1975 Legislative Session: 5th Session, 30th Parliament
The following electronic version is for informational purposes
The printed version remains the official version.
MONDAY, MAY 5, 1975
[ Page 1993 ]
Privilege Clarification of Ministerial answers. Mr. Speaker — 1993
Possible breach of privilege. Mr. D.A. Anderson — 1993
Automobile Insurance Amendment Act, 1975 (Bill 69). Hon. Mr. Strachan.
Introduction and first reading — 1994
Insurance Corporation of British Columbia Amendment Act, 1975 (Bill 68). Hon. Mr. Strachan.
Introduction and first reading — 1994
Burning of logs on Hydro right-of-way. Mr. Fraser — 1994
Payments for Nancy Greene property. Hon. R.A. Williams answers — 1994
Proposed oil refinery. Mr. Smith — 1994
Beacon Body Shop appraisals. Hon. Mr. Strachan answers — 1995
Helping Hand Club investigation. Hon. Ms. Young answers — 1995
Statements by Premier on Social Credit organization. Mr. McGeer — l995
Charge to regional districts for park improvements. Mrs. Jordan — 1996
Supervision of inmates. Mr. Wallace — 1997
Salary for legal officer. Mr. Curtis — 1997
Severance pay for senior officials. Mr. Chabot — 1997
Natural gas price increases. Hon. Mr. Barrett — 1997
Committee of Supply: Department of Housing estimates
On the amendment to vote 102.
Mr. Phillips — 1998
Point of order
Possible conflict of bills. Mr. Curtis — 2029
MONDAY, MAY 5, 1975
The House met at 2 p.m.
HON. D. BARRETT (Premier): I ask the House to welcome a group of students from Port Coquitlam Senior Secondary School, grades 11 and 12, who are accompanied by Mr. Anderson, their teacher.
MR. H.D. DENT (Skeena): Mr. Speaker, I ask the House to join with me in welcoming a group of 27 students from Cassie Hall Elementary School in Terrace together with their teacher, Mr. Ed Ansems, and his wife, Mrs. Sharon Ansems.
MR. P.C. ROLSTON (Dewdney): Mr. Speaker, there are several people from the United Church convention who are celebrating the 50th anniversary of the United Church in Victoria. Included in the gallery are Dr. Al Forrest, the well-known editor of the United Church Observer, Bet Starkey and Lois Boyce from the Outreach division of the United Church. It seems that some of the Christians are in the gallery today watching the lions fight it out on the floor of the House. I'd like them to be welcome today.
MRS. K. SANFORD (Comox): Mr. Speaker, seated in the gallery today are three community-minded citizens from the village of Cumberland. I would like the House to join me in welcoming Dede Hofmann, Myrtle Knowles and Grace Coulter.
MR. H.A. CURTIS (Saanich and the Islands): Mr. Speaker, in the gallery today is another group of about 21 students, accompanied by Mrs. H.E. Bryan, from Gulf Island Secondary School, School District 64. I would ask the House to welcome them.
MR. SPEAKER: Hon. Members, on Friday the Hon. Member for Oak Bay (Mr. Wallace) was questioning a matter of privilege dealing with something that occurred in the Committee of the Whole House. I think what he was asking for was some information, really, rather than a question of privilege. I can't find that it's a question of privilege, but I do point out to Hon. Members that in examining the estimates you'll find, in keeping track of expenditures that are required, that they must be under the Audit Act, either issued by warrant of the Lieutenant-Governor or by a direct legislative sanction contained in the Audit Act, sections 18, 19, 21, 24 and 25.
His difficulty in this matter would have been explained, I think, had he looked at those sections, because where there is an expenditure for this year for staff and there was no expenditure shown in the estimates for last year in the left-hand column showing the 1975 estimates, you look then to contingency expenses as shown in vote 60 in the Finance department estimators, which is for all departments of government. There is $5 million set aside in that vote to take care of contingencies that would include the item that he was questioning. I think it may clear it up for him if he looks at those sections.
MR. G.S. WALLACE (Oak Bay): Thank you, Mr. Speaker. Perhaps you could explain to me, then, since I'm no wizard in understanding all the minutiae of the Audit Act, how a warrant for $500,000 shows that $263,000 came out of that special warrant and not out of contingency.
MR. SPEAKER: All I know is that a warrant for a new provision that has not previously existed has to be authorized through those sections. If you read that, I think it will explain itself. I don't want to take the time of the House doing it; I just refer those sections to you to study. If you have any further problems in relation to tracking this down, I'm sure that the public accounts committee would be of assistance.
MR. D.A. ANDERSON (Victoria): On a point of privilege, Mr. Speaker, In the light of serious statements made recently by he Hon. J.V. Clyne, one of B.C.'s most noted industrialists and jurists, namely to the effect that the senior administrative officer of the government has been lying — and this has been printed by the Province newspaper this morning — may I ask, Mr. Speaker, whether you'll take under advisement the question as to whether a breach of privilege has occurred, a breach of privilege affecting all Members of this House, and whether the said J.V. Clyne and the Province newspaper should be called to the bar of the House?
MR. SPEAKER: I think the Hon. Member knows that statements that he or any other Member may make outside the House are really not the business of the House, nor anything that the public may say about him or any other Member of this House, including in this case the Member to whom you referred. It is not the business of this House unless it occurred to do with something in our duties within the House. I think that's a clear distinction. Without even having to go further, I think you can understand that that is the situation in this particular instance you referred to.
HON. MR. BARRETT: Mr. Speaker, to put the Member's mind at rest, I've already stated that I did
[ Page 1994 ]
not name Mr. Clyne as a fund-raiser for the Social Credit Party. The notes of one of the reporters there confirm that.
MR. SPEAKER: In any case, it is not a matter of privilege for this House.
Introduction of bills.
AMENDMENT ACT, 1975
Hon. Mr. Strachan presents a message from His Honour the Lieutenant-Governor: a bill intituled Automobile Insurance Amendment Act, 1975.
Bill 69 introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.
INSURANCE CORPORATION OF BRITISH
COLUMBIA AMENDMENT ACT, 1975
Hon. Mr. Strachan presents a message from his Honour the Lieutenant-Governor: a bill intituled Insurance Corporation of British Columbia Amendment Act, 1975.
Bill 68 introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.
BURNING OF LOGS ON
Mr. A.V. FRASER (Cariboo): I have a question to the Minister of Lands, Forests and Water Resources and also in his capacity as director of B.C. Hydro. Has the Minister any justification to give the House on a reported order that 2,000 truckloads of logs will be burned on the Hydro right-of-way between Telkwa and Terrace because of decisions of the fish and wildlife branch preventing their removal?
HON. R. A. WILLIAMS (Minister of Lands, Forests and Water Resources): I'll take the question as notice, Mr. Speaker.
NANCY GREENE PROPERTY
HON. R.A. WILLIAMS: On another question last week from I think, one of the Members of the Liberal bench whom I don't recall regarding the acquisition of property held by Nancy Greene Ltd. Further information, I would note, indicates that the payments, as I understand it, up to April, 1975, for the said property at Lost Lake are some $163,500. In addition there are ski survey analyses and outside consultants' fees of some $33,000. Legal fees, interest, taxes and others would bring the total to approximately $210,000. Our Lands department appraisals on the basis of current values are $246,450 for the said property.
MR. G.B. GARDOM (Vancouver–Point Grey): As a supplementary to the response of the Hon. Minister, is he prepared to table in the House the appraisals of his department? It's been our understanding there weren't any independent appraisals outside of the department.
HON. R.A. WILLIAMS: I've given the House the information, Mr. Speaker.
MR. GARDOM: Mr. Speaker, on a supplementary to the Hon. Minister, he has not given the House the appraisals. I'm asking the Hon. Minister if he will undertake to file with the House the de facto appraisals, the documents themselves. It's a pretty simple question.
HON. R.A. WILLIAMS: The figures that I've been given are those, and that is the data the House is receiving.
MR. GARDOM: Was that the only appraisal?
PROPOSED OIL REFINERY
MR. D.E. SMITH (North Peace River): Mr. Speaker, my question is to the Hon. Minister of Mines and Petroleum Resources. In view of the 180 degree about-face in policy between your statements to a resource conference indicating you are not happy about having another refinery in the province and the Premier's statements indicating that a refinery will be built by the B.C. Petroleum Corp., will you indicate whose policy is the correct one — at least, for today, Mr. Minister — yours or the Premier's policy? We'd like to know, for the benefit of the House.
MR. FRASER: You'd better leap for it.
MR. SMITH: Leap where?
HON. L.T. NIMSICK (Minister of Mines and Petroleum Resources): Mr. Speaker, you read the article in the paper. If the paper felt that I was, in my statement there, unhappy, I didn't intend to give them that idea, except that I did say, the same as the Premier had said, that if there's no oil there'll be no
[ Page 1995 ]
refinery. I feel that a lot of people are going off half-cocked about this refinery, that it's a fait accompli; and it is not a fait accompli.
MR. SMITH: A supplemental. Assuming a supply of oil was found, either here or from our neighbouring province of Alberta, are you in favour of the B.C. Petroleum Corp. building a refinery in the Province of British Columbia at this time?
HON. MR. NIMSICK: That's a decision to be made in cabinet, not on the floor of the House.
MR. SPEAKER: I must point out that the question as such is hypothetical and also has to do with what advice a Minister is prepared to give the Crown in cabinet.
MR. D.A. ANDERSON: To the Premier and Minister of Finance: In view of the doubts of the Minister of Mines about the security of the source of supply of crude oil, may I ask the Premier once more whether or not he has received any assurance from Alberta or from any other source of crude oil for the projected refinery?
HON. MR. BARRETT: Mr. Speaker, we've canvassed this thoroughly, and I'll repeat the answer I gave to the Member on the same question and what the Minister is saying. know it's very elementary and difficult to appreciate; so I'll say it slowly as I've said two other times in this House: if there is no oil there will not be a refinery.
MR. D.A. ANDERSON: Your statement said there would be a refinery regardless.
BEACON BODY SHOP APPRAISALS
HON. R.M. STRACHAN (Minister of Transport and Communications): Mr. Speaker, last week the Member for South Peace River (Mr. Phillips) asked me some questions regarding the acquisition of the Beacon Body Shop by ICBC. There were appraisals made and the appraisal figures, with the additional $41,000 for equipment, came to $437,000 as made by Robert Bridge & Associates of Vancouver. An appraisal, with the addition of the $41,000, of $407,000 was made by Penny & Keenleyside Appraisals Ltd., of New Westminster, and the actual purchase price, again including the addition of $41,000 for equipment, was $422,000 which, as you know, comes right between the, two appraisals that were made.
You asked me some supplementary questions a second day. The purchase was made on the basis that all buildings, improvements, fixtures and equipment shall be sold and conveyed to the Insurance Corp. of British Columbia free and clear of all encumbrances. To give effect to the purchase the solicitor for the vendor was to discharge, release and remove from public record a list of various things, some of which you mentioned the other day. A cheque in the amount of $422,000 less an adjustment for the vendor's portion of property taxes was delivered to the barrister and solicitor for the vendor in trust on the day of the closing on the understanding that all encumbrances should be discharged or released and removed from public record and a deed of land be registered in the appropriate land registry office in the name of the Insurance Corp. of British Columbia before any funds are released.
MR. D.M. PHILLIPS (South Peace River): I also asked the Minister last Thursday if there were any mortgages on that property that were past due or behind in payment when the negotiations started. Would the Minister advise?
HON. MR. STRACHAN: There was a mortgage in favour of the Industrial Development Bank dated August 28, 1972, in the amount of $195,000, of which approximately $186,000 represented the unpaid balance at the date of closing. It's my understanding that it may have been a couple of days late, but not to any consequence. That's not important. The important factor is that everything must be discharged before the money is paid out. The corporation must come out absolutely clear and clean from any encumbrance of any kind.
HELPING HAND CLUB INVESTIGATION
HON. P.F. YOUNG (Minister of Consumer Services): Mr. Speaker, the Hon. Attorney-General (Hon. Mr. Macdonald) took as notice a question during my absence some weeks ago pertaining to a question asked by the Hon. Member for Langley (Mr. McClelland) regarding Pat's Unique Plan and the Helping Hand Club.
We have received information from the consumer protection division of the Department of Justice in Portland, Oregon, to the effect that these two enterprises have agreed to cease business. A postal inspector met with the operator on April 18 and obtained his written agreement to return all mail addressed to either of the two businesses. He was described as a retired man of no apparent criminal intent, and he had only received a few replies to the mailing. I trust that will settle the matter for the Member.
STATEMENTS BY PREMIER ON
SOCIAL CREDIT ORGANIZATION
MR. P.L. McGEER (Vancouver–Point Grey): Mr.
[ Page 1996 ]
Speaker, to the Premier. He was called a bald-faced liar by Mr. Clyne, and he said that one of the reporter's notes confirmed that he, indeed, did not name Mr. Clyne. I wonder if the Premier could tell us today what the reporter's notes did say. Who did he name in that speech?
MR. SPEAKER: I don't think this is a proper subject for question period since it does not relate to any department that I know of.
MR. McGEER: It relates to the....
MR. SPEAKER: ...publicity department is all that I can think of at the moment that it relates to.
MR, McGEER: No, no. This relates to the Premier, Mr. Speaker, and his discharge of duty to the public of British Columbia and his credibility as a witness. Mr. Speaker, you are running interference for the Premier.
[Mr. Speaker rises.]
MR. SPEAKER: Order! I ask the Hon. Member to withdraw that statement. If you can show me anywhere in our books of authority that you can ask questions that have nothing to do with the business of this House or any department of government, please inform me of it so that I may bear it in mind in future. But I don't run interference for anyone in this House. I want you to withdraw that statement. I think it's disgraceful. Would you withdraw that statement?
[Mr. Speaker resumes his seat]
MR. McGEER: Yes, Mr. Speaker, I'll withdraw that statement. Now you have given me an opportunity to rephrase the question, perhaps making it a little more relevant to the Premier's duties to the public and to this House.
The Premier apparently made assertions about the behaviors of one political party in this House. The veracity of his statement was challenged and the Premier has said to this House this afternoon, in answer to a question raised about privilege, that the reporter's notes said, in fact, he did not make that statement. But, Mr. Speaker, the Premier did not explain to us what he did say at that meeting. There were three individuals named; he mentioned only one.
MR. SPEAKER: Order, please!
MR. McGEER: We would like to know whether he names Mr. Bonner...
MR. SPEAKER: Order. This is not a proper question for....
MR. McGEER: ...both of whom have also denied....
[Mr. Speaker rises.]
MR. SPEAKER: Would the Hon. Member be seated? This is not a proper question for question period. If you have a point of privilege to do With this matter, you should raise it as a point of privilege. But it does not occupy question period.
[Mr. Speaker resumes his seat.]
MR. SPEAKER: I suggest you look in Beauchesne and you will readily see why it doesn't. I have already explained.
MR. SPEAKER: Delighted.
MR. SPEAKER: Would the Hon. Member for North Okanagan please ask the question.
CHARGE TO REGIONAL DISTRICTS
FOR PARKLAND IMPROVEMENTS
MRS. P.J. JORDAN (North Okanagan): I found the topic so fascinating I nearly forgot my question. But I would like to address it to the Minister of Lands, Forests and Water Resources in hopes that he knows something that's going on in his department.
Would he confirm the fact that he has initiated a new policy which would charge regional districts a percentage of capital improvements of parklands when such a parkland or parklands are turned over to the regional district for local administer ration?
HON. R.A. WILLIAMS: I'll take the question as notice.
MRS. JORDAN: A supplementary.
MR. SPEAKER: Well, why not wait until you get the answer and then ask your supplementary and make a note of it?
MRS. JORDAN: This is pertinent. He can't possibly look it up, because I'd like to give him the specific case that would help him. I'd like to ask him if this will apply to Silver Star Park in North
[ Page 1997 ]
Okanagan. Why did this statement come out surreptitiously from a member of the Lands branch when negotiations between the regional district and the Department of Recreation and Conservation were all but completed? Why, in fact, doesn't the Minister seem to know anything about what's going on in his department, even policies?
HON. R.A. WILLIAMS: I can understand the frustrations of the Hon. Member. North Okanagan at last has new parks which it didn't have when she was a cabinet Minister.
SUPERVISION OF INMATES
MR. WALLACE: To the Attorney-General. In view of the percent tragic suicide in a New Westminster jail due to inadequate supervision of an inmate, has the Attorney-General taken any action to recommend the installation of closed-circuit television in city cells as recommended by the coroner's jury in New Westminster?
HON. A.B. MACDONALD (Attorney-General): This was the question of a belt, I think. I think that has to be looked at very closely to make sure that such belts are not available to prisoners in that situation. On the question of closed-circuit television, we haven't given consideration to that.
MR. WALLACE: A supplementary, Mr. Speaker. In view of the fact that there is a fairly regular incidence of suicides under somewhat similar circumstances, has the Attorney-General made any decision about carrying out a general investigation of supervisory procedures in jails?
HON. MR. MACDONALD: I'll take that under consideration.
SALARY FOR LEGAL OFFICER
MR. CURTIS: To the Attorney-General. Newspapers including the Daily Colonist of Victoria for April 22 of this year, carried a display advertisement for the Province of British Columbia headed: "Career Opportunities." Under the category in that ad of legal officer, competition No. 75-1290, is a position offered by the Department of the Attorney-General for a qualified person with a recognized Bachelor of Laws degree with "preferably one year's experience in criminal law." Would the Minister confirm that the salary is as quoted in the advertisement — that is, a salary range of $24,290 to $30,900 per annum?
HON. MR. MACDONALD: I'll take it as notice, Mr. Speaker.
SEVERANCE PAY FOR SENIOR OFFICIALS
MR. J.R. CHABOT (Columbia River): To the Minister of Economic Development. The Minister on the weekend admits creating somewhat of a precedent in offering severance pay to the former Deputy Minister, Mr. Les Hempsall, on his resignation. Could the Minister advise the House whether all senior officials resigning from any government department are now to be offered the equivalent of six months' severance pay? If not, on what basis is the decision to offer severance pay to be made?
HON. G.V. LAUK (Minister of Economic Development): Well, Mr. Speaker, in this isolated incident I think the severance was justified. As far as creating a precedent in general policy, I don't think it does so.
HON. MR. BARRETT: May I ask for leave to make a brief statement to the House on natural gas, rather than take up question period?
NATURAL GAS PRICE INCREASES
HON. MR. BARRETT: Mr. Speaker, I wish to inform the House that the federal Minister of Energy, Mines and Resources, Mr. Donald Macdonald, has notified us and made a public announcement on the new increases in natural gas, simultaneous to our announcement today, The announcement is that on August 1, 1975, the price of exported natural gas will go to $1.40, and on November 1 it will rise to $1.60. I said at that time it was a welcome increase. We are still under priced according to the United States' own evaluation of natural gas.
I want to congratulate and thank people who helped us so much — the B.C. Energy Board and the B.C. Petroleum Corp. — and I want to say how welcome it is that we are finally beginning to get a fair return from our natural gas, for which, unfortunately, we have a long-term contract, signed by the former administration. Nonetheless, the price must go up again, and this is confirmation that the municipalities will receive the $20 million as announced earlier.
MR. D.A. ANDERSON: Mr. Speaker, I would like to congratulate the Premier on making this announcement, which is a long-standing policy of boot governments going back at least a year in both cases. We, as he does and as his party does, believe that the price of gas should reflect world value.
The question comes, of course, as to what the
[ Page 1998 ]
amount of money obtained from the United States customers for this gas will be used for if, indeed, it is not possible to put this into a refinery because of a lack of a raw material source from Alberta. I trust that in the near future we will be receiving some word from the Premier on the success or otherwise of his negotiations with the Alberta authorities, which he keeps telling us about.
MR. WALLACE: Mr. Speaker, we also are pleased at the announcement. I just have one question, in the light of a great deal of the discussion that preceded the energy conference and subsequent publicity. On November 1 the price will go to $1.60, which is still well below the kind of target figure which the Premier and many others have stated would be reasonable. I wonder if, in the agreement with the federal government, the Premier can tell us what kind of frame has been committed from November 1 at that $ 1.60 price?
In other words, is there any suggestion that within the not-too-distant future that $1.60, which is still unreasonable in world values, is to be renegotiated, or is there any commitment that this price must pertain for at least a year or 18 months? What is the condition on which we are being allowed to charge $1.60 on November 1?
HON. MR. BARRETT: Mr. Speaker, may I have leave to respond?
HON. MR. BARRETT: Mr. Speaker, there is no commitment from the federal government beyond the commitment to raise the price to $1.60 on November 1.
You must recall that there is a certain atmosphere that these negotiations have taken place in. When British Columbia increased the price from 32 cents to 57 cents, at that time the present federal Minister of Energy attacked us for being savage for increasing the price so rapidly. He's increased it on the basis of his own approach now, a year later. I would never accuse him of being savage; I am just responding in retrospect of what the stage was in history. We have made the case to $1.40 and to $1.60.
Dr. Tussing, who is on President Ford's own staff, has publicly stated that the equivalent price of natural gas in BTU exchange, with oil, should be between $2.10 and $2.25 per 1,000 cubic feet. We hope that the natural gas price will rise to that equivalent as soon as possible.
I am pleased again that the federal government has moved to $1.60. Hopefully there will be another increase within the year.
MR. PHILLIPS: In response to the Premier's announcement today, I would like to say that I am glad that he took the suggestion of this party in the spring of.... (Laughter.)
HON. G.V. LAUK (Minister of Economic Development): Once more with feeling, Don.
MR. PHILLIPS: The statement from this party is clearly in the record in the spring of 1973, and I would also like to say that in view of the tremendous increase in the price of petroleum products in the last two years, the Premier has stepped in and taken advantage of this bonanza to the province in view of the world prices for petroleum products.
HON. R.A. WILLIAMS: You voted against the legislation.
HON. MR. BARRETT: You voted against the petroleum corporation.
MR. SPEAKER: The Hon. First Member for Vancouver–Point Grey (Mr. McGeer) wanted the citations. I thought I would give them to you right now, before we go on.
Page 148 of Beauchesne, item (x) and (dd) are matters that deal with matters not officially connected with the government and deal with an action of the Minister which is not responsible to parliament. So I would point out that while it was great fun politically, I can't find any authority for your question.
MR. McGEER: I'll be back.
MR. SPEAKER: I'm sure you will.
Orders of the day.
The House in Committee of Supply; Mr. Dent in the chair.
ESTIMATES: DEPARTMENT OF HOUSING
Vote 102: Minister's office, $150,127 — continued.
On the amendment.
MR. D.M. PHILLIPS (South Peace River): I am pleased to be able to have some time this afternoon to speak on this amendment. As I recall when the amendment was first made, the closure motion which the Premier brought into the House precluded me from finishing my remarks at that particular time.
Before getting into the actual responsibilities and the problems that we have in housing in British
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Columbia, Mr. Chairman, I would like to spend just a few moments, I hope, candidly surveying the Casa Loma issue with the Minister of Housing.
Before we get into the fact that the Minister has turned a crisis in housing in British Columbia into a complete catastrophe, before we discuss the Minister's inability to make decisions, before we discuss the scandal which surrounds the purchase of Dunhill Development over one year ago — and to which we still have no answer from the Minister — and before we discuss his unusual methods of land acquisition in the province, before we discuss the Meadowbrook deal, before we discuss the Burke Mountain issue and the numerous other unanswered questions in the department, and as I say, I want to be perfectly candid with the Minister and I would like him to be candid with the House, I would like the Minister to answer some of the questions which we have posed prior to this date.
Mr. Chairman, I think it is the responsibility of that Minister to be completely candid with this House and to be honest with this House. He must realize that when given information which does not entirely agree with the information which he has, it is our responsibility, as Members of the opposition to explore and find out where the truth is. I would like the Minister to look at it in this light. We have been given information; if we are wrong, I would like the Minister to tell us we are wrong. But I would like the Minister to come down off of his high horse and the defensive attitude which he has taken prior to this date about this whole Casa Loma issue. It should be out in the open. If what he says is completely true and if what the directors of Casa Loma say is completely true, he certainly has no right to be defensive about Casa Loma. None whatsoever.
I am afraid, Mr. Chairman, that the Minister is not being completely candid with the House.
MR. CHAIRMAN: Order, please. I would ask the Hon. Member if he is suggesting that the Hon. Minister has been dishonest in his remarks?
MR. PHILLIPS: You are the one who is making the suggestion. Are you asking me to say yes to that question?
If you will allow me to continue, I intend to bring up some areas where I don't feel the Minister has been completely candid with the House. If you will just leave me alone, we will go into those areas almost immediately.
MR. CHAIRMAN: Order, please. Would the Hon. Member continue?
MR. PHILLIPS: Thank you, Mr. Chairman.
The one unanswered question that seems to be most prevalent with regard to the Casa Loma issue is: when did Dunhill Development actually start negotiating with the directors of the Casa Loma project? That has a great deal of bearing on the whole situation, even though the Minister has filed with the House an affidavit saying that the directors of Casa Loma at no time offered the assets of Casa Loma for sale at less than $3.1 million.
There were negotiations going on between the directors of Casa Loma and the sub trades and all the creditors. All of a sudden, the attitude of the directors of Casa Loma is completely changed from one of wanting to unload the whole project, trying to do maybe what is right by the creditors, to one of having a little muscle and saying: "Okay, we don't have to settle."
I feel, and I have every right to feel, that that change in attitude toward the creditors came when Casa Loma either approached Dunhill Development or Dunhill Development approached Casa Loma to purchase the entire assets and to purchase them at a very good price.
That would allow the Casa Loma people to come out of it without any indebtedness and to make, as the Minister has said, a profit. I think this is very, very important because it does have a bearing.... The Minister can hide under all the legality he wants to; we're looking here at possibly a moral issue.
We also want to know when that first application was made to CMHC for mortgage money. Was it made before Dunhill made their approach to Casa Loma or was it made after?
There is still a further unanswered question: what appraisal was carried out on the Casa Loma project to determine the price the government paid? I am in no way referring to the quantitative survey that was done by the creditors and the Casa Loma directors to determine how much of the project was complete. I want to know what other appraisal of the assets was carried out. Would the Minister table them in the House? Who did the survey? When were they done?
AN HON. MEMBER: Hear, hear!
MR. PHILLIPS: The Minister has not given us those answers.
I feel that there was the promise of a deal with the Casa Loma directors and Dunhill that gave the directors the muscle to settle their claims for 40 cents on the dollar.
The date is very important because here we have a renewal of a mortgage to borrow an additional $170,000. The agreement is between Casa Loma Motel Ltd., Coronation Credit Corp. Ltd. and Mr. Gangji, a businessman, who is one of the directors of Casa Loma. After Coronation Credit agreeing to put up $1.3 million, and the mortgage payment being somewhat in arrears, then on September 18, 1974, with the mortgage payments in arrears, Coronation
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Credit advances an additional $170,000 to Casa Loma Motel Ltd. I am just wondering if it was not on the basis of some agreement made between Dunhill and Casa Loma that would give the directors of Casa Loma the muscle, as it were, to go the Coronation Credit and borrow an additional $170,000. This was executed on September 18, 1974, just shortly after the settlement of 41 cents on the dollar to the creditors.
Then again, on October 1, 1974, we have SG&S Investments Ltd., which we have proven is owned by some of the directors of Casa Loma, going to the Toronto Dominion Bank and borrowing money on their mortgage. This again is dated in October. I'm just wondering on what basis, the directors had to go and receive these additional moneys if it were not for a prior arrangement made to sell. If, as the Minister says, the agreement was made on the basis of getting rid of all the creditors, did the directors of Casa Loma actually force the creditors to settle at 40 cents on the dollar?
This morning, all of the debts have not been settled yet on the Casa Loma deal. I have a letter here which went to the MLA for the area — Dennis Cocke, Parliament Buildings — from the Credit Bureau of New Westminster Ltd. re Beaver Lumber & Supply Co. Ltd. versus Coastside Construction Co. Ltd. — $213.80 — and Northwest Propane Ltd. versus Coastside Construction Ltd.— $2,974. The letter says:
"We wish to draw to your attention as MLA for this area a matter concerning the Casa Loma development. We have been asked to act as agents for the creditors shown above. The accounts are owed by Coastside Construction Ltd. But we are informed by Mr. Gerry Taylor of the company that no moneys have been paid to Coastside Construction by the developers of Casa Loma apartments. Coastside Construction is therefore unable to discharge these commitments."
Now it appears that the agreement was made on the basis that all of the creditors would be satisfied. So I say right now that the government has to take a second look at this deal, because all of the creditors have not been satisfied. I wonder actually how much, how far and how deep did the research of the Department of Housing or Dunhill Development go. How deep did they go into this matter of credits and liens before Dunhill Development backed the Minister into this wasps' nest, or this Minister backed in of his own accord?
Is the Minister completely naive? If he is, he can be completely forgiven. It isn't the Minister who's getting stung; it's the taxpayers of this province that are getting stung. He can stand up and give us all the speeches about motherhood and providing housing for senior citizens, but the fact is that this is immoral.
This whole deal is immoral. If the Minister knew what he was doing, then he should resign. If he didn't know what he was doing, he should get up and explain to the House that he's made a mistake and that he'll try to rectify the situation.
HON. L. NICOLSON (Minister of Housing): A point of order, Mr. Chairman. I believe the Member is trying to suggest an improper motive on behalf of myself. I would ask him to withdraw.
MR. CHAIRMAN: Order, please. The Chair would rule that he has not yet suggested an improper motive — he's asking questions. I would ask the Hon. Member for South Peace River to so phrase his remarks that they take the form of questions rather than to imply an improper motive.
MR. PHILLIPS: Mr. Chairman, I'll accept your ruling. As I said, I think it's time the Minister came down off his high horse in this and got off the defensive position and started to.... If the Minister had been completely candid....
MR. PHILLIPS: If you had been completely candid with this House....
MR. CHAIRMAN: Order, please.
MR. PHILLIPS: I'll come up with something. You just leave me. You just....
MR. CHAIRMAN: Order, please. Would the Hon. Member address the Chair, please?
MR. PHILLIPS: Yes, Mr. Chairman. But the Minister is defensive on this issue; his conscience is bothering him. He knows he's in the wrong.
MRS. P.J. JORDAN (North Okanagan): You should know. You're offensive to the taxpayers because you waste their money stupidly.
MR. PHILLIPS: If this whole deal does not smell somehow or other, how come some of the creditors on the Casa Loma project were paid out at 100 cents on the dollar — particularly the ones that had been previously in business with some of the directors of the Casa Loma project? Goldwood Industries, for instance, received payment in full — a settlement for their lien of $9,200.
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MR. PHILLIPS: Payment in full — 100 cents on the dollar.
MR. PHILLIPS: Well, I'm asking you, Mr. Chairman: is there a double standard here? Why did the Minister advise the House that the cost of the completed project was $3,177,000 when the completed cost is going to be $3,527,000? He made his statement in the House specifically that it was the cost of the completed project. Look it up in Hansard; it's in there. He went out of his way to specify that that was the completed price of the project. Then when he was pinned down, he said: "That isn't so at all. It's another third of a million dollars."
The Minister has still not advised the House if the 3 2 motel units are to be completed as living quarters for senior citizens or if they are to be completed as motel units. I've asked the question of the Minister several times in the House.
I think that the House should be advised of the entire story behind the Casa Loma project, because it has been taxpayers' money that has been advanced to bring this project some air of respectability.
But let's go back and talk about the history of the Casa Loma project. The fact that $560,000 of the taxpayers' money is being used to pay off interest on mortgages which were there before the government moved in maybe hasn't got that much to do with it. But if some of the subcontractors are going to suffer, all of the sub trades should suffer, and so should the directors of the Casa Loma project.
Mr. Chairman, the Minister advised the House that there was a cut-and-dried contract with the original prime contractor and the directors of Casa Loma. I would like to ask the Minister if he has seen a copy of that contract.
Again, I'll say that if I'm wrong, I'd like the Minister to advise me. But I would like to know if he's seen a copy of this cut-and-dried contract, because I am advised....
MR. PHILLIPS: No, you tried to mislead the House and say there was a cut-and-dried contract the other day.
MR. CHAIRMAN: Order, please. I would ask the Hon. Member to withdraw the imputation that the Hon. Minister deliberately misled the House.
MR. PHILLIPS: I didn't.... Well, I'll withdraw it if it ....
MR. CHAIRMAN: Would the Hon. Member continue?
MR. PHILLIPS: I'll tell you what happened, Mr. Chairman. Along came a couple of young fellows in the contracting business who had never had a contract this size before. They gave an estimate as to what it would cost to built this motel. Looking at the original blueprints, which, by the way, were purchased for the sum of, I'm told, $5,000 by the directors of Casa Loma.... They weren't purchased, they were bought at a fire sale, because these blueprints originally cost about $70,000, I'm given to understand. They looked at the blueprints for the original deal and they sat down with the directors of Casa Loma. There were certain deletions made from the original blueprints. There was an estimate given by these young fellows. I'm going to say, Mr. Chairman, that maybe these young fellows...as I say, they'd never had a contract this size before. They weren't able to obtain a bond and they were at fault for not properly checking out the people they were doing business with and getting a cut-and-dried contract. They were at fault, but they had faith in these people. They gave an estimate of what it would cost to build this project, but that was all right.
Even George Frizzel, the chartered quantitative surveyor, when he did a survey for the barristers and solicitors in charge of this project for the creditors, said: "We have not attempted to value any of the variations but can provide some figures for this work if required, and after the decision is reached as to the type of contract entered into by the parties." In other words, the quantitative surveyor could not even find the contract.
So the contractors had faith in the people that they were dealing with. They had faith in the directors of the Casa Loma project. It was an act of faith on behalf of these young fellows who had been in the construction business but never had a project this large before.
What happened, Mr. Chairman? One of the directors of the Casa Loma project comes onto the project and starts changing the estimate that was originally made. There again, Mr. Chairman, if I'm wrong, I'd like the Minister to tell me I'm wrong, but this is the information I have. The information was gained from a meeting with the lawyers and the creditors where Mr. Gangji actually admitted to changing the original specs.
Maybe I could outline for the House some of the specs that were changed on the job by one of the directors, Mr. Gangji, who went around to the subtrades. He didn't even go through the prime contractor. What was changed? The carpeting was changed from a reasonably priced carpeting to a high-priced carpeting. The fireplaces, which were deleted in the original estimate, were added. The fire
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alarm system was changed. That's just to mention a few. These were changed from the original estimates. Then when the prime contractor wanted his money for these changes, what was said? "Oh," the director said, "that was in the original contract."
That's where these young fellows fell down, because they didn't have a cut-and-dried contract. They were dealing with people in an act of faith....
MR. CHAIRMAN: Order, please. I would ask the Hon. Member to relate his remarks to the administrative responsibility of this Minister under this amendment.
MR. PHILLIPS: Mr. Chairman, it is the Minister of Housing who purchased this project on behalf of the taxpayers of British Columbia. As I said before, the Minister may be able to cover this deal over with an air of respectability insofar as the legal aspects of it go but, as I said in this Legislature before, the Minister has a moral obligation to these subcontractors, the families and children of which are affected, because most of them have gone broke because of this very project.
Even in the report from the quantitative surveyor, Mr. Frizzell, dated July 23, 1974, he outlines the additions that he felt were not in the original estimate: changes to the reception area, changes to carpet grade, adjust for change in lumber supply costs, supply and installation of drape track, scored concrete block to exterior court areas in lieu of siding, change in electrical service, change in the fire system. This is where this project went afoul, Mr. Chairman — not because the prime contractors did not do a good job of building the building, but because one of the directors in midstream was changing the specs, adding in the fireplaces which were deleted from the original estimate.
That's why this government has a moral obligation to those subcontractors, some of whom were paid off at 100 cents on the dollar, others of whom were ground out at 41 cents on the dollar.
MR. PHILLIPS: Well, why did somebody get paid in full? As I say, I want the Minister to be candid and I want him to advise this Legislature how much checking Dunhill or the people acting on behalf of Dunhill did. Did they meet with the lawyers who were working on behalf of the creditors? Did they ask the lawyers if one of the directors of the Casa Loma project had admitted that he made changes to the original estimate? Where do we stand on this, Mr. Chairman? Where do we stand?
We have this document which was tabled by one of the directors of Casa Loma stating that the project had never been offered for sale before. But the document says that Casa Loma Motel Ltd. had never offered the project for sale. Maybe they didn't have a board meeting, but why was the prime contractor, when he was going broke, trying to raise sufficient funds to buy the project out at $2.4 million if it had never been offered for sale?
I want to know who is lying! If I've been lied to I want to be told I've been lied to. If the directors of Casa Loma are lying, they should appear before the bar of the House.
MR. PHILLIPS: I've just read it.
HON. MR. NICOLSON: It was never a completed project. They never offered a completed project for sale.
MR. PHILLIPS: Oh. I want to....
MR. CHAIRMAN: Order, please. I would ask the Hon. Minister to wait until the Hon. Member for South Peace River has finished his remarks.
MR, PHILLIPS: Aha! All right. Now we're getting down. Yes, I appreciate that comment from the Minister of Housing. I appreciate that comment very much.
Will the Minister, then, when he stands in this Legislature, advise how much was in the contract, how much additional work is going to have to go to complete the project? Is it $750,000?
Mr. Chairman, I'm not going to belabour this point. I'm going to sit down and let the Minister of Housing.... As I said, I hope he's candid with the House. I hope he gets off the defensive because, as I say, if we have been misinformed in the opposition and the people who have given us this information have been misinformed, I'd be quite happy to stand in this Legislature and apologize, but what I want about this whole Casa Loma deal is to have the truth and the facts so that this project can be cleared of the smell that surrounds it in the province today. That's why I'm asking the Minister to be candid and truthful with this Legislature.
MR. D.A. ANDERSON (Victoria): Mr. Chairman, I wonder whether the Minister would like to comment upon the remarks made with respect to Casa Loma. Would he like to indicate whether he's going to answer?
MR. CHAIRMAN: Would the Hon. Member address the Chair, please?
MR. D.A. ANDERSON: Mr. Chairman, I wonder whether you might indicate whether he's.... Well,
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as he apparently is sitting in his seat and is not getting up, there are a large number of questions on the very specific topic of Casa Loma which remain outstanding.
Let me point out, Mr. Chairman, that the Minister got into hot water on Casa Loma because of the conflicting statements given with respect to what was a completed project; that was the original problem he ran into. Since then other questions have come up. A question was raised a moment ago about Goldwood Industries receiving 100 cents on the dollar on their lien, while most others received 41 cents. I even have here a letter from one subcontractor who received nothing. The letter is dated February 26, 1975, signed by S. Hind, accountant for Fiber-Cann Chemical Toilet Rentals Ltd. They received nothing at all.
These questions have come up. The Minister has so far simply thrown up flak, Mr. Chairman, in terms of "Well, are you for or against senior citizens' housing?" and other equally fatuous remarks when we are trying to deal with specifics of the Casa Loma contract.
There is one very pertinent item of information which is something as yet unanswered but should be answered — something we've requested time after time, going right back I think to March 5, two months ago. We've tried to find out when the negotiations with the government began. Did they begin as the Minister stated? Did they begin following the settlement of the liens? Or did they begin before, as one lawyer for the Casa Loma group, Thomas A. Dohm, Q.C., stated?
There is a very definite difference of opinion as to when the negotiations started. I would like the Minister to focus his mind in the few minutes ahead on that specific point: was the government dealing with the Casa Loma principals at the same time that the Casa Loma principals were dealing with the lien holders? Were they offering to purchase the property? Were they negotiating at the same time as those Casa Loma principals were trying to settle with those lien holders at 40 cents on the dollar or, indeed, in some cases, less? Does the Minister know whether or not the CMHC loan was supplied for prior to the settlement of the liens?
I wonder whether he would indicate to the House when the government applied for that loan. Was it, in fact, within three days of the Casa Loma lien holders' accepting the 41 cents on the dollar? Did all that work, in terms of evaluating the property, deciding that it was a good thing, take place in those three days? Did all the negotiations with the Casa Loma principals take place within those three days? Was the request for the mortgage of over $3 million drawn up in that period as well, Mr. Chairman? The critical question is whether or not the lien holders were fairly dealt with. The question has been raised before: why did Goldwood get 100 cents on the dollar and others, in particular N.B. Electric, get so substantially less?
The most important question for us is the dates when the government started negotiating for the Casa Loma property. We have had very differing views on this. The Minister has had two months to find the information. I think today is the day that he should come clean with the House.
Another question is whether or not the building now meets the NHA standards, which would permit a CMHC contract. Are the electrical receptacles now more than the minimum 12 feet apart? How about soundproofing? How about electrical outlets, switchboxes? Are they back-to-back or are they three feet apart as CMHC and NHA require? Is there a sprinkler system in the parking lot? These are all questions which would affect the CMHC loan. Although asked previously, none of those questions have yet been totally answered.
Mr. Chairman, there are many, many things about the Casa Loma which are questionable. I raised one with the Attorney-General when I failed to get any success from the Minister of Housing. I raised the question of registration fees, and what happened? My letter went to the Attorney-General on March 5. One week later, the lawyer for the principals went on and paid an extra $210 registration fee on the basis of a totally different registered value. That was the result of a letter to the Attorney-General. But we have had absolutely no success whatsoever with respect to the Minister of Housing, who has consistently adopted the head-in-the-sand attitude that if you are building or purchasing senior citizens' housing, it is irrelevant who got taken, or whoever got cheated in the construction. It is irrelevant as to whether the provincial government perhaps assisted — and this is a question — in the defrauding of those lien holders by dealing with the principals at the same time that they in their turn were trying to fob off the lien holders at a lower rate. Until we get some information on this, Mr. Chairman, until we find out precisely what the provincial government did, we are not going to be very satisfied with the explanation.
Let me point out that the only area where we have had any inquiry was done by the Attorney-General. Within seven days of my letter to him, we get not an admission of guilt but just a cheque, which would indicate that the property had been quite undervalued, totally undervalued. But all the questions that have gone to the Minister of Housing have been met with a stone wall. If we don't get answers today, of course, or if we don't get answers very quickly, the question is quickly going to come up as to why he is stalling in this way. Why do we have to go after him time after time to find out what the total completed price would be? Why did he not tell us earlier on? Why did we have to demonstrate to him that he had lost some $315,000 in his
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calculations and then later on lost other thousands in his calculations? Only when we came up with these errors, when we came up with these areas which he had not explained, would he in turn furnish an explanation. Up to that point, he just said: "all is well; all is fine; we got our money's worth; that's all we care about."
We think that that is not good enough because the question still remains, and it is the fundamental question, essentially the first one asked, Mr. Chairman, and that is: when did the government start dealing with the Casa Loma principals? Today is the day that this should be answered.
HON. MR. NICOLSON: Going back to the Member for South Peace River, he asked when Dunhill started negotiations. I answered this in Hansard April 17, 1975, in the evening, page 1482 of Hansard, in response to questions by the Member for West Vancouver–Howe Sound (Mr. L.A. Williams).
I don't know, Mr. Member, whether those answers satisfy you, but I recall that Member saying that finally he had some response to those questions, and I believe at that time he seemed to be satisfied. It was quite thoroughly canvassed at that time.
When the application was made to CMHC? Mr. Member, that application has been filed in this House. The House has knowledge of that application.
HON. MR. NICOLSON: What appraisal was made? Central Mortgage and Housing made an appraisal. It's their internal document. I have said that the cost of this project is about $26 per square foot. Comparable projects coming on stream at this time are over $30 a square foot. This one also involves underground parking, I believe, at the ratio of 1.25 to 1. It's underground concrete parking, and I would say that at current costs that would run about $4,000 per unit.
HON. MR. NICOLSON: Well, Mr. Member, I'll get to that.
Now you have talked about additional loans from Coronation Credit — September 18, 1974, you said. A mortgage from Toronto Dominion — you mentioned some date in October. But, Mr. Member, I have pointed out that there was no way we could make what I would call a final, binding agreement with Casa Loma until we had commitment from Central Mortgage and Housing. There was no way that we could know whether Central Mortgage and Housing had the funding until December. Talks did go on, as I said in response to the Member for West Vancouver–Howe Sound, and started at some fairly early date. I think the first contacts were prior to that September date. If they decided to take some chances, if Coronation Credit decided to go along on that type of an assurance, well, that was their risk because there was certainly no firm assurance from the Crown, because there is no assurance until I sign the agreement; and that didn't take place until well into December.
MR. D.A. ANDERSON: Negotiations took place, though.
HON. MR. NICOLSON: Well, what you call negotiations, you know haggling over prices and such — we knew that things were available and we talked to all kinds of people. As I mentioned once, Mr. Link had a piece of property for sale. We were courteous and we talked to him about it, and the next thing you know it's in headlines: "Department of Housing Making Deal with Mr. Link;" Well, it just turned out that his price wasn't right, and there was no deal.
MR. D.A. ANDERSON: Don't speculate yourself. Tell us what happened. Link is another case. Tell us what happened here.
HON. MR. NICOLSON: There was talk about why I said that the price was $3.1-some odd million. That is the completed purchase price from Casa Loma Motel Ltd. As I've explained, the funding will be advanced, I believe, this June. The anniversary date of the mortgage will be January 1, 1976. That is Central Mortgage and Housing policy. Mr. Member.
I don't like to be an apologist for Central Mortgage and Housing policy, but our purchase price was $3.1 million, There will not be a payment made on that mortgage, because of the Central Mortgage and Housing policy, until June of 1976, I am informed. We will therefore capitalize the interest, and that is the difference between the approximately $3.1 million and the $3.5 million price.
There were a couple of other things. There was a contingency for the B.C. Housing Management Commission for possible improvements that they might request, but the purchase price for the completed agreement was as announced.
MR. D.A. ANDERSON: How come you didn't tell us that until spilled the beans on you?
HON. MR. NICOLSON: Spilled the beans? Mr. Member, that wasn't what I was asked. The concern was about what we were paying Casa Loma Motel Ltd., not what the face value of the mortgage was going to be from Central Mortgage and Housing. If the questions had been more explicit, then we could have answered the question.
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MR. D.A. ANDERSON: That was in all those unanswered questions you have taken as notice.
HON. MR. NICOLSON: Well, look at the order I paper, Mr. Member.
MR. D.A. ANDERSON: I'm looking at the record in Hansard.
HON. MR. NICOLSON: Well, if you want to ask questions like that — excuse me, Mr. Chairman, through you — that require detailed financial things...is someone supposed to be able to recite back to the last cent, from memory, each and every purchase price, et cetera? I think if you want that type of answer, it should be put on the order paper.
MR. D.A. ANDERSON: You've had two months and you haven't got it.
HON. MR. NICOLSON: Look at the order paper, Mr. Member. How many questions are remaining there? Very few, and they'll all be cleared up.
Okay, the contract and spec changes between directors and contractors.
I must say that I am pleased to see that the quality changes were upward revisions, as you mentioned: the rugs were of a better quality, fireplaces, I would assume improved fire alarms. But these changes, Mr. Member are something not to be decided by myself.
I will say this: the matter was referred to the Attorney-General (Hon. Mr. Macdonald), I believe that investigation is still going on between those early contractual matters among Casa Loma, Coastside and the subcontractors. It is not for me to sit as judge and jury. I do know this: the Crown, Her Majesty, is well protected.
Another question that was asked was how much it would cost to complete the project. Well, our agreement is for the completed project. If there should be a default, Mr. Member, our contract is of such a nature that it would come to us at an even lower price.
Dunhill. I don't believe that Dunhill met with Mr. Macdonald until after matters were raised in this House, and that pretty well handles that.
To the Second Member for Victoria (Mr. D.A. Anderson), an inquiry is being done. It is being done by the office of the Attorney-General. But it is nothing that really involves the Department of Housing; it is a matter that transpired prior to that time. We are amply protected by the terms of the j agreement; it is a favourable agreement to the Crown.
I would like to read a letter. You say it is a motherhood issue. Well, you can't seem to treat it that way. But I anticipate some sort of criticism. I expect that from the opposition in this type of case. But you know that....
HON. MR. NICOLSON: Yes, I'm willing to take a little bit of heat for the senior citizens of this province, Mr. Member. You're darned right I am!
HON. MR. NICOLSON: Here's a letter from the administrator of the Senior Citizens' Service Bureau, and as administrator of the Senior Citizens' Service Bureau in New Westminster she says:
"I am constantly aware of the problem our seniors have in finding decent accommodation at a reasonable rate. In New Westminster alone there are some 8,000 seniors over the age of 60. The surrounding areas of Burnaby, Coquitlam, et cetera, have many, many more. The need for housing in this area is now."
Now that is the basis upon which this decision was made.
"How can I tell a pensioner to put his name on an application form for subsidized housing with a list that is a year or two long. He'll say: 'I may be gone by then. That's no use to me.'
"The purchase of the Casa Loma complex in Burnaby through the Department of Housing is a positive step by our government toward a crisis situation, and a step that I personally commend. Since the announcement of the purchase, our bureau has received dozens of calls from interested seniors. We've assisted in completing approximately 25 applications for this accommodation in our bureau alone."
We've had these applications in our office.
Frankly, Mr. Member, or Members of the opposition, we don't take these matters lightly. Certainly everything should be looked into. But when all of that is settled and it sits there idle, you have to take a little bit of responsibility. When you realize that those units will be ready — I think they will be ready by the end of this month — and it is a choice between that or going to some place where zoning doesn't exist, going through the whole thing, the planning and everything, it means about 200 senior citizens will be displaced or have to wait for two years longer than they would have to wait by this particular action.
MR. G.F. GIBSON (North Vancouver–Capilano): Why did you throw them out of Brentwood? It was must down the road.
MR. G.S. WALLACE (Oak Bay): If these gentlemen wish, Mr. Chairman, to respond to previous questions, I'm quite willing to give up my place for the moment.
[ Page 2006 ]
MR. PHILLIPS: Mr. Chairman, I can appreciate the Minister of Housing, as I said, talking about the need for senior citizens housing. That need has been there, evidently, or was it just created a short time ago? You've had your portfolio since the spring of 1973....
HON. MR. NICOLSON: It's been there since 1972.
MR. PHILLIPS: I presume it is growing. But we can't have the end justifying the means. We've got to have consideration for these 40-odd sub trades that were ripped off in this deal.
HON. MR. NICOLSON: Are you a judge?
MR. PHILLIPS: I'm just asking the Minister how much checking he did. The Minister has said that all liens and encumbrances must be paid off before they would advance any money to Casa Loma. Well, how come Beaver Lumber and Supply Co. Ltd. and Northwest Propane have not been paid off?
HON. MR. NICOLSON: They didn't have a lien.
MR. PHILLIPS: Oh, they didn't have a lien. And you didn't check to see....
Well, there again, I say it is legal. But did you and/or anyone from Dunhill have a meeting to determine what was happening or did you just go in and make a deal with the directors of Casa Loma without any regard whatsoever for those 40-odd small subtrades and the prime contractors? Did you have a meeting with them? Did you try and determine why they were in financial difficulties? Did you determine that one of the directors of Casa Loma had changed the original estimate and added, and this is what caused the financial difficulties of the prime contractor? Did you determine this, Mr. Minister? Did anyone from Dunhill determine this? Or did you just go in under the guise of motherhood and say: "Look, get rid of all these sub creditors and we'll buy it"?
You said in Hansard that the first deal was made on September 20. Now on Casa Loma, and I am quoting from Hansard: "When did negotiations come in?" "Casa Loma Motels approached Mr. Paulus with an offer to sell in late summer." In late summer. Now I asked you a moment ago: was it the promise of a deal that allowed the directors of Casa Loma to renegotiate their mortgages? And when do the mortgages come due? How did they know that on the 15th day of July, 1975, they would have money to pay off these mortgages?
HON. MR. NICOLSON: A point of order, Mr. Chairman.
MR. CHAIRMAN: The Hon. Minister on a point of order.
HON. MR. NICOLSON: The Hon. Member has, I am sure, inadvertently misled the Members of the House. He has tried to summarize some of my remarks by saying "first deal". I don't believe that was what I said concerning activities in September.
MR. CHAIRMAN: Order, please. The correction is accepted on the part of the Hon. Member. Would the Hon. Member for South Peace River continue?
MR. PHILLIPS: Well, I am just going by what you said. You said that the first contact was made by the Casa Loma partners and the Casa Loma directors to Dunhill.
HON. MR. NICOLSON: Is that a deal if someone comes into your used car lot and says "hello"?
MR. PHILLIPS: No, that's not a deal.
HON. MR. NICOLSON: Well, that's not a deal then.
MR. PHILLIPS: But what commitments were made? Were any minutes kept of this meeting between Dunhill and Casa Loma? Were any minutes kept, and what was said?
HON. MR. NICOLSON: No, it wasn't at Watergate.
MR. PHILLIPS: Well, it wasn't. All right. I'd like to know what was said because it seems to me more than coincidental that the directors of Casa Loma would be able to go and raise more money shortly after. The deal was made in the late part of the summer, and on the 15th day of September they are able to raise an additional $170,000 when the mortgage was already in arrears with Coronation Credit. October 1 they are able to sell their mortgage to the Toronto Dominion Bank — this is more than coincidental. More than coincidental.
Had you talked to the people from Dunhill who entered into negotiations? They must have had some strength, some assurance, that the deal was going to go through. I can't see mortgage companies and the Toronto Dominion bank advancing more money on a project that just three short months before was completely broke. They did offer it for sale in its uncompleted stage for $2.4 million. They tried to raise mortgage money in every brokerage house in Canada and some in the United States.
Do you mean to tell me — you are not that naive, Mr. Minister — that without some basis and some strength of an assurance that the government was
[ Page 2007 ]
going to buy this project, they could raise more money when they were bankrupt? Then all of a sudden they are not bankrupt; they can raise more money. It had to be on the assurance from somebody from Dunhill that the government was going to buy this. This is the whole point of this situation, Mr. Chairman. It was this assurance that the directors of Casa Loma received from Dunhill which gives them the muscle....
MR. CHAIRMAN: I would point out to the Hon. Member that asking questions and making charges are two different things. If the Hon. Member is making a charge, it should be done on a substantive motion rather than in committee.
MR. PHILLIPS: Oh, we've gone through this motion that dies on the order paper with this government with its crushing majority. You might as well put the motion in the wastepaper basket, Mr. Chairman, and you know it. You might as well put the motion in the wastepaper basket — at least then the janitors will probably read it and that's more than the government will do.
MR. CHAIRMAN: Will the Hon. Member address himself to the amendment, please?
MR. PHILLIPS: Mr. Chairman, the quantity survey I have here indicates the project to be approximately 85 per cent complete on July 23, 1974. Some of the areas of construction were 100 per cent complete such as the excavation, the demolition of the previous building, the drainage, the framing material, the aluminum entries, patios, doors and windows. As you go through the project the entrance was 100 per cent completed, appliances were 75 per cent installed — the project was approximately 85 per cent completed.
General conditions — 70 per cent completion; framing — 98 per cent; masonry — 89 per cent; rebar — 86; exterior siding — 98; roofing — 96; drywall — 76.
The project was 85 per cent completed. They offered it for sale for $2.4 million. So it will take on that basis approximately $360,000 to complete the project. How can the government justify paying the difference between $2.4 million and $7.1 million when the project would only require an additional $360,000 to complete?
You say that the directors are not going to make any profit on this deal. Who is going to make the profit which is going to be made off of the backs of those small subcontractors? How come some of the subtrades and creditors were paid off at 100 cents on the dollar while others only received 41 cents on the dollar?
HON. MR. NICOLSON: It's not like a dredging contract.
MR. PHILLIPS: Mr. Chairman, how come? Did the Minister know of this? Did the Minister bother himself to find out, or is this another deal like when he bought Dunhill in the first place and ripped off the taxpayers of this province to the tune of $2 million? Even today, with this year's financial statement, the assets are still not there. He ripped off the taxpayers of this province over $2 million in the original acquisition of Dunhill Development that hasn't created one single housing unit in this province but has gone out and purchased from private contractors housing projects already in the planning stage.
MR. PHILLIPS: This whole sorry deal smells; the whole sorry deal smells.
Maybe, Mr. Chairman, the Minister would like to advise us once again on how much money was figured to complete the construction from the condition the project was in when the original deal.... I say "original deal" because I think there was a deal made between Dunhill and Casa Loma originally. I think there was a deal.
MR, CHAIRMAN: Order, please. Is the Hon. Member making a charge?
MR. PHILLIPS: I'm just suggesting that I think there was a deal made there.
MR. CHAIRMAN: Order, please. I think the Hon. Member is making a very serious allegation. This should be done by a substantive motion, not by making statements on the floor of the House. It is an abuse of the rules.
MR. PHILLIPS: Oh, Mr. Chairman, let's take this motion bit.
MR. CHAIRMAN: Order, please! Is the Hon. Member questioning the rules of the House?
MR. PHILLIPS: No.
MR. CHAIRMAN: Is he suggesting that the rules of the House should not be followed?
MR. PHILLIPS: I'm not questioning the rules of the House; I'm questioning the motives of that government over there. You put a motion on the order paper and you might as well throw it in the wastepaper basket. I've said it before...
MR. CHAIRMAN: Order!
MR. PHILLIPS: ...and I'll say it again if you
[ Page 2008 ]
want me to.
MR. CHAIRMAN: Order, please. The Chair has no interest on whether or not a motion will be called in committee. The purpose here is to obey the rules in committee. I would ask the Hon. Member to follow the rules in committee. The rules are that no charge can be made in committee; it must be made by a substantive motion against the Minister or a Crown agency. Will the Hon. Member continue with the amendment?
MR. PHILLIPS: I would like the Minister to advise the House how much money was determined to complete the construction of the project from the condition it was in when the original negotiations were carried out between Dunhill and Casa Loma. The Minister just told me a few short moments ago that the Government of British Columbia, or Dunhill, did not carry out an appraisal on the Casa Loma project. I don't think, Mr. Chairman, the Minister even carries out a proper appraisal. As a matter of fact, I don't think anything the government does has any bearing on appraised values.
Would the Minister table the appraisal that was carried out by Central Mortgage and Housing Corp.?
HON. MR. NICOLSON: My name is not Barney Danson. You get elected to Ottawa and you can ask him to table it.
MR. PHILLIPS: Does the Minister have a copy of the appraisal? Does the Department of Housing or Dunhill Development have a copy of the appraisal that was made by Central Mortgage and Housing?
In other words, Mr. Chairman, he is telling me that if I want to go buy a used car, I'll pay for it what any finance company will mortgage it for. That's exactly what the Minister is telling me. In other words, if Central Mortgage and Housing will mortgage the project for $3.52 million, that's what he should pay for it. He stands in this Legislature and says that the cost is only $26 per square foot when other projects of this type are costing $30 a square foot. I'll tell you why, if that's the case: it's off the backs of those small subtrades.
Does the Minister truly not figure that he has any moral obligation to the families of these subtrades?
MR. PHILLIPS: Would the Minister like to advise if he feels he has no moral obligation?
I am sorry, Mr. Member for Oak Bay (Mr. Wallace). I didn't mean to be this long, but this project has got to have the scrutiny of the taxpayers of this province, and we have got to have the answers.
Will the Minister tell me: does he have a copy of the appraisal that was carried out by Central Mortgage and Housing Corp., or did he just go on the figures that were released to him by CMHC? Did he have a cost for completing the unit from the state if was in when Dunhill started dealing with them through to the completion of the project? Were the 32 motel units to be completed as living quarters or as motel units? Would the Minister please advise us?
HON. MR. NICOLSON: Mr. Chairman, the Member has suggested that somehow we gave a document or something, some sort of assurance, whereby they could go and get a further line of credit from Coronation Credit or the Toronto Dominion Bank. Surely the Member doesn't underestimate the competence of the Toronto Dominion Bank in that they would accept hearsay.
MR. PHILLIPS: They did have a document.
HON. MR. NICOLSON: To my knowledge, there have been no questions asked, no inquiries made by the Toronto Dominion Bank to my department and, to the best of my information, none to Dunhill...
MR. PHILLIPS: They did have a document.
HON. MR. NICOLSON: ...nor to Coronation Credit.
MR. PHILLIPS: You are just proving they did have a document.
HON. MR. NICOLSON: What document did they have, Mr. Member? You are imputing this. You are the one who raises all the spurious questions.
MR. PHILLIPS: They did have a document.
HON. MR. NICOLSON: You ask how much and I have said many times how much we have paid for a completed project. I have pointed out that the cost of that project was approximately $26 per square foot. There are CMHC inspectors there, there are Dunhill inspectors and there are Burnaby inspectors on that site to find out the quality of the project.
Take a currently-being-completed project, however, in Burnaby, not of the Department of Housing, not of CMHC, but of the Greater Vancouver Regional District. It is senior citizens' housing. If you want to go look at it and make comparisons, Mr. Member, it is right next to the Cascade Drive-In on Canada Way. Laurel and Lynnwood is the address, Mr. Member. The estimated cost of that is $38 per square foot. That is the kind of appraisal that one can very readily make, Mr. Member. You cannot make a
[ Page 2009 ]
normal appraisal of a half-completed building.
For you to suggest that the past history of this should somehow enter into our figures.... I would imagine that ...
MR. PHILLIPS: You take no responsibility?
HON. MR. NICOLSON: ...because the project was started years ago and because the capital costs came in before the cost of materials went up, the price of this project is considerably lower.
The lien settlements between contractors and subcontractors might have a small bearing on that. I think you can figure that out, Mr. Member. You know the amount that was settled upon; you know it was settled at, what? — 40 or 42 cents on the dollar. You said a dollar on the dollar, by the way, Mr. Member, but I know you didn't intend to say that.
MR. PHILLIPS: To some of them. Why to some and not to others?
HON. MR. NICOLSON: But that was a very small thing. Mr. Member, you might have such an inflated ego that you think you are judge and jury, but I don't.
MR. PHILLIPS: Do you not feel you have a moral obligation?
HON. MR. NICOLSON: I happen to think that agreement's reached on the advice of upstanding members of the bar, by Bruce Macdonald, that opinions put forth by His Honor — and still His Honour — Thomas Dohm, have some bearing, but neither you nor I have that legal expertise. Neither of us were consulted...
MR. PHILLIPS: I'm asking you.
HON. MR. NICOLSON: ...and to this date, I have not been asked....
MR. PHILLIPS: How do you feel about your moral obligation?
HON. MR. NICOLSON: I have had, I think, one letter...
MR. PHILLIPS: Do you have a moral obligation or not?
HON. MR. NICOLSON: ...from one of these people.
MR. PHILLIPS: Do you have a moral obligation or not?
HON. MR. NICOLSON: Mr. Member, it is a legal matter.
MR. PHILLIPS: You are naive.
HON. MR. NICOLSON: That is not my moral obligation.
MR. PHILLIPS: You're just plain naive and ignorant.
AN HON. MEMBER: Order!
HON. MR. NICOLSON: Agreements have been made. It was settled. It is not for me to go back....
MR. PHILLIPS: You are naive and ignorant.
HON. MR. NICOLSON: No, I am not naive, Mr. Member. You are naive. You talk about a deal happening when two people just talk together. I'm sure you didn't run Aspol Motors that way, Mr. Member. I am sure you didn't.
MR. D.A. ANDERSON: Mr. Chairman, the Minister has given us some interesting details about a property at some other address where it is $38 per square foot. He has talked about the bank and accepting hearsay evidence. Thank goodness, my bank accepts hearsay evidence all the time. He talked about a lot of things which are irrelevant to the questions which have been put to him. The questions which have been put to him....
HON. MR. NICOLSON: You ask irrelevant questions.
MR. D.A. ANDERSON: He keeps saying "irrelevant questions." The fact is that for more than two months, back to February 25, I have been working on this matter and questioning him in the House, and there is a string of unanswered questions in Hansard as long as your arm. The Minister knows this. He knows it is totally specious to talk about the order paper when we have been talking about oral questions in the House. He knows that too, or he should.
The fact is that the Minister today talked about what he said to the House back in April when he talked about the details of what took place before the lien holder settled with the principals. He simply has not given, in that statement or today, the details which would have cleared up this matter way back when the question was first raised, somewhere between February 25 and March 5. He's never given us the details of that.
[ Page 2010 ]
What we want is information as to whether or not the Casa Loma principals had some assurance, on the strength of what they were told by Dunhill, Paulus or Housing department people, that the government was going to get in there and buy that property, because at the same time, Mr. Chairman — now admitted by the Minister — as there were discussions taking piece, the creditors were eventually to accept some 42 cents on the dollar, and some, in the case of suppliers or people who provide rental equipment, were to receive nothing. One person even received 3 cents. Fiber-Cann received nothing for $600 worth of services.
Now was the government or Dunhill negotiating with the principals of Casa Loma at the time that the principals of Casa Loma were settling this outstanding account of some $400,000-odd? That's the critical point. It's no use giving us a lecture on people in senior-citizen rental agencies wanting to make sure there's plenty of rental accommodation for seniors; we all agree. But now the Minister of Housing is getting coaching from the Attorney-General (Hon. Mr. Macdonald), who was requested way back before to look into the whole business of this Casa Loma mess, and he refused. He gave a reasonable explanation, saying he can't look into everything that he's requested to look into. Fair enough, but the government was warned by N.B. Electric that N.B. Electric's principals thought the whole thing was very poor and they felt this matter should be investigated by the government.
Mr. Chairman, I've got one list of $390,841.65 worth of approved claims on which payment was $160,894.90. I've given you examples of companies which have been paid even less. There is at least one company which received substantially more — 100 cents on the dollar — and there is some suspicion that the principals involved in that company will show up elsewhere in this business in terms of principals of other companies involved.
The question for the Minister is not to get up and lecture us about the need for senior citizens' housing, but the question for the Minister, as it has been for two months, is when the negotiations began, what type of negotiations were taking place and whether or not any assurances were given to the Casa Loma principals. He has consistently refused to give that information. Indeed, on page 1482 of Hansard, which he quoted to us a moment ago, he said: "From this information, there is no evidence to support the contention that a commitment to purchase by the department, or even negotiations between Dunhill and Casa Loma were either made or going on prior to the settlement of the lien claims." Now he's backed off that today by saying there were odd negotiations earlier. He wouldn't like to put his finger on what exactly took place, but he went on to say there had been discussions previously. He went on to mention that. Well, now all we want him to do is go a little further and come clean.
He's talked about this whole question of liens as being a very small matter. Sure, it's a small matter for him — he's getting his $48,000 a year plus expenses — but it's a major matter for some of these suppliers. One in particular has indicated to me that he figures it will be three or four years before he recovers from the substantial losses that he has incurred on the Casa Loma deal. Sure, it's a small thing for a man who's used to throwing around millions, the way the Minister is. But it's a big thing to individual British Columbia contractors.
The Minister today, Mr. Chairman, has told us that of course prices were considerably lower; therefore there'll be a profit in this. Well, that again is contradictory to what he said previously, which was that the Casa Loma principals would not be making a profit. Now I'd like to know how much.
MR. D.A. ANDERSON: Now he's backing down on the question of how much profit the Casa Loma principals will be making. If he will recall way back to February 24, that was the very first question asked: what was the difference between purchase price and sale price to government? It was only then that we got onto the other aspect, so he's now backing off that as well.
But the fundamental question is: when did you negotiate, and what commitments were given to the Casa Loma principals? That, Mr. Chairman, is something that I have been after for two months — more than two months. We still haven't had an answer today and I'm going to sit down right now so the Minister can get up and come clean and give the details of the negotiations with Casa Loma prior to the settlement of the liens by Casa Loma itself.
HON. MR. NICOLSON: I can understand the reason for some of the remarks and why the Hon. Second Member for Victoria hasn't had a chance to do some of the homework and read some of the documents that have been filed in this House carefully. He's already proven his administrative abilities. He can't even supervise a caucus of four, but it will be a simpler task, Mr. Member — maybe even one within your competence.
I tabled some time ago a letter from His Honour Mr. Dohm.
MR. D.A. ANDERSON: That's right. He denies your statement about the negotiations.
HON. MR. NICOLSON: He concluded that the contract was 72 per cent completed. Well, okay.
[ Page 2011 ]
MR. D.A. ANDERSON: Come on, now. It's so simple you're going to do it just like that.
HON. MR. NICOLSON: Based on the findings of Mr. Frizzell, the quantity surveyor, Mr. Macdonald reported in a letter dated August 22, 1974, that it was his opinion that the liability of Casa Loma Motel Ltd., as register-.d owner of the property, did not exceed $170,000. He would be prepared, to recommend to the committee of claimants that all liens be released upon payment of the said sum by Casa Loma Motel Ltd. So while agreements might have been signed a little bit later than that, on August 22 Mr. Macdonald seemed to have some agreement with his clients.
In point six of his letter he says: "As registered owner of
the above lands, Casa Loma Motel Ltd., through its directors,
decided to attempt to sell the project. Negotiations with the
Government of British Columbia commenced sometime in September
of 1974, the first contact being made in the month of
September, 1974, after the settlement..."
MR. D.A. ANDERSON: You've denied that. You've denied that was the contact then. You've said it was earlier.
HON. MR. NICOLSON: The first contact, Mr. Member — not a deal, not an agreement.
MR. D.A. ANDERSON: The first contact. You said it was back early in the summer.
HON. MR. NICOLSON: "....after the settlement was reached with the mechanic's lien claimants."
MR. D.A. ANDERSON: You said it was earlier. That's the point.
HON. MR. NICOLSON: Well, Mr. Member, it isn't the point.
MR. PHILLIPS: It is!
HON. MR. NICOLSON: The point is this. On December 5, 1974, a proposal call selection committee was advised that the proponent, Casa Loma Motel Ltd., had been advised that the only circumstance under which the project would be acquired was in the event that the 1974 surplus funds were available under section 43 of the National Housing Act. So on December 5 there was not a deal, Mr. Member. In September, in July, in October, in November and still even on December 5 there was not a deal.
MR. D.A. ANDERSON: Mr. Chairman, the quotation that was read with such glee by the Minister proves, if he's taking that at face value, that we've been misled in this House by the Minister, who has talked of contacts prior to September, 1974. He's stated that in this House. He said it was early in the summer and things. Now is Paulus right, is the Minister right, or is he now trying to hide behind the lawyer and the lawyer's letter for the other people, the Casa Loma principals? When did that first contract take place? Are you standing behind this statement? Up to now you've said something very, very different.
HON. MR. NICOLSON: Is the Member suggesting that we can't even talk to anybody, that we have to log everything, that we have to run tape recorders at every meeting that's ever held, or have minutes? Well, Mr. Member, how can I know? I wasn't there, Mr. Member. I can take information, I can take recall from other people, information that's given to me, but am I to deny that somebody from Dunhill might have talked to them at that time? How can I do that? Do you know what one of your relatives is doing right now, or something?
MR. D.A. ANDERSON: I'll be happy to point out this once more. It states here in this letter, which he gave as proof, that the first contact was made in the month of September, 1974. That is the statement read by the Minister. Now previously we've been told that Paulus and other people had been in touch before. We've been told that by the Minister, among others. There can only be one first contact. It's not a question of whether there have been discussions before; it's not a question of the Minister being forced to answer for people he doesn't know about. Is he now saying that he's reversing his previous statements and reversing the previous statements of Paulus and telling us that he accepts the statement that the first contact was in September, 1974? If he isn't saying that, why on earth did he read this letter, if it's wrong on the basis of what the Minister and Paulus have told us before?
MR. WALLACE: Mr. Chairman, this amendment is one of no confidence in the Minister. I have listened very carefully to both sides of the argument on the Casa Loma deal. Frankly, I would think that the debate would range a great deal wider than one specific instance when trying to decide whether or not we should have confidence or not have confidence in the Minister. But I have listened very carefully to the long debate on the Casa Loma deal and the points expressed by both the Minister and by the Members of the other opposition parties.
For the record, it's my conclusion that the whole situation represents substantial fumbling by the Minister, albeit without dishonesty, as has been applied by some speakers. I accept the Minister's
[ Page 2012 ]
statement that he acted in good faith and that there was no deal. I accept that statement.
But to sum it up, in listening to all the arguments, it does seem to me that we have a situation which is legally correct but which morally smells, particularly from a government which promotes and espouses a great belief in fair play and a fair deal for the little man.
In opposition this party was always committing itself, particularly in the face of the government actions of that day, that if it ever became government, it would be much more sensitive to the, rights of the individual and the necessity always in government to at least give the little man fair play. Regardless of the details of the debate on Casa Loma, it's quite obvious that a lot of tradesmen got taken and there is a very unpleasant odour around the whole situation, which suggests that the principals in the deal came out smelling like a rose by being able to sell the property to the government.
The Minister has insisted on many occasions and in several of his comments today that nothing was done which was wrong and nothing was done which was illegal. But I have to ask the Minister: does he feel that from an ethical point of view — or do ethics not matter in government — if he was one of the tradesmen who was paid 3 cents or 40 cents, or whatever cents, on the dollar — and I think that's another factor in the argument, that they didn't all seem to get hosed to the same degree — how would he feel to pick up 40 cents on the dollar one day and very shortly after find that the government had bailed out the principals?
I really don't think it's an argument in defence to say that you stuck to the letter of the law and insisted that all the liens and encumbrances and all the other commitments would be cleared out of the way legally before the government moved in and acquired the property. It's my opinion that if that is the kind of argument the Minister is presenting to this House in explaining the total project and all the dealings that went on, I'm sorry but I have to reject that as an inadequate explanation. It may be absolutely legally watertight, but morally and ethically it is certainly not the kind of example I would want to be part of if I were ever part of a government. It very much sounds like the argument that the end justifies the means.
I think the Minister was less than fair to this House to start talking about $26 a square foot and the need for senior citizens' housing in answering some of the opposition accusations. The price per square foot has nothing to do with the issue that the Minister is being confronted with this afternoon. The issue has two or three very central thrusts to it.
First of all, was there some deal? The Minister has given his word that there was not a deal, and I accept that. The second point is: does a government function honourably simply by living within the letter of the law, or does it have some ethical standards and moral standards by which it deals in human affairs? I would say that the number of tradesmen who finished up losing a lot of money cannot have a great deal of respect for the ethics and moral standards set by this government on this particular issue.
So I feel that either the Minister carried out this transaction having weighed up some of these points that I've mentioned and made one of two decisions. He either did not fully realize the implications of this kind of action, or he chose to decide that the need for the housing was so great that, from a point of view of his responsibility to find units for senior citizens, the sacrifice that had to be paid in this case was the financial rewards that were due to the various construction people who found themselves in this difficulty because of the bankruptcy of the principals. I've decided that it was one of these two decisions which the Minister had to make.
Personally, although I am as sensitive as anyone to the need for senior citizens' housing in this province, I do not feel that the government can hold its head very high at having obtained a certain number of units at the sacrifice of the honest labour and the reasonable commitment that the trades had made expecting that they would be paid for that commitment — namely, their materials, their time and their services.
My considered opinion on the Minister's management of this Casa Loma situation is that either the Minister showed a surprising lack of competence or he made a calculated decision, admittedly in favour of getting units on stream more quickly, but at the cost of the legitimate interests and the financial well-being of men who as trades and subtrades have genuinely done their jobs. They are the ones being sacrificed for the advantage of completing the project and making the units available to the senior citizens. If that's the equation, I have to disagree with it.
I did want to make a few more comments on the amendment over and beyond the Casa Loma project. The general responsibility of the Minister is to solve on a wide front the overall housing and accommodation problem in the province. I would criticize the Minister in one or two ways.
First of all, it seems to me that there's really no integrated, overall plan by the Minister to deal with the housing problems in the province. The impression one gains from his speech on the budget debate in this House and from his press releases is very much a piecemeal approach to the problem. There seems to be no real estimate of the exact needs in the province in terms of what type of accommodation is needed where. I've yet to see any definitive target with statistical backing for the next 12 months.
I know, for example, from this excellent
[ Page 2013 ]
document, "Canadian Housing Statistics," put out by Statistics Canada, that nationally it is calculated we need 250 000 units per year and that British Columbia's share of this is approximately 30,000. The figures, very quickly: in 1971 there were 34,800 starts; in 1972, there were 35,300 starts; in 1973, 37,600 starts; and in 1974, it dropped to 41,400 starts.
My criticism would be that basically the government has not made a real estimate of the actual needs in housing. They have not outlined the various types of housing that are required and in some general, considered way, where these differing types are most required. I suppose, on the basis of that criticism, I have to acknowledge that, if you don't know that it would be difficult to set a target. We do know that the population is increasing at 3.5 per cent per year and that a vast amount of that increase is in the lower mainland.
I'm saying that there is a tremendous need for basic information on the type of need and the location. I would ask the Minister perhaps to respond to my criticism by asking — I'm not quite finished, Mr. Minister — if you could give us some idea, in the light of the criticism I've made, of what our target is for 1975-76 and what the overall plan is for the province. Give us some kind of breakdown. With respect, all the information we hear is of cooperatives and leased property. There seems to be limited overall planning for various other types of accommodation.
Some of these points I have raised already in debate regarding the use of prefabricated homes and the increasing use of mobile homes. The fact is that the mobile homeowner often finds himself in some very serious difficulties because of lack of appropriate legislation to protect the mobile homeowner.
To expand a little on this general question, how many projects in total does the Minister expect to see started this year and what general breakdown? How many of them will be rental accommodation? How many of them will be owner-type accommodation? How many does the Minister expect to see completed in the current fiscal year, 1975-1976? Indeed, it would be interesting to know if the Minister has a total target figure related in whatever way he cares to relate it to the approximately 30,000 figure I quoted from Statistics Canada.
I think it's unfair to discuss housing in isolation when many of the problems the Minister has related are attributed to the municipalities. The Minister has repeatedly in public and in this House made it quite clear that one of the main obstacles he finds in speeding up the construction and provision of units of all kinds is the attitude of the municipalities.
I just want to make it plain that we feel that the reason for that is very obvious. The per capita funding of the municipalities no longer bears much sense at all when the funding by the provincial government to the municipalities is so predicated on the number of people living in a community regardless of the tax base in that community in relation to industrial and commercial properties. I don't propose to go all around that argument, as we have done so many times in this House.
But I think if the Minister had shown a greater awareness that that is where all the trouble starts with the municipalities, that the reason they are often apprehensive, reluctant and hesitant to get into certain housing developments relates to their concern about the net financial effect on the municipality. With the rising costs of servicing and many of the other costs involved where there is a limited tax base within that municipality and a lack of commercial and industrial development, then they are very apprehensive about getting involved in housing projects where the net effect might be increased costs to the municipality because of the very inappropriate per capita method of funding by the government.
While I have no wish to repeat the arguments we presented to the Minister of Finance (Hon. Mr. Barrett), I think it is relevant just to say in passing that while the per capita grant system is causing a lot of the problems for this Minister in his dealings with the municipalities, this first venture into tax-sharing through natural gas profits is such an unreliable, uncertain and unpredictable source of funding at the whim of the senior level of government, it certainly is no solution to the problem, in our view. It is a step which is better than just giving a flat increase in the per capita grant, but this is not the solution.
We hope that this Minister will take to his leader, the Premier of this province, the same kind of initiative that the Minister of Education (Hon. Mrs. Dailly) apparently took in pointing out the need for initiatives in different methods of funding. Perhaps this Minister would suggest to the Premier that he look at Manitoba and Quebec, for example, who are now beginning to consider municipalities receiving a share of other forms of financing which are often of a more reliable, consistent and predictable nature. I think it would be papering over the gulf between the provincial government and the municipalities if it were just assumed that for reasons of convenience municipalities are being awkward and sometimes apparently obstructive to the Minister and his department in plans to bring certain other units on stream.
The Minister has also talked about impost taxation. I think we have discussed this, and left the clear implication that the municipalities are playing games on this way of raising money. I think this brings us back to the basic problem I mentioned a moment ago, that the municipality wouldn't have to try various gimmicks or manoeuvres to raise a few more bucks by rezoning fees or impost charges or
[ Page 2014 ]
whatever if the basic financing available to the municipality was stable, predictable and adequate in the first place. It seems to me that the real explanation is that the municipalities, in various ways through these impost charges and fees, are trying to bolster their inadequate financial situation.
If the root cause of the attitude, namely the lack of basic, consistent annual financing, was solved, I think we would quickly see a removal of some of these charges which are presently being levied by the municipalities.
I hope that this is the route we go and that the Minister, in frustration or whatever, doesn't finish up following a path of greater centralization of planning and control within the provincial government sphere, and blame the municipalities as the reason for his greater centralization of authority and planning. One of the real measures which worries me about what this government has done is the way it has put itself about municipalities and individuals in the measures it can take in land use by amendments to the Laws Declaratory Act.
One of the reasons I would criticize this Minister is that there does seem to be a clear impression left by him in many of his statements that if the municipalities won't get along with his suggestions, then, of course, the power does exist in the hands of the provincial government to put land to whatever use the government chooses.
I think it is vital, if we are to solve this housing problem in the province, that the provincial government must work within the framework of regional and municipal legislation, and in the strongest possible harmony and cooperation with the regional and municipal politicians, because certainly in matters as important as housing, the right decisions and the speed with which progress can be made would have to depend on mutual confidence between the provincial and municipal governments.
I don't see how this can be achieved if the municipal governments realized that at the stroke of a pen the Minister really can very readily impose decisions on the municipalities simply because of the amendments I've mentioned to the Legislation.
Another area where I would feel justified in criticizing the basic housing policy and the Minister's position has been basically in the vehicle used by the government to expedite housing — namely, Dunhill Development Corp.
I suppose that again it might represent an action taken in good faith and with good intentions — that the government would acquire expertise to enable it to enhance the housing construction programme. But again I would have to leave the Minister with a few questions.
The impression I have had is that all that Dunhill seems to have done in large measure is to acquire land from developers and then call for proposals by the developers to undertake projects. In my view, for Dunhill to acquire land — it seems to be doing so at very substantial prices — why would it not have made more sense to provide the incentives to the developers to retain ownership of the land and do the developing themselves.
It seems to me that by having Dunhill acquire the land and then call for proposals must inevitably add to the total cost of the project, because developers owning land are not about to sell to Dunhill at anything but a very substantial price. I happen to know personally of one developer, a very highly honourable man, who was approached by Dunhill and sold on their terms. When I asked him about that, his answer to me was, "they offered me a price I couldn't afford to refuse," although that developer was quite prepared and had plans afoot to go ahead and do his own development.
I just wonder what the rationale of the acquisition of Dunhill Development really was other than the acquisition of expertise. Even if that were the rationale, I have to say that we don't feel that it was necessary in the first instance or that it has been successful in the second instance.
A further element of criticism would be the fact that Dunhill seems to have become involved in the acquisition of many projects that are already under way. That leads to the question: could the Minister tell us actually how many new projects have been initiated by this government, not simply picked up at various stages of completion of projects which have been started by either non-profit groups or developers or any particular group? The impression, I think, is quite clearly that. Yet some of the statements in the annual report of Dunhill Development leave the impression that they have some pretty substantial projects going on which they themselves have begun.
I would like to just ask one or two questions in that regard. For example, this statement appears in the Dunhill annual report: "We have provided incentives to local government to develop municipal land or provide servicing on a rational basis for privately-held land." I wonder if maybe the Minister could give us some of the details. What exactly does it mean by that?
Another statement on page 5 says: "We are implementing programmes which are designed to drastically increase the supply of serviced land on the market. Hopefully, these programmes will have the effect of stabilizing land prices." Once again I don't think we've had the information to know whether that statement is accurate, that the programmes "are designed to drastically increase the supply of serviced land." If so, is it mainly the land I mentioned a moment ago where Dunhill acquires the land from developers and then asks the developers to go ahead and submit proposals for projects?
There is a whole raft of questions; I think
[ Page 2015 ]
probably I've almost used up my half-hour for now. But it's on that kind of basis that I have to question the judgment and the efficiency or otherwise of the administration of the Minister.
I think the Casa Loma matter, important as it is, has been zeroed in on today. It would be a pity, I think, if we lost sight of the much broader concept of what a Housing department of government should be doing, and the fact that there does not seem to be a general overall plan upon which opposition politicians or the man in the street can, in fact, judge the efficiency and the foresight of this department. I wonder, perhaps, if the Minister could answer some of these questions before we go further.
HON. MR. NICOLSON: Mr. Chairman, the Member for Oak Bay (Mr. Wallace) did question me about my views on the ethics and to disregard legal opinion and such. I think that it is unethical for me to sit in judgment of an agreement that was made under the Mechanics' Lien Act, one way or the other. I think it would be very easy to get involved in it on a basis that there are racial overtones, that there are all kinds of underlying things that maybe haven't been said.
But I always come back to this thing that an investigation has been launched, it's been requested, and it has been launched by the Attorney-General's department. What comes out of that will come out of it. I don't feel that I should sit as judge and jury and say that one side was wrong or the other side was wrong. I do feel that there is no agreement until I get some kind of assurance. As late as December we said there was no assurance and that everything was contingent.
I do believe that the Mechanics' Lien Act needs amendment, and I think the Attorney-General has said that he feels it needs amendment. It could be improved and I should think it could be. I've seen people suffer under the Mechanics' Lien Act in other ways before I was elected as a Member. I've seen people sold prefabricated homes by companies from Kelowna and the companies have silently folded up and went away and only one person got any redress under that, and that was because he had signed a mortgage.
In my riding alone, I think about five people were left holding the bag, having made $2,500 or $5,000 down-payments. That company moved to Alberta and it seemed there was no redress. I think certainly nothing was done when appeals were made to the government of the day about that type of problem. I think it's an area that does need a lot of improvement.
You mentioned the housing crisis and CMHC's statistics. I believe CMHC has set a target of, I think it was, 210,000 for this year; 25 0,000 was suggested by the provincial Ministers, but one does have to be realistic. I think you said that the B.C. share was 30,000, so obviously our starts have been higher than that even last year when they were down.
You are concerned that no assessment has been made and no targets have been set. As far as the assessment is concerned, we have recently completed a demand and needs study for all municipalities in the province. We have it right down to places like Chetwynd and smaller villages, towns and municipalities. But it's very difficult to set targets when you have these problems that you've mentioned. Our thrust is not merely with co-ops and leasehold lands, but we have always stressed that these things should add to what would occur naturally.
You talk about mobile homes and the need to protect owners. I think we are caught in a very drastic dilemma there because there is also the need to encourage owners to build and, on the other hand, to protect owners of the mobile homes. Today in the present shortage — which really reflects the majority attitude toward mobile homes, which is not good — people object to mobile home parks in their neighbourhood. In fact, people are objecting to almost any kind of development in their own neighbourhood. But it's become much more acute in the case of mobile homes.
There is a tremendous scarcity there and there are two problems that can happen. Right now there are many things wrong at the present time because there's a scarcity, but there's a practice of a thing called an exit fee, and that is that if you want to sell your mobile home on a mobile home pad, you have to pay a fee to the owner. We have been requested to legislate against that. On the other hand, if the scarcity is there, perhaps if you protected the owner of the mobile home against the owner of the mobile home park charging such a fee, he might be able to avail himself of that scarcity.
So you know, the real solution to that is a good supply of mobile home parks. We have endeavoured to build quite a few and we have had excellent cooperation from some municipalities, but others have a pretty clear policy against the building of mobile home parks.
Our record for the first three months of this year: our housing starts are down 34 per cent, according to CMHC figures. But it isn't a local phenomenon. They are down 37 per cent in Alberta. In Saskatchewan they are down 48 per cent; 72 per cent in Manitoba; 58 in Ontario, and 44 per cent in Quebec. In fact, just three of the Maritime provinces are doing better — or were less worse.
It's not just a local phenomenon, in fact, it's not even isolated to Canada. In the United States it has been even worse, and housing starts are not picking up in the United States as was hoped.
A great deal depends upon whether Mr. Turner
[ Page 2016 ]
gives Mr. Danson the type of money.... You mentioned the letter from the Minister of Education (Hon. Mrs. Dailly) to our Minister of Finance (Hon. Mr. Barrett). In my not-too-recent visit to Ottawa I could see that there is a little drama being played there. I hope that Mr. Danson is successful. We were suggesting ways of jumping the economy in a proper way, not an inflationary way. I think our input was received well. But Mr. Turner wasn't at the meeting. Some other Members of cabinet were in addition to Mr. Danson, but not Mr. Turner.
There is resistance which has taken place in many municipalities, but others are quite actively encouraging building. As I suggested recently to the Real Estate Institute of British Columbia, I think it's time for constructive dialogue with the municipalities. I see many encouraging signs in the Capital Regional District and in greater Vancouver.
You mention the per capita grant. I think the distribution of natural gas revenues is a more significant step than you tend to give it credit for being. Also the sewerage treatment plant assistance Act, transit subsidy Act, and these things. But as much money as municipalities get, they will always be able to spend it, and on worthwhile things. I know that some places are building long-overdue municipal halls. Frankly, compared to some schools and hospitals and other institutions, they looked a little bit like palaces with the fountain in the front and the fountain in the back. But they'll be there for a long time. Right now, that's where a lot of money is being spent by municipalities. I see long-overdue park development taking place and more awareness about the need for parkland and development of raw parkland into something that people will actually make use of.
In spite of these other inputs from natural gas revenues, I think there are also expanded activities being undertaken. It's not necessarily hold the line, although we hear talk about having to cut staff, et cetera, et cetera. There are some very large capital projects being undertaken by some of these municipalities.
That notwithstanding, you referred to something from the Dunhill report, and that is something I would like to talk about — that is, in Saanich, the municipality's pre-service privately-held lands. There are many areas in the greater Vancouver and also greater Victoria area where key services are required. It's not a priority for the municipalities at that time but it's a priority to people holding lands who want to develop them. We are negotiating agreements with a couple of municipalities in greater Vancouver and we will probably be doing something similar in the greater Victoria area where we can bring in this maybe for half-a-million dollars. We might be able to bring a couple of thousand housing units on stream, and then we will prorate the charge back to the development with interest as it comes on stream. It will be a way of springing projects that might lack maybe a road connection, a sewer, water connection, or one or two things — something that's holding up the development for the piece of land or of a large area. Maybe there are a number of ownerships in the area, but nobody wants to take the first step, being the first in. That's really a considerable problem which we've identified as a result of having had a "Housing expediter." This was one of the problem areas which was identified.
Servicing other lands, the Riverview project, Burke Mountain project, and also properties in Burnaby which are being serviced: these will be all on leasehold tenure or perhaps go to social housing. It could be long-term lease, a 99-year tax sale lease, or it could be a month-to-month lease, Mr. Member, of various tenures. It will be an opportunity for the construction industry to get involved in creating more housing units.
MR. WALLACE: The Minister referred to the federal problems and his impressions from the meeting in Ottawa and so on. I'd like to be clear on one other point, very much related to a public comment which I believe the Minister made last week.
Is the Minister saying that he does not agree with the federal concept of using housing as an economic tool? From our side of the House, housing and shelter is like food and health care — you don't turn on the money or turn off the money to use it as an economic regulator.
Last week the Minister made a statement. I can only paraphrase him to the effect that the sooner we have some financial institution here in British Columbia which affords the Housing department access to funding under its own terms of reference, the better it will be. But, at the moment, to be confined within the constraints of CMHC simply by lack of funding is, if not the main obstacle, one of the main obstacles to making more rapid progress in bringing more units into construction. I would like an answer to that question.
The other simple, quick question was: because of the example set by the federal government to subsidize interest rates for private developers on the understanding that the resulting units created will be rented at a lower rate for a specified number of years — as I understand it, that is the kind of proposal that the federal government makes in certain cases — what is stopping us provincially from taking the same approach, that to some degree we would subsidize the interest rate for construction work undertaken by private developers if we got a commitment from the private developer as to some moderate-range rent or price that would be charged for the construction? I gather that the federal government has taken this
[ Page 2017 ]
initiative. Have we got any such plans?
HON. MR. NICOLSON: My statements about using housing as a financial tool were more directed toward the fact that while you might have problems in the in manufacturing- based economy of the cast, a cut-off of the supply of housing funds might be used to cool off the economy. That could have the absolute opposite effect here in British Columbia. For instance, for one thing it would cut down on the sales of lumber. Also, our needs for housing are something I think we have to decide at the local provincial level, and even more locally than that.
HON. MR. NICOLSON: I certainly wouldn't object to it being used to heat up things a little bit at this time, but I don't think it should be used to cool things off, Mr. Member. I know that is a bit of contradiction.
You asked another question, too, which I didn't....
HON. MR. NICOLSON: Yes, with LD housing, the take-up last year on LD housing was only 99 units. This year it might be a little bit better, but under the constraints of the CMHC programme it almost precludes anything else but a three-storey walk-up, which we don't think is really suitable for families. But we have said that we would participate in applying section 44 National Housing Act subsidies to a quarter of the units in an LD housing project. That is what the federal government proposed to us and we have agreed to cooperate on that. We would be in it, not in the incentive to the developer but in terms of subsidizing people up to one-quarter of the units in there, which is what the CMHC has proposed to us. We accept that proposal.
I believe also that you asked questions about the proposal call housing programme. I failed to answer those in the previous round. There were a great number of projects which, from the best information we had, were going to be stopped after being partially completed and they were going to wait until the supply of mortgage funding increased. I think evidence of that can be found in the fact that we have recently heard of the 1,500 vacant new housing units in the greater Vancouver area. We channeled these into an area which qualifies for funding from Central Mortgage and Housing. It brings Ottawa dollars to British Columbia, either at the ratio of 75/25 or 90/10.
We have created jobs by doing this because we feel most of those projects would not have taken place otherwise, although maybe some of them would have gone through. I have certainly had some contractors tell me that they would not be building were it not for the provincial government programme. Others say they would have cancelled after the first phase of an approved project.
[Mr. Kelly in the chair]
Also, the continuing subsidy that will go to those people on a 75/25 basis, to people in need, channels this into an area in which, if it had been in the private sector, probably no children and no pets would have been allowed. It is fulfilling a need for family housing, particularly for the people on low and moderate income, but people who do need some assistance.
MR. CHAIRMAN: I recognize the Second Member for Vancouver–Point Grey.
MR. G.B. GARDOM (Vancouver–Point Grey): Thanks, Mr. new Chairman. Nice to see you in the chair this afternoon without your leg trap on. (Laughter.)
The specifics of Casa Loma have been dealt with to a great extent, Mr. Minister, and unfortunately, I think, with unsatisfactory response on your part.
I don't wish to deal with specifics, but I would like to make a couple of remarks and ask some questions about some general sentiments and some general characteristics that have become very apparent out of this transaction.
Now the Member for South Peace River (Mr. Phillips) and the Member for Victoria (Mr. D.A. Anderson) both clearly indicated that there's something rotten in the deal — something just rotten in the deal. I want to ask you what it is, because why should one really have to walk by Casa Loma with a can of Airwick in one's pocket? There's something wrong there and the public have not received the true facts of what that is. You must know.
You said you wished explicit questions. Well, the Royal Canadian Mounted Police are investigating the transaction. I ask you why.
HON. MR. NICOLSON: Because you requested it.
MR. GARDOM: Oh, well now, Mr. Minister, are you going to suggest that if an opposition suggests that the RCMP should question a governmental programme, they automatically come in? Mr. Minister, you have those facts at your fingertips, and it's peculiar to me why you have not furnished those specifics to the taxpayers in the province.
I'm not going to take the time of the House this afternoon repeating it, but the Members have discussed that some lien holders have received 100 cents on the dollar, yet others only got 41 per cent
[ Page 2018 ]
and still others got nothing. Why is that? No one is questioning, I assume, the validity of their claims. It is my assumption, and you correct me if I am wrong in this, that the claims were all valid, but some people received different payouts than others.
Then you talk about the great bargain — the $26 a square foot as opposed to the $38. If this dollar difference is reflected into those facts, it would appear, as has been raised by the Member for South Peace River and by other Members, that because of those facts, the subtrades, essentially, have not received proper payment and are carrying this transaction on their backs. They have provided the dollar deal for the government. Is that correct? If that is correct, do you believe that's the course of action that the government should be involved in?
Now you mentioned this afternoon that you are prepared to take heat for senior citizens. Well, to me, that's an admission of the fact that there is trouble, that there is heat and you, Mr. Minister, know what it is. You do know what it is. You've accepted the fact that there's heat. You've confessed to that fact. What is it? What is the trouble? Why is there heat? If the opposition's fears are baseless, why the need for the Royal Canadian Mounted Police?
The more important problem is this: it is one dealing with morality. I've heard you use the word "ethics" across the floor today, I've heard "morality" too, I believe. But governmental morality is supposed to be of the highest and it's not enough that it just be adequate. It's not enough that it be the type of thing the Better Business Bureau might, say, frown at but not do anything about. It's got to be morality beyond suspicion. This transaction is rife with suspicion; it's olfactory. There is something wrong there. You know what it is, Mr. Minister, and you have still failed to tell this Legislature what it is. You said: "Ask an explicit question." There, indeed, is an explicit question.
If people have been taken to the cleaners, should the government become a party to that kind of a transaction?
In essence, if you have bought with the knowledge, or the means of knowledge, that people were taken to the cleaners, and you've benefited from that transaction, can you legitimately say that that is a proper way to exercise your own administrative capacity, which is governmental administrative capacity? I doubt very much that it is. I would say that it is not.
Mr. Minister, as I say, without getting into specifics — I'm not talking about dates and contracts; I'm not talking whether it's $ 1.25 one side or another on square footage — one thing is paramount here: some little people have been ripped off. Another thing is paramount: this is under investigation by the Royal Canadian Mounted Police. A third thing is paramount: the Hon. Minister has not seen fit to disclose the full facts to this House, and that is the thing that troubles me. It troubles me that the government will get itself into a transaction such as this without being prepared to furnish 100 per cent of the facts and, secondly, without being prepared to give its undertaking that if people have been improperly dealt with.... I'm not talking about dotting the i's in the contracts. Have people been improperly dealt with? If they have, you have a responsibility to do something to assist them.
I'd like to ask you a couple of questions about another topic, very quickly. This deals with housing on Indian reserves in this province.
Now it is my understanding, Mr. Minister, subject to correction if I am wrong, that the only support for housing coming from this government to reserve Indian people consists of the home acquisition grant, which I am very proud to say, emanated over these benches here many, many years before you were government. I congratulate the government for accepting and seeing that there was a need and doing something about it.
But over and above that, Mr. Minister, can you tell me what specific provincial dollars — I'm not talking about federal programmes, of which I have some degree of knowledge....
MR. GARDOM: Yes, I'm talking about what provincial dollars and provincial programmes are available for Indian reserves in this province. While you are answering that question, it would be appreciated if you do have the figure, or perhaps your colleagues behind you have, of the amount of money we have made available under the home acquisition grant for Indian reserves over the past fiscal period, and the number of houses concerned — both the amount of money and the number of dwellings.
I would much appreciate it, Mr. Minister, if you would give some answers to these questions, and I've attempted to be as explicit as I can.
HON. MR. NICOLSON: The Hon. Member asked why the RCMP is investigating, and he talked about morality and ethics in this House. Hon. Members in this House have suggested that there should be an investigation; they've asked the Attorney-General (Hon. Mr. Macdonald) that there be an investigation. I wouldn't think that they would be acting impetuously or just for political expediency. I would think that maybe they had some serious questions. So unlike the days of Sommers-Sturdy.... Who was the Attorney-General then? Who was the government then? Who sat on that for 17 years, it seemed like, but 17 months I think it was? Was his name Peterson, or was his name Bonner, or was his name...?
[ Page 2019 ]
HON. MR. NICOLSON: No, he just sat on facts for 17 months, or thereabouts, and didn't launch an investigation when Hon. Members of this House wanted to know the facts.
Well, Mr. Member, I think that if there really is something wrong here, then it certainly is before the fact of the provincial government becoming involved. But if there is, then it should be investigated, should be looked into. As I have said to other Members, I'm not a judge; I'm like you. I don't even want to be a judge. I don't aspire to that.
MR. GARDOM: You don't know what my aspiration is.
HON. MR. NICOLSON: I don't pretend to be a jury either. I think that if there is something wrong, the RCMP will find it out. If there was nothing wrong, then people will be absolved of any wrongdoing in this matter. If there is some basis upon which charges should be laid, then charges will be laid. But we will not deny or try to cover this up, as that previous government did.
AN HON. MEMBER: What about the Can-Cel cover-up?
MR. PHILLIPS: What about the Dunhill cover-up? The government has a lot to hide.
HON. MR. NICOLSON: Yes, what is Bannerman afraid of? Why does he want an adjournment?
MR. CHAIRMAN: Order, Hon. Members. Let the Minister speak, please.
HON. MR. NICOLSON: You know the allegation that the claimants are carrying the project on their backs — well, Mr. Member, I think the amount of money involved is very significant. There is a tremendous type of precedent, really, involved here. How far would you go back if you were to acquire some property, if you were to buy some building that had been there for one year or two years, or 10 years, or 20 years, or 50 years?
MR. PHILLIPS: You knew what was going on. You backed into it.
MR. McGEER: Would that have affected the price?
HON. MR. NICOLSON: It was done after agreements were made and signed, Mr. Member.
Mr. Chairman, this Hon. Member has been indulging in repetitious synecdoche. I am not sure that that doesn't offend rule 43 of the House, but I've finally got caught up with his game, Mr. Chairman, and it's synecdoche if ever I saw it, unadulterated and repetitious, too.
Anyhow, Mr. Member, a very good question about the Indian reserves. I have said this many times; I have said it to bands who come into the office. We don't have the figures for this year ready on the home acquisition grants. Certainly, the bulk of them have already come in in the first year of operation...by making it retroactive to the beginning.
We will try to get the information. I'll file that as a return, Mr. Member, because we will have that.
The other type of aid, which we're offering on Indian reserves, is that we have asked Ottawa to participate with us in section 40 of the National Housing Act. Our programmes for cooperative housing cannot be of too great assistance to them because it means leasing land and, of course, land is not their problem — not land on the reserves — for building housing. But we would participate under section 40 of the National Housing Act to build family rental housing. They would act as a municipality in that particular instance.
AN HON. MEMBER: It's federal money, though.
HON. MR. NICOLSON: It's 75 per cent federal, 25 per cent provincial. We would put up our share of the operating deficits in order to bring the rents down to affordable rents. We would also be quite enthused about being involved with a band in management and looking at the idiosyncrasies that would be maybe necessary to have an application of section 40 of the National Housing Act work on a reserve. But we certainly have made this offer and it has been repeated. It is our position, and I also made this position in Ottawa.
MR. GARDOM: The net result of that is that the only provincial funds that are available and have been allocated to reserve Indian housing in the Province of British Columbia are under the provisions of the home acquisition grant. There hasn't been a dime spent save and except there. Now that's fact, you'll agree with me. I put this question to you, Mr. Minister. If I'm incorrect on that, let me know. I understand that to be fact.
I put this question to you: why do you not extend to the homes on the reserves the second mortgage programme that you have? You don't have to raise the tax argument. There's no need to do that. The second mortgage, I take it — and if I'm incorrect in this, again I'd like you to correct me — that the
[ Page 2020 ]
second mortgage programme that is available for all the residents of the Province of British Columbia is not available for Indian people on Indian reserves. Why is that? It's wrong. I mean, it's just silly. Again, one of the reasons that we have the home acquisition grant made available on Indian reserves.... When I was speaking about this the Hon. Premier was in the House, and he recognized that that was an injustice and it's something that had to be cured. Now surely to goodness there's not a logical reason that anyone can advance in this Legislature as to why those second mortgages — B.C. second mortgage funds — should not be made available for housing on Indian reserves.
Housing has been, as we all know, one of the greatest problems for our Indian people in this province. As I've said many times in this House, they face the daily contradiction of attending a modern British Columbia school and then returning home in this evening to living in squalor. Anything that can be done to prevent that should be done. We don't need to get into philosophical arguments; we don't need to get involved in constitutional assessments to bring about and make available to Indian people exactly the same programmes that are available to everyone else in the Province of B.C. Otherwise, they are being discriminated against. And that's the fact of life today in B.C.: they are being discriminated against. We should end that tout de suite. I'd like to hear the Hon. Minister's comments and attitudes to these remarks.
HON. MR. NICOLSON: We are also, of course, participating in the rural and remote housing programme which benefits mostly non-status Indians.
HON. MR. NICOLSON: No, I know. When the grant is given, I would say that the case is normally that a grant comes from the Department of Indian Affairs. There's a certain budget for each year and they build so many homes. Then the home acquisition grant really goes pick-a-back on top of those particular grants from the Department of Indian Affairs. These are quite low and involve a lot of sweat, equity, and so on.
Now to be more specific about your question about the second mortgage, there is a requirement of the second mortgage, by law, that it be registered against the title or against the register of the lease, and there just is not the possibility there of registering this. I think it's a responsible provision that these mortgages have to be cleared before a transfer of a property can take place. If there is no registration, then transfers can take place without the knowledge of people; people can buy something without knowing it. There's no land registry system, or anything really, to trace the title to find out what they're actually buying. There's no protection for the consumer. While it would be desirable to extend this — although I think the $ 1,000 grant is also of great assistance — it raises very difficult problems under the present federal legislation and constitution.
MR. GARDOM: Just in response to the Hon. Minister, Mr. Chairman, he made the point that by law it is not possible to do this because there's not a registration system. Well, I'd like the Hon. Minister to remember that by law it was not possible to extend the home acquisition grant to reserve Indians until such time as the people in this chamber decided the law should be changed.
They made a decision. I am asking you to make that same decision here, notwithstanding the fact I disagree totally with your technical assessment of it, because there is a registry system. Under the federal Indian Act, which I certainly hope doesn't continue to exist forever in this country, it is possible to effect registration of Indians' interest in their reserve in Ottawa in the land department of the Department of Indian Affairs and Northern Development. So you can't really posture that it's a registration problem. That can easily be attended to by an amendment to the Land Registry Act, as the Hon. Member for Vancouver Centre knows, and you could well have a licensing or some kind of simple registration system to take care of that.
But to me, Mr. Minister, this is the glaring inadequacy: why should a B.C. reserve Indian who has to meet all of his provincial obligations, who votes, be put into the position of being a second-class citizen and not receiving the same kind of benefits that everyone else in the community can receive? This programme is denied to the Indian people. This is one of the many reasons that there is so much opposition by the Indian people to the attitude of government. They are still being treated paternalistically, and it's wrong. It's absolutely wrong. They should be entitled to the same kind of services that everyone else in the Province of British Columbia is entitled to. That's all that I'm asking: please, for goodness' sake, see that this one programme that you have can be extended to them. It might help put up a few homes.
Providing there is some assistance — that is, good assistance — I'm not asking for preferential treatment; I am asking for equal treatment and fair treatment. And the Indian people are not receiving that. This is something that has been compounded in this province year after year after year after year, and it's wrong. We don't have to get involved in the fact that they are not taxpaying land tax. That's their only tax shelter — their only one. And income tax that is earned on the reserve...and how many reserve Indians in this province earn a taxable income on
[ Page 2021 ]
their reserve? Next to none. Indeed, how many of their homes today would perhaps be taxable? You didn't take into account the tax argument when you extended to the people on Indian reserves the right, which I call it, to apply for the home acquisition grant and receive it. You weren't concerned about a tax situation there. Not at all.
No, Mr. Minister, I'd say do the fair thing and say that you are going to accept it as governmental policy that reserve Indians shall be entitled to the same housing programmes that are available through your department to anyone else in the Province of British Columbia. Otherwise the reserve Indian people are being discriminated against by yourself, sir.
HON. MR. NICOLSON: It's my information that we have approached the Department of Indian Affairs and Northern Development on this matter of clearing our mortgages, but I'll give this undertaking that we will approach them again. The extension of this certainly is not a hang-up with this government. We feel it's logical, it has been attempted before and we will pursue this matter with them again.
MR. GARDOM: I've been speaking about it for two and a half years and you haven't done it yet.
MR. PHILLIPS: I would just like to spend a few moments more on Casa Loma. I would like the Minister again, as I said at the beginning of this discussion, to be completely candid with the House and advise the House when he first became aware of the Casa Loma project. Has he in the two and a half months since Casa Loma was brought to the floor of this Legislature sat down and had a sincere discussion with Mr. Paulus on Dunhill Development Corp. as to what statements were made in the first meeting between Mr. Paulus and the directors of Casa Loma? The Minister appears to contradict himself in his report on the happenings in Hansard, where he says: "The offer to sell was made in late summer of 1974." A little later on he says: "I said the summer of 1974. I believe it was July." Does the Minister consider July to be in late summer; this is a very important issue for the reasons which we have outlined to the Legislature this afternoon.
I would like the Minister to tell me when he had his first discussions with Mr. Paulus. Has he had a heart-to-heart talk with him since this matter was raised on the floor of this Legislature? If so, did Mr. Paulus of Dunhill advise the Minister what conversations went between himself and the directors of Casa Loma? We have stated in this Legislature that we feel and have reason to feel, because of the chain of events that took place...and in discussing with the prime contractor and the subtrades there seemed to be an immediate change in attitude of the directors of Casa Loma after they had their meetings.
I realize that maybe no cut-and-dried agreement was reached, but if there was even a commitment that the government would buy this project if certain actions were carried out by the directors of Casa Loma, that would be sufficient for them to have a little muscle, knowing that having been practically bankrupt for three months prior to this, being unable to raise money, all of a sudden there's some spine back in their backbone again and they can stand up and fight and wrestle with the situation. They can go and borrow money, and they can get the claims settled — those that they have to settle at 100 cents on the dollar for some odd reason which I don't know. Maybe, as the Minister has said, it's strictly because they have a different lawyer.
But the final letter, Mr. Chairman, to the creditors and claimants against Casa Loma — all of the subtrades — did not go out until February 19, 1975. In this letter it says: "The committee has now been able to settle all of the disputed claims and we are therefore in a position to make the final distribution" — which they did. It's a very slim distribution — not even 40 cents on the dollar on this last. It brought it up but it's a very slim distribution. "Enclosed is the final statement of distribution together with the additional amount to which claims formerly approved are now entitled, or the amount to which disputed claims now settled are entitled."
This is a letter going from Bruce Macdonald, the lawyer working on behalf of the creditors. It says: "You may have heard that the motel has been sold to the provincial government for senior citizens' housing." But what does he say, Mr. Chairman? "Unfortunately, that sale has no effect on the rights of the claimants and will not result in any additional payment or recovery to them." The lawyer who was working on behalf of the creditors feels that it is "unfortunate" that the provincial government did not make any allowance to see that their claims were settled on a more equal distribution of funds.
MR. GIBSON: It's immoral.
MR. PHILLIPS: Yes, it's immoral. I've said it's immoral and it is immoral. I still feel that this Minister, while he can talk and hide under all the legality in this House, has a moral obligation to those creditors to see that they are fairly treated. He has already backed down on his statement that the directors of Casa Loma did not make a profit. At one time he said in this Legislature: "They didn't make one red cent of profit." Now this afternoon he's backing down on that.
HON. MR. NICOLSON: A point of order, Mr. Chairman. I want that Member to substantiate that fallacious statement or withdraw it.
[ Page 2022 ]
MR. CHAIRMAN: It's not a point of order.
HON. MR. NICOLSON: Mr. Chairman, I wish to correct his incorrect statement, then. I never said that at no time was there one red cent of profit; I didn't say that at no time was there one cent of profit either — red or otherwise.
MR. CHABOT: Who's got the floor, Mr. Chairman? Are you running this House?
MR. CHAIRMAN: Proceed, Hon. Member.
MR. PHILLIPS: I'll rephrase the statement then, Mr. Chairman. The Minister certainly made statements in this House that there was no profit being made by the directors of Casa Loma except on the land. But this afternoon he's backed away from that. He must agree, after the evidence we have presented this afternoon, that the directors of Casa Loma are making a profit — about $400,000 worth of profit — and they're making it off the backs of those small contractors.
Mr. Chairman, this is a Minister whose government is supposed to be so pious in looking after the rights of individuals. Had that been some contractor who had ripped off some home buyers in this province, the Minister of Consumer Services (Hon. Ms. Young) would have spent no end of effort to see that the rights of those home buyers were protected. Yet here we have a different case. The small creditors are, in essence, dealing with a government agency. All of a sudden it's only a case of what is legal, not what is moral.
MR. PHILLIPS: Well, it is the truth, Mr. Chairman; it is the truth. All right, Mr. Chairman, I am going to sit down and I want the Minister to tell.... This is very, very important because, after all, we are dealing with the taxpayers' dollars; you have advanced $565,000 on certain agreements. As I said at the beginning of this afternoon: if the Minister made a mistake, why doesn't he stand in this Legislature and say he has made a mistake? Quit hiding behind the motherhood of providing senior citizens' housing. Certainly, I am for senior citizens' housing; I think it is needed. As more senior citizens come to our province from the Prairies because of weather conditions, we are going to need more senior citizens' housing. But that is not sufficient to have some of the 40-odd creditors and their families go broke, some nearly broke because the Minister made a mistake.
Maybe it wasn't the Minister at all, Mr. Chairman; maybe it was that great group of management that he acquired when he paid $2 million more than value for Dunhill Development. He was supposed to have acquired expertise in management. He gave them long contracts and talked in glowing terms in this Legislature about the expertise he had gained when he acquired Dunhill Development.
I want to tell you, Mr. Chairman, that if this is the type of expertise that we see in this deal, the taxpayers haven't only lost $2 million more than value but they will be ripped off time and time again. I intend, Mr. Chairman, before this Minister's estimates are finished, to question some other areas of competence of that great management team of Dunhill Development.
Now, Mr. Chairman, would the Minister advise us of what conversations.... I don't want him to stand up and say: "Oh, do you know what everybody in your department's doing?" and so forth. This is a very important issue and it has been hanging over this Minister's head for about two and a half months now.
It is not going to be good enough for the Minister just to stand up and say: "Oh, I don't know what they are doing all the time."
How much authority does this management team from Dunhill have? How much authority has he given them? Can they go out and make semi-commitments on behalf of the Minister? How long will they deal with a project before the Minister is advised? Will we be getting into other situations of this nature again, Mr. Chairman?
The Minister says in one place, the later summer; in the other, in July. Just when was the first contact made? I'm sure that if Mr. Paulus, the general manager or president of Dunhill, is so great in expertise and such a great manager, he keeps daily notes. I'm sure his secretary keeps daily notes of his appointments. I am also sure that if he is such a great manager and has so much expertise, after he comes back from an appointment, he fills in his calendar book and writes down the results of the appointment. If he doesn't keep an accurate diary of his appointments and the results, maybe we are paying too much for this great management team.
MR. PHILLIPS: Well, they have to have a separate diary for disappointments. But I am sure that, as I say, this manager should have in his diary the date of the first meeting with the directors of Casa Loma. I'm sure that on the opposite side of the page he will have a notation as to what the conversation was, what commitments were made, or at least what the directors told him the situation was with regard to the subtrades and how it all came about.
The reason I am asking this question, Mr. Chairman, is because it is very important. Morality in British Columbia is on trial here today. Morality in government — that is what is on trial.
We have to find out whether this Minister is interested in protecting the rights of individuals or is
[ Page 2023 ]
he going to ride roughshod over them under a cloud of legalities? The Attorney-General (Hon. Mr. Macdonald) stood in this Legislature and said: "Oh, it is perfectly legal; everything is perfectly legal. The government is protected; we've got them tied up in an airtight contract. Perfectly legal." But how immoral is it? That is the question; that is what is on trial in this Legislature today.
As I said before, if this were some group who had been rocked by some businessman, the Minister of Consumer Services (Hon. Ms. Young) would be the first one to come running, come charging, to see that these immoral acts were justified.
That's all I'm asking the Minister to do to reconsider. At least if he's made a mistake, the rest of the contract has not been paid out yet. Will you tell me, when you first were advised of this deal, did you sit down and talk to Mr. Paulus? What were his comments? As I say, I'm sure on his calendar pad the exact appointment date is there. If it isn't, maybe he's not such a good manager after all. Would the Minister advise the House?
HON. MR. NICOLSON: Well, the date of the first meeting cannot be established better than late summer. It was suggested that it might even have been late July, but there can be no recall. It was the matter of an approach by, I believe, Mr. Virani through Mr. Paulus. The discussions were at that time. I think the impression that Mr. Paulus has at the present time — I cannot speak for him too much — is that they were interested and it was available. Now beyond that, the B.C. Housing Management Commission inspected the project and reported on November 20, 1974 — we've said this in the House. From then on, the sequence of dates can be established.
I don't deny that there was a contact made in August, maybe in July, maybe at the very beginning of September. I don't know if it was an appointment.
When somebody just pops into your office, you don't always turn them, away. Sometimes, even though you're as busy as the president of Dunhill, you do find time to talk to these people. I don't know how it was when your group was in government, but some of our Ministers do take people.... We like to have appointments made ahead of time; it is better. These things aren't always necessarily record able up to that time. So that's all. That's as candid as I can be, Mr. Member.
[Mr. Dent in the chair.]
MR. PHILLIPS: It's absolutely amazing how short the memories are when it's convenient for the government to forget.
MR. W.R. BENNETT (Leader of the Opposition): Selective amnesia.
MR. PHILLIPS: Selective amnesia has been used in the House before and now we have another case. We're talking about a $3.177 million deal. Would you not consider, Mr. Chairman, that it would be worthy of a note in your calendar pad if someone came to talk to you about a $3.177 million deal?
If the president and general manager of Dunhill was dealing in lesser sums of money and somebody popped into his office, maybe asking a question, talking about a house, or something in a lesser amount of money, I can understand that maybe the notation wasn't made in the calendar pad. But here he's going to have to make a notation because he's going to have to talk to you and he's going to have to make some notation as to what the deal is. So I say that the Minister or Mr. Paulus just have had another case of selective amnesia.
I'd like to ask the Minister, with regard to the mortgage: does he not feel that it is more than coincidental that on September 18, before there was any finalized deal made, more money could be borrowed from Coronation Credit Corp. Ltd. and that the mortgage would come due on the same date as the government is to pay out the Casa Loma project — July 15, 1975? "The said principal sum hereby secured shall be due and payable on the 15th day of July, 1975." This agreement was made on September 18, 1974, long before the government ever gave any commitment. Now is it not more than coincidental that the government would be paying out the mortgage and paying out the rest of the principal to Casa Loma on exactly the same day that the mortgage comes due? Or did Case Loma request this? Why was the date set in the first instance? Would that give them sufficient time to complete the project? Did they know that they were going to have to complete the project before they could sell it to the provincial government? Did they know that the provincial government wouldn't pay it out until it was completed at that time? How much did they know? That's all we want to know.
Mr. Chairman, I'm not saying that the Minister made these commitments, but did somebody from Dunhill make these commitments? That's why we're asking this, Mr. Chairman — there seems to be more than coincidence. That's why I have asked time and time again that the Minister be candid with the House. Tell us. If you haven't had a meeting with Mr. Paulus, you've had two and a half months. Did he honestly not know? Did you ask him when he had the first meeting with the directors of Casa Loma? Maybe, Mr. Chairman, we should call Mr. Paulus to the bar of the House so that we can question him. Maybe he hasn't got so much amnesia as the Minister has.
Mr. Chairman, as I said, there are 40 creditors that
[ Page 2024 ]
still have a ray of hope that this government is going to help them. They did this work in an act of faith, trusting that they would be paid. They even sat down with the directors of Casa Loma and tried to refinance the project so that they could finish it and maybe settle for 100 cents on the dollar. The directors of Casa Loma were willing to do that — to sit down with the prime contractor and try and refinance it so that the project could be finished and sold as a finished product. Then all of a sudden enter Dunhill Development, and the attitude of the directors changes overnight from one of cooperation, one of trying to settle the claim at 100 cents on the dollar, to one of arrogance: "We don't need you any longer." Why?
That's why this date is so important, Mr. Chairman. If it was the dealings of Dunhill with the directors of Casa Loma that gave them the muscle to settle at 40 cents on the dollar, then this government is part and parcel to this immoral act.
Until the Minister is a little more candid with this House, he's going to leave the taxpayers of this province with a very nasty taste in their mouth — a nasty taste that stems from the directors and owners of Casa Loma coming out of this project with a great profit while the families of 40 subtrades are suffering. The government is involved and the Minister is involved, whether he likes it or not. He's involved. Until the Minister clears up this situation, we will continue to ask questions.
HON. MR. NICOLSON: Mr. Chairman, the Member has raised some questions about a coincidence between the agreement date of July 15, he says, and the termination of the mortgage. I don't know to what he's referring as far as terms of the provincial government agreement, because it's quite clearly stated: "All the work required to complete the development on or before May 31, 1975, and to transfer, sell and convey to the Crown all of its rights, title and interest in all the lands and units in the completed development later...of completion or construction as herein defined or May 31, 1975."
MR. PHILLIPS: When are you going to pay the final payment?
HON. MR. NICOLSON: Pay them the final payment?
MR. PHILLIPS: That's right. That's what I'm talking about and you know what I'm talking about. You're going to pay it on July 15, 1975, aren't you?
MR. CHAIRMAN: Order, please. Would the Hon. Member wait until he is recognized by the Chair?
HON. MR. NICOLSON: Mr. Member, I'm informed there's a holdback pursuant to the Mechanics' Lien Act. But the 15th and the last day of the month are very common anniversary dates for agreements. With all of the dates that are spelled out in here, what if that date had been the last day in May — May 31? Would you draw some immoral spurious implication from that? Mr. Member, there are only so many half-months and ends of months in a year.
MR. PHILLIPS: Is it in July? Is it July 15?
MR. CHAIRMAN: Order, please!
MR. GIBSON: Mr. Chairman, I would be glad to defer to anyone who wants to pursue a line of questioning on Casa Loma, if I can get an assurance from the government House Leader that this Minister's coming back tomorrow. I'd just like to know that one way or another.
MR. CHAIRMAN: The Chair is prepared to follow whatever the Hon. Members can sort out. If the Hon. Member for Columbia River (Mr. Chabot) is not seeking the floor, then will the Hon. Member for Vancouver-Capilano continue?
MR. GIBSON: I was just hoping that the government House Leader might possibly have his ear cocked toward the loudspeaker now and tell us what's going to happen tomorrow.
MR. A.V. FRASER (Cariboo): They haven't got a leader!
MR. CHAIRMAN: Will the Hon. Member speak to the amendment, please?
MR. GIBSON: I will briefly say a few things here. The reason I was concerned about this is that I do want to say something on Housing, and under this new system we may never see these estimates back, so I do want to get this thought in. I'm not going to add anything on Casa Loma; it's a part of the political life of this province now. It stinks. It's rotten, and it is going to get rottener, and the truth is going to come out one of these days. It always does, Mr. Chairman.
I'll say one thing to that Minister: I'm not going to let him blame this rotten deal on the senior citizens of this province and the wonderful things he's doing for them. I want to tell him that not very far away from Casa Loma, in that City of Burnaby, he was a party to taking away 296 places for senior citizens in Brentwood Manor. He took that away. That building was built for senior citizens — all the facilities, the special handrails in washrooms and so on, for senior citizens.
[ Page 2025 ]
MR. R.H. McCLELLAND (Langley): It's no good for anything else, either.
MR. GIBSON: That's what it was built for and he took that away from the senior citizens, so I'm just not going to swallow this phony line about Casa Loma being motivated by that. And these crocodile tears on the floor of this House.... It's a political boondoggle, Mr. Chairman, that's what it is.
Now how about the general Housing portfolio and the very good reasons to lower this Minister's vote, maybe to two-bits?
MR. GIBSON: I wouldn't describe the Minister that way, but it would be an appropriate level to have his salary.
When he was making his opening statement on his estimates, he had a lot of excuses. British Columbia — the housing starts are down, that's true, but not nearly as bad as Canada; we're doing a wonderful job. Listen to this: "The major reason why the housing slump has been less severe in British Columbia compared to other Canadian provinces is attributable to the activities of the Department of Housing." That's what he said.
What are the real figures? The Minister said down 34 per cent in the first three months. Well, now that's right, Mr. Chairman. He said all Canada was down 49 per cent — CMHC says 45.5 per cent — but that's not a big difference for that Minister. We'll leave that one alone.
But let's look at the recent statistics. What were the housing starts down in urban centres in British Columbia in the month of February? Down 41 per cent. What were housing starts down in urban centres in March? Down 50 per cent. The trend is still going down. That Minister used a first-quarter figure and tried to tell us we were in pretty good shape.
MR. FRASER: We are going to end up in tents.
MR. GIBSON: That Minister didn't tell us about the inventories of completed and unoccupied housing stock in this province. He didn't tell us that, as far as the Metro Vancouver area goes, in January it was 2,600, in February it was 2,560, in March it was 2,550. Hardly any movement there, and that's one of the reasons houses aren't being built. The developers' money is tied up in these houses and the Minister is not helping them liquidate it.
That Minister didn't tell us that according to CMHC figures for the 1971-76 period, we should have for each year 22,000 new housing units for new family formation. We should have 10,300 new housing units annually for net non-family formation. We should have at least a couple of thousand units per year for replacement of housing stock demolished because of old age. The total is something in the neighbourhood of 33,000 that we should have just to stand still.
MR. G.H. ANDERSON (Kamloops): At $70,000 each.
MR. GIBSON: Just to stand still. And the seasonally adjusted annual rate, or whatever it was he quoted, is running 27,000, and I tell you, Mr. Chairman, it is going down. The Minister wasn't using those figures in the speech he made to this House.
He didn't tell us that the prices for housing in British Columbia in 1974 were up by 41 per cent over 1973. He's not proud of that figure. I wouldn't be proud of it if I was the Minister of Housing worth 25 cents a year.
The Minister cites national figures, and says we are doing so well in British Columbia. Doesn't that Minister appreciate that just to keep up with the people coming into this province and the houses being demolished, let alone the need for improvement of housing accommodation, and children moving out from their parents' homes, getting married and moving into new homes, and seniors moving out of their children's homes and into their own apartments — leaving that alone entirely, we need 24,000 a year?
So you have to make that adjustment. We are growing faster in British Columbia than anywhere else in Canada. Then after adjusting for growth we are not doing better than the rest of Canada; we're only doing a quarter as well as the rest of Canada in terms of increasing the quality of our housing stock available to the average British Columbian. Those are the true facts of Housing in British Columbia, and we are not likely to get them out of this Minister.
Resign, Mr. Chairman, is what that Minister should do. During the estimates of the Minister of Mines and Petroleum Resources (Hon. Mr. Nimsick) I held a little contest about which Minister in this House was most incompetent, and I gave the award to the Minister of Mines, but by a very narrow margin because of the success he'd had with some of his legislation in ruining the mining industry. This Minister has just put a serious damper on it. But he is No. 2, Mr. Chairman, just don't make any mistake about that at all.
MR. FRASER: No. 2 has to try harder.
MR. GIBSON: He's No. 2, and I'm afraid he is going to try harder; that's what bothers me. He's going to be No. 1 worst, and that's on the backs of everybody in British Columbia who is looking for housing, and that is everybody.
Do you know, when there was a proposal call for family rental accommodation last fall, how many
[ Page 2026 ]
proposals came in from British Columbia? Something like 90 were approved in Victoria and not one came in from Vancouver. There were 6,900 from all across the country. That's the record in British Columbia.
What about his department? Every day we get press releases. "Construction of 12 townhouses." You'd have to put out 3,000 of those press releases a year to meet the housing demand. I've heard of building houses out of cards, but out of press releases I have never heard of. This Minister's trying that.
Talk about growth in this province and this Minister says that growth is our serious problem in this province. Of course it is. But that's no excuse for not building enough houses.
I ask this Minister: does he endorse the excellent report of the Greater Vancouver Regional District called their livable region programme? Does he appreciate what the target increases are for each of the areas in the GVRD over the next 10 years? It's 296,900 overall; 47,500 in Vancouver and the University Endowment Lands; 21,500 on the North Shore; 54,500 in Burnaby, New Westminster and so on. Does he endorse that and what's he doing about it?
MS. R. BROWN (Vancouver-Burrard): No, I don't endorse it.
MR. GIBSON: Well, I don't care if you don't endorse it, Madam Member; I want to know what the Minister says. I want to know what government policy is on this report. It's a pretty good report, and what's he going to do about it? Mr. Chairman, don't let that Member bully that Minister; he should endorse that report if he wants to. I want to know exactly what the Minister's plans are on that report.
Mr. Chairman, I want to ask this Minister if his policy is going to be a policy of threatening municipalities, because he's been doing that.
AN HON. MEMBER: We know that already.
MR. GIBSON: Here he is quoted in a press clipping of January 8, saying that he thinks councils have been reluctant to take action because of fear of local pressure groups. Mr. Minister, what's democracy all about? You fellows should be afraid of local pressure groups because they are all going to get together and throw you out at the next election. Don't be quite so critical of the local area voters.
MR. GIBSON: You stand up and make your own speech, Mr. Minister of Public Works (Hon. Mr. Hartley), when you find out who is going to move into all that empty space you have.
MR. GIBSON: I don't know if you heard, Mr. Chairman, that Minister making snide remarks about new civic buildings. That's what that Minister said; he said some of them have fountains even in the back. Mr. Chairman, he didn't say anything about the tens of thousands of square feet of empty government accommodation.
MR. CHAIRMAN: Order, please. Is the Hon. Member talking about the amendment?
MR. GIBSON: I sure am, Mr. Chairman. I am talking about why his vote should be reduced to $1 — and I say to 25 cents.
MR. GIBSON: I ask that Minister, when he is pushing around the municipalities, if he has any idea of the cost of growth. I am sure the Minister is very critical of the municipality of Surrey, because that's one of those municipalities that puts imposts on new accommodation in their riding. But how does he answer the document that the municipality of Surrey has produced, as amended December 10, 1973, explaining these imposts and explaining the cost of growth in these various areas?
I'll just read a few of the various categories. Municipal non-arterial roadway imposts: $650 for each additional lot created or unit included; municipal arterial roadway imposts: $200 for each additional lot, and where it's Cl, C2, C3, C4 it is $2,000 for 20,000 square feet of lot areas and so on; downstream drainage facilities: $300 for each additional lot; waterworks: $150 for each additional lot, and more for the individual units, or course, when it's an apartment development; acquisition of public lands, parklands and so on that new growth in a municipality causes, depending again on Al, A2, A3: $140 and so on, ranging up to $1,295 per unit or additional lot created, depending again on the zoning classification. Here's a genuine cost of growth to the municipality.
I say to that Minister that the costs of growth shouldn't be put on as impost charges by individual municipalities. I believe that's wrong. But I believe that government, Mr. Chairman, has left them no alternative whatsoever. They just don't have a chance. Municipalities are being asked to bear the costs of growth individually when the costs of growth are a provincial problem.
I want to read a little quote here by a banker, a British Columbia banker. The Premier owns 10 per cent of his company. He's head of the Bank of British Columbia.
[ Page 2027 ]
HON. D. BARRETT (Premier): The people own it; I don't.
MR. GIBSON: Well, Mr. Premier, don't act like you own it.
HON. MR. BARRETT: I don't. The people own it.
MR. GIBSON: I quote Mr. Albert Hall. He's talking about rental housing and he notes, first of all, that the repeal of federal legislation some three years ago affected that — there's no question about that. It's fortunate that the deducibility of that capital cost allowance has been put back in now. But there was a problem. I'll quote Mr. Hall.
"Hall noted federal legislation about three years ago substantially lowered the attractiveness of investment in rental housing. He said that although local construction of rental housing was reduced, it was still a viable operation.
"'At this point,' he went on, 'the only kind of reasonable provincial action would have been some programme to stimulate construction. Instead, rent controls were introduced. Since then, construction of privately financed rental housing has become virtually non-existent. One might ask,' Hall said, 'why was construction stifled when a stimulus was needed?
"The answer will reveal the unavoidable and serious consequences of taking purely political action instead of solving an economic problem.'"
AN HON. MEMBER: Ideology.
MR. GIBSON: Ideology. Just pure ideology acting against the citizens of British Columbia. It is a rental housing crisis; there is hardly anything being built in that area, Mr. Chairman. What do we get out of this government? We get out of it a study that is supposed to report sometime in September and will probably report sometime in December, if then. It is still just a study. They are still going to be all hung up on the ideology, and the people needing new rental accommodation in British Columbia aren't going to be able to find it. What are the answers?
First of all, what is the answer on owner-occupied accommodation? It is a series of growth grants. You know, Mr. Chairman, the government is not totally strange to that idea. The latest grants by the Minister of Municipal Affairs (Hon. Mr. Lorimer) or whoever it is on this natural gas revenue — which, incidentally, is only a third as generous as the much poorer province of Manitoba announced last week, just in passing — awarded $100 per house per municipality. That is the right idea, but they took that good idea and they put it through their Mickey Mouse machine and $100 came out the other end. And after this list of figures I just read about the cost of growth, the cost of a new residence to a municipality, $100 doesn't start to be enough. What has to be done is a series of grants to municipalities which are receiving the growth in British Columbia to encourage them to receive that growth, to cut the red tape, to get that new housing built so the citizens in that community which is receiving the differential growth don't thereby suffer financially. That is point 1.
Point 2. Better per capita tax treatment.
Point 3. Remove the 5 per cent sales tax on building materials. Our Minister of Finance has said that when the federal government did it, he would do it. The federal government half did it; the Minister of Finance here could have half done it. Or he could have gone all the way and done it if he really believes in that principle. He doesn't have to await leadership from Ottawa if he has got a solid principle. In this case, he has. I would like to hear that Minister of Housing defend the fact that houses in this province cost 5 per cent more in a material sense just because of that pigheaded policy.
On the rental side we don't need this study that is going ahead. Maybe the only thing we need it for is an excuse to get this government off the hook. But they know what has to be done. That Attorney-General sitting there, and who is a party to this study on rental control, knows what has to be done.
MR. WALLACE: Shame on you!
MR. GIBSON: I think he probably knows better than the Minister of Housing. What has to be done is that rental controls have to be taken off.
That Minister of Housing was quoted in the press last February or so saying that rental controls were completely the wrong answer. He knows they are the wrong answer. Why doesn't he have the fortitude to get up and speak on behalf of his constituents in this province, who are people who need rental housing and other kinds of housing, and do the right thing and get those rent controls off and get some rental housing built in this province? Phase the controls off in three years and subsidize on an agreed, controlled-rent formula. New housing can be built in the meantime to increase the supply to a sufficient amount.
Mr. Chairman, either that Minister will answer these questions or else he is not competent to be a Minister of Housing in this province. I ask him to throw away his dogma, quit ruining the housing in this province, and do something to get construction going and people into houses at a reasonable price again.
HON. MR. NICOLSON: I would attempt to
[ Page 2028 ]
answer these questions but, again, these Liberal Members keep expecting me to be an apologist for CMHC programmes.
MR. GIBSON: We have enough trouble through you.
HON. MR. NICOLSON: You attacked me. You said that our proposal call housing programme was a failure because there was only an uptake of 99 units in all British Columbia.
MR. GIBSON: Right.
HON. MR. NICOLSON: Mr. Member, that is the CMHC's limited-dividend programme under section 15 of the National Housing Act. You lived there; you should know about that.
MR. GIBSON: That's what I'm talking about.
HON. MR. NICOLSON: Under our proposal call housing programme we have got 2,000 units in the pipeline...
MR. GIBSON: Hah!
HON. MR. NICOLSON: ...many of them under construction...
MR. GIBSON: How many of them are built?
HON. MR. NICOLSON: I could recite a few more than that 12, but we think it is important to build small units. A 12-unit project, whether it be in Kitsilano or Kamloops, isn't a bad idea, Mr. Member.
MR. GIBSON: That's right, but we need thousands often.
HON. MR. NICOLSON: But of course, you people in West Vancouver....
MR. GIBSON: You've got it the wrong way.
HON. MR. NICOLSON: Where do you live? You don't live in your riding, though.
MR. GIBSON: You don't even know your ridings, do you?
HON. MR. NICOLSON: Well, of course you like to see everybody on the other side of Main Street and underneath the Hastings Viaduct and places like that — that's what you think. But, you know, we've got public housing west of Main Street now, Mr. Member, but it is unobtrusive. You might not even be offended if you were to see it. You should get out and look at it sometime.
MR. GIBSON: Your housing starts are low.
HON. MR. NICOLSON: For your information, Mr. Member, we have had proposal calls: Port Alberni, 23 units; Sparwood, Greenbrook in Surrey, 127 units — that's a massive-sized housing project for this particular government — also Meadowbrook. In Cranbrook there is a five-unit project, an 11-unit project. On other locations, about 20 other units. The list goes on: Mackenzie, Squamish, Abbotsford, Burnaby. Many, many of these projects are underway.
MR. GIBSON: Why are housing starts down, then?
HON. MR. NICOLSON: If you want to know about the failure of the proposal call housing programme of the federal government, this is some thing that I brought to the Minister's attention.
MR. GIBSON: Why did it only fail in B.C.?
HON. MR. NICOLSON: I made an offer.... Oh, Mr. Member, it failed in B.C. because the members of HUDAC had fried it once before.
MR. GIBSON: Because of rent control.
HON. MR. NICOLSON: No, not because of rent control, Mr. Member. In fact, we even removed that restriction there. But, Mr. Member, that thing won't go because CMHC has burned the fingers of the developers of this province on that programme. They didn't live up to their commitments and they're very leery to go into it again. That was their position long before we ever brought rent control.
You talk to the members of HUDAC. You talk to the members of the Urban Development Institute and the builders of this province. I think they'll fill you in on the shortcomings of that programme in British Columbia. What does it mean? Under the dollar allotments and the various things, it means the only affordable type of programme can be three-storey walk-ups. But we have gone along with it; we will participate in the section 44 subsidies on a quarter of the units as proposed to us. We're cooperating with the federal government.
That money is into a phantom project. It wasn't just this province that objected to the terrific emphasis on Ottawa's proposal call housing programme; many of the. other provinces in Canada of varying political philosophies pointed out the shortcomings of this. This proposal call is maybe a good programme in certain areas. I think with some adjustments it could maybe be a good one in British Columbia. But to have a blanket programme such as this with a
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restrictive maximum cost and dollar figures, et cetera, which don't take into account differences in weather, climate, economic conditions, et cetera, is completely naive and suited probably just to the areas where it was first dreamed up.
MR. GIBSON: Why are housing starts down 50 per cent?
HON. MR. NICOLSON: Across Canada, Mr. Member.
MR. GIBSON: No, in British Columbia in March.
HON. MR. NICOLSON: Mr. Member, they're down because of the lack of availability of funding. Really, to get back to a question which the Member for Oak Bay (Mr. Wallace) raised and another one which I didn't touch on, a financial institution in this province, not just for the Department of Housing programmes but for people in all kinds of things and nails outside of housing as well as inside of housing, is the need in this province — something that is not subject to the whims of policy and philosophy in Ottawa.
MR. GIBSON: Or Victoria!
The House resumed; Mr. Speaker in the chair.
MR. CHAIRMAN: Mr. Speaker, the committee reports progress and asks leave to sit again.
MR. H.A. CURTIS (Saanich and the Islands): Mr. Speaker, I rise on a point of order with respect to two government bills which have been introduced and are on the order paper. I draw your attention to Bill 26....
MR. SPEAKER: Is that under Votes and Proceedings?
MR. CURTIS: Yes, Votes and Proceedings for today. Bill 26 is the School Tax Removal Act, as you know, Mr. Speaker; Bill 73, introduced on Friday last, is the School Tax Removal and Resource Grant Act — both introduced by the Minister of Finance. The Minister of Finance and Premier is not in his place at this time. We've heard tediously and repeatedly from the Premier that the opposition should do its homework. It's rather difficult, Mr. Speaker, when we don't know which is the real bill. I wonder if the government could caucus on this matter and withdraw one or the other at the earliest opportunity so that we know which to study.
MR. SPEAKER: What was the number of the first bill?
MR. CURTIS: Bill 26 and Bill 73.
MR. SPEAKER: Perhaps that matter could be cleared up by tomorrow. Thank you for drawing it to my attention.
Hon. Mr. Strachan moves adjournment of the, House.
The House adjourned at 5:56 p.m.