1998/99 Legislative Session: 3rd Session, 36th Parliament
HANSARD

The following electronic version is for informational purposes only.
The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

TUESDAY, JULY 13, 1999

Volume 16, Number 23

[ Page 14317 ]

The House met at 10:05 a.m.

Prayers.

Hon. J. Kwan: I see in the gallery today Richard Taylor, the executive director of the UBCM. He is no doubt here watching the speedy passage of Bill 88, so that he can report back to the UBCM executive. He has also worked very hard with government, on behalf of the UBCM, in developing Bill 88. Would the House please make him welcome.

Orders of the Day

By leave, I move that the following bills at committee stage be considered forthwith in section A of Committee of the Whole -- namely, Bill 93, Land Title Amendment Act, 1999; Bill 74, Miscellaneous Statutes Amendment Act (No. 2), 1999; Bill 85, Company Act; and Bill 82, Forests Statutes Amendment Act, 1999.

Leave granted.

Motion approved.

LOCAL GOVERNMENT STATUTES
AMENDMENT ACT, 1999
(second reading)

T. Nebbeling: I'd like to share some thoughts and ideas that I, on behalf of my colleagues, would like to share with the minister in the hope that when we deal with Bill 88 in committee, some of the ideas that we on this side have had to deal with. . . . Community empowerment will indeed be considered.

[W. Hartley in the chair.]

Before I get to that part, I would like to acknowledge not only the presence of Mr. Taylor, who's in the House watching these procedures, but also the role of the UBCM -- and not just in the exercise of this three-year approach to the rewrite of the Municipal Act. I would like to focus more on recognizing the UBCM for having been a very strong advocate for at least the last ten years, in partnership with the Canadian Federation of Municipalities, to truly do something about municipal councils' empowerment and truly do something about the bureaucracy and the red tape and all that goes with it.

[1010]

The role of the UBCM -- the leading role, obviously -- has been to bring up, on an ongoing basis, the importance of the voice of the communities to be heard when it comes to decisions in the Legislature. And it is because of their ongoing pressure, I suppose, that we are debating today, in second reading, the second phase of a three-prong approach on how municipalities and other local governments will work in partnership in the future. I put emphasis on the word "partnership" with the provincial government.

Last year we saw the introduction of Bill 31. One of the disappointing effects of Bill 31 for me was that as the attempt was to clarify the Municipal Act and reduce it to a document that not only would be readable but also would be practical in use. . . . When Bill 31 was introduced last year, of course, we immediately started to deal with 400 sections. This year, with the second phase of the rewrite of the Municipal Act, we see another 335 sections, or something in that order. One of the objectives of the Municipal Act is to reduce it to a form that it is controllable and workable, and we seem to be missing that. I will be speaking more on that in committee. Nevertheless, before I go on to the bill, I feel the need to say that without the UBCM and people like Richard Taylor and other co-workers, we most likely would not be debating this bill today.

As you are well aware, local governments have always been treated by the provincial government as a creature of the provincial government, and by that I mean that certain leeway was given to municipalities in the past; but at the end of the day, whenever a decision had to get finality, it was the municipal or provincial authority that would make the final decision on how an issue would be dealt with.

I was not aware, but it is indeed well over 150 years ago that the Municipal Act was created in order to deal with the taxation problem. It was a taxation problem in New Westminster. New Westminster was one of the first towns in this province to have a problem with the cost of street cleaning, and the colony's authorities at the time decided that maybe it was appropriate for the people living in New Westminster to be responsible for the street cleaning and for the cost of the street cleaning. So they created this little animal that was called a municipality or a city, and the city was given the privilege of being responsible for the cost of the cleaning. There was not very much in return for being given that privilege, but that very first act clearly set the tone of how in the future -- the next 150 years -- the relationship between municipalities and the provincial government would develop. As we saw then, the tool being used to take cost from the colony, or the provincial government at that time, onto local authority was the motivation for the first city to be created. Today we still see the provincial government using exactly that same Municipal Act to, from time to time, make changes that once again put more cost onto the shoulders of local authorities and thereby put more burden on the local population.

[1015]

[ Page 14318 ]

I'm not going to go back into the various times that we had legislation introduced to off-load more grants onto municipalities or to reduce the amount of grants, but one of the things that was constantly highlighted by the minister whenever we saw further off-loading of grants or dollars onto municipal councils. . . . One of the things that was always emphasized was that there was going to be a financial management control system put in place, which would give municipalities the ability to effectively create income that today would not be available. Now, there have been studies done between the UBCM -- and here the UBCM plays a role as well -- and the provincial government to see in what areas the financial relationship that exists today between the two bodies could be changed and to give municipalities more empowerment to fulfil their obligations that they have -- be it in the safety area of a municipality, in the public works area of a municipality or in the utilities forum.

The one thing I really miss in this second part and had hoped would be there is that it would have indeed been the first step to give municipalities more authority to accommodate their increasing pressures on the need for dollars without having to go into a borrowing strategy -- but more to find ways to recoup or create funds.

Although the studies that have been done and the discussions that have been held between the UBCM and the provincial government have led to the suggestion of a number of ways that we could, for the municipalities' sake, see some relaxation in taxation forms that the provincial government today controls. . . . The property transfer tax is one that comes to mind. The municipalities have basically asked the provincial government in the past to consider that the property transfer tax should actually be a tax that will stay in the communities, thereby having an opportunity for councils to compensate for the lack of dollars that are coming from Victoria because of the reduction in grant money -- with these dollars that would come from property sales in their community.

It is something that I had hoped to see at least some consideration for in Bill 88. There is no consideration whatsoever. If the bill is failing in one area, it is certainly the provision of that lifeline that municipalities truly need to continue to do the things that as councils they are elected to do. That includes being responsible for the public safety in communities. I do not surprise anybody when I say that over the last four or five months, more and more communities have been forced not to hire police force and bylaw officers that they planned to do to deal with public safety issues in their communities -- primarily because of the last round of cuts in grant money that the provincial government introduced in November of last year. Again, there was a storm of protest by the municipalities; that storm of protest was being ignored.

[1020]

The second phase of the municipal rewrite is an opportunity to introduce the tools that would allow municipalities to find these dollars so that they can continue to truly do the things they have to do. It isn't there, and I really think it is a shame. It makes me wonder if the government is truly listening. It also makes me wonder if the importance of these issues is a priority in the mind of the minister. Public safety and other local needs that need financing have to be addressed. To have to wait another year before we get to that particular way of dealing with municipal financial shortfalls is something that should not happen.

I think that the third reason -- and we will canvass that very much in committee stage -- is the long-term desire that municipalities have had to truly take that control. In my introduction I already said that municipalities and cities are looking for a clear statement that truly recognizes that municipal councils and local government are that third order of government, with authorities that cannot be overruled by a provincial government. But there has to be a control mechanism for local governments.

When I go through Bill 88 -- which I thought was an opportunity to establish and ingrain that third order of government -- again, it is all based on general principles where municipalities and other local governments have the right to make decisions. But at the end of the day, there is always this last clause which says: "But in that case, the provincial government may interfere and basically undo that which local councils deem necessary for their communities."

So I still do not see that this string, this leash, that the provincial government has held over local governments for all these years has been cut or reduced or lengthened. I still feel that with all the good intentions that some of the sections in Bill 88 seem to indicate, where the relationship is going. . . . At the end of the day, it is the provincial government that holds the final decision as to their authority, thereby truly taking away the belief that local governments are indeed a third form of government.

I would like to discuss some of the practical, or not so practical, elements of the bill. One direction in the bill that really offends me as a legislator is the fact that this bill was introduced on June 29, 1999. It was introduced that afternoon, at the same time that certain sections came into effect -- for example, the election changes in the bill, to which I will speak in a minute. The fact that the minister introduces a bill that still has to go through the whole democratic process of first reading -- first reading is the introduction -- second reading and then committee. . . .

[1025]

[ Page 14319 ]

The opposition has basically been taken out of the process of getting a bill through the parliamentary process by proclaiming sections in the bill, in effect, the day that the bill is put on the table. To me, it really reflects how this government thinks. It says one thing, but it does another thing. It says: "We believe in consultation. We believe in dialogue. We believe in debate. These are the values that we think are your standard values in a parliamentary system. However, when it doesn't fit our purpose or it doesn't fit our program, then we just waive it as if it is a meaningless exercise." I do not think that the legislative process should in any way, shape or form be eroded by this kind of government attitude.

So we will be spending a fair amount of time on debating this bill. We will highlight sections that we believe are good; we will highlight sections that we believe are very bad. But the fact is that all the time and all that will be said here in the House on this bill are really meaningless because of the minister's decision -- proactively -- to declare this bill in effect on a date that's in the past.

You have to wonder: why is it retroactively introduced? The minister had a year to come up with this bill. Again, I know that the advisory groups with which the minister used to at least couch some of the ideas she had -- ideas she wanted to be included in this bill. . . . She had a year to go to the various groups to get the background on this bill and the opinions of the various groups. You know, that's ample time to not only accumulate the information but also to come to a conclusion and say: "Okay, now we can put this bill in front of the House. Now we're going to let the public at large see what this bill entails. Now we're going to have the public at large understand what this bill is going to do to them." That process is just being undermined by doing what the minister did.

So why. . . ? That's the question we'll ask in committee as well: why is it that this bill gets introduced at this late stage? The why is really important in this particular case, because one of the more important sections in the bill is the rewrite of the amendments to the Municipal Act. We will have on November 20, I believe it is, municipal elections throughout the province. Every British Columbian will go to the polling station to select his or her choices for council. This bill is changing a large number of rules and regulations that apply to these municipal elections.

The first problem, of course, is that it's a couple of months from an election, and to introduce a bill at this late stage with so many changes to the Municipal Act. . . . Keep in mind that if you violate the Municipal Act as a candidate, you can be disqualified -- that's a given. But also as a voter, if you do things that are in contradiction to the new rules and regulations, you could also be in trouble.

[1030]

I remember when we introduced the freedom-of-information sections a couple of years ago, which applied to municipalities. The freedom-of-information sections were considerably easier to absorb and understand than the changes to the Municipal Act. But I remember that the provincial government took about eight months to introduce these new sections. They had seminars; they had helplines -- everything to make these clerks and municipal officers understand how this act would indeed work and how the public at large could take advantage of this act. But it took eight months, and it is not as complicated an issue as the rewrite of the Municipal Act.

So if the government at the time realized that eight months was needed to deal with something as simple as the freedom-of-information legislation so that citizens could, under the provisions of the act, get the information they needed from a municipal authority, how can the minister expect the same clerks and the same administrators to have this very short period of time. . . ? By October, they have to hand out the papers and tell people how they have to behave and what they have to do. It just doesn't make sense. The only thing it does is show a real disrespect for these people who work in the municipal offices and have to deal with these issues. It also shows a callous disregard for the sense of responsibility that municipal clerks or returning officers must have when they deal with candidates. If a returning officer is not totally versed in what these sections mean and how they will have to be translated, not only do they jeopardize their own position but they may also jeopardize the position of a person who decides to run for council. If any of the actions that the candidate is involved with are in violation of the new regulations, then that will be a justified argument for disqualification.

I must say that some of these new rules that are incorporated in the rewrite of the Municipal Act are pretty complicated. Some look easy to analyze, but some of them. . . . You really have to ask: "Well, what does this mean? How does this work?" One of them, of course, is the fact that if you're part of an electoral team, the moment you somehow indicate that you're interested in running for council on an electoral team, you have to open a bank account. At that moment you have to declare as an election expense every cent that you spend talking about maybe running. The thing is that if you don't do it, somebody who's opposing your candidacy could use the fact that you may have been talking about running for council. . . . Not having opened a bank account immediately on the day that the individual heard you talking about running for council, a petition could be made to have the candidate disqualified. That is just one small issue in the myriad of changes in the Municipal Act rewrite or election rewrite.

There is another section about how to deal with the funds that are collected during the election. Again, we will canvass this in committee. It's not really clear that when there's a surplus, if you're a single candidate and you run on your own, you know what it's going to be. It's $500, and that can be sent to a good cause. Otherwise any amount over that goes back to the municipality and is held in trust.

[ Page 14320 ]

[1035]

There are a lot of sections in the bill that I thought were always part of local government. One of the sections that the minister has made a lot of noise about is the open and closed meetings that municipal councils have. There are a fair number of sections that are now written into the act which pertain to when and how a meeting can be held in a closed forum.

Having been in local government for ten years, I was always assured by our legal advisers that there are the three Ls: legal, labour and land. Any issues related to these three particular sections had to be done in a closed meeting, for obvious reasons. There has always been, like the new rules stipulate, a motion made by council to go to an in-camera meeting to deal with this thing. So I do not understand why something that has always been part of the municipal system suddenly reappears as something of a revelation. I do not understand why the minister thinks that this in-camera-meeting section is such a revelation and that such a new, democratic element will truly safeguard the citizens from not being exposed and not being aware of all that happens in a municipality.

These sections have been there, as far as I know, for years and years and years. So I think there is a lot of fluff in this bill as well. Maybe the fluff is there to again make it a big, fat document, but I don't think it's a great idea. There are a lot of these sections that were in the Municipal Act already -- maybe under a different number. Or maybe there was a part here in another section, and they put it together. But it is nothing new, nothing revolutionary and certainly not something that I would consider a major contribution -- to have councillors throughout British Columbia say: "Look, this is the way we truly feel. We are now empowered." I just don't see it.

Just quickly back on the election issue. Once a council is elected, of course. . . .

Interjection.

T. Nebbeling: Well, I'm the designated speaker. I believe I have time to go on.

Back to the election again. I've had discussions with the minister about the true empowerment of councils. I believe that once a council has been elected by the populace, it is fair to say that that council has been empowered to make decisions. That council decides to be the best for their community. I think that councillors, when they run for a seat in council, give the community their beliefs and their values. If they get elected, then these beliefs and these values should be used to dictate their actions for the three years that they're elected for.

When it comes to certain empowerment, what does the government again do? They say: "Yes, now you have an elected government." Let's stop for a moment. "The moment that you start spending money and you do not have the whole amount there, you have to borrow. For any capital project, we will do something that is going to frustrate your life as a councillor."

[1040]

I talked earlier about the fact that municipalities are strapped for cash. It is either serious or considerable increases in property tax, or they are basically forced to abandon certain projects. They abandon hiring of certain needed individuals in the municipal infrastructure, or, of course, they lay off people. When the government is not willing to consider new ways to find funding opportunities for municipalities, to add into the legislation more pieces that will just add more financial burden onto these same councils, to me that is not a sign of empowerment. That to me is just a sign of the government not understanding what they're doing when it comes to municipal financial management.

So that section on the 5 percent counterpetition is something that I feel is not a symbol of trust by this government in municipal or local governments, but it is an aspect that I think will continue to frustrate elected bodies. There should have been a different way of giving the community an opportunity to have a say in how things are done in the community, but that say should be based on a considerable community representation and not just a small special interest group.

Just to continue on the fact that I'm not happy with this bill, there are some tools given in this new bill, including the ability of government to compete with the private sector. It's very vague. Nobody can really tell me an answer as to what they mean by this. I asked staff in the ministry what would happen if the council decides to expand a transit system that they may run in the town, and they go to the next community and say: "Well, you don't have a transit system run by the municipality. Let us run your transit system." Could they do that? They can. The problem, of course, is that there may be a bus system in that community run by the private sector. So this particular section would actually allow government to go into competition with the private sector in an area that has nothing to do with municipal management.

I will visit that one as well, because I don't think that the intent of one municipality to have the ability to become a

[ Page 14321 ]

The size of the Municipal Act, as I said earlier on. . . . It is ridiculous that we started with the Municipal Act, with 1,039 sections. The objective was to make this document readable, workable -- to get rid of a lot of nonsensical sections that make no sense, which were there sometimes because they have been there for a long time, sometimes because it was the justification of having gone through an exercise, as the bureaucracy likes to do. But it just didn't make any sense.

[1045]

I think we are really missing the boat by not doing what other jurisdictions have done. I have seen in this bill, for example, that a number of sections are true copies from a new municipal act that was written for Newfoundland and introduced on June 28 -- just recently. In this bill, there are already some elements of that new municipal act from Newfoundland.

I wish the minister had gone further. If she had looked at that municipal act in Newfoundland, she would have seen that it's a document of 62 pages. That's the whole municipal act. We have a book this thick: 62 pages. If only we had been consequent and said: "If we take that stuff from Newfoundland, let's also take the good things -- and that is the real reduction of all these sections." I hope that one of these days, the minister can see the light and understand that just rewriting the Municipal Act -- it being a document that is still very difficult to read and analyze -- makes no sense.

The last part I would like to talk about -- because I see I have been going for a while now -- is business licences and the changes in the powers that are given to municipal authorities. I am a strong advocate for municipal councils to. . . .

Interjection.

T. Nebbeling: No. Two hours.

I'm a strong advocate that municipal councils must have authority to deal with issues that are related to their own communities. However, when I see a business licence approach where municipalities are going to be given the power to tell any business to get out of town and give them three years to get out of town. . . . It doesn't matter what the investment is; it doesn't matter what the job situation is. You're just told to get out of town, because we as a council have decided you are not fit to be in our community. That's a very, very dangerous power. That is an anti-business power. I know how this particular section came into the bill, and I want to quickly talk about it.

When this particular type of approach was taken, the minister did consult with the business councils. The minister said: "Business councils, you must understand. There are some problems here. There are certain types of businesses that the communities in British Columbia really have a problem with -- very often because of morality standards. We should really give municipalities the authority to deal with these businesses that really violate some basic concepts. We shouldn't have a pizzeria open until 3 o'clock in the morning, knowing that after 12 o'clock not a pizza gets baked but that they do sell some dope. We shouldn't allow that. Municipal councils should be able to deal with these kinds of businesses. Furthermore, of course, if a municipal council makes that decision to get a rid of a business of that nature, it will only be done by a unanimous vote."

So the business councils looked at it, and they said: "Yeah, that's fair." Then they went away. And what does the minister introduce in the House? A totally open-ended piece of legislation that allows any business to be chased out of town. It doesn't matter what the business is -- a $10,000 business, a $100,000 business or a $30 million business. It doesn't matter. Suddenly the council, with a vote of two-thirds -- not unanimous -- can just tell the business to get out of town.

[1050]

I hope that when we go into committee, we can talk about these issues. As I said before to the minister, I am a strong proponent for local authorities to be able to do the things that they as councils feel are important for the communities. This bill does not empower local governments. This bill gives some power to local governments to do things that in a democratic society could be considered undemocratic, as I just illustrated with businesses. Otherwise, at the end of the day, whatever a municipal council wants to do, whatever a regional district

[ Page 14322 ]

As far as I am concerned, the second phase of the rewrite of the Municipal Act is doing nothing to change what was initiated in 1851, when the first Municipal Act was written. And that was done for one reason: to off-load provincial costs onto municipalities. The practice continues. What was supposed to happen with this Municipal Act rewrite -- empowering communities to find ways to pay for municipal administration and to do things in the community that would be for the benefit of the community -- is just not in there. It is not the focus. I think it is a shame that it has gone this way, but we will come back in committee stage and go section by section to re-emphasize some of the points I made today.

Hon. J. Kwan: I'm pleased to present Bill 88 for second reading. Last year in this chamber we introduced legislation that recognized local government as an independent, responsible and accountable order of government within this jurisdiction. That was the first time that this was ever done in this country. It was a historic act in this Legislature, which I believe marked a new relationship between local government and the provincial government. It was a reaffirmation of the principles in the 1996 protocol of recognition between the provincial government and the UBCM. To date, British Columbia is the only province in Canada, as I said, that has given local government this level of recognition.

Our challenge now is to build on this recognition by giving local governments the resources they need to effectively govern their communities, matched with stronger accountability measures to ensure greater public input into local government decision-making. That's the balance that we have struck in this legislation. It moves us from a top-down model towards a more general powers-for-local-government model. It is the product of broad consultation over the past year, which included the UBCM, the Business Council, the Canadian Federation of Independent Business, the Federation of Labour and many other organizations. I also held public meetings in the communities across British Columbia to hear directly from members of the public on the issue of local government accountability.

[1055]

When we talk about accountability, I think of fundamental values such as openness and transparency. It is important that these values underpin our system of local government. When I held public hearings on local government accountability last fall, the issue of closed meetings came up time and time again. While there are situations where in-camera meetings are held appropriately, I think most British Columbians would agree that open meetings should be generally accepted as a rule of thumb. Only in specific cases where confidentiality is required should meetings relating to those matters be held behind closed doors. This legislation sets out clear guidelines for open meetings and confirms that voting on bylaws in closed meetings is prohibited.

It also strengthens campaign disclosure guidelines, extending them to cover nomination campaigns as well as general elections. We have also provided new tools, such as a refundable deposit, to allow municipalities to address the issue of so-called frivolous candidates should they desire to do so. I'm pleased to report that these changes will be in effect for the November general election this year.

I believe that these amendments will help bring the Municipal Act into the twenty-first century and will allow the province, municipalities and regional districts to deliver more cost-effective services to British Columbians. I certainly will continue to work with the UBCM to modernize the local government legislation so that it meets the needs of both levels of government.

Before I close, I'd like to just read a couple of quotes, because the member opposite was actually criticizing some of the components of the act. For the record, I'd like to simply quote Mayor John Ranta, president of the UBCM, who states in relation to the Municipal Act reform proposals: "By moving to broad powers, local governments can respond quickly to the changing needs of their communities. With this legislation, municipalities can focus on delivering quality services without having to seek provincial approval each time they want to do something in a more cost-effective manner." This is a quote by Mayor John Ranta in the July 7 Osoyoos Times.

Another quote from the mayor of Prince George, Colin Kinsley, states: "I'm pleased they are eliminating obsolete portions of the act and giving us flexibility. The act is pretty much useless as it is. We can't control cats, for example, but we can control when the steam paddlers on the Fraser can blow their whistle."

These are some of the changes that we have actually been embarking on in modernizing the Municipal Act to ensure that it is brought up to date for the twenty-first century. Another quote from Mayor John Scholtens from the township of Langley states. . . . He's actually very complimentary of the ministry's work on this. He states: "It is refreshing to have a Minister of Municipal Affairs who has been a municipal councillor and understands some of the challenges local governments face." This is in the Langley Times, as it was quoted.

Finally, the last quote I'd like to put forward is from Darrell Evans, the executive director of the B.C. Freedom of Information and Privacy Association. He says: "It is very, very good. Because of a weakness in the Municipal Act, local governments have pretty much had a free ride when it comes to holding in-camera meetings. These amendments will put an end to that. They will be a huge step forward for openness." That was quoted in the Powell River Peak.

[The Speaker in the chair.]

These are just some of the comments from members of the public and from councillors who have reviewed the Muni-

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[1100]

It is very important to recognize that with that recognition comes accountability. The public and all members of the House need to recognize that by giving this authority and recognition to the local governments, we have to believe and feel that they will utilize these powers accordingly. That includes the powers in terms of regulatory powers with businesses. We have to have the faith and trust that they will not abuse these powers, therefore hurting businesses and others in the community. I have that faith. We have recognized local government with respect to that in Bill 31. We will continue to build on the strength of our relationship to ensure that local governments have the tools that they need as we head toward the twenty-first century.

Lastly I want to thank all of my staff who have worked hard on this bill and thank the UBCM once again -- Richard Taylor, Mayor John Ranta and the executive -- for all their assistance in building this act and working with us throughout the year, bringing it as Bill 88 for debate in the House. Hon. Speaker, I ask all members to lend their support to this important piece of legislation.

The Speaker: The minister having moved the motion, I'll put the question.

Motion approved.

Hon. J. Kwan: Hon. Speaker, by leave, I move that Bill 88 be referred to a Committee of the Whole House to be considered later today.

Leave granted.

Bill 88, Local Government Statutes Amendment Act, 1999, read a second time and referred to a Committee of the Whole House for consideration later today.

Hon. D. Streifel: Hon. Speaker, I call second reading of Bill 84.

CHILD, FAMILY AND COMMUNITY SERVICE AMENDMENT ACT, 1999
(second reading)

I'm pleased to bring Bill 84 before the House today for a debate on second reading. The amendments that are proposed today will allow the Ministry for Children and Families to focus more closely on the needs of youth in British Columbia, especially youth who are at the highest risk of missing their chance to build satisfying lives for themselves.

These amendments will give social workers and police in British Columbia the legal tools they need to fight those who do harm to the children in our province -- those who lure them into the sex trade. These changes to the Child, Family and Community Service Act will make a difference in the lives of those unhappy children who are on the streets where pimps and johns have had their ways with them for far too long.

Today is the day our society strengthens the legal wall between exploited children and those who have preyed on them and destroyed their childhoods. I have never been more proud to be a member of this Legislative Assembly and to be a minister of a government that is taking action right now to protect our youth. If the proper role of government is to protect the weak from the strong, the helpless from the cruel, then with this legislation the government of British Columbia is meeting the highest standard. We are standing up and doing the right thing. Now, hon. Speaker, I would like to give you some of the details of the amendments, the government's reasons for introducing them and the effects that they will have.

The Child, Family and Community Service Act is the basic law governing child protection in British Columbia. It replaces the former Family and Child Service Act and is more complex and more far-reaching than the earlier statute. Like any law that concerns a crucial part of life in a complicated and changing society, the act is subject to change. Sometimes laws must be amended to make sure that they allow us to do what society wants and needs us to do. That is the fundamental reason for these amendments: they will make a good law work better. They also represent the consensus of professionals and parents and community and interested parties, who are the ministry's valued partners in designing and delivering services to British Columbia's children, youth and families. I thank all those who have helped shape the ministry's vision and who help us carry on our responsibilities.

[1105]

The second area where we are proposing amendments to the act is in regard to the services the ministry provides to youth, and especially to youth who are at risk. We propose to create a new youth services part of the statute to recognize that the needs and concerns of youth are different from those of children. This new focus within the act will change the way the ministry deals with young people who are already known to the ministry or who would have traditionally come into care.

In the past, youth who could not or would not live at home were brought into care under voluntary care agree-

[ Page 14324 ]

An agreement must contain a plan for independence. For example, a youth may be given residential support if he or she agrees to go to a school or, perhaps, to get into drug rehabilitation. There will be clear expectations of the youth, and his or her responsibilities will be clearly outlined. These amendments will give the director more flexibility to help young people between 16 and 19 years old who are out of home and at risk. For those young people who cannot return home, the social worker will work with the youth to ensure their safety and security until they are able to take on the rights and responsibilities of adulthood.

Youth agreements will help connect high-risk youth with supports and positive role models in the community and may replace the more expensive residential services approach. They will offer young people who have left home an alternative that leads away from the streets, a tool that is a more helpful means of breaking the chains of the sex trade and the heavy drug culture. They will point the youth at risk toward the supports and resources that will allow them to re-enter the mainstream of society to build solid, satisfying lives for themselves.

It's important that we recognize that we will not be abandoning our obligation to protect children. In cases of abuse or neglect, child protection and other services will continue to be available.

Apart from giving both social workers and young people more options and flexibility, these amendments will have a direct and positive effect on the ministry's bottom line. At the moment, providing services to high-risk youth by bringing them into government care costs between $2,000 and $4,000 a month. Special contracted residential services for youth cost even more. Quite frankly, we have not had the ability to make a real difference in the lives of those young people in those resources. Under a youth agreement with more flexibility and on a track that fosters growing independence, it is estimated that costs will be between $1,500 and $2,000 per month. We believe that providing services through youth agreements will deliver substantial savings, savings that will be reallocated to provide much-needed prevention services to youth and their families to help keep their families together. This is a case of making the best use of the resources available.

[1110]

The third part of the act which we are moving to amend involves the protection challenge, where action is most desperately needed. The act will be amended to give social workers and police the power to protect children and youth from those who would sexually exploit them. Amendments will make it clear that the two phrases "sexually exploited" or "sexually abused" include situations where a child is encouraged, helped, coerced or inveigled to engage in prostitution. In other words, it will now not only be against the law to engage a child in prostitution, but it will also be against the law to encourage or help get a child into prostitution.

The changes we are bringing in will enable restraining orders to be made against pimps, customers and others who try to lure someone into the sex trade. We will now be able to act to protect children before they actually get into the sex trade. This is good news for law enforcement officers, parents and social workers who have had to watch children being seduced into the trade and have been powerless to act. The changes we're bringing in will give them an additional tool to try to stop those who prey on our most vulnerable children.

Our message is clear. Sexual exploitation of children is child abuse, and it will not be tolerated. We will protect our children from pimps and customers with injunctions that say, in no uncertain terms: "Stay away from our children. And if you don't stay away" -- you meaning a pimp or a john -- "from our children, the police will have the power to arrest, and you could be slapped with a fine of up to $25,000 or two years in jail or both."

With these amendments we send a clear message to every child snared by the criminals who feed off the misery of the sex trade. The message is clear: we will fight the pimps' power that lures and keeps them in the trap of abuse -- that pushers' power that holds them in the grip of addiction. We send a message to every pimp and every john who buys child sex on the streets of British Columbia. That message is very clear: the party's over. It will be a simple message with no room for interpretation. It's a message that the people of British Columbia want us to deliver: "Leave our children alone."

The sexually exploited youth of British Columbia -- those sad and ill-used children who can be found on the streets of too many communities -- have a right to be protected from those who use them and feed off their pain. I ask every member of this House to join me in my provincewide message: sexual exploitation of children is child abuse and will not be tolerated in British Columbia. This ministry will work with parents and law enforcement officers to bring the full force of the law on those who continue to abuse our children.

It is with great pride that I bring forth these amendments to this bill, and I would like to ask the whole House to give its full support to this action.

L. Reid: I rise to respond to the debate in principle on Bill 84, Child, Family and Community Service Amendment Act, 1999.

When the bill was introduced, the minister noted that child prostitution is child abuse. Yes, that is true. The question for us is: will this bill assist anyone who wishes to protect a child from sexual abuse? The answer to the question is: perhaps. It may become a tool in the social worker toolbox. But the officials of the Ministry for Children and Families do admit that parents cannot make this legislation function, and it is parents who have fought so fiercely to preserve the dignity of their kids and to protect their kids from harm.

The bill will have the potential to create no-contact zones around kids. The intent of the bill is to prevent constant

[ Page 14325 ]

[1115]

Today's bill isn't about new money; it's about a reallocation of dollars. No new resources -- a redirection of resources. There will be many challenges around the implementation of Bill 84. Defining what constitutes harm in the realm of prostitution as both a criminal act and as a commercial transaction will pose many problems: the training and education required around buffer zones for social workers, judges, support workers, lawyers; understanding what the test will be and the strength of evidence required. Will there be a hefty burden of proof required or not? The answers to these questions will either hinder or enhance the use of the buffer-zone mechanism.

At this juncture, I would advise the minister that I will be working on seeking an amendment to section 34.

The ministry tells us that there are approximately 200 to 300 kids in the sex trade in British Columbia at any time. The question for us is whether or not these street-entrenched youth will be assisted by Bill 84. Are these the young people who look upon these legislative changes as a useful tool to aid them in their lives, or are we simply marking time, waiting for the ministry to place some priority on secure-care options for young people who sincerely wish, who sincerely desire, a different life for themselves? The province of Alberta has had secure-care provisions for a long, long time, and I understand the United Kingdom has 72-hour secure care, followed by six months of secure care if required.

Buffer zones without appropriate resources will be barren wastelands. These kids will need timely access to substance abuse programs, to mental health programs, to educational programs -- to an array of services. The province's stated commitment to a multi-year mental health plan is documented. Yet the money hasn't followed the announcements. This year's $4 million commitment falls far short of the $17 million required to meet the needs of these same young people.

These are modest changes, modest amendments to the act. For these changes to be meaningful, these changes must be funded. The ministry staff have indicated that: "Powers in policing do not see these changes as 'new resource issues.' " The ministry staff have also stated that a continuum of service must precede secure-care legislation.

My questions to the minister in committee stage of this bill will focus on the research and rationale that support that statement and many other statements that the minister has made in the last number of days. The regulations are yet to be written. I trust that the street-entrenched youth will be part of the process. Their opinions on what will work will be vital to the success of these mechanisms. It is my understanding that the bill will be proclaimed in November and implemented December 1, 1999.

In committee we will canvass how Bill 84 will be defined in policy and regulation, how high-risk youth will be defined -- i.e., who gets through the gate? Is it 16-, 17- or 18-year-olds who can't be reunited with family? Are there other criteria in place? Is it kids actively engaged in a drug, alcohol and prostitution lifestyle or kids hovering on the fringes and at risk for this lifestyle? I trust all will be included in the regulations pertaining to this act.

At the end of the day, those pimps or johns who break a protective intervention order or a restraining order will face penalties. Their crime will have been disobeying a court order. I want these amendments to provide street kids with some choices in their lives. The examples used have been kids who want drug and alcohol intervention, who want lifestyle changes. Restraining orders alone aren't the answer. There aren't many people today who take comfort in the strength of a restraining order. There must be programs in place to support these kids. Otherwise, the minister will have oversold the effectiveness of this intervention.

Many of these kids can't take one more disappointment in their lives -- one more letdown. So minister, deliver on your promise of ensuring that the programming matches the press release. Without appropriate timely services in place, the young people of this province will not be well served. Honouring and meeting the needs of young children zero to eight or nine years of age may indeed prevent ten-, 11- and 12-year-old children that we see today seeking life on the streets. Early childhood interventions need to be the norm in this province so that at some point we can move upstream and get ahead of the problems.

Today this government is yet again at a crisis-management stage, and the outlook today for B.C. street children is not promising.

[1120]

Hon. Speaker, I cannot find anything wrong with the way Bill 84 is written, but it leaves me with many questions. Nothing in this bill has really been defined. We have not seen any regulations or policy to define what this bill is going to do or whom it will help. The changes in this bill, I feel, are modest. It is only a halfway measure. The intentions of the bill are good -- a step in the right direction. But the question is: will the government give the ministry enough resources to fund the initiatives put forward in this bill? We already know that no new resources will be given to the Ministry for Children and Families; there will just be a redirection of funds. So what part of the ministry will lose funding to implement this bill?

This bill provides new powers to social workers and the police to protect kids from the sex trade, but it leaves parents without the ability to directly seek a restraining order. This bill does not in any way help parents to prevent their children from being harmed by the lowest form of life on this planet. Why were parents left out? The majority of parents only want the best for their children.

In order for this bill to help or be effective and support older youths, the youths in question have to want to be

[ Page 14326 ]

Study after study has shown us that early intervention is where government funds need to be put. Stop the problems before they get out of hand. Any youth headed for trouble should be considered a high risk, and intervention should begin at that point. Society pays a high price for more expensive services later. I believe that if we provide service to our youth when it is needed, we will help resolve that problem.

That is why it is so important that strong legislation is brought in so that a powerful message is sent out to the abusers of our young. We need strong legislation that goes after both the pimps and the johns -- legislation that this government is willing to put forward with the dollars needed to end this scourge that is breaking up our family units. Legislation in this area is long overdue, and all we are asking is that the message be loud and clear and that it effectively unties the hands of the police, social workers and parents.

The child, youth and family advocate, Joyce Preston, has told this government and this minister that we are not providing essential services to our children and especially to older youth. It is time that we stop throwing crumbs to our youth. We have to be ready to stop the madness that is happening to our teenagers on the streets of our cities. What the ministry needs to overcome is that it might be expensive in the short term, but it will save us money in the long run if we intervene when the problem arises.

Governments on all levels need to work together to help save our children and youth from these predators. The provincial government must lobby the federal government for stronger laws and must raise the age of consent to at least 16 years of age. Children at 14 do not have the maturity to deal with pimps and those who prey upon them.

This bill is a start in the right direction, as I said earlier. I hope it will make life miserable for the pimps and johns in this province. I still think it needs to have a stronger message, and time will tell.

[1125]

However, one wonders whether the resources will be available. And if so, will they follow with the commitment of this bill? The purpose of this bill is to protect sexually exploited children and to start youth services that give support to those youths who are unable to live at home.

There is an obligation on government, as you are aware, to see that our children and youth are not subject to abuse and serious neglect. We have a duty to ensure that their safety is there when it's necessary or required. Our duty is also that the government should be a good parent. We have the obligation to be the best guardians of our young people when necessary. So the onus is on this government to do that. Failing to change the plight of thousands of children, we will see ever-growing numbers of our children at risk in this province.

It's rather disturbing when I look at the papers and I see articles stating that we have anywhere from 10,000 to 14,000 children living under government care. At this time of their lives this is not acceptable. When you think that we only have about 1.5 million children in this province, that that many are under government care is very disturbing.

This bill certainly focuses on some serious aspects of our youth and their problems. That is good, as I said. However, from what I've viewed and heard, as I said before, the area of youth services does lack a certain direction. There have been years of neglect and perhaps overadministration and restructuring that have not shown the results that one would expect, considering the millions of dollars that we've plowed into this ministry. We should be ashamed of the ever-growing outcomes that we see before us.

As I have said, we have spent millions of dollars in the hopes of these great utopian results that are expected. It does not necessarily follow that this bill will serve that purpose. I do not believe that's the way it works out in the streets. From what the minister says, I think she is not completely aware of what really is going on out there. I would be interested in knowing what the minister would think with regard to raising the age of consent to 16 or 18 and what efforts she is going about to try to change that through the government end of it.

I don't believe that we really know the correct way of treating the causes through the ministry. There's nothing to measure the results in this bill. You read in the paper that advocates have criticized this ministry considerably -- all over the province. They say that while Children and Families basic services are good, they fall short of what experience indicates. In the papers you see large articles about how child prostitution in B.C. is booming. That in itself is indicative of the fact that we do have a problem.

The point of this bill is a necessary one, but are we going about it the right way? You talk to the police out there -- and I've had the opportunity to talk to one of the policemen that's in charge of children and youth -- and they say that the basis of this bill is good. But they doubt very much if it'll be effective, because first of all, once we seize the children or take them into our care, there's nowhere for them to go, and it's going to be a considerable time. . . . I notice the minister has said that they haven't got that information specifically detailed yet, about where they're going to put the children, but they will down the line.

But again, I see the minister, when she was talking about detox beds, for example. . . . Back in September of last year she said there were going to be six beds put into Prince George. This year, come June, those six beds still haven't even started yet, and she's reannouncing it again. Back in early June she was talking about putting beds into Surrey -- seven more beds into Surrey. They haven't started yet. What we're seeing is a lot of reannouncements of old stories. The minister is endeavouring to get this position filled and get lots of detox beds out there. But will they be done? Who knows? The record of this ministry isn't that great on that basis.

[1130]

[ Page 14327 ]

The Speaker: Member, on Bill 84.

D. Jarvis: Yes. I appreciate that, Madam Speaker.

The Speaker: On the bill, not the minister.

D. Jarvis: That's exactly what I was talking about: Bill 84 -- the contents of it and what we may expect down the line as a result of the facilities for children. . . .

I wonder how the minister can treat an advocate that's out there in the field. . . . How can she say that they are wrong, versus a ministry that's basing its knowledge on perhaps outdated philosophies and on another experiment? She's basing all her statements on her bureaucrats, who appear to be far from the scene in a lot of instances. It's not that they're all wrong, but they are far from the problems that are out there. When you talk to the people out in the field, you certainly get a different story as to what the problem is out there, compared to what you hear from the ministry.

We have problems, and they are not being addressed properly. I know that the minister will argue, but the growing numbers show that we are wrong in what we say in this House as to what is happening out in the streets. At the least, this system has to be either looked into in more detail or corrected once more.

This bill certainly addresses a basic problem, and I am prepared to support it. Secure care is a necessity, and it's a long time coming. So we look forward to discussing the details in committee stage. I thank you for the opportunity of speaking.

[T. Stevenson in the chair.]

Hon. L. Boone: I guess I was a little optimistic in thinking that this negative opposition could ever see their way to saying good things about a good bill -- one that has been widely acclaimed by the partners out there.

Certainly this ministry and I have never said that this change to the act -- the change to bringing in a restraining order -- is the panacea that is going to end all child prostitution. We've never said that it should replace the Criminal Code. Certainly there are some things in the Criminal Code that maybe the Attorney General should look at changing. But this is one tool -- another tool -- to give to those who deal with children that are out there on the streets. It's a tool for parents, a tool for social workers, a tool for law enforcement to use to try to protect those children. It's a tool that can be used as a prevention measure to protect children.

That is the basis of the whole premise with the amendments that we're bringing in today. It is brought under the child protection legislation, and therefore the burden of proof is much lower than it is under the Criminal Code. Because we have a responsibility to protect all children, we are therefore able to act prior to somebody being able to act in a criminal manner. This means that we can move to protect children, and I think that's a good thing.

[1135]

I'm also rather surprised. . . . But it's 20 to 12 now. I guess this is a spending morning. Maybe by tomorrow afternoon. . . . Maybe by 2 o'clock when we come back, the opposition will be saying that we should cut more -- as they have in the past, as they do all the time. In fact, they. . . .

Interjections.

Hon. L. Boone: This opposition, which is standing here demanding that we spend more money and criticizing this ministry for not spending enough money, has endorsed the B.C. Business Council's position, which says that we should be cutting 5 percent across the board. How much money do you think this ministry would have. . .

Interjections.

Deputy Speaker: Members, members. You've all had your own. . . .

Hon. L. Boone:. . .if we were in fact cutting 5 percent across the board? That is what this opposition is saying.

Interjections.

Deputy Speaker: Members. . . .

Hon. L. Boone: However, it's 20 to 12, so this is a spending morning. By this afternoon they'll be demanding that we cut more. We should stay tuned, because probably by this afternoon their tune will have changed, as it does all the time. I'm very proud that this is a government that has deliberately chosen to increase the deficit so that we could support. . .

Interjections.

Deputy Speaker: Members, it's very difficult for the Chair to hear.

Hon. L. Boone: . . .health, education, children and families. There are only three ministries in this government that received an increase, and this ministry is one of them. What would have happened to this ministry if they'd had the 5 percent cut across the board. . .

Interjections.

Deputy Speaker: Member for Okanagan West, please. . . .

Hon. L. Boone: . . .that the members opposite have in fact advocated? Does the Business Council's agenda. . . ? They are telling us to do the B.C. Business Council's agenda, to make the cuts that they are saying. . . . The Business Council clearly said to us: a 5 percent cut to all ministries, right across the board. That is it. Their leader has said: "We support the Business Council's agenda. The government should have

[ Page 14328 ]

This is a good bill. We are reallocating our resources within this so that we can put the resources into the front end -- to the children, so that we provide services to them. We are reallocating those resources. I am proud of the work that has been done to bring in this bill -- a bill that addresses the concerns of British Columbians.

I now move second reading.

Motion approved.

Hon. L. Boone: I move, by leave, that the bill be referred to a Committee of the Whole to be considered later today.

Leave granted.

Bill 84, Child, Family and Community Service Amendment Act, 1999, read a second time and referred to a Committee of the Whole House for consideration later today.

[1140]

COOPERATIVE ASSOCIATION ACT
(second reading)

Although co-ops have been operating in British Columbia for many years, not everyone is familiar with the model. A cooperative business is traditionally defined as one that has a broad base of ownership, that governs itself democratically -- based on the principle of one member, one vote, as compared to one dollar, one vote -- and that offers financial returns to its owners or members -- usually the same -- who may also be patrons of the business.

There are now more than 600 co-ops registered in British Columbia, and those co-ops cover a very broad spectrum. There are consumer cooperatives such as food or retail outlets; there are service co-ops such as the two car-share co-ops -- one in Victoria, one in Vancouver and another one coming in Nanaimo. There are community-based social cooperatives such as health care services -- the Rainbow Community Health Co-op in Surrey. There are many housing cooperatives in British Columbia, and there are increasing numbers of worker co-ops in B.C. Those are co-ops that are owned and run by the workers, such as the Imagine That artisans co-op in Duncan and the numerous wood co-ops that are popping up around B.C.

We see examples of cooperatives every day in a variety of functions. Child care, agriculture, financial services, transportation, entertainment, radio stations, colleges, wholesale businesses and consulting agencies are some examples of the kinds of co-ops operating in B.C. Co-ops and credit unions play an important economic role in many Canadian communities; however, they are very much underrecognized. Nationally, there are more than 151,000 people working in their co-ops, making this group -- i.e., co-ops -- one of Canada's largest employers, with more than $167 billion in assets as of 1996. Co-ops based in British Columbia now have 1.8 million members if you include credit unions, and they employ 13,000 staff, with an asset base totalling more than $19 billion. The cooperative economy generates an annual business volume of $1 billion in British Columbia.

In the past three years an increasing number of B.C. businesses have incorporated as co-ops. A number of them may be familiar to people, though I'm not sure everyone recognizes that they are co-ops. Dairyworld Foods, for instance -- or Agrifoods International, which is their formal name -- is a cooperative. Mountain Equipment Co-operative, based in British Columbia, operates across the country. Island Farms Dairies is a cooperative, United Flower Growers is a cooperative, and Rainbow Community Health Co-op in Surrey is a health co-op.

Worker co-ops are a growing trend in B.C, especially in industries such as forestry, fisheries, agriculture and tourism. A 1998 federal report in fact lists seven B.C. co-ops as among the top 50 in Canada. Cooperatives enjoy a number of advantages over other business models. They keep capital, resources and people rooted in communities -- an increasingly important factor of co-ops in a global economy. Co-ops give people an exciting alternative to traditional business structures, enabling them to work together and learn from each other, rather than the adversarial model that we see so often.

The community approach taken by co-ops removes barriers to employment for many, particularly single parents, low-income and other marginalized people. Co-ops frequently play a role in helping people move from income assistance into the workforce. Co-ops provide a broad, flexible range of employment opportunities, and they create more purchasing power in communities by keeping the money and the economic activity very local. They can undertake very dynamic joint marketing with less individual risk than many other business models.

[1145]

[ Page 14329 ]

The existing act, unfortunately, poses significant barriers to this kind of economic activity. For that reason, the co-op act has been redesigned and rewritten to remove the barriers that currently prevent people from developing co-ops to their full advantage.

The major areas of change pertain to organizational structure, to membership and to greater self-regulation by cooperatives. The changes include an updating of the principles of cooperative activity. They've been changed internationally, and we've changed our legislation to reflect that international change. As well, we have modernized the organizational structure and operation. We've modernized regulation and compliance, and we're moving towards self-regulation consistent with our cross-government initiative to cut red tape. We're accommodating new understandings and definitions of membership in co-ops, and we're enabling cooperatives to expand their access to capital, which is critical in the 1990s and beyond.

The new act will allow co-ops to self-regulate in a number of important areas, such as the amount of surplus to be retained by co-ops and the distance requirements for determining proxy voting rights for members. Traditionally, individual members have formed co-ops and provided the co-ops' capital. However, today there's an increasing need for co-ops to expand their membership to include new types of members, such as corporate entities and public bodies.

The new act clarifies that co-ops can have corporate entities and public bodies as members. These types of co-ops are usually referred to a multistakeholder co-ops, and I'm pleased to say that in my riding, the Cowichan Lake Community Forest Cooperative is of that model. In this kind of co-op, the rights and restrictions of members often differ based on the roles of the various members. Accordingly, multistakeholder co-ops divide members into classes. For example, a health co-op may need to create membership classes for service providers, for service users and for representatives of the community or community agencies or funding agencies.

Currently co-ops access additional capital by requiring member loans, borrowing from financial institutions or other co-ops, or issuing debentures. This has been a significant disadvantage to co-ops trying to operate in a global economy. The terms and conditions faced by co-ops seeking access to capital have often been more onerous than competing entities can obtain from capital markets, which is clearly unfair. This has tended to discourage the formation of new co-ops, and it has impeded current co-ops from entering new lines of business. This act allows co-ops to issue investment shares to members and non-members, which will expand the sources of capital currently available to co-ops.

The introduction of the new co-op act is a direct response to the stakeholders in this sector of our economy and communities, and it's a fulfilment of this government's commitment to them in this regard. I certainly want to thank my two colleagues who have worked closely with me, the Minister of Finance and the Minister of Small Business, Tourism and Culture. I know that the sector appreciates their support, as I do, and their assistance in moving forward on this agenda. I also want to recognize the staff in the three ministries, who have worked amazingly long hours and very, very hard and very thoughtfully to bring this act through to fruition. I also want, finally, to applaud and thank the Canadian Cooperative Association in British Columbia and the broader co-op community and those who have provided input. The CCABC, particularly, has worked very, very hard on this for two years and more.

So I'm pleased to move second reading of this new act, Bill 98, the Cooperative Association Act.

[1150]

I was interested to note, as I was thinking about my remarks this morning, that the history of co-ops is very much rooted in the west of Canada and in the politics of protest that grew out of the prairie region, particularly during the 1920s and 1930s. I guess that if one is looking at this on a sort of political spectrum, it's interesting to note that you have a kind of left wing of this, in the history out of the CCF, but you also have a very distinct right-wing component, if you like, out of the United Farmers of Alberta. Out of this sort of milieu, without getting too precise, grew co-ops. They are very much rooted in western economy and western culture.

I would not disagree with the minister that there certainly is a need to update the act after many years. The act has been in existence for a long time. I believe that the last amendments were introduced in 1988. It would appear, from what I have been able to find out, that the minister has indeed consulted widely in the community, and most of the groups that have responded have so indicated.

This side of the House, I think, would perhaps have only one or two concerns that have been raised with us. The minister is aware of these concerns. One of them is that in consultation, it would appear to me that there is both a financial and a social agenda, if you like, when we talk about cooperatives. If we look at cooperatives, we find some that are more financial in nature and others that are more social. The ownership of the act reflects this, I think, in that the Ministry of Finance has legal responsibility for the act but the Ministry of Human Resources has assumed, in this case, the responsibility for policy and program development. What I sensed from the briefings was that there had been a lot of consultation with the cooperative people but perhaps not quite as much as there should have been with financial organizations such as the Chartered Accountants Institute of B.C. and the CGAs, who have expressed a concern about the auditing component of the bill. We will be following that up in greater detail in committee stage.

I was a bit concerned about what appeared to be a little bit of haste in time for response of consultations. I note that on the web site, the ministry sent out a document on March 29

[ Page 14330 ]

[1155]

The other concern that we will raise during the committee phase is the fact that there has been no regulatory impact statement applied to this bill. We find it, in view of the importance that the government has placed on this, to be something of an error. Those are the things that this side of the House will be looking at during committee phase, and I look forward to that discussion.

Hon. J. Pullinger: I simply want to say thank you to the critic for her thoughtful comments. I do look forward to discussing those issues. In fact, we've had some discussions between ourselves. But it's important that we discuss those in this House, and I look forward to that.

With that, I would simply move second reading of Bill 98.

Motion approved.

Hon. J. Pullinger: I move, by leave, Bill 98 be referred to Committee of the Whole for consideration later today.

Leave granted.

Motion approved.

Bill 98, Cooperative Association Act, read a second time and referred to a Committee of the Whole House for consideration later today.

Committee of the Whole (Section A), having reported Bill 93 and Bill 85 complete without amendment, was granted leave to sit again.

LAND TITLE AMENDMENT ACT, 1999

COMPANY ACT

The Speaker: When shall the committee sit again?

Hon. D. Streifel: Later today, hon. Speaker.

Hon. D. Streifel moved adjournment of the House.

Motion approved.

The House adjourned at 12 noon.

PROCEEDINGS IN THE DOUGLAS FIR ROOM

LAND TITLE AMENDMENT ACT, 1999

The committee met at 10:15 a.m.

On section 1.

G. Plant: This is a new initiative to make some significant changes in the technology of the land title process in British Columbia. I'm hoping I can impose on the Attorney General for some general questions about the implementation of this project, which I think are, perhaps, at least as important as some of the details about the project itself. Can the Attorney General give some indication of the plan for implementation, including time lines and also locations? I know that the way this works -- at least as I understand it -- it is possible to do this one land title office at a time. So I guess I will begin with a general question about how the government intends to implement this initiative.

Hon. U. Dosanjh: I'm told that once the legislation is passed, it would take about ten months to put things in place. The first place that would be operationalized under the new scheme would be Victoria. That would happen by the fall of 2000. That would be then monitored and run for the next two to three months. At that point, we may be ready to roll it out across the province.

G. Plant: Will this scheme be optional when it is implemented? And is it intended to be optional only for a period of time, so that at some point eventually it becomes mandatory? How does the government see that rolling out?

Hon. U. Dosanjh: There is no intention at this time to make this mandatory at any given time. But we may, for instance, say in the case of financial institutions sending releases with respect to mortgages, that they send those electronically at some point, because they're big institutions, and they can make those changes.

My concern is that we don't want to bar ordinary individuals -- particularly lay individuals who might want to deal with the land titles office -- from dealing with the land titles offices other than electronically. I think we should have those options. At some point in the distant future, if there's only 1 or 2 percent of people that are using the land titles office through paper, that may then be the time to say: "Okay, let's make it mandatory." But I want to make sure that there is the option, particularly for laypersons, to be able to use the land titles offices unelectronically.

G. Plant: There's also, I suppose, the question, for the next little while, of seeing if the system works. If it works well, then that may accelerate the timetable of implementation. If it doesn't, then I suppose things will slow down. Following from the Attorney General's observation with respect to ensuring access for what he calls laypeople, what is it about the new system that will make access difficult for laypeople? What did he have in mind, specifically, when he was talking about leaving that option open?

[ Page 14331 ]

[1020]

G. Plant: To put the same point another way, the system would now allow the layperson to go into a lawyer's or notary's office -- or any commissioner, I suppose, who can serve as an officer -- with an instrument and have the instrument witnessed, but then take the document out of the office and carry it around in the back seat of their car for a couple of weeks and then go and actually do the filing. That won't really be possible under the electronic system, because in order to use the electronic system, you have to be a subscriber. The intention is that it will be the lawyers and notaries -- and, conceivably, as I understand it, some others. So the second half of the Attorney General's example would then come into play, which is that the layperson would go into, say, the lawyer's office, have the document executed, and then would have to say to the lawyer: "All right, you use your signature and your access to the system, and register it electronically." Have I got the distinction correct there?

Hon. U. Dosanjh: Correct.

G. Plant: I want to ask, if I may, a question about technological readiness. I understand that in order for all this to work, there have to be software programs up and running that allow lawyers, notaries and others to create their electronic signatures, that allow for the creation of a public and a private key and so on. I guess the question I have is whether those systems are up and running and ready to go or whether that's part of what's going to take ten months.

Hon. U. Dosanjh: The latter.

G. Plant: I foresee that the technology that is being talked about for use here is a technology that, over time, could be used in other contexts, not even perhaps limited to contexts within, say, the legal world -- registry systems like PPSA and other systems -- but perhaps in other contexts across government. It would seem to me to be useful, if not maybe even essential, that this technology be developed in a way that ensures that there are what are called open standards. That leaves open the possibility that as other uses become feasible, the system will be ready and able to accept those potential other uses. Can the Attorney indicate whether the government is proceeding with those expectations?

[1025]

G. Plant: There is obviously some cost associated with all of this. Let me just ask first, consistent with the question of readiness. . . . Let me back up. There are going to be a number of subscribers. Subscribers are the people who have the electronic key -- who have the key to the kingdom. If you looked at the total set of persons in British Columbia who are currently lawyers, notaries and commissioners for oaths -- the people who now can serve as officers for land title instruments -- you might get 10,000, just for a number to use for the sake of discussion. But you would probably not find 10,000 people who actually currently use the land title office. I don't think I executed more than a handful of documents in 14 or 15 years of full-time practice. So the number of actual subscribers may be a lot less than the total number of lawyers in British Columbia.

Is the system going to be cost-effective already? Do we know that we've got the right numbers in place to make the software work financially, so that we don't add an unnecessarily large burden to the operation of the land title system?

Hon. U. Dosanjh: There's an estimate by the land titles administration that there might be about 4,000 subscribers by the end of the day. Based on that, I understand that the system would appear to be cost-effective.

G. Plant: Can the system be implemented in a way which is cost-neutral? Or will it result in an increase in land title registry fees?

Hon. U. Dosanjh: Once the system is fully operational, it would actually reduce the cost of doing business with government. Fees may or may not relate to that in any way, shape or form, as the hon. member knows. But in terms of the actual cost, it might come down.

G. Plant: Well, I certainly don't want to lose this opportunity to have an advance viewing of the minister's revenue expectations. Is it the government's intention, as a result of or during the course of implementing this system, to increase land title registry fees?

Hon. U. Dosanjh: There is no question that, with the mechanisms that would be in place to satisfy all of the requirements for this system, there might be additional steps that need to be taken in terms of registration. So you might have additional fees, or you might have lowering or raising of the fees to adjust. . . . But the overall cost of doing business, the overall cost of registering documents in the land titles office, would be reduced.

[1030]

Hon. U. Dosanjh: It seems to me that both of those costs would be in check. You might have the government's own costs going down in terms of the efficiencies that might be gained, and the overall cost to the public for doing business with the land titles office would not go up. It may go up in one area but be reduced in another area, so it would remain the same, at least.

G. Plant: Moving to a slightly different issue, maybe just by way of a general introduction to the discussion of the

[ Page 14332 ]

Hon. U. Dosanjh: I think the answer is yes, because the basic law is not changing. We're facilitating, with these changes, the electronic routing of all of the processes that are in place.

G. Plant: Looking at section 1 of the bill specifically, the first proposed amendment is going to take out the words "write" and "stamp" and substitute for them the word "endorse." I take it that "endorse" is intended to be a term that would encompass both physical writing or stamping and also the electronic processes that are contemplated by this bill. Is that correct?

Hon. U. Dosanjh: Yes.

Section 1 approved.

The Chair: In the interest of having the debate flow a lot more smoothly, and considering that there are so many subsections to section 2, perhaps we'll go through section 2 seriatim.

On section 2, section 168.1.

G. Plant: Thank you, hon. Chair, that's very helpful.

"Subscriber" is a defined term. Can the Attorney General indicate who is intended to be brought into the group of people who are subscribers -- maybe just for the sake of informing the seven or eight British Columbians who are going to follow this debate? I understand "subscriber" is the term that's been chosen to identify the individuals who will be able to achieve the electronic registration.

Hon. U. Dosanjh: It's anticipated at this time that it would only be lawyers, notaries and possibly commissioners. I can't think of anybody else at this time, but as the system develops there might be other people that might be authorized.

G. Plant: In other words, a subscriber has to be an officer as that term is used in part 5 of the act.

Hon. U. Dosanjh: Correct.

G. Plant: Hon. Chair, I don't know if you want a vote on each of these sub-provisions as we go through them. If you do, then I'm prepared to let section 168.1 pass.

Section 2, section 168.1 approved.

On section 2, section 168.11.

G. Plant: This provision says that this new electronic filing part of the Land Title Act will apply only to prescribed land title districts and to prescribed applications, instruments and other documents.

[1035]

Hon. U. Dosanjh: As the hon. member has said, this section will obviously enable the electronic filing scheme to be implemented in phases. At the outset the scheme will only apply to instruments in form A, which is fee simple transfers; form B, mortgages; and form C, releases. Other types will be added later. The section also enables the electronic filing scheme to be implemented on an office-by-office basis, as we've talked about.

G. Plant: This may be as good or bad as anytime to ask a question that I asked during the course of the briefing I had on this, and that is about the form of security called a duplicate certificate of title. Clearly when we are moving to an electronic system, the idea of what a title is. . . . It moves away from being a document on file to being a record in some chip somewhere. But as I understand it, the electronic system will be capable of generating a hard-copy document that could be used as a duplicate certificate of title to provide the same type of security that that document now provides under the old system. Is that correct?

Hon. U. Dosanjh: The hon. member's understanding is correct.

Section 2, section 168.11 approved.

On section 2, section 168.2.

G. Plant: The title of this section is: "Effect of electronic applications and instruments." The general intent of the provision seems to be that an electronic application or instrument that meets the requirements of this part -- in other words, that meets all of the requirements of the scheme -- will have the same effect as an application or instrument in writing. But this section begins with the language: "Except as provided in this Part. . . ." So there's an exception. I don't understand what the exception is intended to refer to.

Hon. U. Dosanjh: I'm unable to provide the answer. I'm sure the official with me will look into it and provide the answer. I don't understand why the "except" is there myself. So I think we should proceed, move on and perhaps leave this suspended or pass it. There must be a reason, but I don't have an explanation at this time.

G. Plant: The minister will understand that from my perspective it seems to be obvious that an application or instrument that doesn't meet the requirements of the part -- it isn't properly certified or submitted or doesn't look like the form that the regulations provide -- won't meet the requirements of the part and therefore shouldn't have any effect. So that's where I begin to be confused about the opening language. I look forward to a clarification in due course on that. I have questions about section 168.3.

[1040]

[ Page 14333 ]

Section 2, sections 168.2 and 168.21 approved.

On section 2, section 168.3.

G. Plant: I don't know. This might be the heart of it here.

Section 168.3 is "Signing requirements." First of all, subsection (3) says that a subscriber "must not incorporate his or her electronic signature into an electronic instrument unless" certain things have happened, and the certain things revolve around what is described here as a "true copy." I take it that that term, "true copy," is intended to refer to something I might call a conventional paper copy of the instrument.

Hon. U. Dosanjh: Correct.

G. Plant: I'm not sure that this is a question as much as it is an observation. When you read through subsections (3), (4), (5), (6) and so on, you eventually get to the point where pushing the button on the computer will be a signal to the registry, wherever it may be in cyberspace, that certain things are conclusively deemed to be true -- that all of the things that need to be done as prerequisites in order to achieve registration are conclusively deemed to have been done. I could turn my observation into a question. In substance, will that be any different from the situation now, when someone shows up with an instrument in registrable form and the registry office looks at it and decides whether or not to file it? The act is worded in a way that makes it pretty tight. But the question is: in substance, is the transaction the same, or has it really changed?

Hon. U. Dosanjh: It would be absolutely the same.

Section 2, sections 168.3 and 168.31 approved.

On section 2, section 168.4.

G. Plant: Section 168.4 is entitled: "Submitting electronic applications and instruments." The submission of an electronic application under this section implies certain statements. I won't read them all, but in subsection (3) there's a list of them, for example. They are, I suppose, a form of warranty by the person submitting the electronic application that they are in fact applying, that they are entitled to be registered as the owner in fee simple and so on. Are these new, or are these the same implied statements that exist now in the system with respect to the submission of true copies or paper copies of the documents?

Hon. U. Dosanjh: The same.

Section 2, section 168.4 approved.

On section 2, section 168.41.

G. Plant: There has been some discussion in the context of this bill about the payment of property transfer tax. I had asked earlier about the instruments that it is intended will be the first subject of this process. Fee simple and mortgage instruments, I think, were the two examples. But I have also heard about the property transfer tax. This section refers to something called supporting documents. Is the property transfer tax submission an idea of a supporting document, or is that somewhere else?

[1045]

G. Plant: Could the minister give some indication, then, of what is meant by or will be meant by the idea of a supporting document?

Hon. U. Dosanjh: I think an example of such a document will be a certificate of full payment issued by a strata corporation.

Section 2, sections 168.41 and 168.5 approved.

On section 2, section 168.51.

G. Plant: The section before us empowers the registrar, before registering an estate or interest or claim evidenced by an electronic instrument, to require certain things of an applicant. These would be the kinds of things that would allow the registrar to verify the authenticity of the transaction. Are they new, or are they requirements that exist now in respect of the submission or application for registration with hard copy paper documents?

Hon. U. Dosanjh: This provision is new, and it's obviously to reinforce the integrity of the system.

G. Plant: So in practical terms, I guess the difference is that the registrar used to see the original document. Now the registrar will "see" -- or maybe I should say the "registrar". . . . Just don't tell me that the name of the registrar is Hal -- that's sort of a cinematic joke, I guess. So now the registrar is going to have the power to say: "I actually want to see the real piece of paper with the signature on it before I allow this registration to take place." Is that the intention here?

Hon. U. Dosanjh: Correct.

Section 2, section 168.51 approved.

On section 2, section 168.6.

G. Plant: I apologize for not having done this research myself, but subsection (2) here makes reference to section 38(4) and (5). Can the Attorney General assist in explaining what that's about?

[1050]

G. Plant: I would be prepared to go to 168.71.

Section 2, sections 168.6 to 168.7 inclusive approved.

On section 2, section 168.71.

[ Page 14334 ]

Hon. U. Dosanjh: The example of a certification authority might be the Law Society of British Columbia. Once it becomes the certification authority, it would perform two essential functions. It would be responsible for identifying and authenticating the person who wants to be named in the certificate as a subscriber and ensuring that the subscriber possesses a private key that corresponds to the public key that will be listed in the certificate issued to the subscriber. Secondly, a certification authority is responsible for creating and issuing the certificate to the subscriber. The certificate constitutes, of course, a warranty by the certification authority as to the identity of the subscriber and as to the binding of the subscriber to a particular public-private key pair.

G. Plant: So the government is saying, in effect: "We're not going to do the security clearance work, if you will" -- the qualifications work -- "to determine who will have access to this system. We're going to designate other agencies to do that." And the Law Society would be an example. Is that a correct way of restating that?

Hon. U. Dosanjh: Correct.

Section 2, sections 168.71 to 168.9 inclusive approved.

On section 2, section 168.91.

G. Plant: Section 168.91 is the next section I need to talk about. This is the section that gives the power to make regulations. It has a provision at the end of it, subsection (3), which I don't understand. Maybe the minister could explain it.

Hon. U. Dosanjh: I will read to the member the note that I've been given. It talks about, in fact, the difficulty of understanding this section. I'm told it's best understood with an illustration. For example, the power of attorney in the form prescribed under the Power of Attorney Act authorizes the attorney to act regardless of the words of the empowerment appearing in the form itself. In other words, the scope of an attorney's power is derived from the statute rather than the form. Because a power of attorney may be in a slightly different form for electronic filing purposes, this subsection makes it clear that regardless of the different form, the attorney's power will still be derived from the statute. Does that make sense?

[1055]

Hon. U. Dosanjh: Transitional.

Section 2, section 168.91 approved.

Sections 2 to 13 inclusive approved.

Title approved.

Hon. U. Dosanjh: I move that at its rising, the committee report the bill complete without amendment.

Motion approved.

The committee recessed from 10:56 a.m. to 11:13 a.m.

COMPANY ACT

G. Plant: I don't want to make another second reading speech. However, I do want to point out that we have in front of us a bill with something like 445 provisions, with table A on articles and table B. It's a bill where, for the most part, technicians and experts in an important but particularly technical area of the law have sat down and asked themselves questions about whether the act, which was last revised in a significant way in 1973, continues to serve the purposes that it should serve. In asking those questions, they have found it necessary to substantially rewrite the act but, for the most part, leave the major features of a company intact.

The changes that are made are changes that I know will become important in particular contexts. I certainly had the experience as a litigation lawyer. From time to time I was called upon to give advice about a particular provision of the act with respect to reorganization or restoration or shareholder rights, and I did the best I could. But oftentimes I found that I was treading new ground and that the provisions I was looking at had been used, probably with some success, by company solicitors for years without much difficulty, because no dispute arose with respect to the particular ambit of the language. It was really only when a dispute arose that a court would finally have to grapple for the first time with the meaning of a particular provision.

I'm sure that the current bill -- the bill that we have before us -- will have somewhat the same effect: that is, over time, different provisions will get scrutinized in different ways, and it may turn out that after a court has interpreted them, it will be seen by everybody that the provision isn't worded in a way that works. I don't think that the committee stage process for a bill like this is the place to have that debate. We could be here for years attempting to tease out of all the provisions of this bill the various potential arguments that might arise with respect to their interpretation.

Similarly, I can say that I have read through this bill and I have asked others to do so from the perspective of trying to determine whether there is what might, for want of a better term, be called a particular ideological orientation of the bill. That is, does it take a series of pre-existing balances between majority and minority rights and skew it all -- re-skew it, redesign it -- in one direction? The answer to that question, as I said in my second reading comments, is: I don't think so. I think that in some places the bill appropriately adjusts a balance in favour of shareholder rights, where there's good reason to do that. But in other cases the bill changes the old act in a way that enhances the power of the majority, or at least their ability to manage the company effectively, and I think it does so for good reasons. When all is said and done, there are still about a half a dozen provisions of this bill that I think would warrant some discussion here today.

I guess that I also want to conclude my brief general remarks by saying that in the course of the experience that I

[ Page 14335 ]

Having said that, though, there are some issues that I do think warrant scrutiny for a minute or two. If I may, I first come to life at section 30.

Sections 1 to 29 inclusive approved.

[1115]

G. Plant: Section 30 is the new version of the old section 21. The old section 21 was entitled "Power and capacity of company." The new section 30 -- no doubt following the principle of alphabetical order -- is entitled "Capacity and powers of company." Section 30 says: "A company has the capacity and the rights, powers and privileges of an individual of full capacity." The old provision said -- and I'm going to omit that which is unnecessary for the purposes of this question -- that a company "has the power and capacity of a natural person of full capacity."

It seems to me that there are two changes that have been made. One is to change the idea or the term "natural person" into the term "individual." I have thought about that. It may turn out that there is some significance to that. But I rather suspect that the language "natural person" used in 1973 is language which we now would regard as statutorily equivalent to the idea of "individual" as that term is defined in the Interpretation Act or wherever.

What is of more interest to me is that the new act speaks not just about capacity and powers but goes on to talk about rights and privileges. So now we're not just saying that a company has certain powers and capacities but that it has powers, capacities, rights and privileges. It occurs to me that an argument could be made that that enhances the position of companies, in the eyes of the law, in certain contexts where the distinction between a company and a natural person may be significant.

[1120]

Hon. U. Dosanjh: I think it's appropriate to say that I don't believe that a province can confer Charter rights which entities or individuals otherwise wouldn't have. Therefore I don't believe that a company would enjoy those Charter rights which the hon. member is talking about.

Secondly, this is the Attorney General's view, based on appropriate advice: that those Charter rights won't extend to a company, even though there is now a new section with different words and phrases in it.

Thirdly, it is not the intention of the government or the Legislature, at the end of the day, to confer those Charter rights. Just for clarity's sake, there is no intention to do that.

G. Plant: Could I then ask the minister to explain the rationale behind the new definition?

[1125]

I think the term "rights and privileges" ought not to be construed, in my submission, to add to the powers of the company, other than the powers that have been given to the company by statute. Remember, this is a creation of the statute, and a creation of the statute only has the powers that the statute gives it. It would have no powers outside and beyond the statute.

G. Plant: That is so; however, it is also the case that governments have enormous power in terms of their ability to define A as B by simply legislating that A shall be B. In other contexts, for example, we've had disagreements across the floor of the House about the distinction between fees and taxes and whether you can call something which is in substance a tax a fee and have different rules apply to it. Those are issues that can in fact be litigated, and have been, because the constitution of Canada says that there is a difference between a tax and a fee and requires that we look behind the label to see what is there in substance.

I suspect that that is a part of the way in which the Attorney General meets the question I asked earlier: with the argument that whatever the Legislature says a company can do, the courts -- in the Charter context -- are still going to be able to draw a distinction between a corporate personality and an individual personality, if that's appropriate for the purposes of a section of the Charter of Rights.

But here's another context. One of the things that lawyers like to argue about is whether companies can in fact commit criminal offences, because a basic principle of criminality is the idea that the criminal be able to form the intention to commit a crime. People have, from time to time, asked the

[ Page 14336 ]

Does the Attorney General see any change in the way the law in this area, with respect to criminal offences, could perhaps be changed by this expanded definition?

Hon. U. Dosanjh: I don't believe that this statute changes the rights and obligations of a company, vis-à-vis criminal law. They will continue as they were. They will continue to be presumed innocent of the crime until proven guilty, if they are charged with either a criminal offence or a quasi-criminal offence. I don't believe that this statute in any way, shape or form changes the rights and the obligations of the companies vis-à-vis the Criminal Code and other regulatory offences that might exist.

[1130]

Hon. U. Dosanjh: Correct.

G. Plant: The Attorney General earlier answered my question about what was intended by adding the ideas of rights and privileges into this statement of capacity. I want to come back to that topic by asking this question: is there something in the jurisprudence around the capacity of companies that has taken place over the last 25 years that has confined the status, capacity and powers of the idea of a company in a way which the government regards as inappropriate, and therefore wishes to address with this new, expanded definition? That is, in short, is there a problem with the old definition that the new definition seeks to fix?

Hon. U. Dosanjh: As I said earlier, it is not the intention of the government, by amplifying on "powers and capacity" by using additional terms such as "rights" and "privileges," to enhance or increase the powers and rights of the entity -- the company -- beyond what the statute provides for. I don't believe that in any way, shape or form it would confer any additional rights on a company that the company didn't enjoy before. I understand that this language was drafted over five years ago. It's been worked on over the last five years. We don't have the legislative counsel here who drafted this, and this was their way of simply making it plainer language. If the hon. member wants to pursue the line as to why this was done, I'd be happy to have the legislative counsel come in and advise me, and I'd be happy to advise the hon. member.

G. Plant: Maybe I could go this far: I would ask those who have been assisting the minister here to make the transcript of our discussion available to the legislative counsel, and if there is something that requires clarification, then the legislative counsel can advise me.

I do think that in the true contexts that I've identified -- that is, the contexts of Charter rights, human rights and criminal liability -- the issue we're talking about has certainly warranted this discussion and is important enough to try one more time the basic proposition: that is, that from the government's perspective there is nothing in the new definition which is intended to alter the basic idea of corporate personality in the law; there is nothing in the new definition which is intended to provide scope for an argument before a court that companies enjoy certain categories of human rights that they did not previously enjoy; and there is nothing in the expanded scope of the new definition that is intended to permit Crown counsel to argue that the potential range of criminal conduct to which corporations may be subject has been expanded by this definition. When you look at it all in all, the government's perspective on this provision is that it's not intended to achieve anything new or different substantively, but rather that it is intended just to give more modern expression to the continuing idea of corporate personality. If there's anything I've said there that the minister disagrees with, then now is certainly the time to be corrected.

[1135]

Sections 30 to 142 inclusive approved.

On section 143.

G. Plant: This is the section of the act that deals with the number and residency of directors. For the Attorney General's benefit, I'll explain what I understand of the context here. In the 1998 discussion draft, the proposal was to abandon the traditional requirement that every company under the B.C. Company Act have at least one director that is an individual ordinarily resident in British Columbia. My observation is that section 143 returns to the requirement for a resident director. Could the minister explain the logic behind that apparent reversal?

Hon. U. Dosanjh: I understand, yes, that this act has gone through many lives, in terms of the draft, by the time it came here. I know that at one point this requirement did not find a place in the draft. It was reinserted with the intent of reserving and preserving our rights with respect to the NAFTA trade screen. It was felt that if you give up some of these rights, thinking that they might not be consistent with NAFTA, you would never be able to reclaim the rights if you ever wanted to. This is one of the principles that we hold dear. We believe that the majority of directors should be ordinarily resident in Canada, with respect to a British Columbia company. That's why it was reinserted.

G. Plant: There are two requirements. One is that the majority of the directors be ordinarily resident in Canada; the second is that at least one be ordinarily resident in British Columbia. Both of those requirements were omitted from the 1998 discussion draft. I should say that they were both part of the old Company Act -- in section 109, I think. So they're back again. I understand that part of the government's explanation is this NAFTA explanation that, I guess, has something to do with grandparenting or something -- that the government is offside with the basic requirements of NAFTA. But that's all right. If the government chooses to change this basic requirement, it can't go back to the old requirement. I mean, I understand that.

[ Page 14337 ]

[1140]

I invite the minister's further comment on the section, having regard to my observations.

Hon. U. Dosanjh: There's no question that one of the driving forces behind the reworking of this act was to make sure that we are competitive, not just nationally but globally. But I think that one needs to strike balances between certain desires and objectives -- in terms of competitiveness, on the one hand, and in terms of trying to maintain a sense of ownership about what's British Columbian and some connection with Canada as the entity that we hold dear.

I think that's very clear, and the hon. member is correct that we've struck that balance. There are many other provisions in this act that actually enhance and increase our competitiveness. We believe that the impact of this connection that we want to maintain, through the majority directorships and the ordinary residence of one in British Columbia, does not in any significant way impact negatively the competitiveness at all.

G. Plant: Well, we'll see. Talking about an issue that's partly of form and partly of substance. . . . I'm sure the Attorney General had the experience in his own practice where the requirement of a resident director often didn't achieve anything of particular substance. The local resident director was sometimes a person who had no connection to or real knowledge of the company. Other times, of course, that's not so. It may be that this is actually more an issue of symbolism than an issue of substance, but I wanted to ask a question or two about it, and I did.

[1145]

On section 204.

G. Plant: This is not a question specific to 204. Section 204 is the first section in the division entitled "Shareholders' Proposals." These provisions create a situation where a minority shareholder of a company can essentially force the company, in certain circumstances, to deal with a resolution. There are checks and balances built into the system here that deal with things like: how long must the shareholder have held the shares, and how many people have to sign a proposal in order to bring it before a meeting? I can say that, by and large, the people I've talked to about this provision think the section does achieve a pretty good balance.

However, this question has been raised, so I'll raise it too. The idea of ensuring that shareholders can make proposals seems to me good if what we're talking about is the ability of someone who may only hold one share in a company that has many thousands of shares, in certain circumstances to require the company to come face to face with an aspect of its business that the shareholder may be concerned about -- the way the company keeps its books, its business plans, its investment strategies, the way it supervises its senior management; issues that have to do with the way the company does business. Those all seem to me to be really good reasons to enhance shareholder authority by giving them the ability to force the company, in certain circumstances, to deal with their proposals.

It seems to me that the public policy rationale that supports that whole idea becomes very thin when the shareholders are using the mechanism as an opportunity to bring before the floor of the company, at its annual general meeting, an item that doesn't really relate to the business of the company but, say, perhaps is an item that simply promotes a general economic, political, racial, religious or social objective. It seems to me that there is a potential created by this technique for people to bring before the floor of a company's annual general meeting, in a way that might interfere with the efficient operation of that meeting -- and sometimes that's the main objective -- proposals that have nothing to do with the company's business.

So the question I have for the minister is: why is there not here in part 5, division 7, a provision that would allow shareholders' proposals to be refused when they are for the purpose of promoting some cause unrelated to the business of the company? I'm told that such a provision is found in the CBCA and the Alberta Business Corporations Act.

The Chair: Attorney General, noting the hour. . . .

Hon. U. Dosanjh: Okay. Let me respond to this. I think there are balances, as I said, that we need to strike. In the other companies acts in other provinces that the hon. member has referred to there is no requirement that one needs to have been a member for at least two years before one can legitimately raise these kinds of issues and proposals. In other jurisdictions you could perhaps buy a share yesterday and come today and have a proposal. That was the balance that we struck. Rather than limiting us to what kinds of issues can be raised, we said you have to have been a shareholder for two years; it's a different approach.

G. Plant: Again, time will tell. It seems to me that if that is not the right balance, then we will have a potential problem.

I actually only have a couple more questions. Section 217 -- we might want to go up to there.

[1150]

On section 217.

[ Page 14338 ]

Hon. U. Dosanjh: It is so.

Sections 217 to 373 inclusive approved.

On section 374.

G. Plant: We have in front of us Part 11, "Extraprovincial Companies." This is an issue that I can imagine reasonable people could disagree with. We're now talking about foreign corporations and the requirement that they register as extraprovincial companies if they wish to continue carrying on business in British Columbia. In practice, these provisions. . . . Actually, I don't think they're much different from the old act, and this may be another instance where the government has gone back to the pre-discussion draft era in order to preserve its NAFTA position.

It seems to me, without explaining the problem -- because those who deal with this issue know what the problem is -- that we have here the same philosophical tension. The government has said: "We are going to continue to maintain the requirement of registration. We're going to continue to maintain the rules about incapacity if you don't register. From our perspective" -- that is, from the government's perspective -- "that is a useful way of maintaining this connection with British Columbia, which the government philosophically thinks is important, as well as believing it's important to maintain this position with respect to NAFTA." Are we in the same general area here that we were with non-resident directors?

Hon. U. Dosanjh: Correct.

G. Plant: We could argue about that. Perhaps we'll go out in the hall and have a great argument about that. It probably isn't going to have any effect on the language of the provision, at the end of the day. As I said, nothing in the fact that this debate has taken place in a relatively short compass is intended as any comment on the importance of this bill. This is a very important bill. I agree with the Minister of Finance, who said yesterday that the Company Act is cornerstone legislation.

Apart from the issues we've talked about, there are other interesting issues. Time will tell whether the balance has been struck in the right way, whether this truly will make British Columbia a competitive jurisdiction for incorporations, and if it doesn't, what needs to be done to fix that. With that, I have no questions about the balance of the act or table A or table B.

Sections 374 to 446 inclusive approved.

Table A approved.

Table B approved.

Title approved.

Hon. U. Dosanjh: I move the committee rise and report the bill complete without amendment.

Motion approved.

The committee rose at 11:55 a.m.

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