[ Page 10199 ]

CONTENTS

Routine Proceedings

Mineral Tax Amendment Act, 1990 (Bill 33). Hon. Mr. Davis

Introduction and first reading –– 10199

Tabling Documents –– 10199

Freedom of Information Act (Bill M219). Mr. Jones

Introduction and first reading –– 10199

Oral Questions

Ministry of Transportation memo. Mr. Lovick –– 10199

Challenger jet and government air logs. Mr. D'Arcy –– 10200

Spills in Nicomekl River. Mr. Peterson –– 10200

Truckers' dispute. Mr. Sihota –– 10200

TV coverage of the Legislature. Mr. Rose –– 10201

Ministerial Statement

Meech Lake accord. Hon. Mr. Vander Zalm –– 10201

Mr. Harcourt

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

(Hon. Mr. Couvelier)

On vote 28: minister's office –– 10204

Mr. Clark

Ms. Cull

Mr. Sihota

Mr. D'Arcy

Mr. Harcourt

Mr. Lovick

Mr. Cashore

Property Purchase Tax Amendment Act, 1990 (Bill 21). Committee stage.

(Hon. Mr. Couvelier) –– 10228

Third reading

The House met at 2:05 p.m.

Prayers.

HON. MR. STRACHAN: Mr. Speaker, on behalf of my colleague for South Peace River (Hon. Mr. Weisgerber) and myself, let me introduce the acting president of the Youth Advisory Council, a fourth-year student at UVic, Steve, Clark, from Tumbler Ridge.

MR. CLARK: I have the privilege today of introducing several friends: a very good friend of mine and one of the top labour lawyers in British Columbia, Sandra Banister; her daughter Kaleigh; and a friend of theirs from the Philippines, Narlinda Gestiada. With them are my wife Dale, my son Reid, and for the first time in the precincts, my daughter Layne. I'd ask the House to make them welcome.

MR. REE: My father, Alexander Ree, was born in Scotland 95 years ago. He was a very wise, kindly and lovable man. At 6 a.m. today, June 11, Tokyo time, his namesake was born to my son Scott and his wife Izumi in Tokyo. Cheri and I pray that he has the same qualities as his great-grand father. Mr. Speaker, I would ask this House to give a very warm welcome to the world to my grandson, Alexander Ree.

HON. J. JANSEN: I'd ask this House to make welcome the grade 7 students from a wonderful community school, Yarrow Elementary, who are here with their teacher, Mrs. Esau. Would you please make them welcome.

MR. PELTON: On behalf of your office, Mr. Speaker, I would ask the House to welcome to the Legislature today Karen Sonada and Lorraine White. These two women are visiting us from the California State Legislature in Sacramento. They are here representing a fellowship program and visiting with our interns. Would you make them welcome.

MR. CHALMERS: Mr. Speaker, some weeks ago the Kelowna Chamber of Commerce had a charity auction. A couple paid a very generous amount to have lunch with me today in the legislative buildings. I'd like the members here to welcome Mr. Tim Evans and his wife Yolanda, who are visiting from Kelowna.

Introduction of Bills

MINERAL TAX AMENDMENT ACT, 1990

Hon. Mr. Richmond, on behalf of the Minister of Energy, Mines and Petroleum Resources (Hon. Mr. Davis), presented a message from His Honour the Lieutenant-Governor: a bill intituled Mineral Tax Amendment Act, 1990.

Bill 33 introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

Hon. Mr. Strachan tabled the annual report of the Ministry of Advanced Education and Job Training for the fiscal year 1988-89.

HON. MR. STRACHAN: Now that I'm minister, these are going to happen a little faster.

FREEDOM OF INFORMATION ACT

Mr. Jones presented a bill intituled Freedom of Information Act.

MR. JONES: Mr. Speaker, the purpose of this bill is to improve accountability of government through meaningful participation of individual citizens by providing them with reasonable access to information held by government. Under this bill this accountability would be improved by allowing individuals access to such information as logs to the government air fleet, pollution permit compliance information, government loans to private enterprises, information on Crown corporations and individual reports on such matters as our health care system.

Under such legislation the public would be assured that their tax dollars are being spent wisely and well. They would feel more comfortable that environmental protection was being adequately enforced, and they would be sure that the government was acting wisely on solutions to problems of the day. Under such legislation a Premier or cabinet minister would no longer be able to say that the information will be made available, but not at this time.

The bill has two focuses: it recognizes that citizens want and have a right to know what their government is doing even before an election, and it also protects private information held on individuals by government. Freedom-of-information legislation is a hallmark of a healthy democracy.

Bill M219 introduced, read a first time and ordered to be placed on orders of the day for, second reading at the next sitting of the House after today.

Oral Questions

MINISTRY OF TRANSPORTATION MEMO

MR. LOVICK: My question is directed to the Minister of Transportation and Highways. The privatizing and downsizing of the Ministry of Transportation and Highways has of course meant that the ministry must rely very much on the work of the private consultant. Could the minister explain why it is that senior ministry staff within her ministry have now been instructed-and I quote to you from an internal memo: "to remove the word 'consultant' from their vocabulary when dealing with the public and politicians"?

[ Page 10200 ]

HON. MRS. JOHNSTON: Mr. Speaker, somehow or other I'm confused so often by the questions that are put to us. Members opposite would have us believe that if they were to be government, they would be into the ministry, working on a day-to-day basis, censoring every memo that goes out and every telephone call that is made. I have no idea why that memo was sent out. If the member opposite would like to give me a copy of the memo, I would be pleased to obtain clarification. It appears that he has the memo. Why doesn't he call the person who wrote it?

MR. LOVICK: Naively, Mr. Speaker, I assumed that the minister was indeed in charge of the ministry. Sadly, this minister has no idea what her assistant deputies are doing. However, the memorandum to senior staff suggests that the reason for forbidding the use of the word "consultant" is: "sensitivity to the use of the term among government-elected people." Could the minister inform us if any other words have been purged from the vocabulary of senior staff?

[2:15]

MR. SPEAKER: Has the member concluded his question?

MR. LOVICK: If I could ask one more, Mr Speaker... The minister doesn't want to answer, and I'm sorry about that.

The memorandum further states: "The kind of consultants we deal with are generally engineering, and we can easily refer to the work as 'the engineering will be done/ without having to say by whom." The obvious question Is: why is the ministry reluctant to name the consultants? Could she tell us that?

HON. MRS. JOHNSTON: Mr. Speaker, this is really serious stuff we're dealing with here today Could I suggest that the member opposite consult a consultant?

CHALLENGER JET AND

GOVERNMENT AIR LOGS

MR. D'ARCY: First of all, I want to welcome the Premier back. [Applause.] Since, in his deliberations in the far east of this country, there was a great deal of talk about open discussion; and since, in the interest of open government, in the early months when he was Premier, he saw fit to release the air logs of the W.R. Bennett administration for the previous few years In the continuing interest of open government, has the Premier decided to release the air logs for the B.C. government air service for the years from March 31, 1987, to date?

HON. MR. VANDER ZALM: I only just became aware of this. Certainly, as I look back and as I can recall it, there has been a process in place for all of the years that I am aware of, whether it was during the sixties, the seventies or the eighties, for the release of these logs. I think it may have varied as to exactly when these logs were made available. I don't have all of that detail available to me, but I agree that the logs should be released, and I would certainly see to the release of them, as always.

SPILLS IN NICOMEKL RIVER

MR. PETERSON: I've got a question for the Minister of Environment. Can the minister inform this House what steps are being taken to prevent spills In the Nicomekl River, or for that matter, any other water body, particularly if they are the result of wilful neglect?

HON. MR. REYNOLDS: I want to thank the member for his question, and I can advise him that spills like the one in the NicomekI River are very difficult, because it looks like they were done with wanton disregard for the environment. I can assure the member that an investigation is underway, and if the facts are as they seem right now, there will be charges laid very soon.

TRUCKERS' DISPUTE

MR. SIHOTA: A question to the Minister of Labour. With respect to the truck loggers' dispute - sorry, the truckers' dispute-which of course has been escalating over the past couple of weeks in British Columbia, does the minister not agree that there ought to be a legal framework in place by which these kinds of disputes can be rationally remedied?

MR. SPEAKER: The same question was taken on notice last week.

HON. MR. JACOBSEN: Mr. Speaker, I don't believe the question was taken on notice.

My understanding is that there is some Improvement in the truckers' situation. The member mentioned truck loggers, and I'm not aware that that was an issue. But as far as truckers are concerned, I understand that the situation is improving, and as far as labour policy is concerned, we're quite proud of our labour policy. When there are any changes to be made, we will make them on the advice of my ministry and the people in government. So the member will just have to wait for that to occur - if it does. We're not particularly impressed with that member's approach to labour relations in the first place, so we're not led by his demand for legislation.

MR. SPEAKER: I must caution the minister, as others, that it's improper to make gratuitous remarks about another member during question period or at any other time.

MR. SIHOTA: The minister says the situation is improving, which I'm sure comes as a big surprise to those involved in the dispute. The independent owner-operators and companies that rely on their

[ Page 10201 ]

services certainly don't think of the situation as improving. Could the minister explain to this House why he does not believe that the granting of full collective bargaining rights to the truckers is an appropriate way to establish the framework necessary to resolve this dispute?

HON. MR. JACOBSEN: Mr. Speaker, we have had this discussion before. My comments regarding the member opposite with regard to labour policies stems from comments he made not too long ago about labour policy. He suggested that the way he would deal with labour relations would be to improve the opportunity for one side to inflict economic hardship on the other. That's certainly the way he was quoted.

On the other hand, our policy is to eliminate or minimize the need for either side to inflict financial hardship on the other, So I think we would not agree on labour policy.

TV COVERAGE OF THE LEGISLATURE

MR. ROSE: I'd like to direct a question either to the Premier - on his return - or the Provincial Secretary (Hon. Mr. Dirks) as the cabinet minister most responsible for things that go on within these precincts. I'd like to ask whether, in fulfilment of the Premier's 1986 throne speech, the minister -or the Premier, for that matter -has decided to introduce gavel-to-gavel TV coverage in this House at an early date.

HON. MR. VANDER ZALM: Mr. Speaker, immediately after the throne speech in 1987, we did proceed to determine the implications or the costs of instituting this particular system. I regret that, initially, upon receiving the information, it was considered by many - including myself - to be so expensive as to not be a priority, given the many other needs of the citizens of the province. It was a disappointment to me because, frankly, I would like to put our side up against your side on television any day of the week.

Interjections.

MR. SPEAKER: Order, please. It's such a brief question period, and we seem to be wasting the time. So perhaps the Premier could continue and the second member for Victoria (Mr. Blencoe) would restrain himself.

HON. MR. VANDER ZALM: Mr. Speaker, I certainly wanted to complete the answer to the question, because I don't want to lose the valuable time available for questions. My answer is that the matter is still being examined, and I'm hoping to have some information on this in the not too distant future.

MR. ROSE: I realize how terrific the Premier looks on television. I would think he'd be most anxious for it, regardless of the cost. I think TV would give us an opportunity to compare style to substance. I wonder if the Premier is aware of a recent Nova Scotia ruling in which the judge said that TV could not be banned in the public legislature as long as other media were represented.

MR. SPEAKER: This question may be ultra vires. I would ask you to hold the question, because it is my information that the ruling in Nova Scotia is subject to appeal. Perhaps you wish to answer. I'd need more guidance on it, other than that.

MR. ROSE: Mr. Speaker, I take your caution with great seriousness. I merely asked whether or not the Premier, since he's been very busy this last week, was aware of the recent ruling and what implications that might have for this House.

HON. MR. VANDER ZALM: Yes, Mr. Speaker, that is one of the things that ought to be examined. We'll certainly do that as well, as quickly as possible.

Ministerial Statement

MEECH LAKE ACCORD

HON. MR- VANDER ZALM: Mr. Speaker, I would like to make a statement. I would like to begin by tabling a copy of the first ministers' meeting on the constitution, and the agreement reached at the meeting.

I participated last week on behalf of British Columbia in one of the most important discussions held in the history of our country.

It was clear going into this meeting that we had reached a critical impasse. The very future of our nation was at risk. After more than 70 hours of intense, emotional, heart-felt expression of views by first ministers, we reached an agreement on Saturday evening that holds out the promise for securing that future. The process was long and difficult. The discussions were frank; indeed, at times brutal. But they were conducted throughout with the clear objective on the part of all participants of doing what was best for Canada.

I went to Ottawa, accompanied by the Attorney-General, determined to play a positive role, a bridging role, in finding a resolution to the dispute. In so doing, I maintained the consistent position of the government going back more than three years. I signed and stuck by the Meech Lake accord because it allowed us to resolve the outstanding issue of Quebec's five conditions for agreeing to the 1981 constitutional package, a resolution which was then, and remains today, the necessary precondition for unblocking the constitutional reform agenda for other matters.

This House, with strong support from both sides, voted overwhelmingly in favour of the Meech Lake accord two years ago. These other matters, in the view of British Columbia, focus on the need for changes to our institutional and economic framework. These changes would include an elected, equitable and effective senate. Other changes involving

[ Page 10202 ]

the framework of economic institutions in our country are required to enable Canada to compete and succeed in a rapidly changing global economy.

[2:30]

I fully realize, Mr. Speaker, that many British Columbians and other Canadians take the view that the Meech Lake accord was not perfect -to say the least - and they are right. I also realize that there are those who will criticize the agreement the first ministers reached in Ottawa two days ago as imperfect, and they too may be right. But I would argue that the agreement reached is a reasonable compromise. It addresses many of the concerns raised by critics of the Meech Lake accord, and it provides a clear process with target dates for accomplishing further changes to the constitution, changes which focus on the priorities of highest concern to British Columbians and others in the west. The agreement clears the impasse. Hopefully it has forged the Canadian constitutional family together and cleared the way to our agenda.

I want to say a word about the process, Mr. Speaker. I am painfully conscious of the concern of British Columbians and other Canadians about the manner in which Meech Lake was agreed on and about the experience of the past week, with more than 70 hours of private meetings. On May 281 told British Columbians that we will provide an effective mechanism for greater public input in all proposed constitutional change. The constitution is the business of the people. It is their country, and we as legislators and as first ministers are their servants. As a result of our experience, it is clear to all first ministers that future changes to our constitution cannot and must not be forged in private.

This is not to say that private meetings or private discussions cannot or should not take place. In fact, they must; but the process and the constitution it addresses must be legitimate in the eyes of the people, as was made clear on Saturday. I will therefore be proposing a means whereby public input can be provided on the changes we agreed upon in Ottawa, and I will provide for this at the time we table the necessary resolution.

I want to take a moment, Mr. Speaker, to.outline the main features of the agreement reached in Ottawa on Saturday.

Firstly, it ensures that Meech Lake will be done. This will get Quebec back to the constitutional table, which is good in itself and good because it unblocks the agenda for future change.

Secondly, it reaffirms, clarifies and strengthens the commitment to Senate reform, and I will come back to this in a moment.

Thirdly, the agreement provides for clarifications and additions to the constitution in the short run. These changes address concerns raised with respect to protection of equality rights, the role of the Territories in first ministers' conferences and in the nomination of judges and Senators, and they establish a separate process of first ministers' conferences specifically focused on aboriginal constitutional issues - the first to be within one year of proclamation of the additional elements. It is the government's intention to table a resolution authorizing these further amendments within the next few days.

Fourthly, we agreed on an agenda for future constitutional reform issues. These issues include a Canada clause which is to be the subject of a parliamentary committee study, beginning next month with public hearings across Canada. The report will be considered by first ministers at their conference this year. There will also be reviews of the amending formula itself, with special reference to how it applies to the Issue of admission of new provinces from the Territories, and there will be a review of the working of the Charter of Rights and Freedoms.

Fifthly, we received confirmation that Charter rights are not infringed upon or denied by the distinct society clause.

Sixthly, there will be additional amendments with respect to the particular issue of the equality of the linguistic communities in New Brunswick.

I want to explain what this agreement means to British Columbia. Above all, it keeps Canada whole, which is the paramount goal of all British Columbians. Further, it resolves a constitutional reform impasse which has lasted for so many years.

The provisions regarding Senate reform do a number of things to advance this key British Columbia priority. We have a clear process based on the principles of an equal, equitable and effective Senate, as I suggested in the proposal I made public in January. We have a timetable beginning with a commission report to be considered by a first ministers' conference devoted exclusively to Senate reform; that conference is to be held right here in British Columbia before the end of the year. We have a commitment along the lines of the Edmonton declaration of 1986 to keep Senate reform as the key reform priority until comprehensive reform is achieved, and a commitment to seek adoption of such an amendment on Senate reform within five years. And we have a kicker, so to speak, that if such reform has not yet happened after five years, Ontario, New Brunswick and Nova Scotia give up Senate seats in favour of the western provinces and Newfoundland. It does so with a timetable and on the basis of a set of principles as I outlined in January of this year.

The agreement to begin work next month on a Canada clause and to move forward an agreed orderly agenda for constitutional change on the basis of target dates also corresponds to the key points made in the proposal I put forward in January.

The clarification with respect to the Charter of Rights and the distinct-society clause, signed by six of the leading constitutional experts in the country including the assistant deputy Attorney-General of British Columbia, basically confirms the interpretation I had been given upon signing the Meech Lake accord. It is valuable in addressing concerns raised subsequently by many British Columbians and others about the issue, and provides the kind of clarification I said I would be seeking as a result of those subsequent concerns.

[ Page 10203 ]

I think it's fair to say that as we dissect and consider the many objections that we've all heard from time to time - we've read about it in the paper; we've seen it on TV; we've heard the calls to various call-in programs on radio - there's still perhaps a lack of understanding about the distinct-society clause. I'm hoping that this will help clear it up.

It probably won't satisfy all of the people, I'm sure. But it should also be said that when we're talking about the distinct-society clause, and we have a concern about it, we're really more expressing a concern for how it will impact on the people in Montreal and Quebec City and not so much on the people in Vancouver, Richmond, Sooke, Saanich or wherever, because the distinct-society clause applies in Quebec and not in B.C.

I've heard it argued: how will this impact on those who might decide to move from Richmond, Sooke or Vancouver to Quebec? I guess that is a concern. But it should be remembered that the distinct-society clause applies in Quebec. Perhaps that is not clearly understood by many of the people who speak to me, or who I hear from.

As well, I believe that the provision which was made during the round of constitutional changes in 1982 - the Trudeau round, as it's called - where the notwithstanding clause was placed in the charter, is far more impacting than the distinct-society clause. However, not much has been said about that, and little concern has been expressed - at least publicly - about that particular provision. Most of the concerns have been with respect to the distinct-society clause.

Maybe we could all assist in helping British Columbians - our own constituents and the country - by better explaining that. I think all of us may have failed in some regard when it comes to that provision, including myself. We'll need to do a better job.

In summary, Mr. Speaker, the agreement reached on June 9 meets the test I set out as key priorities for British Columbia in terms of necessary changes and future priorities for key institutional reforms, and with the elements of certainty in the form of an agreed-upon set of commitments and a timetable for their realization. British Columbians should feel pleased and proud about this outcome, because it keeps our wonderful country together, intact and unified as one, and because it points the way to future changes which will focus on the priorities of western Canadians. Thank you, Mr. Speaker.

MR. HARCOURT: I would like to welcome the Premier back to British Columbia. I'm sure that British Columbians acknowledge the efforts of the first ministers and the Prime Minister to broaden the consensus on the outstanding issues that were faced in the current round of constitutional change. I received the copy of the final communiqué from the Premier's office this morning, and I'd like to thank the Premier for that courtesy.

We in British Columbia also know that the negotiations were immensely difficult, and we could feel the tensions arising from the quite different visions of what Canada is or - just as importantly - might be. But I believe we have lately become so preoccupied with these differences that we sometimes forget what a great country Canada is already and how fortunate we are to be Canadians.

When you look around the world, you see countries that are just striving to come to grips with the basic fundamentals of a democratic society and with how to work out a federalism among themselves, whether it be in the eastern European countries, the Soviet Union or in the clashes of violence in a lot of federal states. Indeed, we should step back and realize just how fortunate we are and what we've been able to create in this great country of ours over the last hundred and some-odd years. That's the message that I hope is going back to every legislature and to all Canadians throughout this country after last week's very arduous set of negotiations over many hours.

[2:45]

1 want to take this opportunity to deal with some of the concerns about the deal that was signed late last Saturday night in Ottawa in the convention centre. As you recall, when we debated the accord in: this Legislature, this side of the House raised a number of serious concerns, including Senate reform. I'm pleased that the first ministers dealt with many of these concerns last week, but we're going to have to wait and see whether their agreement will stand up to critical analysis and meet the approval of the people of this province. Over the next few weeks Canadians will have the opportunity to voice their concerns as to whether these matters have been dealt with adequately. In other words, the jury is out.

The first ministers have dealt with concerns regarding equality for women and the application of the distinct-society clause by appending a letter from six jurists and their opinion. They have dealt with some of the concerns by providing for future constitutional amendments. In regard to the letter from the six jurists, we regret that this device appears to have no binding legal status.

Mr. Speaker, while we acknowledge that there will be another first ministers' conference on aboriginal constitutional issues, given the sad experience of the last constitutional meeting on this matter in 1987, we are saddened that once again aboriginal people have been excluded from being part of this process and that their concerns have been relegated to the back burner. That is particularly important in British Columbia for the over 100, 000 aboriginal people. For getting on with our great province's challenges, this has to be overcome and resolved.

I believe that British Columbians and other western Canadians will have serious reservations about the ability of this agreement to advance concrete solutions to the question of western alienation. A lot of people in eastern Canada don't understand how deeply it's felt by western Canadians and British Columbians of many political viewpoints.

Specifically, despite the promise of a commission and a first ministers' conference on Senate reform,

[ Page 10204 ]

the concessions made to reach this agreement appear to have put real Senate reform even further away.

With respect to these future constitutional provisions, I trust not only that we'd see them in this Legislature but that the people of B.C. will have every opportunity to express their views fully at open hearings. After all, the constitution of Canada belongs to the people - not the politicians, us temporary employees. It belongs to the people of this country and our children.

Mr. Speaker, I want to say a few words about the process the first ministers were engaged in. Obviously the process was unacceptable, and the Premier has acknowledged that today. British Columbians are rightly troubled that 11 men at the eleventh hour were sitting behind closed doors, making deals on our country's constitution. The process was secretive, and the document was difficult for British Columbians and Canadians to grasp from the snatches of news we got coming out of the conference centre.

It was, sadly, a triumph of the back room over public involvement. As events in Newfoundland show, we are in for another two weeks of uncertainty Never again must we allow this to happen in Canada We need a more open, participatory process for the people of this country to share in constitutional evolution and the changes to our country.

Mr. Speaker, before I take my place, I want to say that as I watched the faces of the ten Premiers last week, listened to their words, saw the exhaustion and the tension, and the importance of what they were attempting to do, I was impressed that here were ten sincere individuals trying valiantly to keep our country together. The so-called alliances were across party lines and were from different parts of the country. I was struck by the sincerity and the depth of the feelings that were coming from the Prime Minister and the ten first ministers.

I want to say a word about Premier Clyde Wells, who has been cast by some as the villain. Mr. Wells speaks for far more Canadians than those who happen to live in Newfoundland and Labrador. Mr. Wells worries about Senate reform, the rights of minorities and the admission of new provinces. I was struck by his courage and tenacity - a man under immense pressure and immense difficulties during the attempts last week to put together this agreement.

Mr. Speaker, in conclusion, after last week's work and the statements made here today, I doubt that either side of the Meech question is entirely happy today. Having said that, our most recent attempt at nation-building deserves a chance, and it deserves our congratulations. Over the next many months, it will require continued goodwill on the part of all Canadians in order to succeed. I believe that the goodwill is there, and that we will succeed.

Orders of the Day

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

ESTIMATES: MINISTRY OF FINANCE

AND CORPORATE RELATIONS

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

MR. CLARK: Mr. Chairman, we have a few outstanding issues to canvass this afternoon. I'll try to be as expeditious as possible. To wrap up where we left off on Friday, I was dealing briefly with discussion of the Vancouver Stock Exchange and the regulatory role of the provincial government.

First of all, I'd like to say that there's no question that the superintendent of brokers and the administration of the Securities Commission, the regulatory regime set up by this administration, has improved the situation dramatically on the Vancouver Stock Exchange; and likewise the Vancouver Stock Exchange itself has taken strides to clean things up, so to speak, including the bill that will be before the House sometime this year -which I have no problem supporting.

There is clearly still a way to go in dealing with some of the problems that exist. I canvassed at some length the role of Mr. Peter Brown in the Carter-Ward scandal, the largest scandal in the history of the Vancouver Stock Exchange. It seems to me that Mr. Brown has gone unchecked and unattacked by the regulators. He has not been sanctioned in any way. I think it's unfortunate, because if we were serious about dealing with the problems on the Vancouver Stock Exchange, high-profile people like Mr. Brown.... Admittedly Mr. Pezim is currently facing some regulatory hearings, and I think it would be most useful to go in that direction with Mr. Brown's involvement.

I might say that in recent meetings with the Vancouver Stock Exchange, they were cognizant of the fact that the problems are associated with individuals and aren't necessarily the fault of the Vancouver Stock Exchange. I must accept that criticism, if I can, that in other jurisdictions, when an individual is caught defrauding investors or the like, it is the individual who bears the brunt of the criticism; whereas sometimes in British Columbia we have too often blamed the regulators in the Vancouver Stock Exchange for the unscrupulous practices of individual investors. I must say that I have sometimes been guilty of that myself. However, the exchange does bear some burden of responsibility as the regulatory agency, and so does the Securities Commission.

There are people still floating around on the Vancouver Stock Exchange, such as Howard Eaton.... It's scandalous that individuals like him would choose to pop up on the Vancouver Stock Exchange. We simply have to deal with nefarious individuals like him, with high-profile people like Peter Brown, if we really want to advance the cause of the stock exchange and really make it a world-class exchange -which I know both sides of the House would like to see.

With that, Mr. Chairman, I'd like to turn it over for a few minutes to my colleague from Oak Bay-Gordon Head who would like to canvass a subject that deals

[ Page 10205 ]

with her constituency and the Ministry of Finance, and then I'll turn to other matters.

MS. CULL: I want to raise an issue raised by the former MLA for Oak Bay-Gordon Head which has to do with the payment of grants in lieu of taxes for the University of Victoria.

The University of Victoria and Simon Fraser University are unique institutions in the province in that together with the University of British Columbia, they serve all the population of the province. Whereas UBC is unique in that it is on the University Endowment Lands, which are funded provincially, Simon Fraser is located within the municipality of Burnaby, and UVic is in the municipalities of Oak Bay and Saanich. I'm going to speak specifically about UVic, because it is within my riding and of concern to my constituents, but my remarks apply equally, I suppose, to Simon Fraser University.

The situation is that the university does not pay any taxes or grants in lieu of taxes. The province doesn't pay grants in lieu of taxes on behalf of the university, and the university, of course, doesn't pay taxes. That means that the municipalities of Saanich and Oak Bay bear the entire cost for the facilities And this Is not an insignificant amount. In the case of Saanich, the municipal council has estimated that the university costs the municipality about $1.5 million in lost revenue. In other words, if the university paid taxes like other properties in the municipality, Saanich would have $1.5 million more in its annual budget. As I'm sure the minister is aware, that would cover a considerable number of services for the people of Saanich. I don't have the precise figure, but a similar amount would also be paid in the municipality of Oak Bay.

I just want to bring up one particular illustration - I don't think I need to go on with this. The minister is a former mayor of Saanich and I'm sure is fully aware of the implications of the lack of grants in lieu of taxes for the university. But last year when the municipality of Saanich was reviewing some costs for upgrading the intersection of Quadra Street and Mackenzie Avenue, at an ultimate cost of $2.6 million, it was brought to their attention that fully 10 percent of the peak-hour traffic at the intersection was destined for the University of Victoria. So this is not an insignificant property or generator of costs within the municipality.

I want to ask the minister whether he has given any further consideration to this matter. As I said in the beginning, the former MLA for Oak Bay-Gordon Head raised this in his maiden speech to the Legislature in 1979, and I would just say that he was hoping at that time to have quick action. Now that's some time ago, but he said - I'm quoting from Hansard: "The equity of this proposal I think is already acknowledged in government policy, and I'm very hopeful that within the next year these payments of taxes for services to university buildings will be extended." That's ten years ago. Perhaps there has been some progress; I'm not sure.

[3:00]

I'm also aware that the mayor of Saanich has been corresponding with the minister on this matter and pointing out that they would like to see some action on the whole question of the university property tax situation. So if the minister could let me know whether there have been any decisions made in this matter or what kinds of discussions have gone on, I'd appreciate hearing from him.

HON. MR. COUVELIER: I am pleased to respond. I can tell the member that she's not alone in her interest in having this issue addressed by government. Even the MLA from Saanich North and the Islands has a similar issue that he's attempting to bring to government's attention. The issue is a longstanding one, as the member indicated. I can say that, as a matter of basic approach, it should be addressed by government and it should be debated openly. There are arguments that justify - or sustain, at least - the view that the universities contribute more to the community than they take out of it and that the economic activity that flows from having the basic infrastructure located in a community outweighs any cost that that community might have to pay. As an ex-mayor, I can tell you that the biggest single cost to the municipality of Saanich attributable to the presence of the University of Victoria was the issue of addressing false alarms with the fire department. What an interesting commentary on how we spend public money!

I can only say to the member that the issue is worthy of continued discussion and that I suspect all affected MLAs would appreciate having a wider public discussion about it.

MS. CULL: I just wanted to thank the minister for his answer and to say that I look forward to participating in that wider discussion. I appreciate your comment that the university provides benefits to our community, and I know that both the council of Oak Bay and the Saanich council appreciate that fact too, but would welcome an opportunity to have a discussion on the matter to ensure that there is fairness and that these three communities which are fortunate to have universities located within their boundaries are not picking up an undue share of the costs of a benefit that is really a provincial benefit. Thank you for your answer.

MR. CLARK: Would that all members were this brief, Mr. Chairman, when canvassing constituency concerns.

I'd like to turn now to the question which I raised earlier, and I'd like the minister, if he could, to deal with it now: that is, my concern about three flaws that I see in the Property Purchase Tax Act. I know that the deputy -or soon-to-be-former deputy -is here, so perhaps he could deal with those.

There are three flaws in the Property Purchase Tax Act and, in my view, those three flaws are remedied by recent provincial legislation; the minister may have some comment on that. But the flaws are, briefly put: first, in British Columbia when land is trans-

[ Page 10206 ]

ferred from one company to a wholly-owned subsidiary, for some reason the property purchase tax applies when the provincial sales tax doesn't. Either the government believes that it is appropriate to tax the transfer of land to a wholly-owned subsidiary... I don't happen to think it is, but if the government thinks it Is, then it should amend the provincial sales tax to provide a similar exemption. Frankly, I think the provincial sales tax is correct to provide an exemption in the event of transfer of goods to wholly-owned subsidiaries. I think, likewise, that land should be treated the same way. However, that's of rather minor concern. But for the sake of fairness and consistency in tax law, which I know all members would like to see, it makes a lot of sense.

The second and third are in my view the most important flaws of the property purchase tax. First, there is an abuse taking place in British Columbia where one transfers the beneficial ownership of real property and the vendor agrees to continue to hold the property as a nominee owner or as a trustee. This is a very frequent and growing planning technique used by accountants to circumvent the Property Purchase Tax Act. So the vendor agrees to be the nominee owner or trustee for the purposes of land title, but in fact the beneficial owner has changed. That is a growing source of abuse of an unintended - I think, or I hope - loophole in the current legislation.

Secondly, a just-as-important and slightly more high-profile abuse is the creation of shell companies and the selling of shares in those shell companies when the only asset is land, in order to escape, after the first time, the property purchase tax. The minister may know that with the recent changes in Ontario, that's no longer the case there-unlike British Columbia, which depends upon registration of title changes in order for the tax to trigger. It's a beneficial ownership change; any beneficial change must be registered. I think it makes a lot of sense.

Obviously the minister knows - he may disagree with me, but I feel strongly about it - that in many cases in downtown Vancouver where $30 million buildings change hands, no property purchase tax applies. Yet the average citizen in British Columbia pays a rather hefty property purchase tax on the purchase of a home, including a first home. It's my view that if we were to remove the loophole that allows corporations to escape paying the property purchase tax by closing it with respect to shell companies and closing it with respect to nominee owners or trustees, then the subsequent windfall to the provincial government would probably be of such magnitude that we could look at relieving the property purchase tax for first-time homebuyers, with some caveats, or something that's slightly more progressive. It is difficult for the law to capture those transactions, but it is being done - at least there's an attempt to do it in Ontario -and I ask what the minister's opinion is on the Ontario legislation that passed, I believe, in July, 1989.

HON. MR. COUVELIER: The member is quite right when he refers to Ontario's attempt to capture transfers of beneficial interests. However, it's our view that that's only half the problem, a relatively minor part of the problem. You might remember, Mr. Chairman, that the member had earlier been under the impression that the Ontario legislation was focused on share transfers. That clearly is not the case. That's the other half of the problem, and that's the major part of the issue in terms of how to attempt to alter this tax application in a way that is fair to all.

I should tell the hon. member that we are monitoring, of course, what Ontario is doing. We are in communication with them on this issue, and have been in the past. We are not yet at all sure that this particular piece of legislation in Ontario is going to be that effective. I can only say that we are constantly dealing with the issues in terms of administering the tax, so the problems associated with it are brought to our attention almost on a daily basis. We will monitor the Ontario experience, and watch it closely to see if there is a possible adaptation or application to B.C.

MR. CHAIRMAN: I would just like to remind both the hon. and learned members that this subject we're on.... I can appreciate the requirement on behalf of the questioner to lodge questions on this matter, but I would just like to remind members once again that matters which involve requirement for any legislation are naturally out of order in these debates. Could we just bear that in mind as we proceed.

MR. CLARK: I'm merely pursuing the policy of the government with respect to the taxing of real property and just alluding to an act that has recently been passed in Ontario to see what the minister's opinion is in that respect. I appreciate the minister's answer, and I would prefer that we were leading the way in British Columbia and leading others in attempting to close this loophole, because I think it's one which lends to the unfairness of our already unpopular tax. I think that the minister might have been wise to pursue this avenue himself.

However, let me just deal very briefly with the other concern I had. There is almost no political benefit to raising this, but I think it makes sense in terms of consistency of the law. My concern is about the exempting of certain intercorporate transfers, again which Ontario has done. But it seems to me that we do exempt the provincial sales tax when it comes to intercorporate transfers. I wonder if the minister has any concern about consistency when we exempt provincial sales tax but don't exempt the property purchase tax from intercorporate transfers -wholly-owned subsidiaries, for example. It just seems to make sense. And if the minister doesn't agree and thinks we should be taxing that, then clearly the provincial sales tax should be changed so we tax intercorporate transfers of real property other than real goods.

HON. MR. COUVELIER: The disciplines and the mental discipline that must be applied in the applica-

[ Page 10207 ]

tion and enforcement of taxes of all types - sales, income or whatever -requires adherence to certain basic structural requirements. My experience has certainly been that if you allow a softness of attitude to enter the administration of the tax field, you quickly become somewhat mired and enmeshed in requests for exemptions or similar treatment, priorities and precedents, so that the integrity of the system itself is placed at risk.

The sales tax system is based upon the purchase of fixed assets. The property purchase tax is based on registration and deals with real estate. The two taxes are designed in different ways, so there should be no compulsion, in my mind, to treat the exemption processes equally. There are two separate philosophies, two separate applications and two separate ways of regulation. I think there are anomalies throughout all of our tax structures, if we were to apply that sort of equal mind-set to enforcement and regulation.

[3:15]

We deal with dozens of requests for exemption every single day of the week, and in order for staff to be able to apply and deal with those in a non-arbitrary, fair and equitable manner, and to keep that integrity~ they must have certain basic principles and a rigidity of mind-set. I don't have any trouble with the point you raise that there appears to be a difference between the way we handle the sales tax, which is a tax collected on purchases of assets, and the application of the property purchase tax, which is based on registration of real estate.

MR. CLARK: Clearly the provincial sales tax and the property purchase tax have exactly the same philosophy or principle behind them. However, I certainly agree with the minister that there is a different technique used to collect them. Frankly, that brings me to what I think is the root of the problem, which is the reliance on the registration to trigger the tax. That is what allows the avoidance schemes to take place - the vendor take-back and the use of shell companies. But I guess there is a difference of views between the minister and me, and I don't expect him to necessarily agree with that.

I would like to move on, Mr. Chairman; we've canvassed that. Maybe I could ask the minister if he agrees, first of all, that there is an abuse taking place with respect to the use of this technique, and whether it was the intent of the legislation to allow for shell companies to escape taxation and for the vendor to be named as a trustee to escape the tax. The minister made comments a year or so ago that he didn't think it was a problem that corporations could escape this tax by use of these planning techniques.

I wonder if the minister would agree with me now that these really are problems that should be addressed by government. We may disagree on how to address them, but will the minister at least undertake to commit himself to saying that there is a problem and that, since their experience, the government is monitoring the Ontario legislation with a view to trying to fix that problem -if that is deemed to be possible?

HON. MR. COUVELIER: Two points: no corporation escapes the tax on a property transfer now. We catch them the first time. Were we to extend an exemption to transfers to subsidiaries, the subsidiary shares could be sold and there would be no capture of tax -as opposed to the present system, where we capture it at least once.

just to finish this segment, the member will remember that we are embarked on a determination to visit our taxation structure in all its aspects, including the relationships with Ottawa. In that process I think we'll have an opportunity to revisit the property purchase tax and all of our taxes. So this issue that you raise will be incorporated into that examination in any event.

MR. CLARK: I'd like to spend a few moments on Principal Trust. I know it's an issue that the minister is familiar with in great detail - probably too familiar, Mr. Chairman. I know my colleague from Esquimalt-Port Renfrew (Mr. Sihota) would like to get in on this debate, but perhaps we can proceed, for the sake of trying to expedite matters this afternoon.

The Principal Trust fiasco has been interesting in terms of regulatory failure; it has been enlightening. I was looking over the debates and the discussion of the Principal Trust affair, and I came across a memo from Don Cormie, the principal of Principal Trust, of June 23, 1986. Shortly thereafter, the government withdrew the licence to sell investment certificates. It was instructive, and I'd like to read it for the record.

Mr. Cormie said to his company lawyer on June 23, 1986: "Locate people inside the government organization who are favourably disposed towards our group, and see if we can start working with these people so as to get them informed.... I know several of the cabinet ministers and advisers to the cabinet ministers, and once we have a clear picture of what is required, I will make a point of calling on them."

This is something which took place prior to this particular Minister of Finance being in the chair that he holds, but it was instructive to see the kind of close relationship that Mr. Cormie had with the previous Social Credit administration. I think it's disturbing, to say the least, to the investors who subsequently lost much of their life savings in this affair. The Code inquiry, of course, brought out more information with respect to the regulatory failure of the provincial government.

I would say, however, that there's no question that the financial institutions legislation has been changed dramatically since that time. We have a different regulatory regime now in British Columbia, which we've debated at some length in this chamber and which, by and large, I've supported.

I might say - if I could - that the changes that were made still allow exactly the same situation with respect to Principal Trust to take place today. For example, the current legislation and policy of the government is to rely on what's called the home

[ Page 10208 ]

jurisdiction to regulate trust companies. Principal Trust was headquartered in Alberta, and that meant that British Columbia relied on the Alberta regulators to do the regulations, by and large. That's exactly the same today, even under the new Financial Institutions Act.

However, I must say that there's work underway to try and harmonize the legislation across Canada, which might mitigate against problems in the future. Nevertheless, I don't think they've really been addressed in any great way.

After the fiasco, many things happened. The first thing the government did was try to stall the investors, and I don't think they were very sensitive to the hardship that they incurred. The second thing that happened was that they waited until the ombudsman reported before deciding to take action.

The ombudsman's recommendations were that the investors in British Columbia should receive up to 90 percent of the money they lost, because the provincial government bore much of the responsibility for the investors losing money.

While Mr. Cormie and company are clearly facing criminal sanctions and were clearly engaged in a fraud on investors, at the same time the provincial government knew that the company was not in compliance and allowed it to continue selling investment certificates during the period when they were out of compliance.

If nobody else, the people who bought investment certificates during that period when the provincial government allowed them to continue selling investment certificates, knowing full well that they were out of compliance, should in my view be compensated 100 percent. Nevertheless, the ombudsman recommended 90 percent recapture, or an obligation on the part of the provincial government to provide compensation up to 90 percent.

I would like to start this section with asking the minister why he chose not to fulfil the terms recommended by the ombudsman in his very thoughtful and comprehensive report on the Principal Trust affair. The ombudsman recommended 90 percent. The government has not seen fit to implement the recommendations of the ombudsman. Can the minister inform the House why the government chose not to follow the recommendations of Mr. Owen, the provincial ombudsman?

HON. MR. COUVELIER: The member covered a lot of points. He rambled around there and got a lot of little innuendoes into his monologue.

I don't know that I can deal with them all, but I think for the record that I'd better state categorically that Mr. Cormie has certainly never had conversations with me and has, certainly never had any contacts, to my knowledge, with politicians of this administration. Insofar as I'm the minister in charge, I suspect that I'd have been the first one he would have approached.

I'm also unable to determine whether the reference in this letter that Mr. Cormie wrote was referring to B.C. or Alberta politicians.

MR. CLARK: No, B.C.

HON. MR. COUVELIER: I guess desperate people might say desperate things. We certainly have no knowledge of any kind of dialogue being undertaken at the political level. I was just asking my staff if the files indicated any sort of a dialogue at the ministerial level - the staff level. No one has any such record, other than possibly back in the seventies when he may have appeared before one of the regulators of that day - as he might well have done, being the principal officer of a string of companies doing business in B.C.

In any event, the record should show quite clearly that this is the administration that sued Mr. Cormie; this Is the administration that froze his assets in B.C.; this is the administration that was first to the wicket in terms of coming to grips with this Principal Trust fiasco. This administration did it very quickly after being advised of the circumstances in which those companies wound up being insolvent. We acted quickly, sensitively and, I think, intelligently indeed.

I can remember the comments from the opposition members when we announced the Lyman Robinson inquiry. There were most laudatory and complimentary comments congratulating us on our Initiative. So we were first out of the chute, and we did it with determination, because no one understands more the need for all of us in regulatory positions to preserve and protect the reputation of those financial institutions.

The public must have confidence in financial institutions if we are to successfully maintain our relevancy in the financial community nationally and internationally. Because of that, B.C. led the country in convening meetings of finance ministers and ministers in charge of financial institutions. We were instrumental in having a western Canadian government accord signed two years ago. That success prompted eastern Canadian provinces to invite us to chair a national meeting for the same purpose. Those national meetings now have been going on for a year and a half -closer to two years, possibly. We will bring them to a conclusion within a matter of months. We will either come to a conclusion and sign agreements on the points we can agree on, or else we will abandon the initiative completely and merely proceed with a western Canadian understanding. We haven't yet finished developing those options.

The member had a question.

Interjection.

HON. MR. COUVELIER: Ah, the ombudsman's recommendations. The government did embrace the ombudsman's recommendations, the hon. member might remember. We accepted them.

In subsequent discussions with the members of the investors' group themselves and led by their president -a person resident in Kamloops who I understand is a declared candidate for the socialist party opposite - he and that organization agreed that we should allow pooling to occur so that the

[ Page 10209 ]

investors could better access other provincial governments' coffers. There was progress made. I think other provinces did come into the arrangement.

I am advised that I am a little premature here. Other governments are still examining the prospects of a pooling arrangement, so those discussions have been going on for many months now. But it was with the understanding, support and agreement of the investors' group themselves that B.C. acceded to Alberta's suggestion of a pooling arrangement.

So we certainly put enough money on the table to meet the ombudsman's requirements, However, in terms of the application and of how the moneys would be used, we subsequently agreed to allow a pooling arrangement to occur. But that was done with the support and endorsation of the investors' groups themselves.

[3:30]

MR. CLARK: It's my understanding that with B.C.'s contribution, it will be about six or seven cents on the dollar. That brings us up to roughly 82 or 83 cents, which isn't 90 cents. So it doesn't seem to fulfil, in my view, the spirit of the ombudsman's recommendations. I can certainly appreciate it being better than nothing, so to speak. But about 10 percent of the investors have died since the collapse, about 600 or 700; the remaining others have been in very dire straits. I think the government has been slow to respond, frankly, or to settle on this question.

I appreciate that there has been some progress since the ombudsman's report. I don't think enough, but there has been some progress.

It seems to me, from my information, that about 30 percent of the investors - mostly small investors -haven't yet responded to the minister's efforts. My understanding is that about 70 percent of the investors - probably covering more than 70 percent of the money lost -have made positive application to recover moneys that the provincial government indicates will be forthcoming.

Can the minister inform the House whether any sort of proactive effort is underway to reach the 30 percent - particularly estates of people who have passed away -and to make sure that they have the opportunity to claim their money? As I say, my understanding is that roughly 30 percent of the investors have not yet come forward.

The minister, I'm sure, would like us to believe -and I gather it is correct -that it is, by and large, receiving a positive response from most of the investors. It's simply a matter of them being aware of the process to recover the money that the provincial government claims will be forthcoming.

I've been asked on several occasions by several people and have referred them to the ministry in my capacity. I know there is some lack of understanding of the offer, some lack of the process there. I wonder if the minister could tell us whether there has been any proactive effort on the part of the government to make sure that all of the investors who lost money have been informed of the government's initiative.

HON. MR. COUVELIER: Yes, I'm pleased to advise the member that we've had a hotline manned dealing with this issue for months now, and we've placed two newspaper ads. The member's statistics need to be qualified. We have been selective in sending out the information and the contracts. A number of the addresses we had didn't fit. We didn't send out those contracts, and that necessitated the newspaper ads to attempt to locate people who have subsequently moved and weren't traceable. Our takeup rate as a percentage, I'm advised, on our first mailing is much higher than Alberta's take-up rate, but that's purely and simply explained because we didn't send out a contract where we knew the address was incorrect.

MR. CLARK: I wonder if the minister could give us some status report on the lawsuit -I'm not clear as to the process - particularly with the big mansion in the minister's riding and the like. What is the status of recovering some of the money lost through the personal assets of Mr. Cormie and the lawsuit with respect to recovering the 50 cents or so on the dollar with respect to Principal Trust assets? I'm not clear on the status of the legal proceedings.

HON. MR. COUVELIER: I'm advised that as a consequence of the Code inquiry, our solicitors are revising the statement of claim with additional information that's at hand. As a consequence, they have developed additional approaches to make very sure that the claim& against the company in British Columbia are protected to the extent that the sale of any of their assets in B.C. by the family will be blocked and subject to a court decision.

MR. CLARK: Is it British Columbia that's suing, essentially, the Corn-des for all assets in British Columbia, and Alberta pursues court action with respect to assets in Alberta and likewise? Are the personal assets of Mr. Cormie, independent of the Principal Trust assets, also part of the court action that the ministry or the provincial government is pursuing?

HON. MR. COUVELIER: The member would remember, I hope, that early on in the exercise there was an opportunity for some of the subsidiary assets to be sold. That was requested, basically, by the investors themselves. Their solicitors had said: "Look, if you are going to get anything out of these residue assets, our recommendation is that you allow a sale to occur quickly. They will depreciate over time, and you will get less and less for them."

The hon. member should remember - and my memory is - that within about the first six months of the demise of the firms, everyone agreed to a sell-off of the company's assets. Some of the assets were sold to a third party, who continued to keep them in operation, and others were sold to a variety of purchasers -basically land. In any event, those assets were sold off.

[ Page 10210 ]

What we have seized and what we have protected by suit is Cormie's personal assets in B.C., which, had we not taken action, he would have been able to dispose of.

MR. CLARK: I'd like to turn, if I could, to the Teachers' Investment and Housing Cooperative. It seems to me that the Principal Trust problems were illustrative of regulatory failure. While the Teachers' Investment and Housing Cooperative took place some time ago, I'm sure the minister would agree that it strikes someone in that capacity as remarkably unfair. People who invested in the Teachers' Investment and Housing Cooperative lost 50 cents on the dollar, and they did so as a result, at least in part, of regulatory failure.

It seems to me that a couple of things would come to light if I were someone who lost 50 percent of my life savings in the Teachers' Investment and Housing Co-op. Now that the provincial government has set something of a precedent with respect to accepting at least some responsibility for the regulatory failure of Principal Trust, it seems to me from reading and from the letters I receive that the people who lost so much of their money in the Teachers' Investment and Housing Co-op.... At least part, if not all, of that was also a result of regulatory failure on the part of the provincial government. How do you answer someone who lost their money in the 1980s in the Teachers' Investment and Housing Co-op through regulatory failure when you've decided to compensate to some extent those who lost money in the Principal Trust affair?

HON. MR. COUVELIER: Mr. Chairman, the fact is that there were different statutes, different acts, different regulations and different degrees of responsibility imposed on the regulators by those different acts. There was clearly a different set of facts when dealing with the Teachers' Investment and Housing Co-op than when dealing with Principal Trust. In any event, as the member knows, the Teachers' Co-op issue is before the courts, so I can't get involved in too much detailed discussion of it, by virtue of not wanting to affect the court procedures.

For the record, I guess I should point out that the ombudsman's report dealing with the Principal Trust issue said that in his judgment the government had a moral responsibility to those investors. My memory of the report was that he made a distinction between there being a moral or a legal responsibility and that he recommended that we provide some assistance purely and simply because of the uniqueness of the collapse. He understood that Alberta was the primary regulator and had the bulk of the responsibility. Nevertheless, he felt that B.C. had what he called a moral obligation, so the government agreed to accept his advice, even though it wasn't at all proven that we had any responsibility in a legal sense. But it seemed to be the right thing to do, particularly given the fact that this independent arbiter was of that view.

MR. CLARK: I think the minister's own words apply with respect to the Teachers' Investment and Housing Cooperative. Perhaps the government has no legal responsibility - it is before the courts - but I think it has a moral responsibility in light of the fact that while it's a different act and perhaps involves different regulators, it's still a provincial government regulation. It clearly failed in this regard, and many people - 32, 000 British Columbians - lost 50 percent of their life savings. I find it hard to reconcile the government's position that we have a moral obligation to pay money to Principal Trust investors and no moral obligation to at least review the case of the Teachers' Investment and Housing Cooperative with a similar determination.

When the people of British Columbia invest in trust companies or investment vehicles like this, it seems to me that if there is a provincial government regulation, they should be comforted by that. While a certain amount of caveat emptor exists, if the provincial government chooses to regulate financial Institutions, then British Columbians should expect that they are regulated and that those regulations are enforced. It wasn't the case in the Principal Trust affair. The government has recognized its moral obligation in that respect -maybe not as much as I would like, and maybe belatedly, but it has recognized it.

It's my view that the Teachers' Investment and Housing Cooperative, while not exactly similar.... The government, in light of its decision on Principal Trust, should revisit the question of the Teachers' Investment and Housing Co-op essentially with a view to stopping the court action and trying to resolve the matter -maybe not necessarily to the total satisfaction of the investors, but at least accepting some moral responsibility in that regard.

I wonder if the minister would agree to review the question of the Teachers' Investment and Housing Cooperative in light of the decision on Principal Trust -no commitments, but just to review the case of those 32, 000 British Columbians to see whether there isn't a moral obligation or responsibility on the part of the provincial government to compensate them at least to some extent and to avoid this costly legal action, which is in no one's interests, in my view.

HON. MR. COUVELIER: I can assure the hon. member that we have looked at that issue very thoroughly. Even the ombudsman, in his report dealing with the Principal Trust collapse, made a point that his recommendation was not a precedent and should not apply equally to any other situation.

The member will forgive me if I accept his stated opinion and discount it, given our respective political roles. The fact is that there was a different act dealing with that housing co-op. There were entirely different regulations - and different facts also, I might add; a completely different history. So for anyone to try to make a comparison.... I must say categorically that they were two entirely different situations. On a cursory look, you might say that it had to do with a government-licensed entity, but the facts and circum-

[ Page 10211 ]

stances, and the law, in those cases were entirely different; and even the ombudsman seemed to indicate that in his report on Principal.

[3:45]

MR. SIHOTA: Before we close the final chapter on the Principal Trust affair, I want to make a number of comments for the record on that matter; in part because, when the matter first arose in the public view, it was an issue that I was responsible for in terms of my critic responsibilities. We subsequently readjusted our responsibilities, so that my learned friend the second member for Vancouver East (Mr. Clark) is now responsible for that issue. But as I was listening to the debate, I felt compelled to join the debate and talk for a few minutes about the government's handling of the Principal Trust affair -that handling being, of course, throughout that time-period in the purview of the minister responsible.

Mr. Chairman, let me say that I think that the approach the government took and the attitude it displayed during the course of the entire Principal Trust affair was what can best be described as uncaring and at times arrogant with respect to those people that were injured by the collapse of Principal Trust.

HON. MRS. JOHNSTON: Absolute rubbish!

MR. SIHOTA: The minister says it's rubbish. She'd better listen to what I've got to say, Mr. Chairman.

HON. MRS. JOHNSTON: Say something logical.

MR. SIHOTA: I'm saying a lot of things that are logical, Mr. Chairman. The point is that the minister doesn't like to hear the truth when the truth stings. And it's stinging, Madam Minister, because of the fact that you know as well as I do that this government exhibited an incredible arrogance and a tremendous uncaring when it came to the Principal Trust issue.

Interjection.

MR. SIHOTA: Well, Mr. Chairman, I'll sit down and let the minister show to me how they demonstrated care, and then I'll make my case.

HON. MRS. JOHNSTON: We've already demonstrated that.

MR. SIHOTA: I'll give way if the minister puts up her microphone.

Interjection.

MR. SIHOTA: What's the matter? Are you afraid to defend... ?

HON. MRS. JOHNSTON: You don't want to listen.

MR. CHAIRMAN: Through the Chair, please.

MR. SIHOTA: Thank you, Mr. Chairman.

I note that the minister who heckles so freely is not so courageous when it comes to standing up and defending the record of the government, But I want to talk about that record.

We had the collapse of a major financial Institution in this province, Principal Trust, which caused considerable dislocation, stress and grief to a number of people in this province. As Lyman Robinson so aptly noted in his report - and 1 don't have it here in front of me - the vast majority of individuals affected by the Principal Trust collapse were seniors, individuals in this province who had spent a lifetime accumulating their savings, putting them into accounts that they thought were protected by deposit insurance, making sure thereby that they had something to maintain their dignity and something to allow them to enjoy a positive quality of life during their retirement. That's what the vast majority were. They were not, Mr. Chairman, speculators, as the Minister of Finance once called them.

Now that the whole dispute is in many ways at an end, I still haven't heard the Minister of Finance come to this House and apologize for calling them speculators who were trying to play, as some do, the money market. They weren't speculators. And the minister used language to those people that offended them. So my first question to the minister is this, before I continue with my remarks: is he now prepared to apologize for some of those comments that he made to those people that offended them, and particularly when he referred to them as speculators?

SOME HON. MEMBERS: Aye.

MR. SIHOTA: Well, Mr. Chairman, you talk about cowards....

SOME HON. MEMBERS: Order!

MR. CHAIRMAN: Hon. member, that's completely unparliamentary. Would you withdraw that, please.

MR. SIHOTA: Mr. Chairman, I withdraw it.

You talk about the....

HON. MR. COUVELIER: Point of order. I didn't hear the member withdraw. Could I ask that to be clarified?

MR. CHAIRMAN: I heard him withdraw, minister.

HON. MR. COUVELIER: The member withdrew that unparliamentary remark?

MR. CHAIRMAN: Yes, he did, minister.

Please proceed.

MR. SIHOTA: Mr. Chairman, it takes an individual with a sense of courage to admit they were wrong ... a little bit of humility every once in a while, particularly for a minister who describes himself as being arrogant -I don't have all the quotes in terms of

[ Page 10212 ]

how he describes himself -to admit that it was inappropriate, at the time that these people were grieving, for him to walk around this province - and the Premier, for that matter -suggesting that these people were speculators. These were decent, responsible citizens in this province of ours who had worked hard to bring success to this province, who had put aside some money for their future, in what they thought was a nest-egg that was protected by deposit insurance, only to discover that there was no insurance there; only then to discover that the provisions of the Investment Contract Act.... Again, I don't have the act before me, but I'll paraphrase what it said. In section 4, 1 think, it maintained that a company like Principal Trust had to maintain on hand assets that equalled their liabilities.

I see my file has arrived. Maybe I'll end up quoting a little more of what the minister had to say with respect to this matter.

That's what the Investment Contract Act mandated, yet that was not the case. This company did not have on hand assets that equalled its liabilities When people invested in Principal Trust, they thought they had legal protection under the Investment Contract Act. They thought they had protection under the insurance provisions of the Canada deposit legislation. They had none of that.

I'll ask the minister a question: does he not now regret that he did not have in place sufficient statutory authority to ensure that the provisions of the Investment Contract Act were complied with?

HON. MR. COUVELIER: The shouting has ceased, so I gather there's something before us. Would it be the motion on my estimates?

AN HON. MEMBER: Not yet.

HON. MR. COUVELIER: I see. Well, Mr. Chairman, the Principal Trust fiasco has been canvassed at length in this House over the last two and a half years. The record is clear. I said it earlier, and I'll say it again. This government, when it took office, was alerted shortly thereafter of the difficulties surrounding the possible collapse of Principal Trust. This government took action unilaterally, and this administration led the way in drawing attention to the issue in other provinces, despite the fact that this government was not the prime regulator, that the firm was headquartered in Alberta and that those regulators were the prime regulators and were the ones who would presumably have the greatest concern and the greatest ability to audit and monitor the performance of that firm and its subsidiaries.

As was repeatedly stated ad nauseam in this House, the fact is that the only jurisdiction that had access not only to the books of the parent but to the books of all the subsidiaries was the Alberta government. This government in B.C., dealing as it was with subsidiaries, did not have anything like the capability of Alberta in terms of monitoring, regulating and staying on top of the daily transactions between the parent and the subsidiaries.

We all know that you can transfer funds with the push of a button and send them around the world. It is eminently quicker to push that same button and move funds into or out of a subsidiary. For that reason it was clear-and still is, to me-that the primary jurisdiction in the Principal Trust issue was the province of Alberta's. Our regulators dealt with that issue; this administration's regulators forced the issue. The record is clear in that respect.

I totally agree with the member when he talks about the hardship suffered by innocent investors, many of whom put their life savings into those corporate entities. I agree with the member that it Is tragic and a difficult emotional problem for those of us in authority to deal with.

The issue is complicated. It is complicated further by the intrusion of the legal fraternity, of which the hon. member is part. It quickly became an exercise in providing lucrative work for a host of lawyers across the country. I had repeatedly said at the time - and I stand by that statement, which the member seems to want me to withdraw from - that the best way to get this issue dealt with expeditiously was to take it to the courts, and that we would do everything we could to hasten that hearing. Because I could just see that it was going drag out for months, and Indeed it did. As the member said: "In the meantime people passed away." In the meantime goodness knows how much hardship has flowed from the delay. Yet it was the investors' own wish to go through this convoluted process. I said publicly then, and I say It again now: their interests would have been far better served to have gone to court quickly. I can tell you that this government would have aided them in every way possible to make sure that the courts heard the case quickly. But if you really care about the hardship of the individuals, that would have been the best way to deal with it.

As the second member for Vancouver East (Mr. Clark) pointed out earlier, many of these individuals still can't be located; many still may not even be aware that they have a prospect of pay-outs that would give them back at least a sizeable portion of their original investment. There's no question that my comment at the time -which the member seems to take offence at -was correct and appropriate, and I think history has proven its correctness and appropriateness. To suggest that the advice was ill-founded is absolutely false. It was good advice, honestly given with the best intentions of the investors at heart. Far from apologizing, Mr. Chairman, I suggest to you and the Legislature that it was the best advice and that events have proven me correct.

MR. SIHOTA: An unrepentant minister, who was ill-prepared and totally unwilling to recognize the failings of his government when it came to the matter of Principal Trust. Worse still, a little two-faced when the minister now comes into this House and suggests that he shares some concern with these people and the situation they found themselves in. I want to tell you, Mr. Chairman.... I see that the minister has

[ Page 10213 ]

chosen to absent himself from the House. There he is; he has left his seat.

MR. LOVICK: He may be doing that later, too.

MR. SIHOTA: He may have to do that again in terms of his responsibilities as a....

MR. LOVICK: He just left the House.

MR. CHAIRMAN: Order!

MR. SIHOTA: I think the minister should be here to hear the allegations against his government, to address the inadequacies of the branch of government that he administers, to account for the statements he made, to face the facts in the evidence that has come out and then address the obvious questions that arise from the facts that I want to bring to the minister's attention. In the absence of the minister, maybe we should move on to other matters. I'll move that we rise and report progress and seek leave to sit again.

[4:00]

Motion negatived on the following division:

YEAS - 1

NAYS - 49

HON. MR. RICHMOND: Point of order, Mr. Speaker. For the record, I would like to point out that's the second time that member has wasted the time of this House by proposing a motion and then voting against his own motion.

MR. CHAIRMAN: It's not a point of order. Thank you.

MR. SIHOTA: Now that the Minister of Finance has agreed to grace us here in this House and come back to listen to the debate, we will continue with the debate as it relates to Principal Trust and the rather uncaring attitude exhibited by this government with respect to those people who were victimized by the collapse of Principal Trust.

I was talking earlier about the regulatory process which failed in this situation. What have we seen as a consequence of the collapse of that regulatory process? We were told by this government that there would be changes to consumer legislation in British Columbia to prevent this type of fraud from occurring.

I can remember two years ago in this House giving an example to the Minister of Finance and the former Minister of Consumer Affairs. I said to them that when people walk into the offices of these financial institutions, there is a list of all the companies -Principal Trust and all the other ones that are there -and at the bottom it says, "Protected by the provisions of the Canada Deposit Insurance Corporation, " as if all of the companies enumerated above are protected.

But the fact of the matter was that not all of them were; only some of them were. And there was nothing-as you walked in-to the offices of those companies before you got ripped off-to indicate that the company you were investing in was somehow not protected by the provisions of the Canada Deposit Insurance Corporation.

The government promised 21 years ago to put an end to that type of misleading advertising, so that when people - particularly seniors - walked into an office to make an investment, they knew whether or not the enterprise or venture into which they were putting money was protected.

Could the Minister of Finance explain why his government has still not moved to correct that type of misrepresentation?

[Mr. De Jong in the chair.]

I want to ask the minister again.... I should actually talk about the Premier and him calling these people speculators. We're talking about Principal Trust, Mr. Premier. You were calling those people speculators. Hopefully you know now that you were wrong in doing that. The minister wouldn't apologize; maybe you would.

Could you explain why your ministry has taken no steps to correct that type of misrepresentation in terms of the comments that I made earlier?

HON. MR. COUVELIER: There is no requirement to speak the truth in this chamber, and that's most unfortunate. I don't know what comments the member is alluding to now, but if he's saying that I called those people speculators, he is wrong. Never once did I use such a phrase to describe those unfortunate investors. Never once! For him to imply I did is a gross distortion of the truth.

MR. SIHOTA: First of all, that wasn't the question that I asked the minister; secondly, I'll be happy to provide the minister with the newspaper clipping;

[ Page 10214 ]

and thirdly, I guess his argument is going to be that he was misquoted.

MR. CHAIRMAN: Order. Through the Chair, please, hon. member.

MR. SIHOTA: The essence of what the minister said - and I'll provide you with a quote - was not just suggestive of the fact but sought to hold these people responsible for the failure by virtue of the fact that they were engaging in investments that weren't simple investments, as they turned out to be, but rather....

AN HON. MEMBER: Are you changing the word now?

MR. SIHOTA: I'll give you the exact quote when I get through this file. I'll find it for you, because you know, Mr. Minister - through you, Mr. Chairman -that I've asked you in the past to apologize. You haven't, and you won't do it today. My question to you, Mr. Minister...

Interjection.

MR. CHAIRMAN: Order, please. Please address the Chair, hon. member.

MR. SIHOTA: If the minister would settle down for a second.... I'm asking you to apologize for things that you said, Mr. Minister, and I'll put that stuff to you. I want to ask you the question I was pursuing. These people were misled by those types of representations on the doors of these offices. Could you explain why your ministry has taken no steps to attend to that problem?

HON. MR. COUVELIER: Mr. Chairman, last week we dealt with that very same question. These things are repetitive and tedious. It is absolutely unnecessary for me to respond to each individual member of the opposition who chooses to show up once in a while to repeat the same questions we dealt with the day or the week before. I dealt with that question Read Hansard, hon. member, to get the answer.

Now your suggestion that everything printed in the press is absolutely true I find humorous. My goodness, all of us In public life are quite accustomed to having our comments taken out of context and indeed, sometimes distorted. It's common to have them done in here, I admit; it's less common to have them done in the media. Nevertheless, it happens But to anyone who suggested that I used the word .speculator" in dealing with these people, it is absolutely false. I have no knowledge of such a claim being made in the press, but if it was, it was wrong All I've ever said was that these are investments, and I have not described those people as anything other than investors.

MR. SIHOTA: In reference to the question I just asked the minister, on July 8, 1987, 1 asked the minister the following question: "Does the minister not agree that this type of misrepresentation ought to be prevented by his ministry?" The minister in response said: "I'm not aware of those specific details. I'm happy to take the question on notice." Mr. Minister, I defy you to show me on the written record where you answered that question on notice. That was on July 8, 1987. I'll even give you the page number - 2274. You haven't answered that question. The point is: could you explain why your ministry hasn't banned that type of activity?

HON. MR. COUVELIER: This representative for Esquimalt-Port Renfrew is a member of the legal profession. He, above all else, should understand that while matters are under possible court action or under investigation by regulatory parties, it is inappropriate for the minister in charge to address those issues. He knows that full well. For him to stand here for the handful of people in the gallery who might be so affected, I find offensive. You can do your histrionics, Mr. Member, during an election. That's the place for your histrionics. You should not try to subvert the time of this House or the valuable time of our members here with these kinds of repetitive issues.

[4:15]

The issue before the House, Mr. Chairman, is my estimates. I have answered ' to the best of my ability, the questions that have been put to me by hon. members. But when those questions are repetitive and when they become tedious, I respectfully submit it's time for the House to get on with its business. We were told that we could expect, after a full day of debate, that we might have concluded these estimates last Thursday. I was further led to believe that we might have concluded them by dealing with them on Friday. I was further led to believe that a short time this afternoon would finish them. All I find is more of these histrionics, with every one of these members who think they have a friend in the gallery to speak to rising their feet to consume the clock.

Interjection.

HON. MR. COUVELIER: That's right. They're disappearing rapidly.

Nevertheless, we do have some business to deal with here. As I think my critic would acknowledge, I do my very best to oblige the interests of the opposition to give them time to do their research work and to give them time to put good questions to me. I gave all of those concessions on the understanding that we would be able to stick to the business at hand. I have seen nothing but a collapse of the kind of discipline that you would normally expect by responsible elected members from the other side of the House.

MR. SIHOTA: If the minister wants to talk about them during an election campaign, tell the Premier to call one, and we'll debate it then. But the point is, Mr. Minister, you have now somehow taken the question that I've asked you -which you took on notice on

[ Page 10215 ]

July 8, 1987, and I'm quoting from Hansard - and you haven't answered it. Somehow now you think that you can justify your non-answer around some litigation which has nothing to do with the very issue that I'm talking about, which is false and misleading advertising.

Interjection.

MR. SIHOTA: Don't tell me to sit down, MR. Minister. I'll sit down really quickly if you answer the question. But to quote the Premier's favourite words: "You don't have the moxie to answer the question." Your ministry hasn't attended to that problem, has it? It hasn't dealt with it. It still allows that type of misrepresentation to continue today. Doesn't your government learn from the lessons? Doesn't it understand that this type of misrepresentation is unethical? Don't you think you have a responsibility to answer these questions after two-almost three-years now? Of course not, Mr. Minister. Don't give me this guff that it's before the courts.

Let's speak about the courts then for a second. The Trade Practice Act.

Interjection.

MR. SIHOTA: If the Attorney-General (Hon. Mr Smith) wants to get into the debate, he should put up his mike and he can talk. The Trade Practice Act: the minister made a commitment that his government would begin to take action under the provisions of that act.

HON. MR. STRACHAN: Point of order. We have a couple of problems here, Mr. Chairman. I realize the member is new and inexperienced in the House, but I'll draw his attention to standing order 43, which states that when a member persists in irrelevance or tedious repetition, there are remedies to stop that type of practice. Clearly by the member's own admission, dealing with a 1987 item -which the member brought forward - in the 1990 estimates would be irrelevant. It's at least three years old.

Secondly, the member is now discussing the necessity for legislation; again, that's something that cannot be discussed during Committee of Supply.

MR. CHAIRMAN: Your points are both well taken, hon. minister. I would ask the member for Esquimalt-Port Renfrew -or for that matter, any member of this House - to take those matters under consideration in the continuation of this debate.

MR. SIHOTA: Forget the Trade Practice Act. Earlier on the minister wanted me to provide the quote in which I asked him to apologize. Let me quote from an article in the Vancouver Sun entitled: "Who Took the Gamble?" This went to the attention of Mr Lautens. "The letter I have here is dated June 20, 1988." It says: "When the Principal Group subsidiaries First Investors Corp. and Associated Investors of Canada had their licences pulled by Alberta on June 30, 1987, the government of B.C., the Premier" -it names him - "and the Finance minister" - and it names him -"in particular, lost little time in attempting to brand the investors as 'gamblers and speculators'." This minister has the audacity to walk into this House and say he didn't make those comments. I didn't see you make that argument back in '87, Mr. Minister. I didn't hear you make that comment in '88, when I asked for an apology - or in '89.

MR. CHAIRMAN: Order, please. Would the member please take his seat. The member seems to persist in placing his questions directly to the minister, and I advise him again that he must address the Chair at all times.

MR. SIHOTA: MR. Chairman, I was speaking through you to the minister. The minister stood up a few minutes ago and said that he didn't make those statements. Well, here they are, on the record. So he turns his back to us in the House, as if he now pretends he didn't make those statements. Come on, Mr. Minister; let's face the facts.

Your ministry was negligent. It failed to adequately monitor the goings-on of Principal Trust. It failed to do it for a number of years. The public record, at least, shows that you failed to do it since 1983. In many ways - I will grant you this - it's water under the bridge, except you have to ask yourself: what has this government learned? It made a promise to take legal action against Mr. Corn-de. Then it dropped elements of that legal action. But after all sorts of puffery, the minister walked into this House and said: "Yes, we are going to sue Mr. Cormie." Perhaps the minister responsible could give us an update with respect to the status of that litigation.

MR. CHAIRMAN: Shall vote 28 pass?

MR. SIHOTA: Let's take a look at the public record in terms of the ineptitude of the ministry that the minister is responsible for. In 1979, B.C. regulators were concerned that Principal was selling CDICinsured deposits....

MR. RABBITT: Mr. Chairman, on a point of order, it is my understanding that standing orders in the tradition of this House limit the debate of the minister's estimates to that which happens within the fiscal year of those estimates. I'm not going to mention again the member who persists in being irrelevant and tedious in his repetition, but I think there has been an occasion within the House to debate many of things which he's raising here again. I would ask you to make the member speak within the terms of the rules that parliamentary tradition has developed over years and years, and let us talk about the estimates of the Minister of Finance in the current fiscal year.

MR. CHAIRMAN: Thank you, hon. member. I would like to ask the member to discontinue speak-

[ Page 10216 ]

Ing on this subject, because It is really what the point of order said: repetitious and tedious. It's taking up unnecessary time in these debates, and I think we could use our time much more effectively.

MR. ROSE: Mr. Chairman, I'm not questioning your decisions or the advice you've been receiving, but I hope that we're not responding here to calls from the government to bring us to order on things that have been clearly in order all along.

I would like to suggest to you - and this is getting to be one of my favourite speeches -that if ministers continue to stonewall, we have to continue to ask the same questions. The questions may become tedious to some of you because we're not getting the answers. What we would wish....

HON. MR. COUVELIER: Read Hansard.

MR. ROSE: I don't want to respond to the minister directly, Mr. Chairman. We didn't come to here to learn to read; we came here to get good, straight, simple answers from the minister. We don't want an example of excesses of bombast. All we need is an answer or two, and we'll get on with this and complete it this afternoon. So let's have some answers for a change, and this won't take so long, because I find it not only tedious but agonizing.

MR. SIHOTA: On the point of order, Mr. Chairman, let me say that I just started asking questions on this matter maybe half an hour or forty minutes ago. I don't see how the member can argue that it's tedious and repetitious.

Secondly, there was some question....

MR. RABBITT: Tell us about your 50 percent attendance record.

MR. SIHOTA: If the member for Yale-Lillooet could get those woodpeckers away from his head, he might be able to hear a little better.

MR. CHAIRMAN: Order, please. The member for Yale-Lillooet rises on a point of order.

MR. RABBITT: The point of order is quite simple, Mr. Chairman. It's certainly unparliamentary for the member for Esquimalt-Port Renfrew to continually lower the level of the debate by trying to demean my character. I would ask that the member withdraw or be removed.

MR. CHAIRMAN: Your point of order is well taken, and I would ask the member for Esquimalt-Port Renfrew to withdraw those remarks.

MR. SIHOTA: Which remarks do you mean?

MR. CHAIRMAN: The remarks you made regarding the member for Yale-Lillooet.

MR. SIHOTA: Mr. Chairman, if I said anything that would insult woodpeckers, I'll withdraw it.

MR. CHAIRMAN: That's not good enough, hon. member; you know very well.

MR. SIHOTA: I'll withdraw whatever point it was that offended the member opposite, Mr. Chairman.

In 1979 B.C. regulators were concerned about CDIC-insured deposits being sold, and the government did nothing. In 1980 the government wanted Principal to stop using the word "guaranteed, " but Principal still allowed them to continue. On June 16, 1986, the acting deputy superintendent in British Columbia, Bill Smith, asked Principal to inject $11.3 million into FIC and AIC and in the meantime not to sell any more contracts. Nothing happened with respect to that request, because this government....

MR. CHAIRMAN: The Minister of Finance rises on a point of order.

HON. MR. COUVELIER: I understood the previous points of order stated that the member must deal with the estimates. He's dealing with issues that are two, three or four years old; he persists in doing this. I understood that the points of order were well taken, and I gathered from your remarks that they were. It seems to me that the hon. member is flaunting the Chair and the Chair's authority. The hon. member seems to be determined to have his will.

It seems to me it's appropriate that you should deal with the fact that the member is wilfully continuing to proceed with questions which you have already indicated are out of order.

MR. CLARK: On the same point of order, Mr. Chairman, the Principal Trust affair took place over many years - the regulation of that company and the scandals associated with it - and the regulation of it is still within the purview of the Ministry of Finance. In order to place in context the remarks within questions respecting regulation of financial institutions in general and Principal Trust in particular, it seems quite appropriate, in fact impossible, to discuss the handling of that matter - including right now, today - without referring to the context and the historical facts with respect to the Principal Trust affair.

[4:30]

If members opposite would stop interjecting, I'm sure the member for Esquimalt-Port Renfrew would bring his contextual comments up to date very quickly. However, he keeps repeating the first couple of lines, and there are repeated points of order. I'm sure that if they would restrain themselves, we would get through this rather quickly.

MR. CHAIRMAN: It's not so much the subject matter that's under discussion; it's the repetition that should not continue. However, the member has made a valid point, I believe. I would hope that the member for Esquimalt-Port Renfrew would deal

[ Page 10217 ]

accordingly with the subject at hand and refrain from repetition. I must again emphasize that the minister is under no obligation to answer the questions.

MR. SIHOTA: Mr. Chairman, I haven't repeated one thing. The second member for Vancouver East is right: I'm just trying to put down the history and then put the question to the minister. He doesn't want to hear the question; he doesn't want me to get to it.

Anyway, that's what happened in '86. Bill Smith said that in British Columbia. Then in March 1987 they submitted the auditor's reports too late, and the deadline was extended to April 15. Ultimately the company collapsed.

MR. CHAIRMAN: Hon. member, I must advise that under standing orders, your time has expired.

MR. CLARK: In order to expedite matters in the chamber, Mr. Chairman, I intervene and ask the member for Esquimalt-Port Renfrew to continue.

MR. SIHOTA: Mr. Chairman, I was just waiting for the minister to sit down so he could hear.

In debate on April 28, 1988, in response to some questions that I was asking in the minister's estimates, when the vote for his office was $293, 000 -1 don't know what it is now -he said that it would .not matter a whit" what the ombudsman had to say Again, I'm quoting from Hansard.

The ombudsman then recommended in his public report.... I don't have the date of the report here, but I'm sure the minister, who has questioned my quoting of all sorts of other things.... I guess I'd better give him the date of the report. Public report No. 19, which was released in September 1989, recommended that the government attend to 90 percent of the costs and recognize its responsibility to attend to that level of payment, despite the fact that the provisions of the act said that the company was obliged to pay 104 percent of the money owed to these people who lost money. Yet the government chose not to accept the recommendations of the ombudsman, in part, I suspect, because the minister said it would not matter a whit what the ombudsman had to say.

It's to the point now where these people have received about 73 or 75 percent of the money they had deposited. I think it was inappropriate for the government to ignore the recommendations of the ombudsman, who said that 90 percent of the money should be returned to those folks. Somehow the minister cut a deal at 73, 74 or 75 percent, and originally represented it as being somewhat in excess of that-around 80 percent-which got a lot of people to say: "Well, heck, we'll proceed with it.

Could the minister explain on what policy basis the recommendations of the ombudsman were rejected by his ministry?

If the minister doesn't want to answer that question, let me suggest that all they wanted to do was to cut a deal. Is it not true, Mr. Minister, that your ministry just made a determination? You figured: "Okay, look. We're into it for 90 percent if we go by the ombudsman's deal, by the ombudsman's recommendation. Legally we might be into it for 104 percent. Let's try to save a few bucks for the taxpayers" -I guess that's the way you looked at it, right? -"and try to chisel the offer down to 73 or 74 percent." It was a simple matter of trying to see what the right number would be that could get enough people to accept the government's offer and say: "To heck with it."

Now the government may want to take that position; that's its prerogative to try to make that kind of offer. We all know that a number of people accepted that. But I think the government went one step further - an unacceptable step - when it said that in order to accept its offer, individuals would have to forgo their option of suing the government in negligence. I think that was inappropriate. I think the government ought to have embraced the recommendations of the ombudsman and not played games with the lives of these people, and then gone one step further and foreclosed their legal options to sue the government. I want to ask the minister, first of all, if he can confirm that that was the thought process?

MR. CHAIRMAN: Through the Chair, please, hon. member,

Interjection.

MR. SIHOTA: I'm just telling the minister. It may be my responsibility, not my colleague's.

What legal advice did you receive with respect to the ombudsman's report? Let me put it to you this way. Did your ministry seek legal advice with respect to the recommendations of the ombudsman in order to ascertain the extent of any liability your ministry may have in this matter?

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

MR. SIHOTA: Did the ministry seek any counsel whatsoever with respect to the recommendations of the ombudsman's report?

HON. MR. COUVELIER: Not to my knowledge, Mr. Chairman.

MR. SIHOTA: Could the minister then explain to the House upon what basis you came to a determination or arrived at the figure that you presented for a final offer on the matter? I believe it turned out to be about 77 cents on the dollar. I think it was 83 cents, but then when you get into the pooling arrangement, it comes up a little bit less. On what basis did you arrive at that number?

HON. MR. COUVELIER: I have never portrayed myself as a great parliamentary student. Much of what we do around here seems to be so irrelevant it's almost childish. In a conversation with my colleagues, I understood that if I had answered a

[ Page 10218 ]

question put to me by another member that deals with the issue you have raised, then that is sufficient. It is my judgment that I answered that question last Thursday-or possibly last Friday, but I have answered it. If the member wishes to read Hansard, he can find it for himself. We can play this child's game forever, it seems to me, and do nothing but waste time and do nothing useful in terms of the people's business.

[Mr. Pelton in the chair.]

I have my estimates to finish. I have two bills that I'd like to get through committee so that we can deal with them. They're taxation issues, and we've got to deal with them. This kind of nonsense, surely to goodness, has no place in here. We've spent already far more time than originally assumed. I gratuitously allowed a delay of dealing with these issues at the request of your caucus so that you could have more time to do your homework. I gratuitously allowed that.

Interjection.

HON. MR. COUVELIER: I didn't have to do that. If it's politics we're playing -and clearly that's what we've been doing here for the last few hours - then maybe it's about time we on this side of the House started to play the same kind of game.

My view is that we're here to do the people's business. My view is that we're here to discusshopefully intelligently - the kind of issues that have to be dealt with legally. It really becomes very tedious-and, I think, inappropriate -in the sense that the people send us here expecting us to do something useful and expecting us to produce some results. I can't for the life of me see any use or any purpose served by the debate that's been going on now for the last couple of hours.

MR. D'ARCY: I have no desire to extend this blue-Monday discussion beyond what it has been, and I am going to go to something completely different, Mr. Chairman. But it does involve the minister's responsibility, which is real property taxation.

This is a question that I would hope to get a thoughtful, reasoned and positive response from the minister on. It's relative to equal property taxation policies relative to power-generation properties owned by B.C. Hydro and Power Authority. Traditionally there have been some inconsistencies in this regard in the province, with some Crown corporations-such as B.C. Ferries and B.C. Rail, for instance -not paying real property taxes. But at least the policies have tended to be consistent: that is, similar types of property owned by B.C. Rail or B.C. Ferries have been taxed on a consistent basis throughout the province.

The problem that we have in the Kootenays and the Peace, Mr. Chairman, with B.C. Hydro is that there is an inconsistent policy. Some power generation operations at B.C. Hydro pay full taxes and have always done so, just as though they were privately owned; some pay part taxes on an education basis only; and some pay no taxes at all. I hope that the minister will remember, when he was involved in civic politics, how outraged he and his council would have felt if they had had large industrial installations owned by a Crown corporation in their municipal boundaries which paid no taxes whatsoever, whereas in an adjoining municipality or in some other part of the province many precisely similar installations paid full taxes. I need not remind the minister and the committee, Mr. Chairman, that every dollar that anyone avoids paying in property taxes is a dollar of property tax that must be made up by someone else.

I also point out that with the changes in the taxation regime relative to B.C. Hydro that the government brought in last year -if the Chair will indulge me for a moment-B.C. Hydro is paying, through their customers, directly on their utility bills, a considerable chunk of revenue into provincial coffers, in addition to that paid by water rental fees, which are significant contributors to the size of B.C. Hydro bills for the consumers of British Columbia.

The general rule of thumb seems to be that any properties which were developed privately - that is, when B.C. Hydro wasn't B.C. Hydro, but was owned by private investors, through B.C. Electric Co. - paid full property taxes then, and do now, as West Kootenay Power or Alcan or Cominco operations do. But those projects which have been built by B.C. Hydro - in most cases on the Peace or Columbia, and their stems, the Columbia, the Kootenay, the Pend d'Oreille and the Duncan; it's called the Columbia basin - escape taxes. This is an inconsistent policy, Mr. Chairman. I would note that in the lower mainland and Fraser Valley areas the municipal governments, particularly the regional district governments, are beneficiaries of property taxation from Hydro projects in those areas. So it's not a factor. I'm quite sure that had these properties been exempt over the years, there would have been considerably more pressure than there has been on the Finance minister to change the rules and make it equitable for everyone.

I would also note that with the government's change relative to school taxes that took place seven or eight years ago - or whenever it was - whereby industrial revenue for school tax purposes has been averaged throughout the province, the chief beneficiary of a fair taxation policy for B.C. Hydro would not be local government but the provincial government; although we need to mention that at the local level certainly, regional districts and their recreation assessments, hospital capital assessments, waste collection, and so on, would be great beneficiaries if there were fair taxation relative to B.C. Hydro.

[4:45]

One other point, before I let the minister rise and give what I know is going to be a positive and sympathetic answer to these questions, is that around 1977-78 his colleague the member for North Vancouver-Seymour (Hon. Mr. Davis), who was then as now Minister of Energy, did agree - and it's on the

[ Page 10219 ]

Hansard record, in this same committee - that there was an inconsistency~ He agreed that a change should be made, and he hoped that a change would be made. But of course, as we know, property taxation is not a function of the Minister of Energy. Here we are, 12 or 13 years later, and no change has been made, even though there have been significant changes made, just since the current Minister of Finance has been minister, relative to revenue that the Finance ministry - that is, general revenue - receives from electrical generation by B.C. Hydro.

So I would hope that this unfair and inconsistent policy of three different regimes of property taxation relative to B.C. Hydro's electricity-generating plants is altered in a consistent and positive way so that all Hydro-owned properties will be taxed exactly as they would be if they were privately owned and exactly as, indeed, those generation projects that are owned by West Kootenay Power and Light and Cominco and Alcan are taxed.

Thank you, Mr. Chairman. I await the minister's positive response.

HON. MR. COUVELIER: Mr. Chairman, I applaud the member for a breath of fresh air: a relevant, pertinent and timely question dealing with a constituency matter of great import. I'm delighted to see the mental discipline the member brings to this debate.

The member raises a valid point. He said he expected a sympathetic response. Well, I'm happy to offer it - the sympathy.

It's not a perfect world when it comes to taxation matters. We recognize that the grant-in-lieu-of-taxes area is flawed. It's as someone once said about democracy: it doesn't work so well, but it works better than anything else that we can think of. And this whole area is much like that.

The member, I think, would concede that for the first time, this administration attempted to nudge into the question by dealing with some grants for the dams in some selected communities. And I understand that that program was enhanced this year, in terms of dollar size, so we are coming to grips with it.

It's interesting that each time we attempt to bring a remedy to a problem, we create other problems. The member is probably aware that we've got ourselves in the middle of a dispute with UBCM about how those proceeds will be split among the various benefiting municipalities.

All that, I guess, is just merely to indicate that we're aware of the points raised, and I think we are making steady progress towards dealing with those issues.

MR. D'ARCY: I applaud the minister's answer. However, as so often happens in government, if 1 could be so bold to suggest it, the minister and the government are complicating a very simple issue. It is not that local government has any problem with grants in lieu of taxes. It's an old and revered practice, providing the grants in lieu of taxes are paid in an amount that would be the same as if the Crown corporation in question was privately owned.

There's no problem with the Assessment Authority in this regard. They've already done the assessments, and they don't differentiate between a dam or a generating station, whether it be publicly owned or privately owned, whether it be in the utility business or developing industrial power. They don't make that differentiation. Of course, municipal government and school boards set their tax rates on an overall basis.

The question is not whether it's grants in lieu. The question is: can the minister undertake to pay those amounts to the appropriate authority in the same way as they would be paid if those dams and generating stations were privately owned? That really is the question.

I also point out that while the UBCM or some regional municipal bodies may wish to squabble over what they may see as the spoils, the fact is that although the UBCM - and all municipal government - have a very important role to play and have every right to lobby all of us for changes in respect to provincial taxation laws or any provincial laws, they don't make the rules. A historic wrong could be righted simply by the government making a decision to pay grants in lieu of taxes by July 3 of every year -not in December, but to pay up when everyone else is expected to pay up. All private property owners have to pay by July 3, and there's absolutely no reason why the province can't pay its statutory taxation obligations as well-simply pay up as though these properties were privately owned. Nothing more, nothing less.

I don't think there's a need to go back and pay all the back taxes that should have been there over the past 20 or 25 years that this unfair policy has been in effect. But if we really want a breath of fresh air, to use the minister's expression, it would be, starting this July 3, for the British Columbia Hydro and Power Authority to pay its taxes - or grants in lieu, if the minister prefers - on a consistent basis: similar types of property have a similar taxation regime wherever they may be throughout the province, exactly as if they were privately owned; that is, exactly as if they were owned by Alcan, Cominco or West Kootenay Power.

MR. CLARK: I'd like to turn now to what I hope will be the last area to canvass with the minister in his estimates, and that has to do with the misstating of the benefits in the privatization benefits account. This is a series of questions, rising out of the auditor-general's report, which I think deserves some attention.

The auditor-general states: "In our opinion, the financial results of privatization transactions are not reported in the most appropriate manner." He draws people's attention to several specific examples, the first one of which is the Expo lands sale. I know the minister may not want to canvass the Expo lands sale in any detail, because it's hard to believe we lost money selling the Expo lands. It's almost impossible to believe that in the middle of a real estate boom the

[ Page 10220 ]

government can sell a quarter of downtown Vancouver and lose money, but that's exactly what the auditor-general points out.

Specifically he states that the accounts in the privatization benefits fund are overstated by $5.4 million in respect to the Expo lands sale. I wonder if the minister could give us some understanding as to why they . . . ? First of all, perhaps he could give us some idea as to whether or not he will be revising the privatization benefits fund - particularly with respect to the Expo lands sale - by reducing it by $5.4 million as a result of the exposé undertaken by the auditor-general.

HON. MR. COUVELIER: I would first of all refer the member to the debates that occurred this session during the Select Standing Committee on Public Accounts. I think the minutes of May 15 would be relevant, in which the auditor-general expands on his report and responds to questions put to him by the member for Cowichan-Malahat (Mr. Bruce).

The member should also be aware of the comments made on the whole issue of presentation of accounts, not only from the firm of Peat Marwick Thorne, which they quote with great glee in the House here - it must be in Hansard a good 24 or 25 times by now, I suspect - but also by the Institute of Chartered Accountants of British Columbia, whose comments we have put on the record, and complimentary comments from Price Waterhouse, another well-recognized firm. So it would appear that the comments of the accountants seem to be influenced by something other than the ethics of the profession, because we have practitioners of the profession giving us contrary views.

To the Expo lands, specifically, as with all privatization assets, the valuation was arrived at by independent outsiders. We were careful in government -and certainly in the Ministry of Finance - to make sure that the recording of the values of assets sold was done with integrity and at arms length with professionals in the field. I can admit that the valuations are always a question of judgment, but to be sure that we handled it equitably and without bias, we went outside. I don't know what more we could have done. I suppose we might have got three outside opinions and averaged them; that might have satisfied some people. But the fact is that it's still a question of judgment.

When government records its purchases, it expenses them - as the member is aware - and so the costs get buried in one year's accounts. It has long been a matter of dispute in the accounting profession how to treat a subsequent recapture of value upon a sale, because the dollars are basically written off in previous years. It's an issue that has had the attention of chartered accountants and auditors, and great treatises have been written about it. I suspect that we're not going to solve it this year in this Legislature, but it will take many more years of discussion before all the provinces are consistent. But it is well recognized that of all the provinces, British Columbia is perceived by our peers across the country as the most responsive to the suggestions of the public service auditing group - whatever they call themselves. And I do believe that Mr. Morfitt, the auditor general, confirms that in his statement to the public accounts committee on May 15. He says: "Our jurisdiction, I think, is relatively close to the forefront In taking the recommendations of the committee into account in the presentation of its financial information." He seems to be conceding that we in B.C. do the most responsible job of any other province in the country of reporting our financial information.

I quote him again, also on May 15: "The interpretation of the financial statements is the subject of debate. The form and content we're quite satisfied with."

[5:00]

So, Mr. Chairman, I do believe that we have handled the information as competently as possible and without the benefit of hindsight. The first member for Vancouver East (Mr. Williams) likes to get up every once in a while to criticize the government, and he's quite correct when he says those property values now appear to have been a very good purchase on the part of the purchaser from offshore. It's quite true. But any fair-minded person has to cast their mind back to the circumstances in 1986. The fact of the matter is that we put those lands up for international bid, and we only got a very scattered response. There clearly was not any overwhelming interest In the properties. The winning bid was conceded, even by the losing bidder, as tens of millions of dollars ahead of the second bid. So I don't think anyone can deny the truth that the Expo lands were put up for competitive bid and that they were sold to the highest bidder.

I agree, in retrospect, that had we decided to hold on to them we would have got more money by delaying it for a few years, but that would not, in my judgment, have generated the kind of activity that the sale of those lands has generated. No one recognizes or acknowledges the tremendous impetus that was given to that area of Vancouver when it became known internationally that there were very serious long-term property developers who saw the potential. That of itself seemed to spawn widespread interest - as a matter of fact, from my vantage-point, too much interest: prices got too high. Prices were driven out of sight, in my judgment. It happened too fast. But it wouldn't have happened at all had there not been that expression of interest by this risk-taker from offshore.

You can laugh if you like, hon. member, but there wasn't one B.C. bidder who was prepared to take that kind of a risk. The second-best bid on that list of bidders was a consortium of B.C. developers. If you check back on your history, days after the announcement of the sale of the Expo lands the second-best bidder said publicly: "It was a good deal; we couldn't come anywhere near it." The fact of the matter is, they couldn't. The bid we received for those Expo lands was tens of millions of dollars better than the second-best bid, and it was conceded at the time.

[ Page 10221 ]

You can argue about the valuation. I say to you in response that the valuation was confirmed by someone outside government, an arm's-length assessor. You can argue in retrospect that it was a bad sale, and I would say to you that, admittedly, we could have got more had we held on to it for a year or two, but we would have lost much more than that in the interim, by virtue of losing that terrific activity that was spawned by the sale of the Expo lands themselves. So I don't have any hesitation defending the Expo lands sale in front of any audience,

For the benefit of those late-arriving members who have just come into the House and therefore missed the earlier comments-and still can't hear them because they're shouting - the valuations were confirmed by independent consultants. I think I've answered the question fully, Mr. Chairman.

MR. CLARK: The minister wants to defend the Expo lands sale. I must say he gave a rather lame defence in attempting to justify selling a quarter of downtown Vancouver in the middle of a real estate boom and losing money. However, the people of British Columbia know full well that this government has lost money on the Expo lands, so they know that the way in which the sale was held was inept, they know that it conspired against domestic bidders, and they know there were other bidders potentially in the wings who would have bid more than Mr. Li Kashing. Mr. Chairman, they know all of that. I don't have to go over that record at length in the House today, because that is a matter which is deeply ingrained in the public psyche in British Columbia.

However, I didn't ask the Minister of Finance to defend the Expo lands sale. I didn't think he could, and I was proven correct. What I asked him to do was to justify how the books treat the Expo land sale, because it has, as part of its value, $20 million ascribed to it as a result of potential zoning changes which could be made, which would increase the value of the asset to the province.

The auditor-general states: "Under generally accepted accounting principles, these amounts must be deferred when calculating the gain or loss on the transaction...." This is important. I'd like to know who the independent auditor is so we can fire them or not use them again after we form the government, if that's the case. The auditor-general goes on to state that the B.C. Enterprise Corporation uses a valuation which.... "Had the provincial government used the same valuation as the B.C. Enterprise Corporation, this privatization transaction would have shown a loss. As a result, the privatization benefits fund would have been reduced by $5.4 million."

I would like the minister to explain what accounting firm he used, because under generally accepted accounting practices and under the accounting practices used by the Crown corporation of the day... If those had been used in this case, the privatization benefits fund would have been reduced by $5 million. I am asking a very specific question regarding this transaction.

HON. MR. COUVELIER: The hon. member aspires to be the Minister of Finance one of these days, I understand. I wish him well, but he's got a bit of learning to do yet. I'll endeavour to provide the training as opportunities are provided.

In this instance, for example, it's a principle of government accounting that you don't use generally accepted accounting principles.

MR. CLARK: So the auditor-general is wrong?

HON. MR. COUVELIER: No, the member is wrong. The member refers to generally accepted accounting principles; those are not the principles used by any government in government accounting. What is used in government accounting is what's called public sector accounting and auditing procedures, which is a different set of standards entirely, hon. member.

Lesson two. The member makes comment about the auditor-general. I quote from the auditor-general's report to the Legislative Assembly of March 1990, dealing with privatization issues. He says: "We examined the 46 sales designated as privatization transactions." I'm extracting here, because I don't want to read the whole thing. Here's another part: "We found that the government's accounting for these transactions, as shown on pages A15, B19 and B20 of volume 1 of the '88-89 Public Accounts, complied in all material respects with the provisions of the Privatization Benefits Fund Act and with the government's stated accounting policies."

SOME HON. MEMBERS: Read the next paragraph.

HON. MR. COUVELIER: With respect, the committee will remember MY comments at the time the report was released, when I used some rather intemperate remarks to describe what I thought to be intrusion by the auditor-general into the issues of policy. Those intemperate remarks were unfortunate, and I've since apologized for them; but this was one of the references I had in mind when I made those remarks.

The question of policy is a matter of government direction and decision. We were told that we complied with the law, and we complied with our stated and traditional accounting practices. I really don't know what more we could have been expected to do. We complied with the law, and we complied with our traditional accounting practices; that's confirmed.

It strikes me that any requirement beyond that In and of itself raises the question of impropriety, because had we not stuck with traditional accounting practices, had we not stuck with the law, I can well imagine the criticism that would have come from the members opposite. Because we chose to do the appropriate, honourable thing, we now find ourselves fighting an argument built on a house of cards - a straw-man argument - that isn't even of enough substance to recognize that we followed the law and did what we have traditionally done in terms of how we reported it.

[ Page 10222 ]

The auditor-general, my friends, gave a very clean audit opinion on the combined financial statements, including the privatization benefits fund. You can manufacture as much of an argument as you wish, but the record speaks for itself. I refer you once again to page 250 of his report to the Legislature, and I refer you to the Public Accounts' discussion of May 15 in which he expanded on those remarks. If you haven't got a copy, I'd be pleased to send you a copy.

MR. HARCOURT: Mr. Chairman, I have been listening to the Minister of Finance try and give a justification for the sale of the Expo lands. Quite frankly, the more he talks, the more he sounds like what must have been one of his ancestors in a reincarnation, the hapless person that tried to defend the sale of Manhattan Island. That's really what he's attempting to do now: defend an indefensible sale of the Expo lands. It's unbelievable that this government sold a quarter of downtown Vancouver to a single developer in the middle of a real estate boom, and lost money.

The auditor-general says $150 million was lost -not $5 million, but $150 million. As a matter of fact, it's more than that because what the government hasn't built into that $150 million loss is the fact that we're going to have to buy back land for 2, 000 units of non-profit cooperative housing which the city of Vancouver, in agreement with the developer, has made part of the zoning for that site.

Do you know what it's going to cost to buy back land that we owned? It was $9 a square foot when we bought it, back in 1979-80. It's going to cost another $30 million to $50 million, depending on the market Basically, we lost up to $200 million on one of the four or five best urban development sites anywhere in the world.

I can see why the Minister of Finance has such a hopeless job of trying to defend this sale. The defence is very straightforward; it was part of the privatization rush. The government wanted, for ideological reasons, to get rid of a whole bunch of very valuable assets and services. It was the triumph of ideology and extremism over common sense. It wasn't here to do the best for the people of British Columbia. It was just to prove an ideological point - that's all. That's why it's indefensible. That's why the minister has such a difficult time trying to defend the loss of up to $200 million on this land sale in a boom market. You can't defend it.

The minister then goes on to say that it has had a tremendous effect; that it has stimulated a whole bunch of activity; that it has enlarged our reputation around the world. That's not true at all. The activity took place in the lower mainland and greater Victoria because they were growth areas in a growth economy.

[5:15]

People build office buildings when they think there's a market, not when the Minister of Finance puts up Expo lands for sale. That's the most tenuous logic I've ever heard. Office buildings go up because the market needs 800, 000 or a million square feet a year to deal with the demand for office space. Industrial activity doesn't take place because we've changed around the Expo lands. Hotels went up because of the growth in the visitor industry. It had nothing to do with the purchase of the Expo lands.

Our reputation isn't that it's a great place to go and invest because this Social Credit government gave such a good deal on the Expo lands. Our reputation, because of your treatment of those lands and the interference of the Premier for his friend Peter Toigo-the embarrassment that cost us-is that we're looked upon.... They get a double laugh in Hong Kong, in Geneva, in London and in Tokyo when they think: "This Social Credit government is a bunch of rubes. Go and pick them clean some more. There's lots of other land for sale. Go and pick them clean while they're still there, and still dumbly selling these valuable assets just to get rid of them." If you think it helped our reputation, then please don't help the province anymore. We don't need that kind of help in British Columbia.

If you're not prepared to take the words of myself, the second member for Vancouver East (Mr. Clark), the member for Esquimalt-Port Renfrew (Mr. Sihota), the first member for Vancouver East (Mr. Williams), or others who have spoken on this matter, if you're not prepared to accept that -and I have a little experience in that city with that land -then I suggest you go talk to Brian Calder of the Real Estate Board of Greater Vancouver, who has been absolutely scathing in his critique on behalf of his members about cutting out the small- and medium-sized developers and small- and medium-sized entrepreneurs who are the backbone of the B.C. economy.

You cut British Columbians out of this deal. You cut out small business and medium-sized business. You wanted to sell all the land in this province either to a friend of the Premier, Peter Toigo, or to highroller billionaires from offshore. Those are the only options that this government presented to the people of British Columbia: either give Peter Toigo all the land for $500 million .... Can you imagine what that would have been like?

The only embarrassment you saved yourself from is that you sold the land for a $200 million loss to an offshore investor. I've never been critical of that investor. The investor took advantage of a good business deal, is a good corporate citizen of this country and has been for a long time. But he picked you clean. He saved you from the embarrassment of selling to the Premier's friend Peter Toigo. Concord Pacific, the purchaser of that land, saved you from a bigger embarrassment.

So you didn't listen to the Vancouver real estate board, to the Urban Development Institute, or to many other developers -a lot of them friends of mine - who said: "There's a better way: break it down into smaller pieces of land, lease the land, make it available when the market is hot and it's in the best interest of the people of British Columbia." To say that this was a good deal is one of the flabbiest, weakest and most pathetic statements that

[ Page 10223 ]

I've heard come out of a legislature, when you look at the tragedy of the sale of this land.

Let's get right back to it. The reason it's such a hapless defence by this Minister of Finance is that there's nothing to defend, because it was driven by a sell-of f-at-any-cost-for-ideological-reasons order that came out of this hapless caucus and this hapless Social Credit Party That's what drove it, and that's why the minister is hoping that the clock will run out soon so he doesn't have to get up and try and defend this indefensible deal-the Expo land deal-in which Social Credit sold and gave away a priceless heritage of the people of this province.

HON. MR. COUVELIER: I find it pathetic that the Leader of the Opposition should stand and try to make a case about the fact that we sold it. My God, if he had his way, we never would have bought the land In the first place. He was the one who tried to kill Expo. Remember? Do you forget, my friends?

If you'd like, we will read into Hansard some of your comments of that day, Mr. Opposition Leader. It's kind of humorous that you'd have the gall to stand up here and criticize this government for selling off the land and not getting enough for it. My God, we never would have owned it in the first place, if you had had your way. Expo never would have happened; neither would SkyTrain; neither would any of the improvements that we've poured into the city of Vancouver -if you had had your way. So for you to portray yourself as the great seer and provider of vision, I find laughable. Every visionary initiative this government has undertaken you fought, you tried to stop. And you've got the gall to stand here and criticize the sale of the Expo lands. That's really humorous.

Let me tell you, Mr. Member, exactly what the sale of the Expo lands will provide. First of all, it's going to give us a first-class, world-class development over 15 years -and 15 years of employment as a consequence of that. Secondly, it's going to provide a great benefit to all of Vancouver In terms of walkways, parks, streets, sea walls, day care centres and other community facilities that the developer is going to turn over to the city upon completion. Concord Pacific is responsible for all of these, except for a small part of the cost.

To suggest that there was some sort of ripoff involved.... Let me just remind this financial wizard from Vancouver that there were carrying costs on this land purchase. Let me just remind him that those carrying costs are probably worth $17 million a year, and that translates into $320 million over the 15-year purchase period so that the city will wind up getting 41 acres of public parks. They make a big thing about a quarter of downtown Vancouver. They forget to mention that 41 acres of that's going to be in public parks - ah, you very conveniently forget that, don't you, Mr. Leader of the Opposition? - complete with tennis courts and playing-fields and other facilities. In addition to that, there will be nine acres of public open space, including the waterfront walkway, and the existing Plaza of Nations is going to be maintained. City streets and pedestrian ways and services such as sewer and water systems are going to be enhanced. We require no schools. A community centre.... I mentioned day care centres. Of the total of 204 acres, only about 91 acres of buildable land will be available to Concord after deducting all of these other requirements I've described: parks, water lots, open space, etc.

You just have to put your mind back to how that Expo site looked as we drove over that new Cambie Street bridge and looked down upon that site. The party was over. It was as if all the ashtrays were filled. It was like going into a room that you'd had a party in the night before, with empty liquor and beer bottles strewn around. It was a sight that all of us felt we had to come to grips with. We had to do something with the land; we had to get something going.

Let's remember that it was the fall of 1986, when the economy needed a boost, a shot in the arm or some push in order to create employment. Let's remember that at that time there were 6, 000 unemployed people as a result of Expo's shutdown in Vancouver, and we were very concerned about unemployment. We wanted to get some development going, and we wanted to get that in the hands of a private developer. We wanted to make things happen. All of those things did happen, so I think that it was an eminently wise decision.

I do admit in retrospect, however, that we might have got a bit more money had we waited. But that's only hindsight. And hindsight is always 20-20, isn't it? When you look back at the times and put your mind on the situation that prevailed then, I think the decision was a good one.

[Mr. De Jong in the chair.]

The member talks about how much the land was worth. I think I explained before that there were valuations arrived at. The member talks about the auditor-general's comment about $4.5 million being a figure he didn't think should be included in the total -and he seemed to be speaking about the fact that there was a $20 million valuation put on the future development prospects of that land. As I mentioned, we received an opinion on that subject. The auditor general himself recognizes that the comptroller-general does not agree with the auditor-general when it comes to putting this value of $20 million on the future benefits. Those future benefits will depend on the density that's finally built, not the density that's approved. We won't know that until all of that land is developed.

We don't concede for a minute that the Expo land sale was an inappropriate thing to do. We believe -and everyone on this side of the House is proud of the fact -that during this administration, we not only wound up a very successful world's fair, but we also re-energized the development of a very important part of one of Canada's most beautiful cities. All of these things are possible at no public expense.

[ Page 10224 ]

Do you remember all the criticism about Expo, how much it was going to cost and all of that? You don't say anything about that now, do you? There's no comment about that now. Of course, you're all quite willing to be critical when you can afford to be critical, and when there's no proof that you're wrong. But when the proof is in, of course, you conveniently forget that you were opposed to this In the first place. It's a sad commentary about the political process.

The fact of the matter is that this administration solves problems, brings in solutions and manages public money responsibly. This administration and the previous one put on the most successful world's fair in the history of world's fairs. We came out of it with a book profit even after all of that tremendous party that we enjoyed so much and were so proud of when it was going on. I think I've answered the question.

MR. HARCOURT: The Minister of Finance talked about the cost of Expo and the role that I played in being opposed to Expo. I want to take him back in history, because obviously his memory has fogged up and vagued out. I'll give you the history of the cost of Expo. In May 1980 the Vancouver city council was told by the then Provincial Secretary, Evan Wolfe: "Don't worry about Expo; it's only going to cost $75 million." You didn't believe it then, and you don't believe it now. We were told that it was going to cost $75 million. I have sitting on my desk a report from Montreal about the Olympics in 1976, and a statement similar to that was made by the then mayor of Montreal, Jean Drapeau, who said: "Expo has as much chance of having a deficit as I have of becoming pregnant." The Olympics in 1976 - I'll tell you what happened, Mr. Chairman. The then mayor of Montreal made medical history: he did become pregnant He had quintuplets, as a matter of fact. He had a $1.2 billion deficit. And it cost the taxpayers of Montreal and Quebec and Canada $1.2 billion -a quarter of that on the property tax of Montreal. I was determined to not let that happen to the people of Vancouver and of British Columbia. Guess what it cost. It cost almost a billion dollars, which is exactly what I said it would cost-not $75 million. That's the kind of harum-scarum finances that this Social Credit government are used to doing.

I'll tell you, I ran In 1980 on the policy of whipping the finances into shape so that there wasn't going to be a huge deficit. I did that before the election. I said that unless these four things happen for Expo, you're not going to get the approval of the city of Vancouver to go ahead: (a) that you have a realistic budget and a way to deal with the deficit, not on the property tax of B.C.... I sent the telegram to the Bureau of International Exhibitions before the election, not like this government which misled the people about a fresh start. They didn't have the guts to tell the people what they were going to do with Bill 19 or privatization or decentralization -all the misleading and betrayal you did. You didn't have the guts to tell people what you really wanted to do.

[5:30]

I'll tell you something, Mr. Chairman: I laid it out - no deficit, a decent transit system, a game plan for the site afterwards, a deal with the people around the site. And do you know something? I was prepared to stand up in an election in 1980 and take on the incumbent mayor on that basis. And do you know what? I won the election. And we did get a realistic budget. Jimmy Pattison came in and said: "It's going to cost over $800 million, and we've only got $550 million in revenue. We've got to have a lottery or something to cover the deficit." Do you want to know something, Mr. Chairman?

Interjections.

MR. HARCOURT: I hear this huffing and puffing about "past history." I want you to know that I was prepared to lay it on the line and put that all out before an election in 1980, and I won that election against incumbent mayor Jack Volrich. Within the next year and a half we negotiated fair financial arrangements on Expo, B.C. Place, the trade and convention centre and ALRT, so that our city wasn't going to go broke like you wanted to have happen. The taxpayers of British Columbia were financed....

MR. CHAIRMAN: Order, please, hon. member. I'd just like to ask the Leader of the Opposition what relevance this has to the budget estimates.

MR. HARCOURT: The relevance is that we are talking about the Expo land sale and the history of that sale. The minister made some personal remarks about my role in that, and I think it's appropriate for me to be able to get up and answer those remarks in that context.

I think the minister forgot to mention that in 1980 I won an election against the NPA, Socred-farm-team mayor at that time, Jack Volrich. Guess what. I heard the same blustery, hysterical words that the Minister of Finance used just now in 1982 when the Socred farm team, the NPA, ran Jonathan Baker: "Defeat Harcourt. He's against Expo. He's against this. He's against that. He's not in favour of this. He's not in favour of that." Guess what. My lead of 1980 increased from 3, 000 votes to 35, 000 votes, which I beat the 1982 Socred-farm-team mayoralty candidate with.

Do you know what happened? In 1984 1 again heard the same arguments I heard from the Minister of Finance and just recently from one of the other members from Burnaby. In 1984 they had run out of talent in Vancouver to run against me, so they had to reach outside. I wasn't sure if he was living in Surrey or in a castle in Richmond at the time, but he was a fellow by the name of....

MR. SIHOTA: Who was that?

MR. HARCOURT: He's the Premier now. I can't use his name, because we're not supposed to use members' names; but he's the Premier now. He used the same arguments, and I whipped him by an even bigger margin in that election: 2 to 1.

[ Page 10225 ]

I heard the same arguments used in the by-election in Boundary-Similkameen, and we won that one. I heard the same arguments in the Cariboo, in Nanaimo, in Alberni, in Point Grey and in Oak Bay, and I hope we hear the same arguments in the provincial election, when you've got the guts to call it. I hope you've got the same arguments coming forward, because I'd love to answer them then.

People have heard those arguments, and we know that you had to be chased into whipping those projects into shape. They were out of control, because this Social Credit government is out of control on megaprojects. A billion and a half dollars on northeast coal, and look at the money it has cost us. Look at the Coquihalla: it was supposed to cost $375 million and it cost a billion. You take a good idea and turn it into a mess financially.

I think it's entirely appropriate that the Minister of Finance walks out of this chamber with his tail between his legs and his head hung low, because he knows that he has an Indefensible argument on the Expo lands. If he wants to keep talking about my track record as the mayor of Vancouver, be my guest. I'd love to see it in the next election. Call the next election as soon as you have the courage to do it.

MR. LOVICK: I am looking in vain for the Minister of Finance, whose estimates I understand we're discussing at this moment. I had some rather specific questions that I wanted to address to that worthy. I would therefore perhaps ask for some guidance, Mr Chairman, or else I could give you one of my patented 15-minute discourses on beauty and truth, or something. I suspect that ought to guarantee the return of the Minister of Finance.

The Minister of Finance is fond of talking about the behaviour of members in this Legislature as being political - perish the thought - and he sets himself apart from that particular charge by saying that he is conducting the public's business; everybody else is political. It's on just that area that I wish to focus now.

A few minutes ago my colleague the second member for Vancouver East (Mr. Clark) began his questioning by making specific reference to the privatization benefits fund and the auditor-general's report on that particular fund. The Minister of Finance - I hope not deliberately - answered by quoting a selection from the minutes of a Public Accounts meeting dated May 15, ostensibly designed to answer the question of my colleague the member for Vancouver East. The predicament is that the meeting of May 15 said nothing whatsoever about the privatization benefits fund. Indeed, what the minister was quoting -if my memory serves, and I've just done a very quick canvass of that meeting, which I attended as a member of that committee - seemed to be talking about the accounting principle of using a consolidated fund statement versus a general fund statement as the most accurate means of representing the state of a province's finances.

I wonder, then, if we might start this questioning, Mr. Chairman, by my simply posing a direct and simple question to the Minister of Finance to respond to the query this piece of the estimates debate began with: what about the privatization benefits fund and what appears to be an absolutely damning indictment of this government's performance with regards to that fund, to judge from the auditor-general's report? Would the minister care to respond?

MR. CHAIRMAN: Shall vote 28 pass?

MR. LOVICK: I notice that the minister looked to be about to rise in his place to answer the question. I'm wondering, Mr. Chairman, if, in your haste to see us to 6 o'clock, you perhaps didn't give him sufficient time. The minister has, I see, the comptroller-general with him as well as another official, and they are presently conversing, I gather, about the question I raised. Maybe I can stretch out the question somewhat, if need be.

The essential issue about the privatization benefits fund had to do entirely with whether the public was being given an accurate rendition of what was in that fund. You recall that one of my roles in this chamber is to be opposition critic for privatization. I have been saying for two years at least that what we were getting was a somewhat distorted and overstated response from government in terms of the benefits of the privatization exercise.

It would seem pretty clearly that with the privatization benefits fund - this one-time special fund that was going to be based entirely on the assets realized from the sale of concrete and more tangible assets; the cash assets realized, in other words - we would see the wonderful benefit accruing to the populace. In other words, we sold off these assets. We made a whole bunch of money.

I said on a number of occasions that I'm not sure the sale of assets can be considered to be intelligent and sensible policy. I'm not sure it is the case that we come out ahead. But let's, for the sake of argument, assume that selling off the assets is a good and worthwhile and desirable process.

The next question becomes: how do we report what we actually got for the assets? The predicament we discover after reading the auditor-general's report is that we don't know. We don't know because of peculiar and particular accounting mechanisms used to report what is in fact In the privatization benefits fund.

I think I have now given the Minister of Finance enough of a lead. He ought to be able to respond to that first question.

HON. MR. COUVELIER: We've been listening on this side of the House, and the member seems to be repeating what we discussed in his absence earlier, which is the $20 million valuation on future development prospects. As near as we can calculate, that appears to be the root of his confusion.

I would just point out to the hon. member the presentation of volume 1 of the 1988-89 Public Accounts. First of all, the auditor-general opens that material with the comment: "In my opinion, these

[ Page 10226 ]

combined financial statements present fairly the financial position of the CRF at March 31. The $308 million figure in the privatization benefits fund statement of revenue and expenditures for the fiscal year ended March 31, 1989, is confirmed." That's exactly the same figure that's in the auditor-general's report. So we have what the Public Accounts debate brought out, which was a difference of opinion between the auditor-general and the comptroller-general. I answered that question a good 15 minutes ago.

Let me put into the record the previous comments of the Leader of the Opposition, about which he seemed to have a memory lapse. In the 1980 mayoralty campaign he called Expo "an unwanted frivolity." During the bids for the Expo fair - at that time it was called Transpo, if you remember -he sent a wire. The mayor of the host city sent a wire to the international adjudication committee in Paris, and I'll put it into the record. The wire said: "Dear Mr. Reid and fellow committee members of the Bureau of International Exhibitions: Please stop plans for Transpo '86 on the north side of False Creek in downtown Vancouver. Most Vancouver citizens do not want Transpo '86 to proceed on this site." Now there's a gentleman who 15 minutes ago was trying to tell us that he really liked it, but he thought It was too expensive.

Not all members of the opposition are that two-faced about it. We have a quote from the first member for Vancouver East (Mr. Williams) on a CBC radio show of January 2, 1985 in which he says: "It's all an expensive flash in the pan." However, on December 30, 1989, that same member was reported in the press as saying: "I was against Expo, no doubt about that But it turned out to be the event that gave Vancouver its own economy, separate from the provincial economy, and there's no doubt at all that Expo triggered much of the investment we're now seeing."

Not all members opposite seem to have these memory lapses. At least one member conceded that he was wrong. I haven't heard the Leader of the Opposition yet make that statement, but clearly, after reading these comments into the record, we might expect such an admission, Mr. Chairman.

MR. LOVICK: I began my comments in a rather temperate manner - and, I thought, trying to be reasonably restrained -because things had been somewhat acrimonious here. But we have to listen to that sanctimonious twaddle coming from across the way, Mr. Chairman. He's not talking at all about the issue I raised, but rather tries to obfuscate matters by pretending not to understand.

We're not talking about the $20 million; we're talking about the specifics of a report in the auditor general's document. If the minister would read that document - I despair sometimes of ever discovering he does indeed read -pages 252 to about 255, he would discover that we're not merely talking about some $20 million. We're talking about a flaw in the reporting mechanism so that we don't in fact know what we realize from those sales. Worse than that, Mr. Chairman, is that what we have done - apparently, at least according to the auditor-general - is not calculate the actual cost of transferring the assets.

The Minister of Finance and I debated at Camosun College about two years ago, and at that time I suggested part of the privatization dodge was to hide the cost of transferring the assets. Of course, at the time he cried foul and suggested: "Oh no, this government would never be party to such a thing." Indeed, he carried on in much the same way we have seen him carry on in this chamber of late - almost frothing at the mouth when he gets flying.

[5:45]

But you know, we are now seeing precisely that point made In this report by the auditor-general. We're being told that you have not told us what it cost to transfer those assets.

How dare this minister -or any other member of that government -stand up and presume to tell the people of this province that we did well as a result of privatization! That is hypocrisy of the most flagrant kind. I think the Minister of Finance owes us an apology for the fact that he is not only party to doing that, but refuses to even acknowledge the validity of the claim made by the auditor-general. I think that's reprehensible.

MR. CASHORE: Mr. Chairman, apropos of the comments just made by my colleague, we now turn to exhibit A. I would point out that on page 145 of the auditor-general's report, with regard to the Environment Lab, we have here that Zenon bought most of the assets for $850, 000. 1 think the minister will remember that there was a Price Waterhouse evaluation in the order of $2.75 million, if my memory serves me correctly.

We're short of time, so I'm going to put on the record some points that were made by the auditor general. I have been sitting in the House a lot this afternoon, and I haven't really heard very many answers. But I think it behooves us to put this on the record.

First of all, on page 145 the auditor-general states: "The selection of B.C. Research" - to replace part of the function of the lab - "was made without competitive bidding." I repeat: "without competitive bidding." It's very interesting in the light of discussions we've had recently in this House with regard to hospital equipment.

The auditor-general makes another point. He states on page 153: "The Zenon contract places substantive restrictions on the ministry. It calls for a fixed minimum annual total payment irrespective of the workload levels. In other words, the ministry must pay Zenon $2.8 million per year whether or not it requests tests of this value."

My question to the minister is: were you aware of this when you became aware of it through the work of the auditor-general? That's on page 153. Have you, Mr. Minister, decided what you're going to do about that?

Turning to page 154, we have: "The subsequent five-year contract was based on a cost-plus-expenses basis, a less preferred method of pricing than fixed

[ Page 10227 ]

costs. This method of pricing leaves the ministry vulnerable to cost overruns and provides little incentive to the contractor to operate efficiently." My question to the minister is: what has he decided to do to correct that incredible mistake in the operation of the lab?

Turning to page 155, the auditor-general says: "During the first year of privatized operations, the government paid adjustments of $180, 000 to Zenon for which no services were received." My question is: has the minister apprised himself of that issue... ?

MR. CHAIRMAN: Order, please. The Minister of International Business and Immigration rises on a point of order.

HON. MR. VEITCH: I know that the opposition just wants to take up time and eat up the clock in this committee today. I've been in this House a number of years, and this is the first time I've heard this sort of thing discussed here and not in the Public Accounts Committee. Indeed, it's a travesty to allow this sort of thing to continue in this committee. It is the wrong committee. They ought not to be asking the minister these questions; it ought to be discussed in the Public Accounts Committee. It's completely and absolutely out of order, Mr. Chairman, and I would ask you to inform the member or to ask him to take some instruction from the Clerk or something.

MR. CHAIRMAN: I recognize that these matters are specifically dealt with in that committee. Really, there is no need to repeat them here in the House and I would ask the member, if he has some comments other than those that he was busy with, to get on to some other matter.

MR. GABELMANN: Mr. Chairman, I would ask you to give us a citation from either the rules of the House or Beauchesne, or anywhere else that you might find these kinds of suggestions. Discussions that go on in the Public Accounts Committee concerning the Ministry of Finance are equally available to members of this House for discussion.

MR. CHAIRMAN: Again, these matters of the auditor-general are dealt with in the Public Accounts Committee. I will leave it there and ask the member to proceed with the statements that he wishes to make.

MR. CASHORE: Mr. Chairman, in his point of order the minister used the term "travesty, " and the travesty in this House today is the avoidance of dealing with these issues that are being brought in good faith by the opposition. The record will show the kind of evasion that has taken place in dealing with urgent and pressing matters of public business.

I have read into the record statements that have been made by the auditor-general. It is the business of this House. I now call upon the minister to respond to those statements with regard to the policy that he has put in place to deal with that very indicting criticism from the auditor-general.

HON. MR. COUVELIER: I don't agree that it's an indicting criticism, in the first place. But if the gentleman of the opposition has a genuine desire to see the issue addressed seriously, I suggest that he take it to the Public Accounts Committee, where It belongs.

MR. CLARK: This particular Finance minister has single-handedly delayed the calling of the election by a remarkable display of ineptitude over the last couple of weeks. He has made inappropriate comments regarding the auditor-general. The government is running a deficit in the middle of an economic boom and is trying to hide the deficit through the BS fund. The accounts of the privatization benefits fund are clearly not reflecting the true value, according to the auditor-general. He has made inflammatory comments with respect to B.C.'s place in Confederation. All of this leads me to move that vote 28, which includes the minister's salary, be reduced to $1.

Motion negatived on the following division:

YEAS - 19

NAYS - 31

Vote 28 approved.

Vote 29: ministry operations, $74, 195, 868 - approved.

Vote 69: other appropriations, management of public funds and debt, $646 million - approved.

Vote 70: other appropriations, contingencies (all ministries) and new programs, $65 million-approved.

[ Page 10228 ]

HON. MR. RICHMOND: I move the committee rise, report resolution and ask leave to sit again.

The House resumed; Mr. Pelton in the chair.

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

HON. MR. RICHMOND: Mr. Speaker, I call committee on Bill 21.

PROPERTY PURCHASE TAX

AMENDMENT ACT, 1990

The House in committee on Bill 21; Mr. De Jong in the chair.

Sections 1 and 2 approved.

Title approved.

Queen's Printer for B

Victoria,

HON. MR. RICHMOND: Mr. Chairman, I move the committee rise and report the bill complete without amendment.

Motion approved.

The House resumed; Mr. Pelton in the chair.

Bill 21, Property Purchase Tax Amendment Act, 1990, reported complete without amendment, read a third time and passed.

Hon. Mr. Richmond moved adjournment of the House.

Motion approved.

The House adjourned at 6:03 p.m.