Hon. James McCrae (Government House Leader): Mr. Acting Speaker, I would like to inform the House that the meeting of the Standing Committee on Public Utilities and Natural Resources originally set for Thursday, May 8, at 10 a.m. to consider the Annual Report of the Manitoba Liquor Control Commission will be rescheduled to Thursday, May 22, at 10 a.m.

Mr. Acting Speaker, I am seeking leave of the House to make some changes to the sequence for consideration of Estimates set out in Sessional Paper 21 tabled on March 27, 1997, and subsequently amended: first, that the Estimates for Community Support Programs, the Estimates for Allowance for Losses and Expenditures Incurred by Crown Corporations and Other Provincial Entities, the Estimates for Internal Reform, Workforce Adjustments and General Salary Increases, and the Estimates for Urban Economic Development Initiatives, scheduled for consideration in Room 255, be moved to the Chamber for consideration prior to the Estimates of the Department of Culture, Heritage and Citizenship this afternoon.

Mr. Acting Speaker, were you following your list there because there are a number of those appropriations and some of them have long names?

Secondly, Mr. Acting Speaker, the Estimates of the Department of Industry, Trade and Tourism scheduled for consideration in Room 255 are to be moved, with the leave of the House, to be considered immediately after the completion of the Estimates of the Department of Consumer and Corporate Affairs. So following Consumer and Corporate Affairs would be Industry, Trade and Tourism in the committee, and that is the leave I am seeking this afternoon.

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The Acting Speaker (Mr. McAlpine): Is there leave of the House that the Estimates for the Community Support Programs, for Allowance for Losses and Expenditures Incurred by Crown Corporations and Other Provincial Entities, for Urban Economic Development Initiatives, and for Internal Reform, Workforce Adjustments and General Salary Increases, scheduled for consideration in Room 255, be moved to the Chamber for consideration prior to the Estimates of the Department of Culture, Heritage and Citizenship. Is there leave of the House? [agreed]

And second, that the Estimates of the Department of Industry, Trade and Tourism scheduled for consideration in Room 255 be moved to be considered immediately after completion of the Estimates of the Department of Consumer and Corporate Affairs. Is there leave of the House? [agreed]

Mr. McCrae: Mr. Acting Speaker, I move, seconded by the honourable Minister of Industry, Trade and Tourism (Mr. Downey), that Mr. Acting Speaker do now leave the Chair and the House resolve itself into a committee to consider of the Supply to be granted to Her Majesty.

Motion agreed to.

The Acting Chairperson (Mr. Peter Dyck): Order, please. Will the Committee of Supply please come to order. This afternoon this section of the Committee of Supply meeting in Room 255 will resume consideration of the Estimates of the Department of Consumer and Corporate Affairs.

When the committee last sat it had been considering item 5.1. Administration and Finance (d) Research and Planning (1) Salaries and Employee Benefits on page 24 of the Estimates book.

Mr. Jim Maloway (Elmwood): Where we left off last night, the minister had the advantage of running out the clock, and I did not have a chance to respond. We were discussing at the time the question of the requirement for sticker prices to be left on new vehicles when they are sold and the advisability of having such a requirement such as is the case in Ontario. The minister had been explaining that it was quite a pleasurable experience to shop for a new car and barter with the dealers. I wanted to assure him that all of the studies that have been done, at least the ones that I have been aware of, are almost unanimous in their conclusion that buying a new car is a very, very stressful period for anybody who has ever done it. They do not do it very often in their lives, and they find this method of buying a car quite bizarre actually, having to barter for it, because they are not--if you have ever been to Morocco, you know that you do barter for everything that you buy. I guess if you are brought up in a society where you do barter for each and every thing, then bartering for a car probably would fit in quite nicely. But, when you are in an orderly society like ours where people normally pay the asking price for a product on the shelves, from food to any other kind of consumer item--these people are used to doing that--to all of a sudden have a different set of rules for one of the most expensive expenditures that a person is going to make, makes it very stressful to most people and very confusing for them.

I wanted to challenge the minister on that point because I am certain that he would agree with me over time that he will find very few people that find that a pleasurable experience.

Hon. Mike Radcliffe (Minister of Consumer and Corporate Affairs): Mr. Chairman, I do not wish to be argumentative with my honourable colleague, but he was talking about bartering. To me, my understanding of the word "barter" is to exchange goods and services on a nonmonetary basis, and I believe that really what he was referring to was bargaining. If he is alleging that bargaining is a stressful activity, I can accede to that comment, that, yes, I indeed presume it would be.

There is a whole myriad of issues I think that in our society are subject to bargaining, such as buying and selling a house, and while these are things that we seldom do on a regular basis unless one is a realty agent, I do not know that it would be conducive to order and good government if we as government in charge of provincial affairs were to regulate how someone fixes the value of a house or to have a centrally regulated pricing. I believe there was a Liberal regime once in dim distant history that did get into price fixing, and I think we can only look to the regimes of eastern Europe and the Soviet Union which were centralized economies and did deal on a totally regulated environment, a regulated economy, to show that in fact these run counter to our fundamental human nature.

While I do agree with my honourable colleague that there may be stress involved, I would suggest that for the majority of the community the stress is a healthy stress and that stress is not in all walks of life to be something that is pejorative or a negative influence in our lives and in fact it brings out the competitive edge in many, many people.

I know that if I were to go to my honourable colleague and ask to buy his home, he would I am sure probably assess, do a comparative study in the neighbourhood as to what homes comparable to his were selling for and inform himself, educate himself as to what he would need in order to replace this sort of property. He would educate himself as to other areas of the city and what comparable prices were and then build in the cost of commission, cost of legal services, so he would arrive at a net figure, what we would call a last ditch figure. Then I am sure that my honourable colleague would probably, very likely add on a significant amount, $10,000, $15,000 as his bargaining room. That would form the first part of his asking price. Then he would see-saw back and forth and if he found a willing buyer who was willing to buy from him at a price in excess of what his drop-dead price was, he would go away a happier person and think, well, my efforts were well rewarded and that this was a very pleasurable exercise.

I would suggest as well that when one is shopping for an automobile, as an informed, educated consumer, one almost has a duty really to ascertain what the real value is, and this applies to every aspect of commercial consumption. If we are going to the grocery store, I often look at the prices of articles on the shelves and do my mathematics and divide the price by the units that are being displayed to ascertain whether the blue box, the no-name brand, is a real bargain in comparison, say, to Kellogg's Corn Flakes or to any other name brand that one is purchasing. Sometimes, much to my surprise, the no-name brand is no cheaper than the name brand, and other times it is significantly cheaper. That, I think, is part of being a well-informed responsible consumer. I think that each one of us has an obligation, if we are to spend our resources wisely, to do this sort of exercise.

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So extrapolating further from the micro to the macro, I would suggest that with car sales--and it has been a year or two, I think, about three years since I purchased a car; nonetheless, almost time for a new one, I guess--before I were to do something like this, I would do my reading, my consumer guide reading as to which were the best brands or makes of cars these days, research the Ralph Nader-type of publications to see if there are any visible defects, find the safest vehicle that was out, and then I would go through the neighbourhood or the community of Winnipeg and perhaps even travel to Steinbach and ascertain where I could get the cheapest price.

Then you are also looking--[interjection] Well, that is right--as well, I would suggest, at support and servicing as a key component when you are making a major acquisition these days. So that would also weigh heavily on any decision I would make. So whether there was a manufacturer's suggested retail price on the window screen or not, really, Mr. Chair--yes, there is stress because you are combatting your wits against the wits of the fellow in the booth or the sales manager down the hall, and I am not so naive as to know that it is not a game of mathematics and it is a drama that these people do like to play out, but they, too, have fixed overhead. They have bread to put on the table in their own families and their own homes. They have to have a profit margin. I know they are not there just for the short haul, that they do want to give good service to their consuming public because they want repeat business, and this is very important, I think, for any responsible merchant.

I would suggest with the greatest of respect to my honourable colleague that it would be just a very facile solution to say, oh, thou shalt not remove the retail price sticker. I think that there is far more involved with major acquisitions of consumer products than just looking at a sticker because, quite honestly, the manufacturer may not even know what is relevant for pricing in our particular local area, and something that perhaps might be very reasonable on the streets of Detroit or the streets of Chicago or the streets of Toronto bears no resemblance to the cost of living and the pricing index in the city of Winnipeg or in the town of Altona.

So I think that there are many more components to this issue than just the one issue that my honourable colleague raises, albeit I think that it is a very interesting point that he does bring up today.

Mr. Maloway: Mr. Chairman, I accept the minister's point about changing barter to bargain, but I do think that the requirement for the sticker to be left on the new car until the car is sold is a requirement in Ontario and I think other jurisdictions, other provinces, and has been a requirement for many years. I think it is fair to say that it is likely that a Tory government was in power when this rule was brought in, and my guess is that it was brought in for a reason. I am sure that the sticker prices that are put on the cars are put there for a reason, and the fact that a jurisdiction such as Ontario would legislate that it must remain, and there are several elements to this legislation, but would actually go to the point of legislating that the sticker must remain on the vehicle probably had some good reasoning behind it at the time.

So I guess if the experience had been when we went chasing around with our TV cameras and so on some years ago into these car dealers' lots to check this out, if we had been pleasantly surprised and found that these stickers had been removed and the resulting replacement sticker was, in fact, less, I think we would be quite happy about that. We would be sitting here today saying, those terrible car manufacturers, they are putting those stickers on the window and the government requires you to keep them on there, and here is this little car dealership in Winnipeg that does not like these stickers. They are taking them off because they want to put lower stickers on.

But that is not what was happening. In all cases, these stickers were being removed, and the new sticker that was being put on the vehicle was a couple thousand dollars higher. I suppose psychologically the reason for that is so that the person would get adjusted to the higher figure and that when the person came down in price, that once they got nearer to the sticker price, they would feel they had saved a couple of thousand dollars and they would sign, right?

You have to understand that there is no level playing field here, you know. The Tories, the neo-Cons, like to talk about the level playing field and getting rid of rules and all this other stuff. The point is this is not a level playing field. You have professional car salesmen who, that is all they do all day, is sell cars. That is how they make their living, and you expect that somehow average guy consumer, or woman consumer, is somehow going to go and buy a copy of Phil Edmondston's Lemon-Aid and is going to read up on it and now is somehow going to put on the boxing gloves and be on an equal playing field with the professional? That just cannot be expected.

The department has emphasized consumer education since the act was proclaimed in 1969 or '70 or whenever it was. Well, if education was the answer and if education was getting results, then why are we having these same problems keep coming up, recurring over time, all sorts of consumer type problems. The marketplace is out there and the education is not necessarily solving the problem. Clearly, there has got to be some sort of a legislative framework put in place.

So we have survived all these years, I guess, without the sticker rule. Ontario has had the sticker rule, and the member for Emerson (Mr. Penner) pointed out yesterday that in a dealership he is associated with, they leave the stickers on the window, so even in Manitoba it is not universal. It is just that our experience was in Winnipeg, that it seemed to be somewhat universal. It was an issue with the Motor Dealers Association, in fact. We thought we were making good progress on this issue during the minority government period, and then the car dealers rolled into town. The Motor Dealers Association and my old friend Lefty Hendrickson rolled into the building here, sat the Liberal caucus down and straightened them out on the issue, just like that.

Of course, they were just new, and they did not know any better, and they were easily led. The Conservative caucus was a little more stable, but it succumbed pretty quickly, too, because the car dealers simply told the Tory caucus, now this is the way it is going to be. We are not going to have this, we are not going to have that, because there is the backing that you have to worry about come election time.

So we know how the system worked. We know how it currently works. We know how it has always worked with these guys, and it just seems to me that the government should be taking the side of the overall protection here of the public. It might surprise the minister that I even get letters from people who are quite well off. I know of one well-known insurance broker in town whom I have never spoken to in my life except that I got a letter on an issue like this back five, six years ago who was really perturbed that he was purchasing a vehicle, and things did not work out exactly the way he thought they should.

I mean, the point is no matter how schooled you are, not everybody has the wherewithal to go out and buy the lemon law book and read it over and pick a vehicle and then go down and work one dealership against the other to get the best price, because it is a maze. It is too confusing. They confuse you with different options and different this and different other things. There are just so many different areas and warranties and all sorts of things, and their advertising practices are in some cases somewhat questionable because they sell on the basis of gorillas and balloons and stuff like that as opposed to just solid facts. So I think we are going to have to agree to disagree on this point.

I do accept the minister's comments that the public does have a responsibility to check things out and to do comparisons and so on, but the minister also has to understand that people get worn down in buying situations much as we are doing through this process perhaps, but they get worn down over time and they finally just give up, and the car dealers, the salesmen, they understand that. They know that you have only got so much time in a day, and when you have a spouse and the kids and the dog and whatnot and you allocate so much time to go out and purchase that car, that mathematically if all the dealers kind of stick together, it is only a matter of time until you are just going to stop, give up and just buy the damn thing and walk away.

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I am just saying that the consumers are not getting the protection they should from this government, in fact, from most governments. They are not getting the protection that they need and they deserve.

Now, Mr. Chairman, I want to deal with the issue of renovators, and that has been a subject that has produced all sorts of stories over the years and a lot of problems. I recall there was a renovation organization that formed itself a couple of years ago, and once again, dealing with impressionable caucuses around here, they met with the Liberal caucus at that time. I realize the Liberals are not here to defend themselves, but they had the president of this organization--and I think you are probably aware who I am speaking of--the president came to the government and wanted some sort of recognition from the government and some training for renovators and a requirement that they had to belong to the renovation association. This guy was going to become the president and I guess be paid out of government funds for doing all of this stuff.

In any event, within a short period of time, the Liberal caucus issued a press release saying this was a terrific idea. That was the caucus of six, I guess, at that time. Peter Warren had the guy on the radio just a few days later and he caught him. Some caller phoned in and this guy had not paid his bills for God knows how long, and he had been getting sued by a number of people, and that was the end of that issue.

Now, recently, another person, individual, has surfaced, and he has been on 'OB in the last week or two flogging another renovation organization, demanding self-regulation and the requirement that the renovators take courses and so on. He went so far as to suggest that he was getting a pretty open ear from the department here. One of you people, anyway, has been talking to him, in his view, and he said Manitoba was quite receptive to his overtures.

So I would like the minister just to kind of take some time and tell us about just what is happening or not happening with this fellow in this whole area.

Mr. Radcliffe: Mr. Chairman, as my honourable colleague was outlining this problem, I was reminded of a period of time when I served as the president of the Crescentwood Homeowners' Association. Crescentwood is an area of the city of Winnipeg in which I currently live and has a number of large, old homes which continually require renovations, so the residents in this area are, you might say, somewhat vulnerable from time to time to the depredations of unscrupulous renovators.

We researched this issue as a citizens' coalition committee and came up with the suggestion that we would maintain a registry that different citizens, residents in the area could phone in if they had a good experience with a renovator. Then if we were solicited by another resident, we would be able to say, well, a number of the residents in our area have recommended the following people. You may want to phone Mr. A or Mrs. B or Miss C and get further particulars on them. We found this to be a very satisfactory way of dealing with this problem.

To go beyond that, however, as government and to impose a regulation on something where practically every fellow or even every woman who has a hammer and saw and the skill and the motivation to stand up and say I can do carpentry work in your basement or plumbing--and, in fact, I have a facility for plumbing, although it is not something that I enjoy particularly, but owning one of these homes, I am compelled from time to time to have to solder pipes and fix joints and things like this.

Nonetheless, beyond this sort of issue, I think that our government would be very reticent to regulate who could and could not be a certified carpenter or a certified renovator short of--we can offer the training at Red River and make available opportunities for people to enhance their skills, but to keep people out of the industry, I think, would be an invasive activity.

I would suggest that from a regulatory point of view, it would be a virtual nightmare. We would almost have to have a policeman for every citizen in order to enforce this sort of regulation, albeit I understand my honourable colleague's intentions that are nothing but honourable and well-meaning, and in a perfect world we would want to see that nobody suffered at the hands of somebody who was fraudulent or failing to come through with what their commitments were, but I think that, again, one must rely on the good sense of the average citizen.

I can recall and recast back to the days when I was going from house to house soliciting support for particular endeavours in which I have indulged, and be the house large or small and be the person educated or not educated, I was struck by the innate, inherent common sense of the individual behind that door. They knew when they were being deceived and they knew when they were being fed the truth, so I would suggest to my honourable colleague that I think we have to have a certain essential reliance on the good sense and the common wisdom of the ordinary person.

Mr. Maloway: Mr. Chairman, I guess the observation that I had on this particular renovation organization was that it was just another example of many, many organizations which essentially demand standards and so on to build sort of walls around themselves to keep others out. I mean, that is the idea. It is similar to the Law Society and medical society and so on. So, on the one hand, you need some standards, but on the other side, you have to recognize too that the public are forced to deal with professionalism at almost every step of the way. So, if these renovators had their way you would have to hire from an approved list of plumbers who had taken all these courses, an approved list of roofers, an approved list of--and they had to be a member of this organization before they could even do work in the city.

We have just seen over the years the travel agents and their desire to become "professionals." The flip side of the argument is that the reason the organizations want to do that is to keep other people out. The insurance people want to keep the banks out of their business so they put all these rules in place here to put obstacles in front of the banks, you see, but they sell it on the basis that, well, we have got to be concerned about the public here and protect the public and make sure that they have a certain amount of professionalism.

I can see that particular move by this group of renovators for what it is in that sense, but they do have a point about having some sort of responsibility to make certain that people do not end up in a situation like they did, as I mentioned yesterday, with the sunroom operators and other situations. Perhaps one of the solutions that the department, I would guess, is probably looking at because the department has always been keen on bonding people and the bonding has worked quite well--the solution probably is to register these renovators and require some sort of bonding for them, and let the insurance companies worry about checking them out and taking the responsibility for issuing them the bonds. That may be the solution to the problem or a partial solution. So I would ask the minister whether he is looking at bonding, because he uses bonding right now in a very wide sort of area or fairly wide area.

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Mr. Radcliffe: My honourable colleague I think makes some historical allusions. In fact after the Industrial Revolution and in fact even prior to the Industrial Revolution when European society was coalescing into the city states and local towns, there were a number of guilds that sprang up. Guilds were associations of like-minded and like-skilled people who formed craft guilds. One of their primary motives, or directions I guess, was mutual support of one another; education of apprentices, but also a very real and concerted effort to exclude any other individual who was not of their own little cadre or power structure. Consequently, if we were to perpetuate--so I am saying that in the guild environment it was not all bad. On the other hand, in a free and open democratic society and a populist-based society which we enjoy today, it tends to concentrate economic power in the hands of a few. Then you have an oligarchy that springs up, and it only succeeds, I would suggest, from an economic perspective of driving up the price of the service that is being supplied.

We can look at perhaps the Law Society and the medical societies today here in our own communities and see that, while they do insist on appropriate education and standards and codes of behaviour for their different practitioners, there is often a suspicion on the part of the populous as to price fixing. So, to perpetuate or extend that sort of model down to the level--and perhaps that is deprecating--over to the level of the carpenters and the plumbers and the renovators would, I would suggest, visit a restrictiveness on society which is uncalled for at this point in time.

I can only reflect upon my experience when I was a practising solicitor, and I acted for a number of farmers in our community. Here were a number of individuals who were eager to supply and produce food stuffs but because of our supply side economics, which we still have vestiges of and very real vestiges of in our communities, there is quota which one must own in order to be able to own laying hens or to have fryers or to have milk quota. I would share with my honourable colleague that this is an anathema because here were individuals who had the means, had the motivation, had the skill, ready, willing and eager to produce food stuffs, but because of the constrictions and constraints of these quota boards, they were unable to enter into the market of animal husbandry for which their society was directed and, therefore, that only succeeded in driving up the price of the individuals who did possess these quotas. So albeit on one hand I laud the concept of collective marketing--and I think that is an organization in society that we should encourage--the aspect of limiting the supply of any sort of commodity is reprehensible and something that ultimately works to defeat the best interests of our consumer.

I can indeed point to another example where at one point when I was in active practice, a number of my colleagues and I thought that we might like to get into the business of selling general insurance, and we were prohibited, we found, from opening up an insurance agency and being and nominating ourselves as insurance agents because we did not earn the preponderance of our living from the sale of insurance. We thought that at that point, being lawyers, that we were well skilled, understood the concepts and we were honourable individuals and had all the structures and support and resources available, that we could supply this service, but we were prohibited from doing that and felt somewhat aggrieved in that particular case.

But what we do, and to be responsive to my honourable colleague's question, when we have direct sellers who go door to door who have no virtual stake in our communities, they are required to be registered by the Consumers' Bureau. The Consumers' Bureau monitors them with some degree of care, and they do require bonding. This is to protect our consuming public so that if there is somebody who is ruthless or a person of straw, that they are here today and gone tomorrow, then there is some fallback position where if there is some deceit that has been practised at the door, the consumer is protected. Of course, I am sure that my honourable colleague is also very much aware of the terms of The Consumer Protection Act which allows a cooling-off period and the ability of a consumer to cancel an agreement that is made at the door or at a direct sales--[interjection] My honourable colleague has just mentioned that it is a 10-day cooling-off period which has been a negotiated level--[interjection] We are in the process of formulating regulations now to support this legislation which has amended our act, and as soon as they are ready, of course, we will be proclaiming a new harmonized standard which is in conformity with the other provinces across our great nation.

Mr. Maloway: I wanted to follow up a little more with the renovators, but I wanted to finish the discussion about the professional organizations and so on with one comment that I remember being involved in. About 1989 or 1990, I guess it was, where we had a proposal before the Legislature that Land Titles Office provide--that we allow individuals when there is buying and selling property to go in and register it on their own.

We could not see what the big mystery was and why you were pretty much forced to use a lawyer. At the end of the day there was quite a fuss made by the Law Society about it, and they did not want to go along with this, but why should the public not be allowed to simply go in and if they want to do a simple land transfer from within the family, why is it a requirement they deal with a lawyer? Why cannot they have a clerk there to simply help them process the transaction? I would not say the Law Society went berserk about this, but the Law Society was concerned. The Law Society felt that there would be a liability potentially on them and it became a liability question. Anyway, my point is that they rallied around and did their best to quash this, what I thought was a very visionary proposal on our part. Maybe after the next election in 1999, we will be sitting here and we will be introducing legislation like that, depending on how many lawyers are elected in our caucus, I guess.

Mr. Radcliffe: Mr. Chairman, I take great delight, great pleasure in sharing with my honourable colleague the unalterable fact that any person can go down to the Land Titles Office at this point now, as we sit. You can file a transfer of land on your own. The clerks who are working in Land Titles Office are unable, as my honourable colleague has pointed out, to offer any legal assistance or direction because, if they were to offer some sort of legal assistance and it were to be misconceived or misapprehended by the individual registrant and it was to the loss of that person, then liability might be visited on the shoulders of that particular civil servant.

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In fact, what the Law Society, I would suggest, and for the purposes of the record I would want to make clear, in Manitoba says that any person can represent themselves. You can do that in the highest court in our land; you can stand up and speak for yourself. In fact, we pride ourselves that our citizens have that facility and ability to do, and we must never forget that. This applies to all the branches of the law, but what the Law Society does insist on is that if you are going to put your services out for hire to your fellow citizen to plead before the courts or to act as a solicitor, then you must achieve certain levels of education and expertise and be a person who is known to the society.

My honourable colleague has mentioned that he does not see the need for solicitors when transmitting land and land transactions. I would suggest with the greatest of respect, however, that the ability to read and interpret all the registrations that are against a particular piece of property, albeit it does not take monumental intelligence, it does require thoroughness and care and regard for all the registrations. One has to know where to look. One has to know that when one is buying a residential property it is often prudent to have a survey certificate which indicates that the residential dwelling is wholly within the bounds of the property upon which one is purchasing, that there are no encroachments thereto, that the zoning memorandum complies with the use to which the property is put, and often banks require that good and merchantable title be conveyed by virtue of the mortgage document.

One thing that I have noticed that sometimes in conveyancing one must be careful of, especially in the country, is the stacking of oil leases by way of caveat. In the past in my practice I have noticed that oil companies will go through a particular area of the country, they will sign up farmers with oil leases, they will register these oil leases by way of caveat--and you actually pull up copies of these oil leases, and you will see that they are only good for 10 or 15 years. Often that time period will have long since expired, but those caveats still remain as a cloud on the title, albeit you say, well, they perform no real substance or real harm to the particular landowner, and I would suggest to the contrary, that if there is, again, another land cruiser coming through looking to sign up farmers so that the farmer can gain more income from leasing his oil rights, he will often pass over those properties which have the old caveats against them and say, ah, well, they are leased out to Imperial Oil, so I will just pass over and move on to more fertile ground.

So there is a very, very small point, but, in fact, in conveyancing I have found that sometimes when you get into meets and bounds descriptions of land, that it is very, very useful to make sure that you have a good solicitor who is accustomed to either country conveyancing if that is a particular case in which you are involved or--

An Honourable Member: Is there such a thing as a good solicitor? Is there such a thing?

Mr. Radcliffe: Absolutely. There is a certain persiflage emanating from the ranks here, Mr. Chairman, but I would suggest that often the skills of a competent and thorough solicitor in conveyancing often saves the landowner, the prospective purchaser, hundreds and hundreds of thousands of dollars which the innocent citizen could fall prey to and lose if it were not for the skills of a competent person.

Mr. Maloway: Having employed the services of lawyers on various occasions, Mr. Chairman, I must admit I have been totally satisfied with the results that have been produced, and so I only have the best things to say about lawyers that I have personally employed over the years.

We may as well deal with the fundamental issue, and I think the member for Turtle Mountain (Mr. Tweed) will be sitting on my side of the table on this issue, and that is that the member for Turtle Mountain got here the same time I did in 1986, and he knows that at that time Mr. Marty Dolin was elected in Kildonan. One of the things that Marty Dolin used to constantly impress upon our caucus was that it was high time that we translated the laws into English because the average person did not understand the law, was cowed by it and fearful of it and would end up going to a lawyer for all sorts of reasons that, if it was made friendly enough, could do himself.

Let me tell you, Mr. Chairman, that one only has to go to Office Depot and you will find little kits for doing your own wills and doing your own divorces and doing your own registrations of companies and doing your own this and that, and probably--I do not know what the percentage is; I do not know whether it is 10 percent, 20 percent, 30 percent of the legal agreements can be done by anybody with a little bit of confidence in themselves, can be done by themselves, and we should be encouraging people to do these sorts of things.

For example, land titles, and this is not really a territorial sort of question, Mr. Chairman, because, for example, even the Law Society and the lawyers of this province supported us, at least I believe they did, when we made moves to increase the small claims limits to, I believe, the 2,500 range and then to the 5,000 range, because the lawyers, quite frankly, did not want to be fiddling around with little rinky-dink sorts of claims.

Also, the organization known as POINTTS has made a business for itself largely I think because lawyers just cannot afford to work for $10 or $20 an hour, which is all you could justify for working on something like a traffic conviction. So the people at POINTTS work for $100 or whatever it is, and they do your job for you. You could not possibly--I mean a lawyer would not necessarily even want that sort of work. So there are lots of examples where we could, with a little bit of effort--the Consumers' Bureau could make a real effort here, if it wanted to, by sending out speakers to the schools and making an effort to demystify the law a bit and explain to people that, yes, you can do this by yourself and you can do that by yourself.

Now, admittedly, there are going to be many examples of where it is not possible. In doing a will, if the will is going to be complicated and there is a lot of money involved and there are dependents and so on and so forth then, yes, it is not a good idea to be doing that will on your own. There you need a lawyer to be involved in it. But I think the lawyers in many cases add to the mystique and are very territorial in how they want to deal with the situation and want to protect--and that is not just lawyers, that is just any group within society that is trying to protect its turf.

I know, Mr. Chairman, we started here with renovators, and how we got from renovators all the way around to where we have got, I am really not certain. But I want to know what he is going to do about the renovators.

Before I forget, Mr. Chairman, the surveyors--I believe the surveyors too in the last few years have managed to get some sort of a rule and requirement through now that if you are selling a house you cannot--it was customary in the past to use the same survey certificate, you know, after houses were changing hands several times. Maybe a garage was on the first survey certificate, and it might have been torn down or whatever, but that did not stop people from using the same survey certificate. Finally the surveyors' organization somehow convinced the government or convinced somebody to give them the right now--I believe within the last couple of years now, it is a requirement that every time you buy or sell a house you have got to get a brand new survey done. The minister could probably give me more information on that, but I think that is roughly the truth. So if he could respond to those comments, and then we could go back to the renovations.

Mr. Radcliffe: The first issue that my honourable colleague brought up was that of plain language. I can advise that our government, under the able direction actually I believe of my deputy who is here at the table today, introduced the plain language measures at our Winnipeg Land Titles and Manitoba Land Titles offices.

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(Mr. Mervin Tweed, Acting Chairperson, in the Chair)

However, as a note of caution, I would put on the table that while the actual document that is registered nowadays is a one-page document, be it a transmission or a transfer of land or a mortgage document, and it is in plain language, it does make reference to, by virtue of number, a standard precedent, for example, with a mortgage, which will be the standard charge terms which the credit granting institution seeks comfort from. These standard charge terms are registered in the Land Titles Office, and then by direct allusion, not allusion--by direct reference every subsequent document includes and incorporates those standard charge terms in the actual terms of the instrument that is registered in the Land Titles Office.

I guess one cannot legislate how people think. One cannot legislate morals. One cannot legislate behaviour. One can modify or restrict the top end of behaviour perhaps. But from a philosophical point of view, if a lender derives comfort from a series of very intricate and complex, sophisticated wording and they understand and know what those clauses mean by virtue of the fact that there have been court decisions that have interpreted them, there have been legal opinions that have been rendered which give them comfort, then it is very difficult for the legislator to subsequently come along and say, oh well, we want you to stop thinking and making reliance upon those clauses and change your thinking to something very simplistic and monosyllabic.

However, having said that, I must point out that I have taken great pleasure over the years in reading the judgments of the Privy Council in Great Britain and in particular those judgments of a Lord Radcliffe, who often was able to take a very complex subject and make it very clear in his decision. I feel--I have taken comfort from that--that when people are speaking from the bench, if somebody has a real grasp of the topic about which they are speaking, they do not need to obfuscate it with very complex wording. I, therefore, have significant sympathy with my honourable colleague, Mr. Chairman, when he makes a plea for plain language, and I think that in every case where we can in society, these sorts of levels of communication should be rewarded and endorsed.

One further point that my honourable colleague has raised--while he was citing the different areas where an individual can go on a self-help basis and obtain forms from Willson stationery or now Office Depot and fill them out, that is only one aspect of the function that one goes through when one is transferring wealth or effecting and severing one's relationships with one's colleagues or passing on wealth after one's demise. In fact, there is another very, very significant and important aspect to this behaviour which perhaps is barred from the individual consumer and that is the aspect of objectivity; that when one goes to a solicitor or a counsel, one has the opportunity to consult with someone who can be totally objective. They are working fee for service. They have nothing to lose or gain from the transaction, other than to see that it is competently performed and completed, but you have the sang-froid of a professional.

I remember the adage that I think--oh, it was not Lord Denning, but it was another--it was Dr. Schmitoff who came to speak to us when we were neophytes in law school, and he said that the individual who pleads his own case basically has a fool for a client. I have never forgotten that. That is something, I think, a tenet that any self-help practitioner ought to keep in the back of their mind or even in the forefront of their mind when they are approaching the courts or the regulatory offices, and that if there is anything at all controversial, any individual citizen very quickly, because you have a personal stake in it, one tends to lose one's own objectivity and become emotionally involved. One's emotions overrule or cloud one's judgment. Then I would suggest, with the greatest of respect, that one is beginning to lose the day because I would suggest that thought and behaviour and relationships of the law are rational, and if they become irrational and emotion enters into it and becomes paramount, then the process is tainted.

One of the issues that my honourable colleague mentioned, of course, was the aspect of demystifying the law, and I would suggest that in fact a very good place for this plea would be to present this at the Manitoba Bar. I would suggest that the practitioners at the Bar would be very open to this because, in fact, any function, really, down to the most complex personal property registration with, say, David Voechting at Aikins Macaulay who is recognized as one of the authorities in this particular endeavour in the province of Manitoba, that he can explain these issues in the simplest and most directive terms, if one were to ask him, because he has such a command of his topic. He can explain that to the consumer. Often I have received significant edification from Mr. Voechting when working opposite him on particular transactions through his command of the Personal Property Registry, which is in its case a very specific and technical field of endeavour.

My honourable colleague, Mr. Chairman, has mentioned the aspect of wills, and, in fact, in Manitoba in order to protect the public we have a very specific format for wills and for witnessing wills. In fact, a typed will must be witnessed by two individuals who are not beneficiaries to the testator in order that they satisfy themselves that the testator was of sound mind, was not under any undue pressure, and, in fact, if one of those witnesses to that document were to be a beneficiary under the will, the law automatically assumes that person has disinherited themselves because by virtue of their signing the document, witnessing each page and being a witness to the attestation of the testator, it would be a conflict of interest. This is to go to the protection of the testator.

One also has the opportunity, of course, to execute a holograph will in Manitoba, and this is more upon the populist approach, I guess, of my honourable colleague. One can execute in one's own handwriting a testament which as long as it is expressed in clear language and with a clear intent is perfectly acceptable before our courts and even to this day is accepted and honoured and respected before our Surrogate Court, which is a division of our Court of Queen's Bench.

I would suggest to my honourable colleague that when one gets into the ambit of the law that there are many, many complex countervailing considerations which one must take into account and which, in fact, skilled solicitors and barristers today in our court system do take into account in a very sensitive fashion in order to make sure that good service is conveyed to their clients.

Mr. Maloway: I think the mysticism of professionalism is really strong in the larger centres, but when you get to the rural areas or further up north, you find people in towns with maybe a hundred people in them. The barber is also the insurance agent, also sells marriage licences, is also the liquor vendor, and that is where professionalism is kind of--where it becomes obvious, that when you are in a situation like that, people just make do with what is reasonable under the circumstances.

For example, in the medical field now, I believe that doctors are going to allow nurses to do some of their functions in rural areas. They are not going to let them do it in the city and downtown Toronto, but if it is way up north, a thousand miles north, then if the nurse is around, the nurse will be allowed to do some of these things.

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So I think that professionalism is fine and it has a place, but we have to just understand all sides of it. What I am really asking the minister is what specifically is his department doing or going to do about making these rules more understandable to people and about making people more self-reliant in this whole area of consumer laws, because people are not getting any more educated. We have been trying to educate them for years, but we are still finding ourselves not really making a lot of progress.

Mr. Radcliffe: Mr. Chairman, I believe we touched somewhat on this point when we were talking about Research and Planning, but I am pleased to advise my honourable colleague that the Consumers branch as well does go out to groups of new Canadians, to schools, to aggregations of individuals in the community and explain to them what it is to be a good and informed consumer, what the issues of the day might be that they should be aware of, and basically to bring common sense, wisdom and education to the community and to explain to the individual groups whom they are addressing the meaning and the essence of the particular statutes which the Consumers' Bureau administers, namely The Business Practices Act, The Consumer Protection Act, The Personal Investigations Act, The Charity Endorsement Act, The Hearing Aid Act and the Bedding, Upholstered and Stuffed Articles Regulations of The Public Health Act.

Mr. Maloway: Mr. Chairman, back to the renovators again. Why would the minister not work out a bonding system and registration system for the renovators? Forget the requirement of courses now and forget the requirement that they have to belong to the central self-administered organization and that stuff; just forget those two issues for a moment. Why would they not look at bonding requirements and registration for these renovators?

Mr. Radcliffe: Well, I guess, first of all, what we have to do is try and analyze the essence of the nature of the question my honourable colleague is asking. He says: Why would we not bond a renovator? You look at the word "renovator," and that means somebody who renews something. I presume implicit in his question is somebody who renews something for hire, for commercial activity. Basically I guess what he is asking, and I am being somewhat presumptuous I guess but he is saying that any carpenter, any handyman, any labourer, any tradesman who goes out and lifts a hammer or saw or inserts a screwdriver or does anything, that person should be bonded.

The cost alone, just the virtual cost of registering and naming and numbering every one of our citizens in this country who is involved in the activity of building a fence or raising a post or putting a new piece of siding on a building, I think, just boggles the mind. It brings up, I think, even a very ancient Scriptural prohibition which was: Thou shalt not number thy people. The ancient Jews when they were roaming around in Sinai were aware of the evils of overregulation of their people. I think that some of that still applies to our society today, that we do not want to make a national industry out of government itself, which would be the logical result if every handyman, every person who were to be employed in a building trade or building a rec room or a cupboard or a shelf were to be registered, numbered and identified and bonded, that we would have a preponderant group of people watching the watchdogs.

I can only look to that excellent tome by John Milton, Areopagitica, which was on censorship, where Milton was speaking to censors and that really what one ought to do is go out and murder all the censors if one were to give any credence to the fact that one ought to restrict knowledge or information or publication to the community because, of course, then the censor would become the most tainted and corrupt individual in society. It was sort of the idea of the watchdog watching the watchdog and that you create an endless line of individuals who would be performing this function, and it would basically cripple society.

I do not want to bring the reductio ad absurdum element to the argument, but I think that very sincerely one must watch that we do not want to be overly regulatory in our society. There has to be some sort of spontaneity, creativity, and I think probably the fact that we are a very self-reliant people and our experience of the last two or three weeks I think gives testimony to this, that, in fact, we ought not to rely on regulation if there are people in our society who are fraudulent, who are taking advantage, who are not fulfilling their obligations or their promises.

There is a system for dispute resolution and that is called the courthouse. We have mediation centres now where people can submit to resolving their disputes. We have an Arbitration Act in our governance which allows for a very pacific and moderate resolution of dispute, but, beyond that, if we were to resort to trying to define a renovator and then regulate the renovator, I think that the issue would become so complex and insurmountable that government would be brought to its knees.

Mr. Maloway: Mr. Chairman, I would like to ask the minister then, has he been approached, has his department been approached by people wanting this kind of activity for renovators?

Mr. Radcliffe: Mr. Chairman, I am approached by any number of individuals in the community from time to time, and, in fact, I try, bowing to the exigencies of my legislative duties, to be as approachable and open to every element of society. I can advise my honourable colleague that I have had an approach from one of the stakeholders in the industry who was a spokesperson for a group of tradespeople who was exploring the concept of getting a government endorsement for their exclusive group to the exclusion of all others.

Again, I cautioned him that this was something that government itself was very wary to do because as soon as you say that one group is preferred and another group is not preferred, then you, I think, are becoming exclusive and creating classes of individuals and creating barriers which go to the breaking down of relationships in society and commerce and the free flow of wealth, rather than the building up of these elements that we want to encourage.

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Mr. Maloway: Mr. Chairman, I would like to ask the minister, what was the name of that organization and who was the representative?

Mr. Radcliffe: I would be loath to give his name because I do not have the permission of that individual to give his name at this point in time. I can consult with him and if he has no difficulty with my releasing his identity, I would be more than glad to give it to my honourable colleague. I can, by definition, say that it was a group of renovators. It was not just one particular renovator, but it was an individual acting for a consortia of renovators in the province.

Mr. Maloway: On page 13 of the annual report under Licensing, there is reference to the seven days for a buyer to cancel a contract. Now, can the minister confirm that that is, in fact, now 10 days? The Saskatchewan provision was 10 days, and I recall when we got this increased four or five years ago we put an amendment to increase it to 10, vis-a-vis Saskatchewan. At that time the most we could get from the minister I think was seven days. My understanding is now that it is--because of this interprovincial trade agreement, they have deferred to the provincial authority with the highest standards, which in this particular case would be Saskatchewan which would be 10 days. So my assumption is that it is now 10 days, but I am not 100 percent sure. Could the minister explain what is going on with this?

Mr. Radcliffe: I would confirm to my honourable colleague that seven days is still the active status of the law at this point in time. There has been a legislative amendment that was put through in the last session of the Legislature, and it has yet to be proclaimed, as I think I referenced earlier, because we are working on regulations to support the change in time span. As soon as the regulations are proclaimed and have gone through the vetting process, then it is our intention to put in the 10-day period.

Mr. Maloway: Just a matter of interest. Why would there be a complication in increasing the requirement from seven to 10 days? I mean, why would that take excessive time for changing regulations?

Mr. Radcliffe: I believe, Mr. Chairman, that my department people have the wording, but what is involved is drafting the wording for the cancellation in the contracts that has to be considered by Legislative Counsel and has to clear the different hurdles within government, at which time the process is, I believe, that this will be referred to the minister and if it meets with the satisfaction of the minister, then the regulations will be proclaimed. There is no hiatus or complication with the issue. It is just the mills of the god grind slow, and in this case due process is working its way through the thrall of government, and we are anticipating that these regulations will be up very soon.

Mr. Maloway: I would like to draw the minister's attention to the bottom of page 16 of the annual report. We are dealing with Agape international ministries. I would like to ask the minister what was happening with this particular pyramid scheme. I think I heard something about this type of thing, but I am not sure whether it is the same one.

Mr. Radcliffe: Mr. Chairman, I am advised by my department that, in fact, the department acted very swiftly on this case. They sought and obtained an injunction against the principal who was behind this Agape international ministries here in Manitoba.

There was a similar court process invoked in Austin, Texas where this individual originated from. Criminal Code charges were laid against this individual under Section 55 of the Criminal Code, the charges being that of operating an illegal pyramid scheme. I am advised that the salient points of that are that if one has to pay to participate in a pyramid enterprise, that is in itself illegal. There was a conviction obtained by the Crown in this particular case, and the individual received a suspended sentence from the courts. The effect of the injunction was in fact to paralyze the operation so that he was rendered totally ineffective in operating in Manitoba.

Mr. Maloway: Mr. Chairman, I refer the minister to the top of page 17 and the situation with Carter Toyota. I would like to get an explanation from the minister as what in fact was happening here, all the ramifications involved with this car dealership.

Mr. Radcliffe: I am advised, Mr. Chair, that Carter Toyota and a number of individuals named were the recipients of charges laid against them by the Crown under The Business Practices Act and that a plea bargain was entered into and a plea submitted, and five charges were sustained. A conviction was sustained in five different situations against these individuals for improper business practices relating to the sale of automobiles and life insurance policies.

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Mr. Maloway: This case did not also involve, did it, the failure to collect the GST, basically selling vehicles on reserves. This is not the case that we are dealing with?

Mr. Radcliffe: Mr. Chair, our department would not be involved in the collection or enforcement of the goods and services tax.

Mr. Maloway: The PST.

Mr. Radcliffe: Oh, PST. That, again, would be, I think, Finance rather than our department.

Mr. Maloway: I think we can probably move on a bit now. I do want to ask, though, before we leave this area of the department about--there was a monument company that was selling insurance on--believe it or not there is such a thing. If you have a monument in a cemetery, you can buy insurance from the graveyard. Well, you can buy insurance through a property and casualty insurance company and just tack it on your homeowner's. It was news to me when I first heard of this a couple of years ago, but there is such a thing.

Evidently, one of the monument sellers was, in fact, selling an insurance policy where they collect depending on the value of your marker, so if it was a $5,000 marker, it would be so many dollars, and if it is $10,000, it is another amount of money, and it is a self-insurance program similar to what we were just referring to here with Carter Toyota. I am sure you do not know about it. Well, actually, I thought you did, but I had a complaint about it a couple of years ago, and I just wondered if you had heard anything about it, whether anything was done.

They are not a licensed insurance company or anything. They are a monument company, so if you buy a monument from them, they will sell you a little insurance package, that if somebody vandalizes the monument, they will fix it for you.

Mr. Radcliffe: Mr. Chairman, I am not personally aware of this individual practice, and if my honourable colleague wishes to raise this with me, if it is still a current practice, I certainly have no problem referring this to the Consumers' Bureau for inquiry. I would just reflect in passing that, oh, my goodness, the vanities surrounding the whole process of death I think are, in fact, themselves something that is unfortunate in our society.

Mr. Maloway: I believe it was the Brookside Cemetery where this situation developed, and the woman in question had purchased I think it was a $10,000 monument, and certainly her financial means might not have justified that, but certainly it was a good part of what she could afford to do. So she, I believe, had one of these or certainly had the option of buying this insurance package.

Now, where you would buy a monument for Brookside Cemetery I am not sure, but I think there might be one associated with it up in that area on McPhillips or wherever. I do not know anything more about it than that. This was a couple of years ago. I thought that had been referred to you at the time, but, once again, we are going back a couple of ministers here.

Speaking of having gone back a couple of ministers, where we have another example or another case here, the minister's department might be aware of a company called Travel Smart that was the subject of a number of press reports back around, oh, circa 1990 or whatever. I think by the looks of things or sounds of things you will be reading about it again relatively soon.

So, if you could dust off your old files, assuming that you have such files, but I would think you do have because what essentially was happening in this case was that the person involved in this company, Travel Smart, was selling once again travel franchises, and at the time he was collecting $50,000 or $40,000, whatever the amount was, for essentially the same functions that an outside travel agent would perform for free to a regular travel agency. So there was no real value here in what was being sold. The media, I believe it was CKND but also the print media, carried stories about this at the time. In any event, it has been brought to my attention that this particular individual is back in operation now and has a company called Futronics. I guess we are not suggesting that there is necessarily something wrong with this company, but I guess we or the media are interested in knowing whether or not the person who is setting up this company has in fact satisfied all the old judgments against him from the last debacle that he was involved in.

So that is basically the tenor of it. We wanted to know, given his track record in the past with his previous company and what was done there, we were wondering whether the department was aware of this company and the other company. I think it is called Futronics, and I am just not sure what the other name of it is, but it has got a--there is Telesend, I believe. So do you have any records of this, any complaints about this company, and do you have anything on the old Travel Smart?

Mr. Radcliffe: Mr. Chairman, in response to my honourable colleague's remarks, I would react and say that, as an even-handed government, one must be very careful to maintain the same visage to all our citizens. Sometimes individuals do fall into unfortunate business practices, and they either innocently or maliciously do take advantage of their fellow citizens. They are caught and dealt with to the full impact of the law. But our legal system is such--and I would hope that our community regulations and attitudes are such that--once somebody has paid their debt to society for any misdeed that they may have done, they then have the opportunity to re-enter and interact with their fellow citizens, and the book is closed on that particular issue.

We have made some exceptions to this where perhaps there are child molesters or people who have characteristics that do not seem to be remediated, but short of that, especially in the consumers' protection world, the business world, we try our best at least not to bring forward old issues and old news. Having said that on one side--and I guess in compliance with that sort of concept and background, if someone under a corporate heading has incurred liability and gone broke and these liabilities, these debts remain unsatisfied, they can be either cleansed through bankruptcy or just remain unsatisfied under the guise of a corporate entity, but that individual has the opportunity under our legal system to start up a new enterprise unless they are debts that are incurred on a personal nature.

So, having said that, I can advise my honourable colleague that we are not aware of the two names that he has mentioned. If there is an individual behind them, which I believe we were discussing earlier, I can advise my honourable colleague that my department is aware of the individual who did get some involvement with the department a number of years ago, but there has been no recent involvement with him. Until somebody were to transgress the law or there were a complaint that had to be sustained, I think the old adage that one is innocent until proven guilty is something that must still rule the day in our society.

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Mr. Maloway: Mr. Chairman, I was just checking with the minister to see whether there had been any complaints to his department about this particular issue. I mean, the member can understand that sometimes complaints do not find their way to the department. Even within a caucus such as my own, we have people that come and complain to me when they could be complaining to somebody else in the caucus or complain to someone else when the issue was in my area, because people do not necessarily know who is the critic for this and who is the critic for that. So we tend to get a lot of people, perhaps, covering the waterfront where they will come to our office and they will come to the Consumers' Bureau. They will come to a bunch of things, but oftentimes where they go first is to the media or they come to the critic, and the last place they go is to the department.

I mean, we know that because of the cases, recent stories about red-lining of downtown areas for insurance purposes. It is the Insurance Bureau who is the last to be approached. That is the refrain that the person at the insurance branch usually is heard putting out on the media, is: Why does the person not phone us; they phone everybody but us. They phone the Free Press, and they phone the television and they may phone the critics, but they do not necessarily get in touch--because they just do not know where to find it. Then I am sure in a lot of cases they do get to the department, and we never hear about it. There are lots of instances where you are working on things that I never hear about. I think that is terrible and it should never happen, but I know that it does.

Now, Mr. Chairman, I would like to ask about the--because this leads me into another area here that we have not dealt with for a number of years now. I think this is a prime opportunity to ask some questions about it, and that is the whole issue of a travel act. Quebec has a travel act; Ontario has a travel act; B.C. has a travel act. What do those three jurisdictions know that we do not know? I can tell the minister that, in those three jurisdictions, I am sure there have been some modifications over the years, but the travel agencies and the tour companies and so on are assessed a certain premium based on their volume of business, I believe it is. The money goes into a--it is similar to the property and casualty and the life insurance compensation funds that have been set up over the last 10 years on an interprovincial basis. Maybe this should be done, the same sort of concept as CAMVAP with the lemon law equivalent, on a national basis as well, ultimately.

But Manitoba probably should look at a travel act because if you are an Ontario consumer, if you live in Kenora and you book a trip somewhere, and the airline or the tour company goes bankrupt--as they do regularly out of Toronto; people have been stranded. If you live in Ontario, you get your money refunded to you. It comes out of the Ontario travel fund. But, if you live in a nonregulated province, of which we happen to be one, you have nothing to protect you except if you are able to buy an insurance policy that covers basically what is known as default of the carrier. There are exclusions in that particular coverage as well under default of the carrier. From memory now, they do not cover American airlines or other such things, I believe. I could be wrong about that, but there are some exclusions to it. The Ontario travel fund is a kind of a blanket sort of operation and it covers the public, so whenever you see a tour company go out of business and all these customers are stranded in Mexico and so on, you know that all those Ontario people are being taken care of. Whether it is the travel agency that goes out of business or the tour operator, they are protected. If it is Manitobans that are sitting in the same plane just a couple of seats down from the Ontario people, you know that you are going to hear from them because they do not have the protection of this fund unless they were to buy the insurance coverage. I would like to know why the minister has not done anything about this yet.

Mr. Radcliffe: Well, Mr. Chairman, I have had the good fortune to do a bit of travelling myself in my adult life, and I guess I am at a bit of a loss as to know how this legislation that my honourable colleague is talking about would work, because I have always dealt through a travel agent. When I order tickets, the tickets arrive at my house about a week before the proposed trip and my Chargex account is debited the appropriate amount. I get on Air Canada or Canadian or whatever other carrier, Northwest, whatever the carrier might be. My hotel reservations are made, and I am responsible for those hotel reservations, be it London or Paris or Rome or wherever I might be travelling--or the Caribbean.

So, whether the tour operator goes broke or not, I guess the only thing one could be referring to is if there is a prepaid package under a charter, and we have had no complaints to date from any members of the public on this issue. This is perhaps something that might properly be researched by our Research and Planning department.

Sorry, this is perhaps something that might be referred to Mr. Anderson, but we certainly have not been swamped nor even made aware of any business failures which have resulted in hardship to any Manitoba travellers in the recent past.

Mr. Maloway: Mr. Chairman, well, it is sort of preventative medicine that we are suggesting here, and the Ontario fund does pay out quite regularly. There is always one or two agencies in there every few months that go out of business and leave people in the lurch, and those are the minor amounts of $5,000 or $10,000 maybe or $30,000, $40,000, and then you have the big ones when the tour companies go under, but there are airlines too that go under and once again if the insurance is not provided--now to be fair, the insurance companies and many of the travel agencies do insist on waivers for people who are buying packages, they require them to buy default insurance, so that is probably why you have not had as many complaints as you normally would have because they are being forced under penalty to sign a waiver, and when they have to sign a waiver they usually think better of it and buy the default protection.

That is all fine and dandy as long as the insurance companies are providing the coverage at a reasonable cost, but if in fact the insurance companies get hit by a fairly big loss, then you can see the premiums going up substantially, or maybe insurance companies withdrawing from that area and that would leave you exposed. It is something to keep in mind. When these failures happen, they happen kind of unexpectedly, and that is when you will get a lot of people being stranded and chasing you at the time. So I guess you just want to know that when the time comes, I will be out there saying that, you know, well, I have been after this for a long time. So I would ask you to send it to Research and Planning and take a look at it a little more closely.

Now we could go on for quite a bunch longer on this area, but I think it is probably a good idea. I understand the people from the Public Utilities Board are not available today, so we are going to have to reschedule them for a different time. The Securities Commission people are here, so maybe if we spent some time poking around in the Securities Commission for awhile, we could get some of that done today.

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Mr. Radcliffe: Mr. Chairman, that would be very satisfactory. I also would invite my honourable colleague, if he has questions on the Public Utilities Board, my deputy is very conversant with the activities of the Public Utilities Board and some of the underlying principles and concepts. I have had the opportunity of sharing counsel with Mr. Forrest, who is the chairman of the Public Utilities Board. I would advise that he and his deputy right now are out of town on some interprovincial travel in order to gain some more harmonization, more skills, some more knowledge of what is going on in other provinces so that they may better administer the areas of activity within Manitoba. Having said that, I would not want to curtail or limit any questions that my honourable colleague might have with regard to the Public Utilities Board, and we would gladly entertain those at this time.

If he chooses, we would be glad to produce Mr. David Cheop, who is in the assembly right now, and we could carry on with the Securities Commission.

The Acting Chairperson (Mr. Tweed): Would it be reasonable to suggest that we pass the Administration and Finance portion (d) Research and Planning, as we have basically moved right away from that completely now. Again, I recognize we have been moving back and forth freely. I am just looking at the order of--I guess, trying to get some completions on some paperwork.

Mr. Maloway: Mr. Chairman, I think at this time we could pass everything up to where we are now with the exception of section (d) Research and Planning.

The Acting Chairperson (Mr. Tweed): So then I will ask under 5.2 Consumer Affairs (a) Consumers' Bureau (1) Salaries and Employee Benefits $876,900--pass; (2) Other Expenditures $202,200--pass.

5.2.(c) Automobile Injury Compensation Appeals Commission (1) Salaries and Employee Benefits $437,200--pass; (2) Other Expenditures $170,500--pass.

5.2.(d) Grants.

Mr. Maloway: I wanted to ask another question about these grants. The minister was going to get back to me as to what the actual breakdown was between the grants for the Community Unemployed Help Centre or there was a credit counselling, I believe, and the Consumers' Association.

The Acting Chairperson (Mr. Tweed): Just before the minister responds, I will advise for the record that (b) Residential Tenancies was passed in a previous meeting.

Mr. Radcliffe: Is it appropriate that I excuse the director for the Consumers' Bureau at this time? Good. Thank you very much.

I am advised in response to my honourable colleague's question that the Department of Consumer and Corporate Affairs issues two grants annually. One is to the Community Financial Counselling Services, which was formerly the Community Consumer Credit Counselling. This is a grant to help provide credit counselling services for low-income individuals. The amount there is $53,800 for the current year. The second grant is to the Consumers' Association of Canada, Manitoba branch. This grant enables the organization to provide a product information and product-rating service to consumers. It is a service which is not duplicated by any other organizations, provided by a combination of paid and unpaid volunteer staff. The amount involved is $33,900. So, that is, to repeat, $53,800 for the first and $33,900 for the second.

Mr. Maloway: Is that grant to the Consumers' Association up or down over what it has been over the last couple of years?

Mr. Radcliffe: I believe there has been a decrease of 2 percent on both grants, and this was a general 2 percent reduction right across the department on governmental spending wherever we were able to do it. I believe the deputy was very, very assiduous in her savings measures in order to curb the expenses of government.

Mr. Maloway: It just occurred to me that I should ask the minister at this point: There are three SOAs currently in the department, what will be the next area that will be developed into an SOA? I mean, would there be any of the functions of the Consumers' Bureau that we have just dealt with that will be put into an SOA?

Mr. Radcliffe: My honourable colleague is quite correct that there are three SOAs right now in the Department of Consumer and Corporate Affairs, and we have no active plans at this point to develop any further SOAs, so any further response of mine on this part would be speculative at this point. There are obviously a number of other self-contained departments that do function on their own, and we are continually reviewing them as to efficacy and need in the community and just analyzing them because I firmly believe, as does my deputy, that just because we have done something in a particular fashion for a number of years does not of itself justify continuing to do that. We must be satisfied that it continues to meet the needs of our citizens in Manitoba.

With regard to launching any new SOAs, we have no real plans or concrete plans at this point in time and anything further would be wholly of a speculative nature.

Mr. Maloway: I believe now we are moving to the Securities Commission?

The Acting Chairperson (Mr. Tweed): Yes. At this time, then I will ask for item 5.2.(d) Grants $87,700--pass.

Resolution 5.2: RESOLVED that there be granted to Her Majesty a sum not exceeding $4,883,100 for Consumer and Corporate Affairs, Consumer Affairs, for the fiscal year ending the 31st day of March, 1998.

For the record, I would like it to show now that we are moving on to item 5.3. Corporate Affairs (b) Manitoba Securities Commission (1) Salaries and Employee Benefits $1,305,600.

(Mr. Peter Dyck, Acting Chairperson, in the Chair)

Mr. Maloway: Mr. Chairman, I would like to begin by asking the minister about the advisability of putting the Manitoba Grow Bond Program under the auspices of the Securities Commission and what the minister thinks of that idea.

Mr. Radcliffe: Mr. Chairman, my honourable colleague raises a very intriguing question here, and what I can do is reflect from a somewhat peripheral nature on the issue of Grow Bonds. Grow Bonds is an investment vehicle backed by the Manitoba government whereby the principal that is lent by the citizen to a particular enterprise is guaranteed by the Manitoba government. It has a community focus and is administered by the Department of Rural Development. Beyond that, I would hesitate to make any comments because this is a matter that really lies beyond the ambit of the Securities Commission.

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The Securities Commission is a regulatory body that governs the behaviour of brokers themselves, their professional standards and ethics. It covers the issues of disclosure. I think that in the case of the Grow Bonds, they were launched in 1992 as a vehicle to enhance investment in our communities, and government wanted to make sure that they were very accessible and that we were not layering on any expense to these vehicles.

It was felt that these instruments would be perhaps beyond the reach of the community, which is what they were aimed at, is enhancing the community, if they were administered by the Securities Commission, but, in fact, really, this is beyond the area of discourse by this department at this point in time, other than those general remarks that I have put on the record.

Mr. Maloway: Mr. Chairman, well, we have a different opinion about this matter and just if I could explain to you why that is. We have seen the Grow Bonds--and I believe there are 11 of them or so right now; I could be wrong about that, but I think that is how many there are. Increasingly, more and more of them appear to be falling into problems. The company is having difficulties with them and, at least in a couple of cases, there has been a suggestion that improper disclosure has been made. It seems to me that if this was put under Securities Commission auspices that there would be the rules and so on that would require disclosure and registration and so on. It would tie it down a little better, give it a little more professional approach than appears to be right now.

In other words, this program, I guess, we are saying, is not working out as well as the minister would want to believe that it is, or the government would want to believe that it is. It is not working out well and that in the future that any new Grow Bonds and so on should be put under the Securities Commission, so that they can at least take a look at them and have a proper prospectus and disclosure and so on would be drawn up and it would prevent--I mean, in opposition it is our job to criticize the government. We also know that sometimes if we are too good at it, we are going to keep the government in power for too much longer. So we do not want to give you too many ideas here, but you know, if you are going to be running into trouble with these and the Achilles heel to the bond is the fact that this thing has not been researched right and it does not have the stamp of approval of the Securities Commission, the situation could be helped by doing that, then I would think as a government you would want to take those steps and hopefully avoid some of the problems that you seem to be developing with these Grow Bonds.

Mr. Radcliffe: Mr. Chairman, well, I am certainly buoyed up by my honourable colleague's support of our government and I would hope that it would ever be thus, but I think that what he is really addressing, and part of I guess the role of government is to look at what the real need is here and the real issue. I would suggest without being argumentative that really what my honourable colleague is concerned about, and I think this is a very worthy concern, is measuring the risk of the enterprise which is the subject of the investment, and the Securities Commission right now does not measure the risk. In fact, there are many enterprises that trade on the Toronto Exchange--and we have a very notorious one right now in the newspapers, but--

An Honourable Member: 70 cents--7 cents, pardon me.

Mr. Radcliffe: Exactly. I believe that Bre-X is trading today at 7 cents, and I am certainly happy to advise my colleagues that I have no holdings in that company. I get through that one unscathed. I think that really what my honourable colleague is referring to here is that he is concerned that the Manitoba government perhaps is being put to expense by backing commercial entities that look like a good enterprise at the point in time when the investment is being made and subsequently, for a myriad of reasons, do not prosper and that a call is made upon the Consolidated Fund of the Province of Manitoba, and the payout has to be made to investors.

That is not something that, with the greatest of respect to the department or the individuals on the Securities Commission, they perhaps have a competence in. In fact, what I think my honourable colleague is referring to is that one would need the services of a good corporate analyst, or an investment analyst, to see if such and such an enterprise is a good investment. Short of that, a government would not perform that service, at least government as it is constituted today under the Securities Commission does not perform that function. What it does is the limits of disclosure are of a much more regulatory nature in the Securities Commission, and so we would continue to miss the mark. I would suggest with respect that all we would be doing would be moving one area of activity from one department to another which was perhaps a glorified shell game, and I do not know that there is a lot of merit or advantage to be gained by the consumer in that respect.

Mr. Maloway: The suggestion had to do with the disclosure question, not the analyst's role of recommending whether the proposition is a good one or not. It had to do with disclosure. I understand that the Grow Bonds procedures did not allow for proper disclosure as opposed to what the Securities Commission requirements would provide.

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Mr. Radcliffe: Our difficulty in being responsive to my honourable colleague on this issue is that we would hesitate to comment on the issue on the level of disclosure. We have general knowledge and vague knowledge which is, perhaps, just derived from what one discerns from the public media on the level of disclosure that is practised in the Grow Bond environment and probably these issues would properly lie with questions to the Minister of Rural Development (Mr. Derkach).

Mr. Maloway: I will leave that topic right now and go on to an area that I am sure you will be able to provide me lots of information on, and that is the question of the house-flipping. The house-flipping ring, your staff, Mr. Cheop, is quite familiar with it, and I am sure that he would be prepared to entertain us for quite some time, giving us an update as to where things are with it.

Mr. Radcliffe: Mr. Chairman, I have taken this brief interlude to familiarize myself with the practice of house flipping, and in fact I was never aware of this when I was actively practising law because perhaps my path took me more to rural real estate rather than urban real estate.

An Honourable Member: Much better, too.

Mr. Radcliffe: Indeed, yes, I would concur. But I am told that the m.o. here, and it involved one particular agent who was an individual I can assure my friend is now no longer active in the real estate market in Winnipeg, but it came to the Security Commission's attention that there was a series of very quick sales and a number of sales and transactions sequentially over a few pieces of real estate. Basically what was involved was that a realtor, or a particular individual bought a house for a very modest sum of money, put in some very minimal renovations, got some occupants who were not that skilled or sophisticated to move into the house and then inveigled them to purchase, move from being a tenant to a purchaser, lent them the down payment and arranged for them to get mortgage financing for 95 percent of an agreed value which was an inflated value, significantly higher than that for which the original purchase was very recently before the subsequent transaction.

These were individuals that did not have the financial worth or sustenance to maintain the mortgage. The mortgage fell into arrears, and when the mortgagee came to foreclose, much to their chagrin, they found that the real value was not in that piece of real estate. Now implicit in this is that there may or may not have been a number of other individuals who were either innocently or not so innocently involved with this transaction, and there are a number of ongoing investigations by different bodies other than the Securities Commission. The Securities Commission itself acted very quickly and made sure that this person was no longer--[interjection] I am told that one of the difficulties here was that the agent, the person who was registered, who was involved in the transactions was not the individual who was doing the flipping, but rather was an agent for a principal.

Therefore, there was a report or a referral made to the commercial fraud people by the department, and the individual agent has since ceased acting in this area. That is sort of an anecdotal situation, and one cannot legislate or regulate against dishonesty as much as one might wish. What the real estate broker society or registry has done is advised all real estate brokers and agents in Manitoba not to become complicit with evaluations or to become personally identified with the owners of these properties. There are regulations right now of disclosure where the agent must disclose on the face of an offer to purchase if this is, in fact, their personal property or something that is connected to them.

The Securities Commission, through the services of the real estate brokers, has made very public what the basis of this transaction was and how the Securities Commission disapproves of it, and how it will be dealt with with the full force of the law and abjured all the individuals in the profession to refrain and abstain from such activity.

Mr. Maloway: Well, will the minister confirm that his department was, in fact, aware of this ring as early as April 1995, because it was during the election campaign of April 1995 that the original person came forward and started the ball rolling on uncovering these series of house flips?

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Mr. Radcliffe: I cannot specify that it was April 1995 that this matter first came to the attention of the department. All I can say is that it was in the spring of that year that there was some knowledge shared with the department, and by the fall of 1995 the matter was referred to the mortgage insurer at the behest of the real estate brokers' society. [interjection] I stand to be corrected by my director here, Mr. Chairman. It was in the fall of 1994 that this matter first came to the attention of the department, and in January of 1995 there was a referral to CMHC which was the insurer for the mortgagee, January of '95.

Now, I do want to comment on some of the nomenclature, I guess, that my honourable colleague has used when he refers to it as a ring. The attention of the department was focused on the actions of one particular agent and his principal. It may well turn out that there was a group of professionals who were supporting or enhancing the activities of this individual, but that is yet to be proven.

As I said earlier, there are ongoing investigations, so therefore it would perhaps be inadvisable of me to comment any further on the subject of any inquiries, but it was, in fact, and I will be specific, one agent that the department investigated.

Mr. Maloway: Would the minister provide me with a copy of that letter or note that he says was sent to CMHC, I guess it was, in the fall of '94?

Mr. Radcliffe: In January '95, the contact was made to CMHC, and I can advise, Mr. Chair, that, in fact, I believe the contact that was made was that of a meeting with CMHC to urge the insurer that they should contact the commercial fraud people. I do not know at this point that there was an actual letter. I think it was a face-to-face meeting.

Mr. Maloway: Well, on what date in January '95 did that meeting take place?

Mr. Radcliffe: I believe it is January of 1995, and we can look it up. I can ask my director to supply that to me, and I will be glad to forward it to my honourable colleague.

Mr. Maloway: Can the minister tell us, at the end of the day how many house flips were involved in this ring? What was the total number?

Mr. Radcliffe: Mr. Chair, we do not have the specific number in front of us right now. I can only give my honourable colleague an indication of the nature, and it was a significant number. The number of 40 to 50 is the recollection of the department. These were different properties that were being turned over quickly, and they were properties of a modest price nature so that when the Securities Commission saw a number of properties with one particular individual involved and a significant number within a short time span, this is what attracted their attention and they became involved.

Mr. Maloway: The fact of the matter is that the numbers that you are giving out are very low. There are probably 100 properties involved. When we were uncovering all of this stuff and trying to get to the bottom of it, and I had occasion to meet with a lot of these people in their homes. Sometimes before Bill Baluk got to their doorstep, I was there. In some cases he was there ahead of me by, you know, a few days, a few hours, and I guess the problem with this is that the people--this process has taken too long. If I became aware of it or our caucus became aware of it in the middle of the election 1995, you people became aware of it January of '95, or in the fall of '94, passed it on to CMHC.

You have to understand that CMHC was picking up these houses on mortgage foreclosures, so you have to look back to CMHCs role in this thing. CMHC would see that these were houses where people were walking away from them. A lot of them were vacant by the time you guys even found out about them, by the time I found out about them. So I did not become aware of them until maybe May of 1995, six months later, but CMHC should have been on this from the very beginning, because there were a good number of them that were vacant by the time we found out. We found out only because, and you found out only because, there were a couple of people who would not take no for an answer, and they pushed this issue and took it further and retained lawyers, and so on and so forth.

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The point is, this thing still has dragged on far too long from the time that the investigations were done to the time that it was turned over to the lawyers and to the commercial crime people. At this stage, how long has it been? It is now going to be three years this fall, and these people are still no further ahead. Now that is not entirely true, because let me tell you that--and it is not just one real estate agent. We are talking about three real estate agents here. We are talking about at least three lawyers. One lawyer did get a judgment against him from the Law Society, and the Law Society paid out on his behalf. So it is true that it is an ongoing arrangement, but throughout the whole process it became evident to us that it was the appraisal function that needed to be looked at, because if you look at the thing as a funnel that was kind of--the neck of the funnel was the appraisals. In other words, the reason they could get away with this is because there was no sharing of the appraisals. So as long as you could get your favourite appraiser out there--and it was almost done on the basis of appraising to order. You have to understand too, that it also involved a mortgage broker. So what you had was the friendly real estate agent, the friendly lawyer, the friendly appraiser and the mortgage guy from the bank. It had all of those elements. They all had to be in place for it to work, but it was the appraiser that made it all work.

That is why I asked you this in your Research and Planning division the other day, if there was some way you could force a change to the rules that require that when you purchase a property, when you purchase a house, and an appraisal is done for you by your bank, the bank will not show you that appraisal. You have paid for the appraisal, but the bank will not show you the appraisal because it is their appraisal; they require it and they require you to pay for it.

To me that is terrible and it really helps the appraisers out because they do an appraisal on one house and they do it for the bank, and then if anybody else wants an appraisal on it, they will do it specifically for that person, even though the appraisal may be almost identical. They charge a fee each time they do it, you see, and that is what this is all about.

So what would happen is, in this case, I guess, the head guy here, without mentioning his name, the guy who was supposedly running--the Mr. Big in this operation. He has been mentioned in the Free Press when they did the big front-page stories on this issue last year. I mean, when he was doing this stuff, they would have friendly appraisals done, but the key to this whole thing was that they would put an ad in the paper and the unsuspecting--and, I mean, you have to meet the people. I have been out and met most of these people, and most of them are young; some are rural people who have moved in from the country. It is a first-home situation. They are working at minimum-wage jobs, and so they are not in a position where they could afford a down payment on a house.

So they would read an ad in the paper, and the ad in the paper would say, come and look at this house. It is basically a private sale. Then what would happen is the person would get involved, and they would need a down payment to qualify for the mortgage. So what would happen is Mr. Big would provide the money. What he would do is he would provide it in cash. He would give it to them in an envelope, and I had numerous examples of where they would tell me they had never seen so much money in their lives as this, and they locked it in the glove compartment of the car and hastily drove it across the city to get it into their bank because they were scared, you know, what if they got into an accident and this money never got back.

So he would lend them the money. They put the money into their bank, and then they would write the cheque as the down payment. If they were unemployed, that was no problem for Mr. Big. He just found some fake company that would give them a letter of employment, and there were examples of letters of employment.

In some respects, the victims were culpable in this whole operation because they did not question the inflated price of the house. Well, they had no reason to question it, because Mr. Big was such a nice guy. They did not necessarily all come from Winnipeg, so they were from the country, and he was just a nice, helpful guy. They were not familiar with the land prices. If they were buying in the area that they were used to buying in--but they were not.

There were a lot of city people, too. My point is that the rules are such that you cannot get a mortgage unless you have a job, and you cannot get a mortgage unless you are going to have the cash to put down, the down payment, right? So what would happen is Mr. Big had all the answers. He would lend them the down payment. He would give them credentials to show they had a job, and that was the only way they could own this house, so they willingly got involved in this thing. In many cases, they were not even aware their house was overly priced until we actually came to the door and told them. You know, we were the deliverers of the bad news and said, did you know this, and they would argue, some of them would argue with you, and say, well, no way, my house is worth $70,000; it says so right here.

So that was the kind of environment that we are talking about, and my disappointment, I guess, is that it has taken so long, that they had nobody really to turn to. We kind of got them together as kind of a support group among themselves and so on, but they cannot wait for the wheels of justice to turn because they turn so slow.

The province seems remote to them and really cannot give them much in the way of support. Some of them actually have lost their houses since the man from the government showed up and said I am from the government, I am here to help you, and they thought, well, help is here, but in a lot of the cases they have lost out. They could only hold on so long. One of them has gotten divorced over this. Another one has, well, other problems. There are all sorts of problems. By the time this thing winds its way through, and Mr. Big ends up in jail, if that is what, in fact, happens, these people are going to be on to a new house by that time because of the time frame.

So that is what I am really disappointed about, is the lack of action. The lawyers, all three lawyers are still happily plying their trade. Two of the three real estate agents are probably still out there. You say one of them has voluntarily withdrawn and that is fine. What about the mortgage broker and what about the guy himself? Mr. Big is still happily feeding his llamas. Well, maybe with the flood--he was living right on the river so he might be seeing real justice in the last week or two.

Mr. Radcliffe: I can commiserate with my honourable colleague that, in fact, it often appears that the guilty go unpunished and that the innocent are victimized, but I think that one must not paint all departments of government with the broad brush out of a sense of frustration.

One must discern what is the actual area of responsibility of each individual department of government, and here the administration by the Securities Commission of The Real Estate Brokers Act applies to the behaviour and the activity of the real estate broker. I would advise my honourable colleague that within a matter of months, be it one month, two months, at the outside two months from this information coming to the attention of the Securities Commission, contact was made to CMHC who is the mortgage insurer in this case to acquaint CMHC of the nature and extent of the transactions that were going on and to urge CMHC to bring in the civil fraud people, the criminal fraud people.

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In no way does the Securities Commission have control or any influence at all over the criminal justice system, and what my honourable colleague is referring to as the ongoing dilatoriness of the Crown and of any tangible results is, in fact, I think a justice issue. I think many people in society feel frustrated at times that either the Crown does not lay charges, even though you know somebody may well be very guilty of some transaction, or that it takes an incredibly long time for an issue to grind itself through the courts. It can take up to a year for an issue to get through the courts, especially ones of a civil nature, involving civil fraud, which are complex and sophisticated.

I can tell my honourable colleague that, so far as this department is concerned, we issued a letter, in May of 1995, to all real estate brokers and authorized officials warning them not to become involved or complicit with activities of this nature and then we closed the book. That was it. We were finished so far as we were concerned.

Now, whether the Law Society is going to be acting to revoke the licence of these lawyers, again, is something beyond our jurisdiction. I can tell my honourable colleague that usually my experience with the Law Society has been that if there is a complaint that comes out of the community with regard to your practice, and I admit that I have been the victim of these complaint letters from time to time, and I think every solicitor practitioner has been, that you receive a letter from the Law Society. You have, I think it is, seven days or 10 days within which to respond to the complaint, and the citizen's letter against the practice of the solicitor is enclosed for you to respond. That matter is then referred to the disciplinary committee. There may be some attenuated correspondence back and forth. Then, usually, the Law Society meets pretty expeditiously because the disciplinary committee meets on a pretty frequent basis and is very conscious of its image, the image of its society and members of the public, and does not want any individual to be victimized by a practising solicitor.

I would, therefore, perhaps suggest to my honourable colleague that if there has been no proceedings to date, and it is two years after the fact at this point in time, that in fact there may not be any proceedings now against these particular practitioners.

I agree with my honourable colleague that the facilitator who made this whole thing happen was probably the appraiser; in fact, was the appraiser. I am aware of the particular practices of the bank, and I am at a loss as well as to why the bank does not disclose the appraisal material to the homeowners.

An Honourable Member: Can you force that, though?

Mr. Radcliffe: I do not think so. No.

Mr. Maloway: Mr. Chairman, I wanted to ask the minister if there was any mechanism to force the appraisal institute to conduct itself differently in terms of what the appraisals can be used for? I am not sure just how they are governed, but there must be something that can be done in this regard.

Mr. Radcliffe: I would hazard a reply to that, Mr. Chair, that probably our federal colleagues in Ottawa would be the appropriate people because this would fall under the management and jurisdiction of the banks. They are the people who pay for the appraisals, although they extract the fees from the applicant, and the appraiser is, in fact, working for the bank in that particular case. So that would probably be the appropriate place to complain or to advocate for a change of legislation.

Mr. Maloway: Mr. Chairman, you know, even as a compromise to the appraisal, because the Appraisal Institute are the appraisers, they make a fee for doing multiple appraisals. I think you could allow them to keep doing their appraisals on demand, so they would not lose business. But the key would be to provide disclosure because everyone knows that two different appraisers are going to come up with two different prices. So, just as a bare minimum, the bank should be required to at least show you or disclose a copy of the appraisal, and if another one is required by the other party to the transaction, then fine, you know at least you can have two to compare.

I know that a lot of the appraisal people--I gather they are human beings and they do not like to be caught blind-sided and find out that one guy has appraised something at 50 and the other one has appraised something at 70. So they like to go into a situation knowing what all the facts are so they can come up roughly the same. So what happens is, once they both know what the ground rules are, they will both come out about the same but, if you send them in blind, you could come up with some pretty widely fluctuating appraisals.

Mr. Radcliffe: I think in this case that I do not disagree with any of the comments that my honourable colleague has made, and I think that this is a very cogent criticism. Unfortunately this is beyond the jurisdiction of my department but, just as a follow-up to my previous remarks as well, I wanted to share with my honourable colleague a letter that went out under the signature of Mr. Storsley, registrar to The Real Estate Brokers Act, dated May 26, '95, and I am quite happy to share a copy of this letter with my honourable colleague.

Basically it just outlines that to the Manitoba Securities Commission warning all registrants to avoid participating in any type of financing scheme which is intended to mislead mortgage lenders. It goes on to describe much of what my honourable colleague has described here before us today. Mr. Storsley sums up by saying: All brokers are directed to give a copy of this notice to their sales agents and to provide appropriate warning to avoid involvement in such schemes. I believe, Mr. Chair, that my honourable colleague says that he is aware of this letter and is familiar with the terms of this letter.

Mr. Maloway: I think the minister would also discover that a good chunk of these appraisals were done by the same firm and by the same people as well. Can he confirm that?

Mr. Radcliffe: We have no knowledge of that because, again, the appraisers are beyond the ambit of our legislation.

Mr. Maloway: There were in fact several appraisers and appraiser companies, but there was one in particular that showed up in more than its fair share of cases.

Well, you know, I think we will just have to wait and see how this develops. I wanted to ask the Securities Commission about the Bombay Bicycle Club and what is going on with that. That is a case where they owed quite a bit of sales tax, provincial sales tax. There were investors who lost a lot of money. That was $300,000, $400,000, quite a bit of money, and I do not know what the Securities Commission did or could have done to save that from happening, but I would like to get some comments and updates on it.

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Mr. Radcliffe: Mr. Chair, my honourable colleague has referred to the financing that was conducted by the Bombay Bicycle Club. I can tell my honourable colleague that the Securities Commission has a practice that encourages small corporations to raise money amongst the public called a limited offering exception, and for small amounts of money--and we are talking about the number of folk that can become involved in such an offering. This can range anywhere from 15 individuals to 50 individuals. The corporation or the entity raising the funds does not need to file a prospectus or go through a lot of documentary formality that is often incurred with a public offering. But in exchange for that, the individual investors must file a notice saying that they are sophisticated investors, and that they do not need the protection of the Securities Commission, and that they have satisfied themselves as to the fiscal viability of the investment which they are making, or that these particular investors go out and get independent financial advice with regard to the transaction which they are anticipating undergoing. At that juncture, after notice has been filed and the investors respond--and it is a limited number of investors who are allowed to respond; there is cap of either 15 or 50.

I would point out to my honourable colleague as well that a private corporation is entitled to have up to 50 shareholders in any given time as long as there has been no public solicitation. But this sort of puts a framework on the whole corporate structure law in our province that the Bombay Bicycle Club was up and running. I can say to my honourable colleague that this is, again, the extent and the nature of the regulation that where a repository for the notice--in this particular case it is a vehicle by which shareholders and investors and promoters can get together. The issue that gave rise to the problem, however, was the nature and quality of how the business was operated, and that I think was the deciding factor of why these individuals lost their money. It was not the way in which the money was raised. It was not the way in which there was disclosure, lack of disclosure or the amplitude of the disclosure, but rather it was the operation of the business. This, again, is something that is beyond the realm of jurisdiction of the Securities Commission.

I guess this goes back to a conversation that my honourable colleague and I were having a few days ago when I was saying that we cannot as a provincial government legislate, as much as we may have compassion for people who lose money in the stock market or lose money in investments, that people shall not lose money or that people shall not invest in risky enterprises. I mean, as we all would love it to be Camelot and all the regularity of Camelot that was in that lovely musical, that is not the realistic pith and substance of our everyday world. So that is the background and the philosophy, I guess, of our government and our department with regard to the issue of the Bombay Bicycle Club.

Mr. Maloway: Just to go back for a minute to the house-flipping ring. Would the minister endeavour to contact the appropriate federal department regarding the appraisal rules and seek to get them changed?

Mr. Radcliffe: Well, I would invite my honourable colleague to do that because I am at a loss as to which department--I can only think that it would be something under the Bank Act--might be the appropriate department of the federal government to contact.

Mr. Maloway: When the minister does find out what the appropriate body is then, would he endeavour to lobby and send a letter on behalf of the people who were the victims here?

Mr. Radcliffe: I do not wish to be combative with my honourable colleague, but, Mr. Chair, I question when we have a cheat who is fabricating appraisals whether the disclosure of the appraisal by the bank to the homeowner would really cure the problem. I, too, am frustrated and agree with my honourable colleague that it seems unreasonable that the bank would refuse to release--and I do not understand why the bank would refuse to release the appraisal information to the homeowner, but I am at a loss from a logical perspective at this point to see that that release of information would cure the problem we suffered at that point in time.

If we can get a nexus there, I would be glad to co-operate with my honourable colleague, but I would be at a loss at this point to make an argument that would be addressed to curing that ill.

Mr. Maloway: On November 15, 1996, I sent a letter to the minister's predecessor, and it was concerning--the Manitoba Securities Commission had been investigating complaints concerning the activities of a former investment advisor, Mr. Douglas Mann, for six years. Mr. Mann was at the time a salesman for Richardson Greenshields, and I have had a number of calls from former clients of Mr. Mannconcerned that the case has been dropped due to the sale of Richardson Greenshields.

I was asking for advisement on the current status of this investigation and how much longer it is reasonable to assume the investigation will take, and I will provide a copy once again to the minister, as this is one of the outstanding--I see the Deputy Premier (Mr. Downey) has left and it is interesting that--I do not know whether it is because of him, but I saw just the other day a list of--and I thought this was kind of a pretty good idea. It was a list of questions taken as notice by different ministers and aged by, you know, almost like an accounts receivable chart.

So we have every question that the ministers have been asked and have not responded to, going back a number of ways. I thought that was actually kind of a pretty good way of dealing with it because we were finding that some ministers, current company excepted, of course, but certain ministers were not being overly quick about responses.

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Mr. Radcliffe: I have for reference the letter that my honourable colleague Mr. Maloway has produced, addressed to Jim Ernst, dated November 15, 1996, and it is a two-paragraph letter which basically says that the commission has been investigating a former investment advisor, one Douglas Mann at Greenshields, and I am supplied by my director a copy of a letter originally executed by J.A. Ernst, my predecessor in this position, dated January 6, '97, addressed to Jim Maloway, which reads as follows: Thank you for your letter of November 15, '96. I am advised by the staff, the commission originally began formally investigating the conduct of Mann, et cetera, and goes on for some two and a half pages.

If my honourable colleague finds the letter insufficient I would be glad to try and amplify it, or if he does not have a copy I would be glad to give him a copy.

Mr. Maloway: Perhaps you should provide me with another copy of that letter. I am sure my staff gave me this letter to follow up on it and obviously they do not have--at least they do not have it in the right file. It got into some file.

Mr. Radcliffe: I can advise my honourable colleague that, as a practice, what I have done with my office staff is that I keep no files in my office. That way they have sole responsibility over every piece of paper that comes into my office. So that is a good business practice. It was a major leap for me as a lawyer because, of course, in a law firm you tend to hoard every single piece of paper, but when I walked into Consumer and Corporate Affairs, I made the decision that I was going to deal on the clean-desk principle. So I force every piece of paper out into my staff and into a file and make them dispose of it on a daily basis so that when I walk out there may be three or four pink slips of telephone messages unattended, but other than that, everything is off my desk. I recommend that process.

Mr. Maloway: That brings to an end my questions for the Securities Commission, and it seems to me that there are a number of questions I had for the Public Utilities Board, and perhaps the Research and Planning division would take those questions and pass them on to the Public Utilities Board or could provide some of the answers because, in actual fact, some of them are of a general policy nature in the area of the gas brokers and the pipelines questions. So I do not necessarily need the Public Utilities Board to be there on a policy kind of question.

So, if we could move on and deal with, well, we have the SOA people here, so maybe we could deal with them and then save a little bit of time at the end for the Public Utilities Board, specifically the pipelines and the gas broker question.

The Acting Chairperson (Mr. Dyck): Is there will then to pass 5.3.(b) the Securities Commission?

5.3. Corporate Affairs (b) Manitoba Securities Commission (1) Salaries and Employee Benefits $1,305,600--pass; (2) Other Expenditures $367,800--pass.

Then, yes, we will move back to 3.(a) Insurance Branch (1) Salaries and Employee Benefits--[interjection] Is it then the will to move on to Public Utilities Board?

Mr. Maloway: No, we will go to the SOAs. [interjection]

The Acting Chairperson (Mr. Dyck): The question the minister has asked is, Trust and Loan Corporations Branch. Could we deal with that one now?

Mr. Maloway: Well, why do we not just leave all that to the end? We just pass the whole thing; whether we finish today or tomorrow, we will just pass everything in 30 seconds.

The Acting Chairperson (Mr. Dyck): So, then, the committee would like to move on to 5.3.(f) Land Titles Office (1) Salaries and Employee Benefits--

Mr. Radcliffe: I think we got Corporations Branch here.

The Acting Chairperson (Mr. Dyck): Moving on then to 5.3.(h) Companies Office.

Mr. Maloway: Essentially, I wanted to ask the same questions of the remaining two SOAs as I did of the first one. We are going to be awfully short of time to do this today if, in fact, we can do it today, but I did want to ask about the Companies branch.

Now, it is a recent SOA and what we wanted to know was--once again, I am doing it from memory, but we wanted the old fee structure before it became an SOA and the fee structure when it became an SOA and the fee structure now, like where it is today; so those three sets of fees, and, of course, I can tell you what the reason is behind that. We want to find out just where the fees are going and what the public now has to pay for the use of this new user-pay system.

Then we wanted to get into the whole question of the computer system that is driving this new SOA and what it is going to mean for the staff and staff positions and so on.

Mr. Radcliffe: Mr. Chair, I am pleased to inform my honourable colleague that, in fact, there has been no change in the fee structure for registrations at the Corporations branch since 1993. In fact, he brings to my attention the fact that perhaps we should be investigating this to see that we are keeping pace with inflation and rising costs. I would thank my honourable colleague for raising this issue because we want to make sure that government keeps pace and keeps competitive, but I must tell my honourable colleague that there have been no changes since the advent of the--[interjection]

I am told save and except, and I would amend my previous remarks by saying that there were three new charges created by the Corporations branch. One was for a charge for facsimile information, and one was for a file summary for a summary page. The director is not aware of the third charge, but these were all five bucks, five bucks, five bucks.

Mr. Maloway: Just to correct any possible misunderstanding that the minister might have here, we certainly do not support any increases in fees. What we are trying to discover here is whether or not these user fees were being increased in an effort to develop a little slush fund for use around election time for reductions in fees.

That is what we were searching for here, is all these little slush funds that over the years have developed in places like Autopac for reductions before an election. The Workers Compensation Board is running projected huge, huge surpluses for 1999 which will culminate in a big reduction just going into the election and other things. So that is what is driving the questions, and we certainly do not want increased fees. We want the fees to stay where they are or be lower, not increased.

So you have answered the question about the fees. Now let us deal with the computer system. What sort of a computer system do you have? Is it year 2000 compliance currently or when will it be, software and hardware? What will this do to your staff components in your SOA?

Mr. Radcliffe: Mr. Chair, I can advise my honourable colleague that the current computer system that we have at Corporations Branch is not 2000-compliant.

Mr. Maloway: Hardware or software?

Mr. Radcliffe: The hardware--no, the software, I guess, is not compliant. Yes, the software is the problem. We are functioning right now under the ISM management mainframe system, and it is about a 10-year-old system. The software was designed specifically for the corporation's registry function. What we are looking at right now is we are anticipating that the solution to our problems will come with the resolution of the whole process of Better Systems.

We are anticipating that there will be a resolution by the fall of 1998, but this is a very complex issue and a multifaceted issue which is looking at and analyzing government's needs right across government for computerization, and we are just one very small cog in the wheel. So, until that is implemented, we are really not in any position to reflect on the impact on staffing, because we are not sure where our functionality will go. Each is related to the other so that anything that we would say now would be precipitous.

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Mr. Maloway: Well, if the software is 10 years old and the equipment is not, well, even if the equipment was bought this year, it is probably not 2000-compliant.

Mr. Radcliffe: It is not.

Mr. Maloway: It is not. So neither equipment nor software is 2000-compliant.

Mr. Radcliffe: I think the problem and I am starting to tread into some information that I am not too comfortable with, but I gather that it is peculiarly a software problem. Mechanically, the hardware that we have can receive and register a date, a two-digit date. The problem, as I understand it, is registering a 00 under the software and that has all sorts of ramifications for repeats and spinning out for the software, which makes the thing fall into a fault mode.

Mr. Maloway: Do you have a team working on this to solve this problem, this year 2000 problem, or do you have a representative on a bigger team?

Mr. Radcliffe: There is a team, a Better Systems team, which is operating across departmental levels that is addressing this issue. It is time sensitive, because I think some of the departments, and I hesitate to say which ones, have to be able to register documentation or database material well in advance of the onset of the year 2000, so therefore our absolute time of change must be the fall of '98 or the close of business of '98.

Mr. Maloway: Well, that is absolutely true because the software programmers, computer programmers, I am told, their salaries are doubling every six months now. I mean, the longer you leave this, if you solve your problem now, if you solve your problem today, you might do it for $50,000; but if you wait until the end of the year, it will be $100,000; and if you wait for six months after that, it will be $150,000.

I think MPIC is one where they are having trouble keeping programmers. I know of one fairly well-known large Manitoba computer company who just lost a programmer to, I am not sure who, but I think somebody in the government, who said they wanted $75,000 or something like that. We are talking about astronomical fees. These programmers are going to make enough money to retire. After the year 2000, they are going to be out of a job, but they are going to have made enough money in the next couple of years to live quite well.

So the argument here is that some departments, I believe in the United States, are quick and are moving ahead with this, and other departments are just sleeping and letting things lie. In the computer hardware area today, as we sit, computers are being sold, hardware that is not 2000 compliant--it is not 2000 compliant--and unless you ask and insist you will walk home with a--and the theory being that the equipment is going to last 18 months anyway, so for home use what do you need to worry about this for.

I thought it was just a software problem too at one point, but it is not. There is something to do with the bias or something on these computers and so the hardware--so anything you buy, unless you make sure it is year 2000 compliant, then you are going to have some real problems come midnight year 2000. So I am trying to find out how serious your problem is, so it is hard to tell because different areas of the government are working at different rates on this, and you have different kind of computer usage, so good luck. I am glad I do not have to worry about this problem. Well, mind you, like I said before, by 1999, the year 2000, we probably will be the government and by then it will be too late. The government will be shut down at midnight.

So, Mr. Chairman, I am being told then that the action that this SOA is taking, we are not going to see what it is until the fall and when it is done it will be 2000-compliant and the jobs that are lost at that time we will find out next year at this time.

Mr. Radcliffe: Well, I would hesitate to agree with my honourable colleague that there will be any jobs lost because, until the functionality of the department--you see, the Corporations branch is basically a registry office, as I am sure you are no doubt aware, and that is for all limited liability corporations, for registrations under The Business Names Registration Act and Partnership Act. Annual returns are filed on an annual basis with the corporations. There may well be additional information, corporate information, that may be required or to be of advantage to the public of Manitoba or the government of Manitoba, and we are moving towards, and I am just sort of broadly forecasting now into the future, we are broadly moving towards a registry function that we have a general registry office which will be ultimately a one-stop shop.

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So all registry functions, whether they be of incorporeal hereditaments or real property--I thought I would get the honourable member for Emerson (Mr. Penner) on that one--or corporations registrations, may well all fall under the aegis of one administration. I do not know at this point, and it is too early to forecast on that. But, when you see a similarity of function, and government wants to design the most streamlined and efficient process possible and yet still give good service to the people of Manitoba, there may be many changes before the implementation of this computer system.

I just also wanted to take the opportunity, Mr. Chair, I noted that my honourable colleague was speaking with some degree of awe about a programmer being able to charge $75,000, and this level of emolument was something so stupendous that they would be able to retire. I would point out to my honourable colleague that $75,000 is a far cry from being a sufficient amount of money on which to be able to retire and live on your investments the rest of your life with the present rate of return which we have in our country now, which is, I believe, around 4 percent or 5 percent, although I know some mutual fund investors are perhaps gaining a higher rate of return. But the real rate of return when you take into account inflation, which is driven by the collective bargaining units that we have and contracts that we have to sign in this country and the ever advancing force of the labour unions which drives up the fans of inflation, we really are forever having to keep ahead of these inflationary forces in our economy which in fact really is a devaluation of our currency. So that $75,000 really does no longer cut it. I would thank you for the opportunity to put those few remarks on the record.

Mr. Maloway: I would certainly like equal time on this matter. I want to clarify for the minister what the person had told me. Essentially what the person was saying was that this was a very difficult period for him in his business because he was losing programming people that he wanted to keep working for him, and he was paying them roughly I believe it was $50,000, and this one had just been stolen away from him just a few weeks ago I gather for about $70,000. The stats that I have read about indicate that every six months, as the date approaches and more people get into the market trying to desperately get 2000-compliant, these programmers are going to be demanding multiples of their old salaries.

What he was saying was that he did not expect that these programmers who did this would be employed after the year 2000, because they would be taking these year 2000 jobs essentially as consultants. There would be so many of them doing this that he would not be hiring this guy back, because if the guy was going to leave him, you know, essentially leave him in a lurch right now and just leave him over a question of money to head out and do these 2000-compliant contracts, then he was not going to take him back because he was not going to spend this $70,000 to keep him right now. He just felt he could not do it.

So that was the reason for that comment. I am certainly not suggesting that the programmers were going to be able to retire, just there would be a lot of them unemployed on the year 2000. The schools are turning them out in insufficient numbers currently, and that is the place to go. If we all had it to do over again, that is where we would head. If we were all in our twenties right now or in our teens looking for a future, it is computer programming.

I think it was Autopac, you know, Autopac has a severe problem with becoming 2000-compliant as well, and they are having a hard time keeping their programmers. So what do we learn from that experience? What we learned from that experience is the following, that if you have multiple departments in the government, the department that moves--like in the United States I believe I read an article in January or thereabouts and I think it was the Social Security department, or one department had started to look at the year 2000 problem back a year, two, three, four years ago, as early birds. They have got their system running perfectly, and you know the cheques are going to go out January 1, 2000; there is not going to be a problem.

But a lot of departments have just ignored the problem hoping it would go away, and now they are going to be caught in that bottleneck in the rush. That is all I have been trying to do is to alert the Government Services minister (Mr. Pitura), if he is not up to speed on this stuff, and he is brand new to the ministry as well, that we do not want to be coming down to six months or a year before year 2000 and have to run around and pay excessive amounts of essentially taxpayers' money trying to upgrade this system and get it operational by the year 2000. That is all we were saying, because we know in the United States and in the rest of Canada, there are all sorts of problems with this because people are just saying, ah, it is off in the future. It is still a couple of years away and if you are a government and you are thinking about only what is going to happen today and you do not care that you might not even be around the year 2000, then, yes, leave it for the next guys to sort it out.

We do not want to see that happen, so we want to see a responsibility. We want to see people starting early on the problem, recognizing the problem, and I am not in my mind right at the moment convinced that this government really kind of has a handle on the scope of the problem. I will tell you why, because the departments each on their own have been buying computers that are not necessarily compatible with one another over the last few years. I mean, take a look at what you have got.

As a matter of fact, you know, Mr. Minister, when the tender was announced last November, the government did not even know how many computers it had. It is only when they sent out the tenders and that we find out that out of 8,000 computers--and I do not have the figures here; I can get them for you tomorrow. I can show you department by department how many computers they have. Did you know that there are only about 300 out of 8,000 that are even Pentium-based computers? You know, anything that is older than Pentium is pretty old at that point. The majority of your computers, you know, there are 2,000 of them that are 286s. I mean, where would you find a 286 today?

There are another couple of thousand that are 386s. Where would you find a 386 today? Then there are another couple of thousand that are 486s. So you are talking about ancient equipment here.

Mr. Radcliffe: I echo the sentiments expressed by my honourable colleague and, in fact, it reminds me of the remarks of former Prime Minister Kim Campbell, who said that we were moving away from an assembly-line economy in Canada and moving to that of an information-based technology. These remarks are echoed by a rather prominent author and person who comes on speaking tours to Winnipeg, a very prominent individual by the name of Nuala Beck.

So I see that my time is up, but I thank you very much, and I just want to re-emphasize to my honourable colleague that change is an imperative and is perhaps the one constant to which we are all subject, and we will endeavour to continue good government to the people of Manitoba.

The Acting Chairperson (Mr. Dyck): Order, please. The hour being 6 p.m., committee rise.