company. On December 24, 1984, Canarim had underwritten 600,000 units of Energex at 40 cents, and on January 25, 1985, Energex publicly announced a significant private share placement of 250,000 shares at 80 cents each. The buyer was the notorious United Services' Prospector Fund.

In the first week of March, the VSE accepted documentation with respect to the Prospector Fund placement, and a second public placement was made about it. One week later, on March 13, 1985, Bart Resources was listed for trading on the exchange. It's unfortunate that an opinion on the spectacular Toodoggone ground wasn't sought from Ed Thompson, president of Lacana, the experienced mining firm that over two years earlier had decided the property Brown wanted for Bart wasn't worth exploring.

So let's get this right. Lacana, which Is a real mining company, said that an area was not worth exploring. Yet two years later, Mr. Peter Brown wanted Bart as part of a Carter-Ward deal. Had the president of Lacana been confronted....

MR. SERWA: Point of order, Mr. Chairman. I have a great deal of difficulty relating the ramblings of the second member for Vancouver East to the Ministry of Finance estimates. He's turning this Legislature into a charade.

MR. CHAIRMAN: With all due respect, if the hon. member had been listening either on the speaker or in his seat, he might find that there is some relevance to the discussion that has been going on since the committee sat and started discussing vote 28.

Interjection.

MR. CLARK: Do you want me to move it? It might fail.

HON. MR. VEITCH: I move the committee rise and report very little progress.

The House resumed; Mr. Speaker in the chair.

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

Hon. Mr. Veitch moved adjournment of the House.

Motion approved.

The House adjourned at 12:45 p.m.