The Acting Chairperson (David Faurschou): Good afternoon. 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.

As had previously been agreed, questioning for this department will follow in a global manner with all lines of items to be passed once questioning has been completed. The floor is now open for questions.

Mr. Jim Maloway (Elmwood): Mr. Chairman, I believe the previous day that we were in Estimates we finished the day by talking about–there was a question to deal with the Insurance Branch I believe. I am not certain that I got complete answers on the questions that I was asking there. Can the minister confirm that the answers were provided?

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Hon. Shirley Render (Minister of Consumer and Corporate Affairs): I do not have a copy of Hansard here in front of me, but I think I answered all of the member's questions. So perhaps, if I have left one dangling, he can just restate it.

Mr. Maloway: Well, regardless, there were a number of questions that I had concerning the Insurance Branch. One of them was to do with the whole area of demutualization, which is a process now that has been, I guess, around for a number of years, at least talked about for a number of years. It is only in recent months that the press have taken an interest in it, and there have been articles appearing in the last few days about this process. So I have asked a number of questions about the issue at this point.

What I am interested in knowing, the minister stated that there are no studies that have been done to analyze the effects of the process on Manitoba consumers. I think that should be done, that there should be some effort made to do an analysis. In particular, I think we would be interested in knowing what the net effect of the process would be on the Manitoba economy. To do that, we would have to look at the number of policyholders in Manitoba for each of the companies and determine how much money would be coming to the policyholders in Manitoba versus the amount of insurance company investment that is in Manitoba and how much of it may be at risk if in fact the insurance company, as a result of this process, becomes an internationally controlled company.

So I would like some response from the minister about this process as to what is being done by her department and what has been done. What is being done and what she is planning to do?

Mrs. Render: Maybe just generally I will just sort of restate that the department as well as the Securities Commission is unaware of any studies that have been done on this matter. However, I think it is fair to assume that, by being in a position to raise additional monies for operations, insurance companies will have more money in which to invest in their operations. But actually, the whole question of demutualization and how this will affect the economy, in a sense it is a difficult issue to address.

Again, I must reiterate that the demutualization process is being handled by the Office of the Superintendent of Financial Institutions federally, and one of the things that is, I guess, up in the air is that we do not know whether the people will take shares or whether they are going to take cash. The policyholders of Mutual Life, for instance, have the option of taking either cash or shares in the newly publicly traded company, and the values of the shares would depend upon the listing price of the new company's shares. This will not be released until the initial public offering of the listing of the company. In other words, the companies also do not know exactly how much each policyholder will receive.

Personally, I have got a friend who has been told that he is going to receive $27,000, and he has been given the option of whether or not to take that in cash or in shares. So there is still, I think, a lot of information that is literally up in the air. The amount that a policyholder will receive is contingent upon the values currently built up in the participating insurance policies that they hold, so for all of these reasons it is not possible to know just sort of a finite answer of what effect demutualization might have on the Manitoba economy.

As I say, presumably if there is more money available by the insurance companies, that means more money that they will have to invest in their operations. If there is more money in the pockets of the people who are benefiting, that means an infusion of cash into the economy of Manitoba. If the newspaper reports are to be believed, there is some $10 billion, I think it is, $10 billion, $12 billion, $13 billion worth that is supposed to come out of this demutualization scattered across the country. Obviously, some of those policyholders are in Manitoba. So that means money in the pocket of Canadians, money in the pockets of Manitobans.

Mr. Maloway: Mr. Chairman, I would like the minister to tell us what the government's policy is regarding demutualization. It is not something that just came about in the last few days. The process has been talked about now for I guess two or three years, maybe even longer than that. So what is the policy of the government on this issue?

Mrs. Render: Again, this is not something that is happening with companies that are registered here in Manitoba. It is a federal matter.

Mr. Maloway: Well, the government makes representations and takes policy positions on all sorts of things that it feels it does not have control over, and in this there will be an effect on the Manitoba economy. So if it is such a big benefit to the Manitoba economy, then clearly the government's position should be in support of the policy. It has to have a position one way or the other on it.

Mrs. Render: I guess all I can say to the honourable member is this is not an issue that I, myself, have discussed with my colleagues, simply because it is not an issue that we are monitoring in the sense that the federal government, through the Office of the Superintendent of Financial Institutions, is monitoring the process. As I stated last week, Manitoba has no provincially incorporated mutual life companies. This whole process is being overseen at the federal level, and this is not something that we have a control over.

Mr. Maloway: Has the minister had any meetings or made any representations to the federal authorities on this issue?

Mrs. Render: I, myself, have had no meetings. The superintendent also has not had any meetings but has reviewed the process and is satisfied with the principles that have been identified that must underpin the demutualization process for Canadian mutual life companies.

Mr. Maloway: The ministers from the provinces meet periodically to discuss issues of common concern. The superintendents of insurance meet I think annually to discuss matters of common concern. Are you telling me that in all the national meetings of ministers over the last three years plus and the last three or more meetings of the superintendents of insurance that this has not come up at all in a discussion?

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Mrs. Render: Mr. Chair, I have been advised that for the superintendents' meetings, their concerns are flowing mainly around whether or not policyholders are being treated fair and equitably; that is the focus of their discussion. They feel that the principles that have been laid down will satisfy that requirement. Being a relatively new minister, I cannot really speak as to what exactly went on at former ministers' meetings, but my understanding is that this has not been an issue that has been discussed in other provinces. The whole question of insurance, the regulation of insurance companies, does not necessarily fall under Consumer and Corporate Affairs. It sometimes falls under other departments. So not necessarily is this a topic of discussion, because it is not an area that always falls within the Minister of Consumer Affairs' portfolio. So it is not necessarily a common area which I guess is perhaps one of the reasons why it has not been a topic of discussion or not to my knowledge.

Mr. Maloway: Mr. Chairman, I find it very surprising that if 2.5 million Canadian policyholders are being affected–we are talking about $11.5 billion, I believe, just among the five insurance companies that are planning to proceed with this at this point. It has been called, whether correctly or not, the largest single transfer of wealth in history. I mean, I know that that phrase has been used to describe the impending transfer of wealth for the next 20, 25 years in Canada where the older generation dies and the younger generation inherits. So I do not know how big a figure that is compared to this, but certainly this is currently being called the largest single transfer of wealth in the history of the country. So surely, the ministers, and if not the ministers–but I would find that very surprising–certainly the superintendents of insurance, I would think, across the country would be discussing this matter at their annual meetings. I would find it very surprising that this has not been on the agenda probably many times, and if not, why has it not been? Why has the Manitoba government not brought this up for the purposes of discussion?

Mrs. Render: Mr. Chair, I guess the short answer is simply that this is a federal matter. There are always enough things to take up the discussion time, whether it is at a ministerial meeting or superintendents' meeting or whatever kind of a meeting, than dipping into another jurisdiction. So I would suggest to the honourable member that I am sure at the federal level this has been discussed. Your questions, regretfully, cannot be asked to a federal member during this particular process, but because it is a federal matter, that would be where it would have been discussed. There is, I am sure, enough to keep our provincial people fully occupied during any conference that they might have.

Now I would just like to read something into the record. It is from Finance Canada dated October 30, 1998, and again, I caution the member that this is at the federal level. I am quoting: In developing the proposed demutualization regime, we had the benefit of examining the approaches taken in other major countries including the United States, United Kingdom and Australia, said Secretary Peterson. This is Secretary of State Jim Peterson, International Financial Institutions. Based on the experiences in those countries and our extensive consultations, we believe that we have developed a comprehensive and strong regime in terms of policyholder protection.

I just say once more to the honourable member that governments are often accused of duplicating, of wasting their time, of stepping on the toes of other levels of government, and I think when another level of government is overseeing a process, is undertaking whatever it considers to be adequate studies and adequate consultations, as I say, totally monitored by the federal level, that is not up to us to be peering over the shoulder of another level of government in this particular instance.

Mr. Maloway: I do agree that duplication is not good and should be avoided as much as possible in the interests of efficiency. I do know that in the last year or two there has been talk about a national securities commission to deal with securities issues across the country. We will deal with the securities commission another day when we can talk about what has been happening with that. Has there been any interest? Have there been any initiatives? Have there been any moves in light of what the minister just said about avoiding duplication and increased efficiency? Has there been any initiatives among any of the ministers across the country to look at a standard national insurance regulatory body?

Mrs. Render: I have been advised that the Canadian Council of Insurance Regulators has been working to harmonize regulations in forms. Really the focus is to make it easier for companies that do business in a variety of jurisdictions. I believe this is consistent with what the Securities Commission also does.

Mr. Maloway: If they are contemplating ending some duplications and allow national companies to operate, I guess that is the goal, to operate right across the country with uniform rules. How will that impact upon jobs in Manitoba?

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Mrs. Render: I am not too sure I understand the question. I do not see that it would impact at all.

Mr. Maloway: Well, it certainly does whether right or wrong. It does have the effect. On the one hand you want to strive to reduce regulations. You want conformity across the country. You want to make it easy for businesses to do business, so that is one of your goals. Unfortunately, sometimes when you do that, it results in loss of control if you give up–sometimes not necessarily so–regulatory control in certain areas; so you lose some control there.

The other problem that surfaces is that if it becomes easy for the company to do business, then they can, in fact, bypass Manitoba. I will give you an example. If you allow companies to operate, for example, out of Toronto and not license people in Manitoba or Saskatchewan or any other province, then they can simply set up a toll-free number and operate the entire country just out of Toronto or Waterloo or wherever they operate from. So insurance companies, provincial insurance regulators have been very jealous about guarding their turf.

For example, we have a company in British Columbia and it wants to operate in Alberta through a toll-free number so Alberta residents can phone in on a toll-free number and get their quotes, the insurance company will be much more efficiently run by doing that. But Alberta says, no way; we want those agents to be licensed here in Alberta, so we create jobs in Alberta by doing that. If you have a company that operates in Manitoba, and it has a hundred jobs here, underwriters and all, the types of jobs that we would have in the industry, what happens if you eliminate the regulations? It can be much more efficient for that company to simply go and close down shop here, eliminate a hundred jobs and maybe hire two or three people somewhere else to answer the phones and still operate here.

It is the same situation, Mr. Chairman, that we had with regard to breweries for many years. For many, many years, it was a Manitoba requirement that if you are going to sell beer in Manitoba to the liquor commission, you had to have a brewery in Manitoba. It did not make sense ultimately for these breweries to do that because they had inefficient operations, and I guess it was not bad years ago when you had dozens and dozens of breweries. But at the end of the day, when you had in the United States consolidation factors where huge breweries can operate, I am not sure which one is in St. Louis but there is a huge one, it maybe Coors in St. Louis that can produce for the entire country, then little breweries become very inefficient.

So that was the rule in Manitoba and I am sure other provinces, too, that if you are going to sell beer in Manitoba, you must have a brewery. At a certain point, I think in recent years, that rule was given up on and you see what has happened. There is now hardly any breweries in Manitoba. They are allowed to close but they are still allowed to sell into Manitoba. It is the same scenario with the insurance industry.

I am not saying one is right or one is wrong. I am saying the logical extension of giving up the regulatory powers and allowing easy access to the Manitoba market, the end result will be that one jurisdiction in Canada will have all of the head office jobs, and what Manitoba will have is just a little branch plant office with half a dozen people working in it. What I want to know from you is what is the state of affairs with regard to that whole issue, and what are you planning to do about it, if anything?

Mrs. Render: I think perhaps the member might be confusing harmonization with elimination. As much as I am for eliminating regulations that do not serve a proper purpose, I am certainly not in favour of eliminating regulations that do the job that they were put into place for. So when I talked about harmonization, it was harmonization of regulations and forms, so that instead of one company, whose head office might be in Toronto, having to read through maybe 10 different forms to operate in 10 different provinces, there is one form. It was not a matter of giving up the regulation, or saying to the company that they did not have to fulfill certain requirements to be doing business here in Manitoba.

So I guess I am back to my first statement. I do not see how harmonization or allowing a business to set up and operate here in Manitoba is actually going to take away jobs. If you make things easy for a business so that they are not jumping through a million hoops, businesses are quite happy. It is one of the things that I hear all the time, and I have heard it from the moment I was put on the reg review committee: make things easy for us, do not make us go to 10 different stops to fill out 20 different forms that are confusing, that are pages long, that are in small print, that do not make sense. Make it easy for us.

So harmonization, I think, is a way to make it easy for a business that wants to operate in more than one jurisdiction.

Mr. Maloway: The minister can do all the harmonizing she wants, and I agree with that. I am just concerned about job losses in Manitoba. Can the minister guarantee us then that there will be no job losses in Manitoba in the Manitoba insurance industry as a result of her harmonization efforts?

Mrs. Render: I do not think any minister, at any level of government can ever guarantee anything in this day and age, whether it is jobs, whether it is whatever. I think all of us want to make sure that there are jobs, whether it is for our young people, whether it is for those that are halfway through their working life, or whatever. Nobody wants to deliberately try to force somebody out of a job, so for the member to ask whether I can guarantee something like that, I just say that, speaking in a very general sense, whether I would be the Minister of Consumer and Corporate Affairs or the "minister of jobs," if there were such a minister, I do not think even that minister could guarantee that there would also be X number of jobs in a particular field.

Mr. Maloway: Then would the minister guarantee that there will be no investment losses from insurance company investment to Manitoba as a result of the demutualization process that is currently taking effect?

Mrs. Render: Again, I think the minister is asking me to guarantee things which I have no control over. One of the reasons given by insurance companies for demutualization is to permit insurance companies to issue shares to the public by way of a prospectus. These shares would be tradeable and, in all likelihood, they would be listed on one or more stock exchanges. As I said earlier, I think it is fair to assume that by being in a position to raise additional monies for operations that insurance companies will have more money with which to invest in their operations.

Mr. Maloway: I think we can probably solve part of the problem now if the minister would agree to bring or try to get this whole issue of demutualization on the agenda for the next minister's meeting, or that the Superintendent of Insurance would endeavour to put it on the agenda of her next meeting with the superintendents with the goal to attempt to find out whether there will be any net losses to Manitoba as a result of this move. I mean, I think it is probably getting a little late in the game to be doing this. This should have been done a couple of years ago, but what I think should be done is that the department should ascertain what number of Manitoba policyholders there are that are affected by this. She has already indicated that at this point she really cannot tell how much money they will be getting because some may elect shares versus the cash payout, but she certainly could from the federal authorities get a good idea as to what the extent of the investments are of these five companies in Manitoba to begin with and what is likely to happen as a result of the demutualization process to these investments in Manitoba. So I ask her whether she would make an attempt to do something about this issue.

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Mrs. Render: I guess, first of all, I will start by saying that we do not control what Manitobans do with the money that they are going to receive, nor do we tell the federal companies what they should be investing in. But back to perhaps part of the member's question is that the federal government's overriding objective, as stated by Finance Canada in developing the proposed demutualization regime which is largely set out in regulations, was to ensure that policyholders are protected and receive fair treatment. Now I think it is also important to note that fundamental to this is that it is the policyholders that must approve of any proposal to demutualize, so they are having a say in what is happening.

In addition, the regime contains a number of other measures to protect policyholders' interests including the requirement for independent, expert opinions on the security of policy benefits for policyholders and on the fairness of the allocation of the companies' value among policyholders.

Mr. Maloway: The minister's Superintendent of Insurance annual report for 1998, page 5, clearly indicates that her department is responsible for mediating disputes between consumers, agents, adjusters and insurance companies. So it just seems reasonable to me that if we are talking about, with these five companies, 2.5 million policyholders just with these five, that that has got to be quite a number of Manitobans. Based on the very first meeting where the shareholders did vote in fact to demutualize, at that meeting there were a few people that were opposed and upset by this move. So it stands to reason with this number of people that will be affected that the minister should be prepared for quite a number of inquiries and complaints and disputes that should arise in the future between the consumers and those insurance companies. So what is she doing to anticipate this possibility?

Mrs. Render: I guess, whenever you have changes of this magnitude, there are always going to be people who are a little uncertain or unsure or perhaps afraid. I do not know that you are ever going to get 100 percent agreement on anything. But, again, I must reiterate that there is a regime in place that the companies must follow. Converting companies must describe in the information sent to policyholders the measures they have taken or intend to take to provide policyholders with information on the proposed conversion, with an opportunity to raise questions or concerns about the proposal. These measures may include toll-free lines, Internet sites, advertisements in widely circulated publications, information sessions. OSFI will oversee steps taken by the companies to communicate with eligible policyholders. OSFI may order companies to address the concerns of policyholders through measures such as holding information sessions or sending additional information to policyholders, if it is the view that policyholders should be provided with additional information.

So, again, the eligible policyholders will have an opportunity to have their say in this matter.

Mr. Maloway: I would like to ask the minister then: how many complaints does her branch anticipate to come out of this process?

Mrs. Render: I do not know that I can give an answer as to how many complaints because, interestingly enough, we have not been receiving any phone calls about the process. Usually, if people are extremely concerned, they will make a phone call and try to gather some information, but, as I say, we have not even received those types of phone calls.

Mr. Maloway: I would like to ask the minister if she would develop a position either for or against or neutral on this issue–because right now she does not have any position on it–whether she would develop a position and let us know what it is?

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Mrs. Render: I am not too sure that it is appropriate for this department to develop a position. As I stated earlier, policyholders have a say in this matter, and once again, these are companies which are incorporated at the federal level. They are being monitored at the federal level, and I do not see that it is up to this department to be developing a stand at this particular stage. Perhaps, if we see problems coming out of it or as things move along a little farther, it may be wise for us to develop a stand, but I do not know that there is enough information or things have developed far enough for us to take any sort of a stand. This appears, from the information that has been given out, to be going to be beneficial to policyholders and the companies themselves, and until we have more information on hand, I think it would be unwise to take a stand with not enough information.

Mr. Maloway: The other day the minister provided an answer which would seem to indicate anyway that there was no possibility of corporate greed being the order of the day regarding the demutualization process when I believe she said that the corporate executives were not permitted to benefit or were not permitted to be shareholders in this process. If that is the case, I think that is fine. That is what we would want to see. But my information, from somebody who is fairly well known in the industry, who actually has made speeches on this subject to different organizations and so on, tells me that part of the push and desire for the demutualization process is the idea that the presidents and the executive officers of these companies will be on a more even playing field with other captains of industry and their banking colleagues in that, rather than earning smaller salaries, they will, through a process of stock options and much increased salaries, be doing very, very well compared to where they are right now.

The argument that has been advanced to me is that, yes, the policyholders will benefit by this move, but in reality the management and the boards of these companies will become much, much richer and enriched by this program, very similar to what happened with the Manitoba Telephone System whereby the president and vice-president and some of the other president's men, over the course of one or two years, were able to, in effect, get themselves what amounted to million-dollar packages with share options and much increased salaries as a result of the privatization initiative.

If she is telling me that this is not the case, that in all five cases so far this has been prevented, then I would like to see some evidence of that because clearly that is not what I have gotten through the Manulife website nor with discussions with the national insurance people, the financial institutions people in Ottawa, and the person that I had mentioned to you earlier who is quite knowledgeable about this area and makes speeches on this subject. Certainly what I have been told is that in fact this is a classic example of corporate greed at the highest levels.

Mrs. Render: Actually what I will do is check to see whether this legislation has, in fact, gone through, but I have before me a bill to amend the Insurance Companies Act. Under Restrictions on Benefits, 12, subsection (1), subject to subsection (2): a converting company shall not provide any director, officer or employee of the company with a fee, compensation or any other consideration in relation to the conversion of the company other than: (a) the regular compensation provided to the person in that person's capacity as a director, officer, or employee of the company; and (b) any benefits provided to the person as an eligible policyholder.

Now this, as I mentioned to the honourable member, is a federal bill, and that was introduced last fall. I will undertake to verify that this legislation did or did not go through.

Mr. Maloway: Well, I think that information, if true, certainly will go some way to alleviating some concerns that I have and a number of people I know have. Certainly I will make the effort to pass that information along so that people are not making speeches to various organizations saying that there are going to be benefits when in fact there are.

But, clearly, that, I guess, ties into a larger issue. For many years critics of corporate structure in North America have looked at Europe and, I believe, Japan, but certainly Europe–I believe Japan as well–where company presidents really do not earn excessive amounts of money. It seems to be a North American phenomenon that you have. I wish I had the figures here, but just the other day I saw the old figures for the president, not only the president but the board of directors of MTS, and what they got before privatization versus what they got after privatization. It was just a whopping increase in salary. It was from, say, $300,000 to $600,000. So their salaries almost doubled, and the stock options, of course, were astronomical. These benefit packages that the corporate executives have seem to me to be peculiar to North America. Why that is, I do not know. Perhaps there has to be some sort of federal government initiative, both in the United States and Canada, to put some sort of limits on what these corporate executives get, because it is fairly obscene in our society to have corporate executives actually getting incentive bonuses to reduce staff.

So what you have is a number of $10-, $12-an-hour workers being put out on the street after 10-20 years of work, and the corporate executives getting a couple of hundred thousand dollars in incentives for doing that. That is just not the proper way. I do not believe the average person believes that that is a proper way for the society to operate. If in Europe and in Japan and other countries you could have companies being run with a very small disparity in wages between the worker on the floor and the top managers, then I would think that is the way to go.

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Now I know that the minister cannot solve that problem today, but certainly that is something that we should be looking at. If it were the case that the executives were planning to make big money because of this, then I would expect the minister to identify that as a problem and put it on the agenda of the ministers' meetings or issue a press release or do something anyway to indicate that at least the government of Manitoba does not support activities such as this. So perhaps if the minister could follow through and just make certain that this legislation has passed and just ascertain that there will not be a big issue here of corporate greed, then this will go a long way to solving part of the problem. I will say though that I thought at that meeting in Ontario a few days ago, this was an issue at that time, as well.

The other issue that is important in this whole process of demutualization is the whole area of the loss of control. The minister will know that while a number of these companies have been mutuals from the very beginning, many of them formed in the early 1900s, late 1800s; in fact, I am told there were a number of companies that were in fact private companies before, and in the 1960s they turned themselves into mutuals so they could not be targets for takeovers. So what they are doing now is in fact opening themselves up for the take-over market, and that can work out okay, I guess.

If you assume for a moment that the company has a retained earnings account of–I am not sure what these companies would have–but assume that if there are five companies and they are looking at $10 billion, they are fairly substantially reserved up in the retained earnings department. The question is why are they demutualizing in the first place if they are simply going to become take-over targets? I mean, what they are actually doing is they are flushing out their retained earnings, and they open themselves up then to become take-over targets from other interests who may operate them in a different sort of way, may in fact centralize them in Montreal or Toronto or Vancouver and shut down local offices. I mean, we have no idea what is going to happen. The control of the Manitoba Telephone System in terms of the shares, while they were sold to Manitobans, within days I believe, days or weeks, the majority of the shares became owned by people outside Manitoba, and that is what is going to happen here.

What you are going to have when you demutualize Manulife, which is one of the first of the five to move, is that these shares will be traded and traded back and forth. The original people who get these shares, do you think they are going to hold onto them for any length of time? Not at all. A lot of people are going to take cash right from the beginning, and a number who take the shares are, in fact, going to trade in the shares within the next few months or years after they get the shares. It is conceivable that most of the shares of these companies will be owned and controlled off shore. Is that what we want to happen?

So I do not really buy the argument that these people give that they have to grow larger or fail. I mean, right now they are mutual companies, they cannot be taken over. What is the problem? Right now they are protected because they are mutual companies. They have $11 billion between the five of them that they are now going to give out to the shareholders. So tell me what they are going to gain by going public. I mean, it seems to me that going public is really designed for somebody who needs cash. You know, the Chairman or myself or someone else who needs cash may go and float an IPO on the stock market to raise money because neither one of us have the cash to set up the company.

We are talking about companies here, Mr. Chairman, with $11 billion that are sitting there invested right now. So why are they turning themselves into takeover targets by becoming publicly traded companies? Why are they giving out their $11 billion in the hopes that, what, they are going to be taken over and there will be more cash coming in? They are going to do what? Merge with another company, be taken over by another company, probably a foreign controlled company?

I mean, what you are going to see in the space of four or five years is not five companies. You may see only two or three companies, maybe only one company. Maybe all five of them will be controlled outside of Canada. The result will be perhaps less jobs in Manitoba because of this process. So I would like to know where we are going here. Can the minister tell us where we are going?

Mrs. Render: My understanding is that the insurance companies want to convert into share companies in order to be in a position to raise additional money by public offering of shares. These companies, I have been told, feel that they will need substantial investment over the next number of years in order to compete with other financial service providers. I do not know, but this may result in these companies expanding the types of financial services provided beyond the traditional insurance products.

I really cannot say anything furthermore than that, Mr. Chair, but as the honourable member knows, insurance companies that have not demutualized are limited in their ability to raise money. So, as I say, this is one way that they can maybe make sure that they are in place for the future.

Mr. Maloway: I know that it becomes at some point a philosophical question to be debated. I am simply observing what is in the process of happening with the Manitoba Telephone System and suggesting that the same will happen here, that in fact we will have fewer companies rather than more companies.

I think part of the problem is that Canadians in some ways do not like the idea of having five huge banks. In many cases they think that the banks are too big the way they are, that there should be more banks, should be more competition in the banking business. What the federal government is doing here is they are opening up the potential for there to be fewer companies rather than more.

What you will see happening is right now, you have five big, protected banks. I do not know how much competition you are seeing with the banks these days, but you will have these insurers doing the same thing. They will become private stock companies. What will happen is they may be bought up by the banks. So you will have fewer. There is no doubt in my mind that you will have fewer companies. There is a consolidation that is occurring in the industry and probably worldwide. This is all tied into the globalization of business. That is where this is headed.

I understand that the federal government has control of the agenda here. That is quite clear. But that does not stop the minister from becoming active here, doing her studies to show what the net effect is going to be to Manitobans and look at the whole idea as to whether it is good for the Canadian economy, is it good for the Manitoba economy, getting her position out early as opposed to sitting back and just being in a reactive position and saying, well, there is nothing we can do about it, this is beyond our scope and control, and it begs the question, well, why are we in the business in the first place? Why do we even have a regulatory body then if we are not going to take an active interest, especially in an area where we have already indicated that we are looking at 2.5 million policyholders and $11.5 billion in a move that has been called perhaps the largest transfer of wealth in the history of the country. Gosh, this is not some little, isolated issue here. This is a huge issue, so regardless of whether she has direct control or not, I think that it is incumbent upon her as the minister and the government to be taking some position here, even if it is only to say that they think it is a wonderful idea, because I am sure they do. They think it is a wonderful idea and that it should be proceeded with, with the greatest of speed.

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Mrs. Render: Mr. Chair, well, I guess it would be safe to say that we are satisfied that safeguards are in place and once again, I would say that it is the policyholders who have the final say, and I hope the member opposite is not saying that he thinks that government should have the final say. Policyholders have the final say. I am just reminded by staff that once again the conversion proposal must be approved by the policyholder, so if they believe, having read through all of the information that has been sent out to them and I am sure that they will be discussing this and asking questions; if they feel that this is the proper way to go, then they will vote in that particular manner, but policyholders do have a say in this, in fact, have a final say in this.

Mr. Maloway: Mr. Chairman, I would like to move on to other areas of the branch. Page 38 of the annual report under client services indicates that the Insurance Branch handled 303 complaints last year. I would like to ask whether that number has increased or decreased this year.

Mrs. Render: We have 40 complaints, oh, 40 more.

Mr. Maloway: These complaints then, could the minister give us some idea as to what sorts of complaints we are dealing with, what the resolution is of them, I mean, do they all get resolved? I guess that is probably impossible that they all get resolved, but what is the percentage of successful resolution?

Mrs. Render: The department has been tracking the successful resolutions; 58 percent have been resolved. The complaints really run the gamut from just simply inquiries to some people who feel they have been treated unfairly, or others who believe they have problems with their adjusters. I think, if the member has his book in front of him, he will see on pages 42-43, you can get a sense of the types of complaints.

Mr. Maloway: We will get to those pages, I guess, in a couple more questions. I would like to ask the minister, also on page 38, the recommended capitalization limits for the Manitoba incorporated insurers were to be increased from $3 million to $5 million. I ask, why did that happen? Has this been done, and are all of the companies in compliance?

Mrs. Render: The legislation was changed and, for the life of me, I cannot remember whether that was last year or the year before. Perhaps the honourable member's memory is better than mine, but it is just within the last year or two. One of the changes was that a new company to be registered had to have $5 million to incorporate, that the $3 million was just simply seen as too low in today's world. Existing companies were grandfathered, but they are being urged to grow their capital to $5 million.

Mr. Maloway: Oh, I see. The wording is "recommended that the limits for Manitoba be increased from $3 to $5 million." So what she is saying is if a new company sets up shop here that they are required to start with $5 million. I recall it being $2 million. In 1981, I believe it was changed and increased to $2 million at the time. So I see now that inflation has taken hold here, and that we are looking at $5 million. We have no problem with that at all. I think that is probably quite low the way it is. It should be even probably higher than that.

The question is then: are there any companies then that are having difficulty raising the capital? There was a reason why it was done, that obviously you felt either it was happening in other provinces or there was a certain problem that precipitated this move. Governments do not usually just introduce legislation for the fun of it. It is a difficult process, and legislation usually comes about when there has been a problem that has been severe, and to solve the problem we change some legislation and take some corrective action. So there has to be more to this than just a simple, well, we just woke up one morning and decided that $5 million sounded like a nice, round figure where $3 million was okay.

Mrs. Render: PACIC encouraged this change, and I believe the $3 million had been in place for a number of years. Perhaps the honourable member, again from his memory because he is in the business, might be able to advise me, but my understanding is that the $3 million had been in place for quite a while and it was felt that $5 million would be better for this day and age.

Also, before I forget, apparently this change had taken place in other provinces as well.

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Mr. Maloway: So, basically, this is just part of this standardization of rules and regulations across the country then. Manitoba wants to be in step with other provinces. Would that be a fair assessment of why this was implemented?

Mrs. Render: No, I would not describe this as harmonization. We wanted to have absolute minimum requirements in place.

Mr. Maloway: How long do the companies have? They are being encouraged to increase their capitalization to the $5 million, but how many of them are at the $5 million right now, and how long will it take until the rest of them get there?

Mrs. Render: I have been advised that we have not set any firm time lines on this.

Mr. Maloway: Well, if you have not set any time lines, then perhaps it will never happen.

Mrs. Render: Mr. Chair, no, it is discussed each year at the annual solvency examination. I guess maybe the best way to answer the question is simply to say that there is no requirement. That would be like changing the rules of the game once the game has started. So there is a close monitoring of the companies which do not have a capitalization at the $5 million.

So, as I say, it is discussed each year. There is close monitoring, but there is no absolute requirement for those companies who have been grandfathered to change that. There is an encouragement for them but they are monitored.

Mr. Maloway: I understand that there should be a phase-in period that if $3 million was okay for a number of years and then $5 million becomes the norm, that the existing operators should be given some sort of a phase-in period. But one would think that would be a definite, there would be a definite five or 10-year phase-in period, because if that were not the case then it is conceivable that what will happen three or four years from now when $5 million is not enough–because we do not have an accelerating factor here, an inflationary factor.

So what happens in 10 years when $5 million is not enough and we raise it to 10? Do we grandfather in all of these $5 million operators and we leave the $3 million where they were? Over the case of 30-40 years, then you really could have some problems on your hands. So I would think that there has to be some sort of a phase-in where there is going to be an equal, level playing field for everybody at a certain point in time.

Mrs. Render: I may have missed part of the member's comments, so if I am not answering all of his comments maybe he would just repeat them. The legislation only addressed newly incorporated companies. The existing companies have been in business for a long time. They do have a track record, and as I have been advised, their solvency is monitored. It is not as if they are on shaky ground.

Mr. Maloway: I understand that and I just think that a level playing field would be the ideal situation and that if you are going to change the rules, then you should probably at least allow a phase-in period but make certain that at the end of the period that everyone is on equal footing.

But, having said that, I would like to ask a question regarding page 39, I think it is, dealing with the number of licensed companies. It indicates that there are 246 federally registered companies and 37 provincial. Now I am sure there is a simple explanation for this, but I noticed in the annual report I got a different figure when I looked in there on page 1 of the '98 superintendents' annual report. There they list provincially incorporated companies, 38 of them, I believe. Oh, I see, and it says 37 in the report, but then when they bring the classification down–I see, okay, I think I have part of my answer here. Later on in the report it indicates that there are seven.

So just what is the explanation for this discrepancy? I know there is supposed to be seven provincially licensed companies. At least, that is what I thought, and then in two other parts here, we indicate that there are 37 or 38 of them.

Mrs. Render: Mr. Chair, I have been advised that there are seven home-grown Manitoba incorporated companies, and the other 30 are extraprovincially incorporated companies.

Mr. Maloway: So they are extraprovincial that are registered in Manitoba.

Mrs. Render: Yes, the member is correct.

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Mr. Maloway: But that is not what it says in the department's '98 annual report. It says as of December 31, 1997, the 38 provincially incorporated companies are classified as follows: B and C, 22. They tally up to 38.

Mrs. Render: I think where the confusion is coming, and I can certainly understand the confusion, is it is the word "provincially." They were incorporated in a province but not necessarily in this province.

Mr. Maloway: I thank the minister for that clarification. That makes sense now.

On page 41 of her annual report, they give a description here of agent's licence cancelled, then suspended, then revoked. What is the difference between each of these? What is the difference between cancelling, suspending or revoking? I understand "refused" is the next category; now that makes some sense. But what is the definition of "revoke," "suspended" or "cancelled," the difference between them?

Mrs. Render: A very good question. I think there may be a problem with the terminology. I have been advised that these are the terms that are used in the act, but you will see that "cancelled" has zero, and I think that is because there is too much of a similarity between "cancelled" and "revoked." "Suspended" is lifted for a period of time whereas "revoked" is taken away, which is what "cancel" also implies.

Mr. Maloway: I would like to, on the same page, page 41, look at the number of exams that are written, the number that have been passed and failed. There seems to be quite a high number of failures. The failure rate is fairly high on the Life side. Let us take the most recent year, '97-98, there were 542 written and 338 passed, so 204 failed. Now I do not know that those figures are out of whack with other provinces or out of whack with historical records here in Manitoba, say 10 or 20 years ago. I am assuming that those statistics could be compiled. Then I notice in the General, there are very few written in the first place there. For example, there were 41 written in '97-98 and there were only 10 people passing and 31 failures, so that does not sound to me like a very high success rate. A and S has 226 written; 147 passed and 79 failed. So you can see a better proportion in the A and S area and the Life portion, but a pretty bad set of statistics for the General side of things.

Could the minister put this into perspective, once again try to deal with how this compares to other provinces and how this compares to historical trends in Manitoba here over the last, say, 10 years?

Mrs. Render: We will have to check into both of the member's questions as for the historical trends and how we do in comparison with other provinces. The exams are set by the industry. They are written by the industry, but other than that, as I say, we do not have that other information right here.

Mr. Maloway: I certainly do not mean to suggest that the exams may be too difficult, but maybe some better preparation needs to be done or courses need to be taken or something like that in order to prep the people for the exams because it certainly does not look like a very good success rate to me when 24 people write and only nine people pass, another 41 write in '97-98 and only 10 people pass. The success rate is not very high in that particular class.

Mrs. Render: My understanding is that the industry has study guides, and it is up to the industry to prepare the people for the exam. The little bit that I know personally on people taking some of these exams are that they have to go for an interview and the company determines whether or not they think this fine upstanding young man or woman in front of them is somebody that they would like to hire and after that has been determined and they hand them the study guide. Then the person writes the exam when they feel that they are ready. As I say, this is industry driven and it is not this department which oversees that particular aspect.

Mr. Maloway: I wanted to deal with an issue that has gotten some attention over the last few years, the whole area of redlining, what is called redlining anyway, in the B and C area. I mean, I believe I have been told that mortgage companies do that as well, that they redline certain areas and refuse to lend in certain areas of the city or certain streets and so on. Of course, the allegations have been made that the insurance industry does that as well. In fact, two or three years ago now, a reporter with one of the news outlets wrote a substantial piece on this whole subject, and it purported to show that there was discrimination going on against the core area in the north end of Winnipeg. Out of that whole process I believe a committee was set up, some sort of committee was set up. The superintendent was involved in this whole process. I wonder just whether you can give me a background on why this all surfaced and what was the eventual resolution of it.

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Mrs. Render: As the member knows, in fact I suspect everybody in this room can remember some of the media coverage on this issue, that there definitely was a perception that there were some people, some homes, that were being denied insurance on the basis of where they lived. Upon investigation into the matter, it turned out that no one was denied insurance on just that one qualifier, in other words on where they lived, but both this department and the insurance companies realize that sometimes perception is stronger than reality and it was felt that it would be a good thing to have a standing committee of which, the member is correct, the Superintendent of Insurance is the chair. The basis for the committee was really to seek a solution if nonavailability problems arose. As it happened, the committee has been in existence for two years, I guess, and there have been no issues requiring calling a meeting.

Mr. Maloway: Can the minister tell us who was on this committee?

Mrs. Render: The chair is the Superintendent of Insurance. There is also a representative from Wawanesa, a representative from Portage and from two other companies operating in Manitoba, but the players have changed.

Mr. Maloway: I thought at the time that there were representatives of the public that were on this committee.

Mrs. Render: I have been advised that, no, because the committee when it was set up was set up to deal with a specific issue, in other words, a specific consumer, and because the committee was set up to deal with a problem, a problem which, as it turned out, did not occur but presumably might have occurred, you would have been breaching confidentiality to have a member of the general public on the committee.

Mr. Maloway: Maybe this is a different committee, then. At the time that all this was happening, I believe it was a series of articles, more than just the one article, that there was a committee set up at the time, so it obviously is not this standing committee. This is something else, and there was a committee set up. There was, I believe, a representative from Wawanesa on it, and there were members of the community. For certain, there were, but I just forget who the members were. They were well-known names of activists in the north end or in the core area of the city who were supposed to be on this committee, and I just wondered who was on it now and what was happening to it and did it ever meet.

I assume that it did, because I never heard anything more about the issue, but clearly there was a committee that had people from the area on it.

Mrs. Render: Yes, there was another committee I have been told, roughly 20 members, including a variety of people from the Fire Commissioner to members from the Social Planning Council. They had about four or five meetings. The committee was disbanded because it was felt that the problems were not insurance problems but social problems. So, rather than setting up another large committee, it was better that the people who were experiencing the problems go back to groups that were already set up to deal with these particular problems.

As I say, the committee that the Superintendent of Insurance was chairing, that committee was set up specifically because there was a perception there were some homeowners who were being denied policy claims or policy insurance. That committee just did not have anyone come to them, so we are talking about two different committees.

Mr. Maloway: Has the minister received any complaints about the same issue, the redlining, as regards to mortgage approvals, because they seem to go hand-in-hand? There seems to be a problem in the real estate industry with the suggestion that mortgages are being denied at times to certain areas of the city, along with this issue?

Mrs. Render: The answer to the member's question is no.

Mr. Maloway: In the annual report, there is an indication that–now this is dealing with insurance applications and not mortgage applications–the number of applications rejected or renewals refused in 1996-97 was 11. And then '97–that is hard for me to read this–'97/9? And there is an eight underneath it, so I am not sure what that means exactly. Is that a misprint? It is on page 42, just down No. 2, after claims, there is Application Rejected/Renewal Refused. [interjection] Yes, 42.

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Mrs. Render: I guess, there are many reasons for rejection. Each company has its own underwriting criteria, and, I guess, all of us have the ability, if we are turned down by one company, to shop around, to approach another company.

Mr. Maloway: Mr. Chairman, well, first of all, could the minister clarify that the second column the 1997-9 and an eight underneath, what year are we talking about there? Because there are only two rejections and renewal refused, and it says 1997/9 and then and eight underneath it. What does that mean?

Mrs. Render: It is confusing. The eight should have been up right next to the nine, so it was 1997-98. You know, look at it too much and it–

Mr. Maloway: So, from what we see here, the number of applications rejected and refused actually dropped from 11 down to two in '97-98. Now, that does not seem like there could be a problem here at all if there are only two refusals or two rejected. But my suspicion is that there is a lot of people who would not find their way to the superintendent's office, that it is not that widely known, and I would expect that if people got rejected or refused that this is not really representative, I guess, is what I am saying, of the problem if there is one out there. I mean regardless of whether there is deemed to be a serious problem or not so serious problem, the point is that these sort of statistics, I do not think–

Mr. Chairperson in the Chair

I recall meeting with former Chief Cassels a couple of years ago, with the caucus. At that time, the chief was quite adamant about the fact that the crime rates were dropping in the city and was quite happy with that, but my point to him was that that may not necessarily be, because that is a case of reported crime.

If you deal with the insurance industry, you know that people do not necessarily report. They know their deductible may be $500 now as opposed to $200 before or $100 before that, and so they may not even bother reporting an incident if they feel that it is not major enough. So that is what I am suggesting is happening here, that there are probably far more cases than you realize here, but reality is that there are only, in that year, two people that actually made a complaint to you about this problem.

Mrs. Render: Well, I am not too sure that I totally agree with the member. I think that when people feel like complaining or they think they need help, one way or the other they are going to track down that help. At the very least, they can phone the government information line at the back of the telephone book.

They can look under, I believe, probably the white pages for the Insurance Council. If I were having problems, I think I would just open the book and look for the word "insurance," and if I saw the words "Insurance Council," I would phone them, and the Insurance Council would recommend that they phone the Superintendent of Insurance.

Also, agents have also been advised to tell dissatisfied people whom to go to if they have a complaint. Also, with all of the media attention that had been given to the matter of presumably lack of insurance for certain homeowners, the Superintendent of Insurance was on a radio talk show just discussing the insurance availability. So I think there are a variety of ways, if somebody wishes to pursue a problem, that they can find the Superintendent of Insurance, I would say, relatively easily.

Mr. Maloway: I guess I am just suggesting that those figures may not actually be reflective of how bad the problem is or is not. It is just reflective of how many people actually got through to the superintendent that year. I think most people, if they get rejected or refused, simply give up at a certain point, and there is a lot of evidence of that.

I mean, I am not sure that there was the problem there that was represented in the Free Press either, by the way. That was certainly a very good way to sell a lot of newspapers. It may be overstated how bad the problem was, but perhaps these figures may understate the problem.

With some statistics that I saw the other day, I do not know what exact area the boundaries are, but there was a suggestion that people who paid an average of $40,000 for a house, the property values had dropped over a certain period to $22,000. To me, that is a pretty scary prospect because working people who bought their houses 10 years ago and paid $40,000 for a house are now finding their houses worth $22,000. That is, I think, a pretty scary prospect for a working person and a family who normally would buy a property thinking that over 10 years–I think that most of us grew up that way, that we just assumed, we just had faith that the market may not go up like Vancouver or Toronto, but if you bought something today, it was going to be at least worth as much as what you paid for it with maybe some slight increase to keep up with inflation. But for people who are buying homes in the $40,000 range and now finding 10 years later they are worth $22,000, that has to be a pretty scary prospect.

Well, it is a cycle, and what happens is that–I mean, we are saying now this has occurred during the current government's watch. It just so happened they happened to be in power while this drop in property values has occurred, while they have been in power, but, clearly, the society, the government, have to come up with some solutions to try to rescue the problem because one problem feeds on another.

If the property values drop from an average of $40,000 in an area to $22,000, then the mortgage companies do not want to lend in that area. Then the insurance companies do not want to insure in the area, and the area just falls further and further and further. We are not talking about an area now that is just confined to a few blocks; we are talking about an area that just seems to be expanding every year.

I think a lot of people living in these areas were not aware that the water was coming up alongside of the boat. There is the old joke about the guy on the Titanic who, when he was asked about what the ice was doing around the boat, he said it was for the party he was having on Saturday night. That is how I see things developing in certain areas of the city, where people have been living there and with the best of intentions making their mortgage payments and keeping up their properties, and all of a sudden–there was not one set date at which they realized it was a problem, but now they are waking up to there is a problem, and they are all trying to run out the door at the same time, and you know that does not work, right? When everybody tries to leave the area at a certain time, the property values just collapse.

Somewhere, I do not know where the line was, but I know last year I had a complaint from some people whose relatives' estate was turned over to the Public Trustee. On the surface of it, it looked like there was a case for some serious malpractice on the part of the Trustee's office whereby a property in the north end was very well maintained, it looked very nice, and the city assessment showed it was worth $30,000, but it was sold for $11,000. The heirs thought that they were being ripped off, that they were being cheated and robbed. On the surface of it, it looked like that until you got beneath the surface and went and talked to the appraisers and the appraisal companies, and you found when you checked with a few of them they said, yes, the whole bottom has just fallen out of the real estate values in large chunks of the area. So any action that is being taken by the government is certainly not too soon in this whole area.

I wanted to also, before we leave this area and perhaps go into the Consumers' Bureau, on page 44 in the annual report, it indicates that the number of complaints opened has dropped between–pardon me, in '96-97 it was 48; in '97-98 it is 215. So why the big increase?

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Mrs. Render: I am advised that before it was the Superintendent of Insurance that investigated complaints against agents, whereas the year that the jump took place, that was when the Insurance Council of Manitoba undertook to investigate complaints against agents. It was a hearing process and, as I say, the superintendent did that. So those stats, those numbers were simply not showing up in the 1996-97 figures but, as of '97-98, the insurance council was responsible for investigating complaints against agents.

Mr. Maloway: So those figures would indicate then that they are a little more active in looking at complaints then.

Mrs. Render: Yes, before it was somebody–sorry, Mr. Chair. I am not too sure just what the member's question is, but as I say the numbers under '97-98 reflect the new function that the insurance council had undertaken. That function had previously been done by the superintendent.

Mr. Maloway: I see. So what they did was expand their operation. I see. So it is not a reflection of a huge increase in complaints then.

Mrs. Render: No.

Mr. Maloway: It is just a phase-in of the council.

Mrs. Render: Yes.

Mr. Maloway: I thank the minister for that. I would like to ask some question of the Consumers' Bureau. I do not know how far we can get in this today.

Mrs. Render: I would just like to check with the honourable member. Is he finished with questions for the Superintendent of Insurance?

Mr. Maloway: I think so. I know we can call her back if we have any more questions, but that would be another day. I do not think today there would be any more questions for the superintendent.

Maybe while we are waiting for the change of staff, I could ask the minister if she could report on any trips she has taken. I know Minister Radcliffe was not overly active in the trip department. I was disappointed in how little activity he had in travelling compared to the high-flying Premier and the high-flying former Minister of Industry, Trade and Tourism. I would like to nevertheless ask the minister in the last year, and this would be before she has become the minister in January, I guess, or February, what the department has done in the area of trips and conferences and other activities.

Mrs. Render: For clarification, minister's trips or department's trips? I am assuming just the minister's trips.

Mr. Maloway: At the time, yes, I believe the question was ministerial trips. The minister can check back and see what the request was at that time and just provide me with updated information on any activities in that area.

Mrs. Render: I believe the previous minister travelled out of province only once to the consumer ministers' meeting last November '98. If the member wishes, we can check the record and see if there were any other trips, but to our collective knowledge here there was only the one trip.

Mr. Maloway: We would also like to know–I think the last printout I got may have been back in Minister Ernst's day actually–the designation of who went and where they went and the costs of the trip. So in his case then, it always may be a train trip to Stonewall or Brandon or somewhere and it was $85, that kind of detailed information we were looking for.

Mrs. Render: Again, I need a little bit of clarification. I am assuming that the member really only wants out-of-province trips because within province a minister might visit an office or an area that the department is responsible for. It is usually just a day trip.

Mr. Maloway: I am not sure just what information was provided last time, but certainly out of province was included, out of province or out of country. Certainly within the province it would not hurt to have that information either.

Mrs. Render: We can certainly provide the member for out of province, out of country, if such a thing occurred. It may be a little more difficult within province. I mean I was into St. Boniface and that essentially is a trip, but I am not too sure that my deputy would have known that I was there. I know that the member is conscious about staff time and making sure that we are asking questions that will be useful, so I really need to know just if he wants to concentrate on the out-of-province trips.

Mr. Maloway: That would be fine. Whatever format you followed last time will be okay. It was not an exactly involved transmission. It was just one trip to Toronto, or something like that, so it is not a big deal.

I would like to ask the minister about gas prices. We have had a succession of ministers who travel through this department onto bigger and greater things and by no means all of them have made promises about research and monitoring, at various points, into the price of gas. Minister Connery was having people out checking prices here and there, and nothing really happened with him.

Mrs. Render: Thank you to the honourable member because I have interrupted his question. This is actually not Marjorie Simpson's area. I thought we were going to talk on the Consumers' Bureau. I am wondering whether the member could clarify which area.

Mr. Maloway: I thank the minister for the clarification. I really was not concerned about who answered the question or whether it had an application to the Consumers' Bureau. I understand there is some crossover in some of these areas. We know that the planning secretary, research department were to be here for around four o'clock, and we were going to try to put some questions in there between four and six o'clock, but we also have to deal with the Consumers' Bureau.

It makes no difference to me as to which one you want to deal with. We are going to be here for a while anyway, so if you want to deal with gas prices right now, we can deal with that and we can go back and forth. My next area will be perhaps dealing with the Consumers' Bureau. We can make everyone happy by going back and forth if you like. That would be fine.

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Mrs. Render: If the member does not mind, it might be a little more efficient if we could finish with the Consumers' Bureau, since we sort of started on it the other day, and then the Research and Planning for another day.

Mr. Maloway: This would give the Research and Planning department ample opportunity to assemble all its myriad of studies and so on that it has done for the last few years on gas prices. Yes, I would be amenable to that. So perhaps we could–I do not know how many more areas I have to deal with the Consumers' Bureau on, so perhaps the Planning department could stay around in case we do run over into that area.

Now, Mr. Chairman, at the outset, I did want to deal with the area of charities which, I understand, are dealt with under the minister's department. I would like to know what would have been the activities and experience with charities over the last year. We were concerned a couple years back in a whole area involving charities' sponsorships. I guess the whole concern about how much money–and it is a common problem that gets discussed. People are concerned at times, and I do get complaints where people are concerned about how much of their money actually ever sees its way to the starving children or whatever the purpose of the charity is. This issue came to a head a couple of years ago when the Premier was on a cruise. I do not think we had objection to him being on a cruise, but there was some suggestion that somehow the reason people were signing up for this cruise was to be close to the celebrity. In this case it was the Premier, but it can be football heroes or hockey players. I know the Chairman and I probably would not draw a lot of interest if we were the celebrities chosen for the cruise. The Premier certainly would be a pretty good draw, I would think. That is why people like him are chosen for these trips. They are being promoted.

Every few months you hear of a promotion to join such and such football player on a cruise. The idea is that people who take these cruises are really, I guess, not concerned so much about the costs as they are with rubbing shoulders with the celebrity. The charity is to get some benefit out of this. When we looked into it, we found the charity was not getting very much at all and were selling themselves quite short for this. What I would like to do is get into this whole area and get the minister's comments as to what the state of affairs are regards charities.

Mrs. Render: The act does not designate a percentage of funds raised that must go towards charity. When the Consumers' Bureau issues a licence, it has to be satisfied that the money is to go towards a charitable objective that that particular group is organizing for, but the act does, in fact, not specify specifically a certain percentage. In particular, for new groups that are getting up and running, this could be a hardship because it takes a while to develop donor lists. You have your overhead, of course, but just that whole business of getting yourself up and running can eat up some of the money that is raised.

Both the city and the Consumers' Bureau are working together right now to develop guidelines and criteria to evaluate fundraising applications in a consistent manner, and I think the bureau is also going to be talking to other municipalities. It is really a review of fundraising activities so that we can get a better sense as to these kinds of fundraising programs, projects, whatever you want to call them, on a province-wide basis, just get a sense as to what is happening out there and whether there are complaints out there and, if so, how many complaints, and really just getting a real feel for what is happening on a province-wide basis.

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Mr. Maloway: How many complaints has the minister had regarding charities in the last year, and what was the resolution of the complaints?

Mrs. Render: There were 29 complaints, and I guess they ranged from a variety of things. Some of the people that were collecting were simply not authorized, so they had to go through the process and apply to the bureau. Other times, when a complaint came into the bureau, the bureau told them to stop. Other times the complaint was that the individual who had donated money had not received a receipt in return. The bureau was able to intervene in those cases and satisfy the donor.

Mr. Maloway: Can the minister then give us an idea of how many charities have been fundraising where they were just basically out fundraising illegally, I guess? I am trying to differentiate that group from a group that simply went out, that are a legitimate group that just did not have a licence.

Mrs. Render: Apparently in the investigations, all but one complied. But I am advised that the bulk of the complaints were with groups that were not deliberately trying to pull a scam or anything but that simply had allowed say a licence or an authorization to lapse.

Mr. Maloway: Mr. Chairman, has the minister or her department had any communication from the Community Party in regard to the issuance of charitable receipts?

Mrs. Render: No.

Mr. Maloway: Has the minister had any inquiries–and this is getting off charities slightly–from the members of the Community Party for door-to-door licensing for their activities?

Mrs. Render: I am advised that this particular group is in the hands of the police, so this department is not involved.

Mr. Maloway: I understand that. My question was: had the minister or the department had any representations from this group for direct sellers licences and/or charitable recognition?

Mrs. Render: To my knowledge, no, they had not applied.

Mr. Maloway: Let us get back to the charities here. I see the problem, if there is a problem, in the split jurisdiction here with the city on one side and the province on the other, and that is what we determined a couple of years ago. It was hard to sort of keep track of what was going on because nobody was really in charge. The responsibilities were split up, and you really did not know what was going on, so it was kind of a hit-and-miss system. So it needs to be, I think, probably tightened up with, if possible, a more centralized authority over this area, because right now it is a shotgun approach out there. We just know sitting here that next year we will have a new list of people who we will be asking questions about.

When does the minister expect that these guidelines and evaluations are going to be available, and just when is all this going to be put to bed and sorted out?

Mrs. Render: The member is certainly correct. Both the city and the province authorize charities, and of course the process is slightly different. At the present time, the Consumers' Bureau authorizes some 150 charities annually, and the city issues permits to roughly 400. The city charges a $25 fee for those permits and a $45 fee for a tag day permit, whereas the bureau does not charge at all. So it is not necessarily just a simple matter of having one jurisdiction take over, because say the province takes over the city, because then it may be that all municipalities might want to have the province do their work. So, as I say, the process in place right now is to be working towards a consistent set of criteria so that, whether it is the province or whether it is the city or whether it is the municipality outside of the city that is issuing a licence or a permit, the criteria are the same and we are working towards having something ready by the end of this calendar year.

Mr. Maloway: I think that is important, when you see a problem like this, that you take some immediate steps to clarify or solve the problem before it gets worse. For example, and this was much more severe, but during the flood two years ago we found out to our collective horrors that municipalities had merrily gone along their way over the last few years and allowed people to build houses using lower standards than other municipalities. There was not a consistency between municipalities, and so some people built houses on higher levels and so they were more flood proof and others were permitted to build houses on lower levels. Basically, to encourage house building, I guess, the local municipality wanted to attract people with as few rules and regulations as possible and I can see that happening in smaller towns. The result was we had ultimately a big mess on our hands with all these different regulations. So the government had to step in and say no; this is the way it is going to be. You are going to build houses a certain level and so that they are not as susceptible to flooding or you will not get a building permit.

It is the same thing here. I mean, this system has gone merrily on its way for all these years, and I do not know what triggered the interest in this. I notice the Premier has not been on any more cruises lately, but the point is that it is about time that we did get this under control, and I do not have any objection to the province and the municipalities, if they are agreeable, to turning the function over to the province. The province can do it more efficiently, centralize it and make certain that there is compliance. Then what we are doing at the end of the day is protecting consumers.

I got the impression, maybe not correctly but at least it was my impression, that with the city it was just basically a fee collection service. There was not a big amount of effort spent looking into the charities and how well they were operating or what their qualifications were. They were just issuing licences holus-bolus. Now I could be wrong about that and maybe a little harsh on them, but that is the impression I got at the time. So to me it seemed like the gate was open and the cows were all wandering out anywhere they wanted to go. So if the minister says she is closing the gate and calls all the cows home, that is fine. At the end of the year? I guess I do not have a problem with that. I mean, six months is not an enormous amount of time, but I think the minister is assuring me that this is being dealt with, this is a fairly high priority and that she is dealing with this right now.

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Mrs. Render: Yes, the member is correct. I would like to assure the member that, even though we do not have criteria in place right now, the bureau does consult with the city on a regular basis and particularly if there is, I guess I could term it a problem application, just so that an individual does not play off one jurisdiction against another, so there is communication back and forth.

Mr. Maloway: Is this activity that the minister's department is involved in, has this been an ongoing thing for many years or has this been brought to a head by one or two developments in the last year or so?

Mrs. Render: The province and the city have always exchanged information and talked about this back and forth. But I guess the member is correct that really the development of criteria and guidelines has really just arisen and been worked on in a more definitive manner in the last little while.

Mr. Maloway: Is this going to involve legislation, or will the changes be able to be accomplished by regulations?

Mrs. Render: I do not know in what form the changes will take place. I do not see legislation as being the answer, because then they are written in stone, and it is a little harder to change if we have not–whether regulation is the way to do it, I do not know. It may be that that is simply outlining the criteria. We have not got down to that particular point as to defining just exactly what form it will take.

Mr. Maloway: I would like to ask the minister: since the Consumers' Bureau licenses collection agents, I am sort of interested in an update as to what is happening with the province's collection agents and what sort of rules–I know they do follow a set of rules as to how late they can call people and how often they can call people. There is a whole set of rules. If the minister could explain to us just what the current rules and regulations are and whether there are any changes contemplated.

Mrs. Render: Any new collection agents that come on board come into the bureau for a briefing session. In answer to your question on calling, the act does set out rules pertaining to collection practices. For example, collectors cannot call consumers before seven in the morning or after nine at night, nor can they call on statutory holidays or Sundays, neither can collectors threaten debtors with proceeding with any action for which they do not have lawful authority. They cannot collect or attempt to collect from a debtor a greater amount than what is actually owing.

Mr. Maloway: I would like to also ask the minister whether she sees many changes in the rules.

Mrs. Render: There have been no problems identified, and if no problem is identified, there are no changes contemplated.

Mr. Maloway: The Consumers' Bureau, according to their annual report, recommends changes to consumer protection statutes and regulations, and we are talking about harmonization here with other jurisdictions. I would like a list of all of the changes that are contemplated in this area, a list of the ones that have been recommended.

Mrs. Render: There have been changes to the direct sellers. This has been done. The cancellation period was changed from seven days to 10 days, and there has been harmonization of other regs. The department is currently working on the bedding, upholstery and stuffed articles to harmonize with Quebec and Ontario which are the only two jurisdictions which regulate this particular area, and this will be done under The Public Health Act, and in the future we are looking at some changes to the cost of credit disclosure.

Mr. Maloway: I guess one of the benefits of this harmonization move has been, I believe, you have harmonized to the highest level so that, for example, your 10 days, that comes from Saskatchewan. Saskatchewan direct sellers' legislation gave 10 days, and we gave seven, so by harmonizing, in that case I believe, you have taken the highest figure, the most beneficial figure to the consumer. Did you do that in all of these cases?

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Mrs. Render: I have been advised that was the premise for harmonization, to take it to the higher standard.

Mr. Maloway: I think that is only fair because otherwise if you took it to the lowest standard, you would be taking things away from consumers in different provinces. So it makes sense to me that harmonizing to the highest figure that benefits the consumer the most then actually extends consumer protection in those provinces that did not have the highest standard. So that is probably the proper way to do it.

I know we are running out of time here, and I did want to get into the whole are of the consumer complaints. These pages are just a bunch of figures, and they do not really mean very much unless you get a better explanation as to what is behind them. For example, in the area of home improvements, the number of complaints this year is 163, the minister said, and was 160 last year. So there is a certain amount of stability. That is down from 218 the year before.

But I was looking for a breakdown of that particular category in home improvements. Presumably there will be some problems there with different types of–I would like to know whether their complaints are, you know, sunroom installations or kitchens or bathrooms or roofs. There probably is a predominance of one type of activity over another, but I do not know, just looking at statistics like this.

Mrs. Render: I am advised that the department does not break down the complaints in that manner. They simply break them down into home improvement complaints, but they do not break them down any farther, whether it is a roof or a furnace or what have you.

Mr. Maloway: I accept that because this is just a statistical analysis. But clearly the department knows roughly what sorts of trends are behind these statistics. So I would like to know what sorts of home improvement problems I guess, regardless of the statistics here, have you noticed in the last year as opposed to say a couple of years ago. Is there one type of home improvement that is starting to develop as a problem versus another?

Mrs. Render: Mr. Chair, there is no real trend. The only trend that there was was that the work was not done satisfactorily. Perhaps nature has something to do with it. A number of years ago, I am sure the member remembers, there was a downpour of hail. Some people, it was their roofs that were hit; other people, it was their cars that were damaged. So, as I say, in that particular instance, it was sort of an act of nature that that came in. So it was not as if there was a company going around that was not doing business in a proper fashion. Homeowners just needed something done, and as I say, in this instance it may have been roofs and the roofs were not replaced in a satisfactory manner, and the bureau intervened.

Mr. Maloway: Following up on that then, in the area of the furnace chimney cleaning, what sort of complaints were received in that area?

Mrs. Render: We do not have that information here. Again, just in a general way, it was simply not done to the satisfaction of the homeowner.

Mr. Maloway: I guess what I am looking at here is: are there any cases of furnaces being–or companies selling furnaces and maintaining that they have to be replaced because heat exchangers are cracked? Do you recall a few years ago, the CBC I-Team did a story on the heat exchanger question, and there were a number of heating companies in Manitoba at the time who were found to be taking advantage of elderly people, not necessarily elderly people, anybody that seemed vulnerable? After all, when your furnace breaks down in the wintertime, you are not really in a strong position to argue your point. When the furnace person shows up and shows you a crack in the heat exchanger, it is very easy to fall for the argument that you need a new furnace because you do not want to be dying in your bed of carbon monoxide poisoning.

Now, that is the kind of argument that I am told that people are presented with when the furnace goes down in the middle of winter. So people sign up for new furnaces because of that problem. When you look at the whole area of the heat exchangers, you find that minor cracks are not necessarily that life threatening. For example, your car may have lots of scratches on it and dents, but you do not throw away the whole car. But it is not explained to people that the crack in the heat exchanger has to be in a certain place for it to be serious enough that the furnace has to be replaced. So what is happening is little cracks–by the way, all heat exchangers have some cracks somewhere, I am told. Even if your furnace is only a year old, it is going to have some cracks. The question is where are the cracks? Are they in a serious part of the heat exchanger or are they in a not-so-serious part? The point is that, because every heat exchanger has some cracks, some unscrupulous heating people may point to a crack and say, look, that is a crack, and you can see the crack so you know that the guy is not lying to you, and the result is you end up buying a high-efficiency furnace for $3,000-plus or whatever the price happens to be.

So what I am trying to find out is, from these complaints here, how many of these are heat exchanger problems, as an example? What I am expecting from the department is for you to be able to tell me that that is no big surprise because in the furnace chimney cleaning side, 80 percent of these are heat exchanger problems. I am just doing this as an example because we can go through each and every one of these all day long here. That is what I am trying to figure out. When I read this stuff, I do not get a clear picture of what is going on in the province. When I see furnace heat cleaning, I do not know what that means unless there is an explanatory note as to what–there is some sort of breakdown here. Well, okay, let us deal with that one right now, and then we will go on to the next one.

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Mrs. Render: Mr. Chair, the number for the furnaces and the chimney cleaning is 13, a relatively small number. We cannot just say right here today what those complaints were, but I can say that the people in the department who investigate the complaints, if they see a trend developing, will alert the director. The director is not aware of any trends that have developed. As I say, the complaints have been small, so I think it would be correct to assume that the complaints were various. Certainly this is something that the department does monitor, but if there is a trend developing, then that is something that we have to be on the lookout for.

Mr. Maloway: Mr. Chairman, once again, similar to the red lining question we talked about a few minutes ago, I think it is possible here that the problem is much bigger than what these figures would indicate. If you have a crack in your furnace and the furnace repair guy is there to fix it, your heat is off and you see the crack, you are going to agree to the new furnace. The furnace comes in the next day and your old furnace is gone, and you will not think to question about this crack. There are just certain things you accept in life. So there may be a much bigger exposure here than what these figures indicate. I am just saying that this was examined by CBC a couple of years ago, and they found a lot of this abuse going on. It is not something that necessarily would be reflected even in these seven, but it has gone on. It probably still is going on.

Let us deal with coupon books/lottery/ prizes. There were 42 complaints last year. What does that tell me? I do not know. I would like to know just what types of complaints people would have regarding coupon books. I guess I can think of a few of them. What sort of experience do you people have with the coupon books, lotteries and prizes?

Mrs. Render: Mr. Chair, I am advised that the department does not keep individual stats. It is a range of complaints. It could be something such as a business has gone out of business when a person goes to use that coupon, or it may be that a person has to phone a 900 number and there is a charge involved when, presumably, they thought it was something free, and then they find that they have to make a payment to find out more about their so-called win.

Mr. Maloway: Mr. Chairman, that really does not give me a very good explanation. Maybe the minister could check or the director could check with the department and find out just what these complaints are regarding coupon books. I can appreciate that some of the problems with coupon books certainly could be businesses that are not around when it comes time to cash in the coupons, and that is certainly possible that a business could be listed or featured in a coupon book. I mean, we have a company in Manitoba featured in the Industry, Trade and Tourism annual magazine that is put out by a section of their department, and the company was bankrupt. The Little Red Tool Kit, I think, it is called. That is certainly not impossible that coupon books could be out there where companies are out of business, but that is the kind of detail that I was looking for here. Once again, it does not really mean anything looking at a statistic about 42 complaints, but we do not know what the nature of the complaints were.

For example, I think yesterday's Free Press details a complaint about a trip that was offered to the air show attendees last week. I am wondering if there have been any complaints to the department about this problem and how usual something like this is. It certainly sounds familiar to me some of these things, but can the minister explain just whether any complaints have been made and what has been done about this particular situation here?

Mrs. Render: Interestingly enough, I, too, cut out the same clipping. I do not know. Does that saying "great minds work alike" hold here?

The department is not aware of any complaints. I guess what I saw in the clipping and what I happened to highlight in the clipping was the fact that I think consumers are becoming more aware. I was interested in the comment of this particular individual who said: there has been enough in the news about scams that I knew not to give it to her. She was talking about her Visa number. I think that is correct. I think a lot more people in the last very couple of years have become much more aware that nothing really is free in this world, and before they start giving away credit numbers and things like that, I think more and more people are asking questions.

Mr. Maloway: I think that would be a fair assessment, if in fact it was true. What happened in this case, from what I read here, and I think what happens in some of them is this borders on, or not borders on, is misleading advertising. They are claiming that a free trip will be given. That is basically how it is being sold. Entry forms were given to win a 10-day trip for two to Florida, including a short cruise to the Bahamas. So, if that is the case, I mean, if you go to the home show, for example, you can put your card in or your name in to different draws. I guess you know that they are going to be phoning you. You may win something in the draw, a little jacket.

I know that in Las Vegas last year at the Comdex show, Manitoba had a little booth there, and they were advertising the Pan Am Games and Manitoba Call Centre, I think it was. There was a draw there for a Pan Am jacket. You understood that when you put your card in the box at the trade show that you had the possibility of winning this jacket. You trusted that the Manitoba Trade department was going to give this jacket, and you know that they are going to take your list of attendees and they are probably going to contact you later on. Every time I put my card into one of those boxes, I know I get calls from all these computer companies and whatnot all over the place, and I accept that. You know your free T-shirt is not free, that you take the T-shirt but you are going to get these calls. I understand that.

This is not a case of that at all. This is just outright false advertising, if this is true, because this is a case where these people thought they were entering a draw for a free trip. Evidently there is no free trip, that each one of these people who gets called is called for a fee, and in fact the charges and fees associated with them "winning" this trip, because they are all winners, I guess, comes to more than what the trip is probably worth. So this is just an out-and-out scam, and the question is: how could this be permitted to operate at something as respectable as the air show, which is not something that just started this year?

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Mrs. Render: I am unsure really how to answer this question. I know this was sort of a two-pronged effort by the air show organizers and Mind Computer. In fact, this particular combination of an air show and a computer exposition is the first of its kind in the world. So I hesitate to point a finger at the air show organizers and Mind Computer for being at fault. I would suspect that they rent space. Certainly there were a fair number of tents out at the airport, and they had a large number of exhibits, I think from right across North America. I think I am correct in saying that they had exhibitors come in from other parts of the world. So whether they can identify everyone, every single person, who rents a spot and absolutely guarantee to the nth degree that a particular exhibitor is not running some kind of false advertising or doing something that is not playing by the rules, I do not know.

I think that anything along this line, usually there are people who are not interested in seeing the computers. They are not interested in the business aspect of it, but in this kind of a show people quite often look for that easy win. All of us look for an easy way to try to get something, so I suspect that it is like any carnival or any group. Whether it is a neighbourhood block party or whether it is a community club, there is usually at least one kind of a booth that offers something. Now, whether somebody just did not check out this particular exhibitor properly, I just do not know. It may be that they did do a check and the check showed that there was nothing wrong with the company and let them set up. They paid their fee, and they set up. As I say, I do not know whether it would be proper or right for me to point a finger at the organizers of this particular show.

Mr. Maloway: I certainly know that Mind Computer is a reputable company. I bought a software package from Mind before it was even Mind. I mean, it was just a little two-man, two-person office out in Transcona and upstairs where it was very hard to find. So I go back with Mind from the very beginning before anybody knew what Mind was. So there is no doubt about it, the company is very well run and extremely successful and very capable.

But that is not the point here. The point is that some people may have lost money as a result of this, and clearly it looks on the surface to be a case of just out and out false advertising. I do not care where it is. This one happened to be at the air show, but if you go to a booth, whether it is out on Broadway or anywhere, and you see a chance to win a trip for two to Florida, then you assume that you are not going to pay for the trip, right? It is a free trip. So if you get a call from the company the next day saying you have won, and they ask you for upwards of $1,000, I believe it is an administration fee or something like that, and tell you you have to go and buy your own airfare to Florida and pay all these registration fees and stuff, then clearly you know that you have been had.

So I do not blame these people for being a bit upset about this, and if you cannot go to the organizers about it, then who can you go to? I do not know. Have you had any complaints? Have any of these people complained, or is this simply another Free Press story?

Mrs. Render: As of noon today the department had received no complaints, and to my knowledge the air show took place a week ago. So a week has gone by for complaints to have surfaced, and again, because of the article in the newspaper, I am sure that it would have generated some complaints. But, as I say, the air show was more than a week ago. I think people are just becoming a little more careful.

Mr. Maloway: Will the minister undertake to investigate this story or this article here in the Free Press, June 13? When she has a copy, investigate it, contact some of the complainants and find out whether this is a real complaint or whether this is just a fancy story.

Mrs. Render: The bureau has a lot on its plate; however, we will attempt to see what we can find out. Like the member, I, too, have known the founders of Mind Computer, Brad Fry and Neil Stern, since they were operating out of one room. As a matter of fact, I bought my first computer from them way back in about 1981. I wrote my first book on it. The computer, I think, had 56K of memory, if you can believe it; bumped it up to 256K of memory, but that IBM computer that I bought from–or my next computer, no, that actually came from Mind now that I am thinking of it. But I have known both of them since they began in business and have followed their business when they first set up on Portage Avenue West. They expanded that site, and then moved over to the Ellice Avenue site. As I say, we will check with them and see what we can find out from them and pass on any information to you.

Mr. Maloway: I would like to, maybe for tomorrow, we could have a better explanation of some of the complaints in the chart here; nevertheless, I am going to press ahead here and see if I can get some ideas as to–requests for information. There were 28 requests for information in '97-98. I just wonder what constitutes a request-for-information complaint. I request information all the time, and I do not get it.

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Mrs. Render: I am not too sure that we can sort of give you any specific examples just at the moment, but they are complaints that do not fall nicely into these other categories. I suspect that they are sort of grouped. In other words, they are not about charities, they are not about hobby products or towing companies. They are requests for information on a variety of things.

Mr. Maloway: Mr. Chairman, I would have thought they would be requests for information that consumers had made to, say, a computer company or a retail store and then denied the information. That would be my guess at this because these would be requests for information from the department. I cannot see that. Those would be complaints against her department if that were the case. I cannot see that happening, but maybe it is.

Mrs. Render: We will clarify this particular line for the member.

Mr. Maloway: Mr. Chairman, there was a decrease in Personal Investigations Act complaints last year. Nevertheless, what sort of complaints does the department get involving The Personal Investigations Act? What sorts of things would trigger a complaint under The Personal Investigations Act?

Mrs. Render: Just for the member's information the number for 1998-99 is five, so they have decreased from 23 to five. I think that people are becoming a lot more aware.

Mr. Maloway: Mr. Chairman, once again, it really does not help me out a lot because those are five complaints that get to her, but maybe there are still people having problems that they are just not complaining about it. Why would the number of Personal Investigations Act complaints drop from 56 to 23 to 5? That does not make any sense to me. Was there some big change to the act? Did the personal investigation companies all of a sudden change their tactics or their strategies? I would think that they are essentially spooks who go around checking things out, and they would employ the same tactics that they have always done, you know, hidden cameras and all this stuff, but is there something in terms of technology or rules or regulations or something that would cause them to change their tactics, that would cause the number of complaints to be reduced? What sort of investigations are we talking about here? I can only speculate, but it is an awfully big decrease in the number of complaints.

Mrs. Render: The act is very specific. It regulates the conducting of personal investigations by users, personal reporting agencies only in respect to applications for credit tenancy, employment or insurance, and it also regulates, as I am sure the member knows, the type of information that can be obtained, that can be in a personal report. In answer to the member's question, I think we can only speculate. We do not know why the number of complaints has decreased. It may be that people are just that much more aware, that they are that much more sensitive. It may also be that companies also are just more careful how they are using the information. So it may be a combination of factors, that the information that is being gathered is being used properly for the purpose for which it was obtained.

Mr. Maloway: Well, how many companies are registered then under this act?

Mrs. Render: The department does not register the companies. The department responds to complaints.

Mr. Maloway: Then I think perhaps it is the Attorney General's department or the Department of Justice that registers them. Am I right about that or not? Because they certainly are registered. The investigation companies have to be registered. They have to be checked out. I do not know whether they have to provide bonds, but they certainly have to be checked out. I do not think anybody can become a private investigator just by setting up shop. I think they have to go through the process of some sort of vetting. I just assumed that it was through Consumer and Corporate.

I am still trying to find out why this drop in complaints from 56 to 23 to five and looking for an explanation as to the investigation companies, how they are registered, who registers them, what do they do, how do they do it, the whole thing.

Mrs. Render: Well, I think the member opposite should take the optimistic view that people themselves, the consumers, are being more careful about the information they give out. The companies themselves who are asking for information are also being more careful that they utilize the information properly, and the net result is that the number of complaints have decreased.

As I say, that is only speculation. I do not have an answer for the member. I think it is good news, and perhaps in another year we might be able to give the member an answer. If the numbers keep going down, there might appear to be a reason that literally leaps out at us, and we can answer the member's question.

Mr. Maloway: Well, I will check with Justice then to find out what role they play in the private investigators, but I know they certainly are registered. There is no doubt about that.

I would like to ask the minister then, the number of complaints has dropped substantially, too, in the food and drink category. Can the minister explain why that has happened?

Mrs. Render: Again, there is really no specific answer. It may be that somebody has gone to a restaurant and simply has not had a satisfactory experience and then phones in. The complaints sort of shift, I suspect, from year to year, and I do not know that there is any specific answer for any of these, why in one year complaints might be high, and in another year they might drop, or they may go up.

As the member himself has pointed out, sometimes people phone in. If they come home angry because of poor service, they tend to phone. Other times people shrug their shoulders and say, well, why bother. But, again, there is no trend or anything that is happening at the department. I think really this is what the member is trying to get at and what the department wants to make sure that it monitors, that if there is a specific trend, that we get on it before it becomes a full-fledged problem.

Mr. Maloway: Well, that is right. The food and drink complaints have dropped quite a bit. The minister refers to restaurants. Well, that is on the very next page. Restaurants and restaurant complaints have dropped from 12 to two as well. So what is the reason for that?

Mrs. Render: Again, we just do not know what some of these specific complaints are. They may be actually very general complaints, which is why they sometimes just do not fall into a particular category. They are just vague, general complaints.

Mr. Maloway: Residential dwellings, they have stayed roughly the same. What kind of complaints are constituted by the title here, residential dwellings?

Mrs. Render: Again, we cannot specify. What we can do, for residential dwellings we can ask that specific question and see if we cannot get back to you on that.

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Mr. Maloway: Is that landlord-tenant complaints that we are looking at here? No, it is not.

Mrs. Render: I would not think so.

Mr. Maloway: We have hardware and software on the next page, under personal effects and services. We have hardware and software, the complaints drop from 87 to 48. Once again, what sort of complaints are these? I would think if one were buying software, the complaint–well, I am not sure. I will let the minister answer the question. I do not want to speculate.

Mrs. Render: Well, I do not wish to speculate either. We, again, do not have a hard and fast answer for the member.

Mr. Maloway: Right above it, Personal Services, the number of complaints went from 101 to 134. What constitutes personal services types of complaints?

Mrs. Render: Likely the personal services may have been the fitness clubs because '97-98 was the year that many of them closed.

Mr. Maloway: Just a few lines down from Personal Services, five down, we have got Personal Improvements, and those have dropped from 69 to 18. So we have Personal Services, Personal Improvements. There is nothing here that explains what personal improvements constitutes, what personal services constitutes. I think what we should do is try to get a better fleshed-out explanation for what these things are.

I can understand when you have got dry cleaners. Well, I think most people understand what dry cleaners are about. Those are complaints about dry cleaners. Then you want to ask why types of dry-cleaning complaints are there. Are they increasing, decreasing, what types are they? General types, a general explanation of them. But when you get into something like personal improvements, what does that mean. Personal services, what is the difference between personal services and personal improvements? There should be some sort of explanation here to indicate. Just give us a few examples of what personal improvements, how it differentiates itself from personal services.

Mrs. Render: We will endeavour to find out what the difference between personal services and personal improvements is by tomorrow.

Mr. Maloway: I think the whole category probably needs some work as to give a better explanation to what is going on in the department. I know that a lot of times these reports are sort of drafted to give as little information as possible. Part of the argument is protecting confidentiality, and that is understandable in some cases. But in some cases I just see this material as just filling a bunch of pages and not really saying very much at all, so I would like to see some more narrative as to what the breakdown of these complaints are about. Now maybe it takes more than a day to deal with this whole area.

I wanted to get into questions about the BPA and whether the minister and the director felt that the BPA was operating satisfactorily or whether there should be some changes to it. We had the argument years ago that the BPA was watered down by the minister who was in charge when it was passed, but we have not really heard, and it has been a number of years now that it has been in effect, and perhaps it is time to review the BPA and how it operates with the view to strengthening it or if, in fact, it needs strengthening.

So I would like to know what the opinion of the director is as regards the powers of the BPA and whether she feels that she has enough powers under the BPA as it stands right now, or whether some legislative changes may be necessary to improve its effectiveness.

Mrs. Render: I am advised that The Business Practices Act continues to be a very effective tool in dealing with consumer complaints. In general, all complaints received at the bureau are reviewed under The Business Practices Act unless it is a matter pertaining specifically to an unlicensed direct seller, collection practices, or matters dealing with financial contract disclosures. There were 21 charges laid under The Business Practices Act this year as compared to 60 in the previous year, and in our opinion, this indicates that compliance is being achieved through dispute resolution processes using The Business Practices Act.

Mr. Chairperson: The time being six o'clock, committee rise.

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