Legislative Assembly of Ontario

The House resumed at 8 o’clock, p.m.

ESTIMATES, MINISTRY OF CONSUMER AND COMMERCIAL RELATIONS

On vote 1301:

Mr. Chairman: The hon. member for Wentworth.

Mr. I. Deans (Wentworth): First of all, I’d just like to give a little advice to the minister. When I said, “Oh, of course,” to his comment, I didn’t necessarily agree it shouldn’t be; I just recognized that at this particular point in time it might not be anything to do with the minister.

The whole matter of consumer protection is, of course, something that should fall within the ambit of this ministry. I think the fact that the Attorney General (Mr. Welch) administers the Landlord and Tenant Act and other matters related to landlord and tenant, doesn’t necessarily mean that it should not have come within the umbrella of consumer protection. I think it should come within the umbrella of consumer protection.

I do not intend to go on at any great length about it, except to say that I think that the government is going to have to do something in terms of protecting the consumer in the area of rentals during this period that will undoubtedly stretch for at least two years, until such time as the housing is built that the Minister of Housing (Mr. Irvine) tells us is going to be built.

I can imagine there are going to be a lot of arguments. The proposal that I put forward, as you may recall, was that if there were a rental review tribunal established, and that rental review tribunal were empowered to hear complaints of tenants against what they consider to be unwarranted rent increases, and if the onus then were on the landlord to provide the justification, and if the tribunal were empowered to do one of only two things -- either to approve on the basis of the justification being ruled or to disapprove on the basis of the justification not being there -- then we would not be in a position of having to make a judgement as to how much might be given rather than the amount that was applied for. What I can imagine happening would be that the landlord would come before the tribunal, if it were the tribunal’s right to determine what the amount should be, asking for considerably more than he felt he could justify in the hope that maybe he would get a saw-off somewhere along the way -- maybe a little more, even, than he was able to justify from the tribunal.

I’m quite interested and quite concerned about the plight of the tenant in the Province of Ontario. I think there are so many different areas in landlord-tenant relations that are desperately needing change. I don’t for a moment suggest that every tenant is lily-white and every landlord is somehow black, but there is no question that in terms of real power the landlord has all of the power on his side, that the landlord can easily deprive a person who has paid his rent and who has lived up to all his obligations of a living accommodation by simply handing him notice, and that the whole process of having to go to court and get an eviction order is one which firstly is rarely used and secondly is so easy to come by that it simply delays rather than adds any substantive review to the whole process of eviction.

I have found tenants, and I’m sure the chairman has found tenants in his constituency, who have complained bitterly about exorbitant rent increases and have said: “Surely I am entitled to know why my rent is going up. Surely it’s not too much for the landlord to be asked to explain to me why the rent is being raised by this particular amount at this time, given that I’ve been a good tenant, lived in the building for a number of years and have always paid what was asked of me?”

Of course, there’s no requirement; there’s no requirement. It’s for that reason that I raise this with the minister, and it’s for that reason that I think he should approach his own cabinet and ask to be given the power to establish just such a tribunal, to ensure that, in keeping with all other areas of necessity, justification be a requirement in the Province of Ontario for any increased cost.

I don’t suggest that the colour TV manufacturer needs to come forward and apply for permission to change the price of his colour television. I don’t think that’s a necessity. There are all kinds of other things where there need not be any intervention of any kind, other than in the areas of warranties, and that we’ll get into a little later.

But I do think that in the essential things, in the food industry and in the provision of accommodation, there simply has to be a way to ensure that there will not be any gouging, that there will not be any unfair practices and that there will not be any levying of rents which are exorbitant, to ensure that tenants will be able to live in peace and will be able, in fact, to pay whatever is required in order to reasonably maintain the building and to return a profit.

It does occur in one area, and I want to make this point. There are some restrictions in some apartment buildings that are sponsored to some extent by the federal government, where application has to go to them for rental changes, and where certain income groups were permitted in and other income groups were not. I think that that might be viewed to determine how it worked. I don’t know that it’s working very well but I don’t have many complaints about it.

I do know at this stage that there are far too many elderly in the Province of Ontario who are not able to get into senior citizen accommodation because there isn’t nearly enough of it, who are being forced to pay far more of their income than they can reasonably be expected to pay, among which group it isn’t uncommon to see them paying 60 per cent of their actual income, monthly pension, just to get a place to live. I think those people deserve some protection.

There are a great many people in the Province of Ontario who fall into the low and low middle income group who will undoubtedly be helped by the housing action programme if it ever gets off the ground. Those people require and deserve some protection during that interim period. That protection is not too much to ask. It’s not sort of sitting down and playing God and establishing what the fair rental should be, but rather saying -- given that the landlord’s rate of return was reasonable previously -- on the basis of his actual expenditures and increases in those expenditures, whether or not any increased rent that he would want to charge would be deemed to have been justified before the board, and thereby permission given for that to be charged.

I really do urge you to give that serious consideration, because I think that in most major municipalities across the province it would act as a deterrent, on the one hand, to landlords attempting to charge too much, and it would avoid, on the other hand, the problem of a blanket rent control, which probably would not work effectively or efficiently, or for that matter work fairly, because the circumstances differ from building to building, let alone from community to community. I really do urge you to give that consideration, to make representation to your own colleagues, to ask for that kind of power if you don’t already have it.

Mr. Chairman: The hon. member for Lakeshore.

Mr. P. D. Lawlor (Lakeshore): I did ask a question before, and just to keep the record straight as between the departments, what was the transfer of $500,000 to the Ministry of the Attorney General?

Hon. J. T. Clement (Minister of Consumer and Commercial Relations): That, Mr. Chairman, refers to salaries for land compensation people, their board.

Mr. Lawlor: You mean the board now comes under their jurisdiction? Okay.

Just one other question on the figures themselves. Your estimate for this year for main office only is $617,800. In 1972-1973, just two years ago, it was $251,000. What is crepusculating inside your domain over there? Are you burbling?

Interjection by an hon. member.

Mr. Lawlor: Well, look at that; the thing’s gone through the roof. Do you have Aubusson rugs over there and various types of oriental tapestries?

Mr. J. A. Renwick (Riverdale): His answer is yes; he nodded his head.

Mr. Lawlor: His answer is yes. That’s what we thought.

Hon. Mr. Clement: I’m advised, Mr. Chairman, that most of this relates to the information services, which accounts for the difference between the years 1972-1973 referred to by the member for Lakeshore, and the estimate for 1974-1975.

Mr. Lawlor: That is not an adequate explanation by any stretch. We don’t want to prolong these estimates unduly, because there are other people coming up after us, but to tell me it’s for information services is no information to me at all.

Hon. Mr. Clement: You must recall, and I’m sure you do with great clarity, that last year there was roughly a $500,000 expenditure allowed for information services which were provided by the minister. They comprised some storefront groups. We had a number of brochures or pamphlets printed; 15 different pamphlets dealing with things like buying a used car, second mortgages, and this sort of thing. I’m sure the hon. member has seen those pamphlets.

We had radio programmes, TV and radio spots dealing with consumer information.

I think I touched on it in my general remarks earlier today, but initial printings for each of the 15 pamphlets was $50,000; and some of them have been so popular that we’re into second printing now. The breakdowns -- if you’re interested in having them -- I do have them here. Perhaps you would like to peruse them rather.

Mr. Lawlor: I would just rather peruse them and not take up more time.

Hon. Mr. Clement: Well, I’d rather take up the time -- but whatever you want to do.

Mr. Lawlor: I am sure you would.

Mr. Chairman: The hon. member for Thunder Bay.

Mr. J. E. Stokes (Thunder Bay): Thank you, Mr. Chairman. Will the minister answer the question posed to him earlier by my colleague, the member for Riverdale, about some kind of assurance that we will have an ample opportunity to discuss the Liquor Licence Board and the Liquor Control Board?

Hon. Mr. Clement: It’s not my prerogative to make that decision or give that undertaking here, but I am introducing later on in this session new liquor legislation -- not amendments to the existing legislation, but a new Act. May I suggest that might well be the time where the questions could be answered dealing with the budgetary items in which you have certain interest.

Mr. Stokes: That presumes that we will have the indulgence of either the Speaker or the chairman that they will give an opportunity for a wide-ranging discussion on liquor control and liquor licensing legislation; because if it’s not contained in that particular legislation it won’t be germane to the debate and will be called out of order. This is something we’re going to have to deal with, through either the Speaker or the House leader (Mr. Winkler) for that commitment.

I want to find out something under administration services or your managerial secretariat, or someplace within this first vote. I see there is no money down here for research. Are there any research funds made available anyplace in your ministry for certain reviews of social and economic problems that are a direct result of the excessive use or misuse of alcohol? We’re not going to be given an opportunity in these estimates to discuss that.

You are the minister responsible for the administration of those two Acts. In the close to two years that you’ve had the responsibility for these estimates, have you found any need, or has anybody tried to impress upon you the need to set funds aside to come up with the various kinds of rehabilitative programmes that are going to be necessary to come to grips with the excessive use of alcohol and all of the social problems that result from the excessive use of alcohol? Are you contemplating making these kind of funds available?

It seems to me that since you are responsible to the people of the Province of Ontario for the administration of those two Acts, it’s quite possible that your ministry should be the one that is doing the research -- even though you don’t collect the money directly. It seems much more appropriate that you people should be coming to grips with problems that are the direct result of the abuse of alcohol.

I am wondering, if you haven’t had any discussions, will you take that under advisement, to see that funds are made available either through your ministry or through some other ministry, because it does very, very little good for us to be sitting here talking about -- if given the opportunity -- changes in the liquor licensing laws or the liquor control laws in the Province of Ontario, if we aren’t going to come to grips with that terrible social problem that is becoming almost unmanageable in certain segments of our population, particularly in certain areas of the province. The minister knows what I’m talking about. Will you impress upon your colleagues the need for those kinds of funds?

Mr. Renwick: Mr. Chairman, may I just comment about this question of where we are going to discuss the Liquor Control Board and the Liquor Licence Board. I have always assumed under our system of government that when an announcement is made from the office of the Premier (Mr. Davis), that Ontario’s Liquor Control and Liquor Licence Board will become the responsibility of the minister of Consumer and Commercial Relations, and then the minister writes to every member of the Legislature advising him about that, we should have a specific statement about when we are going to discuss the affairs of the two boards.

It simply is not adequate for us to be shuffled around, as we have been on the Workmen’s Compensation Board in other years, and pawned off on a proposition that you are going to introduce some amendments to a bill that may or may not get to the floor of the assembly, and which will not necessarily deal with the kind of question that my colleague, the member for Thunder Bay, has raised. When you think that over $250 million comes to the government of the Province of Ontario through the operations of the Liquor Control Board of Ontario, when you think that in excess of 47 or 48 cents on the dollar comes to the government of the Province of Ontario for every dollar spent on the consumption of liquor, and when you think of the immensity of the problems caused by the consumption of methyl alcohol and the problems related to it, and if this minister is responsible, as the Premier of the province has said he is, we deserve and are entitled to a clear opportunity to discuss matters related to the policies and principles of the board and not to be told that when amendments come into the legislation we will then be given some opportunity by the grace of God and the minister, and the leader of the House, and the Chair, and everybody else.

Mr. J. R. Breithaupt (Kitchener): Mr. Chairman, perhaps I could make a suggestion that might be helpful in this line. After the debate finishes at 10:30 this evening there will be another four hours or so which have been suggested as being available for the estimates of this department. I would suggest that if a separate debate is not held, as it has been in the past for the Compensation Board and for the two liquor boards, on separate days, and a session set aside, then perhaps the House could consider using part of those remaining hours for a specific debate on the matters of alcohol within the operation of the province.

I would undertake to approach the government House leader to see if either a separate debate can be scheduled, or if time could be used out of those hours, or time added on to the estimates. I would think it might be useful for us to go on with the other areas of the ministry if there are other general comments, and if it is agreeable that that could stand aside I would be pleased to try to sort out a separate time if that could be useful.

Mr. Renwick: Anything would be helpful as long as it is definite and specific.

Mr. Chairman: The member for Windsor-Walkerville.

Mr. B. Newman (Windsor-Walkerville): Mr. Chairman, I would like to concur with the remarks of my House leader. Last Sunday I happened to attend the opening of Brentwood in the city of Windsor, a facility to treat alcoholics. Here we have the Ministry of Community and Social Services funding the institution to overcome a problem that is caused by the beverage industry. It seemed ironical to me that while here in my own community we happen to have one of the biggest of the alcoholic beverage industries in Canada, they, or even the whole industry wouldn’t be involved in some fashion in funding an institution that is attempting to rehabilitate those who are unfortunate in not being able to control the consumption of the product of their manufacture.

Mr. Chairman: Mr. Minister, do you have any comments?

Hon. Mr. Clement: Firstly, I think the suggestions put forward as to examining the estimates or the budgets of the Liquor Control Board and Liquor Licence Board are perfectly proper and necessary; there is no question about that. As I understand the problem, the opposition members of both parties would like to know when. I can’t give undertakings on behalf of the House leader this evening. He will have to give those or have those discussions himself.

But I do say this: that the legislation which I am introducing is a complete Act, it isn’t an amendment to existing legislation. In it the financial ramifications and how the board shall be funded and operated and so on are all spelled out. While it is not a gratuitous opinion I am offering, it would seem to me perfectly proper at that time to enter into those discussions dealing with the financial --

Mr. Lawlor: Can you give us any indication when you are likely to introduce it?

Hon. Mr. Clement: I am just trying to think. Probably about three weeks from now.

Mr. Breithaupt: Mr. Chairman, perhaps the matter could be left until we see what the bill is going to be. The government House leader has advised me that he hoped to have a list of pending legislation sent to opposition House leaders, perhaps by tomorrow or the beginning of the week. If that bill is called we could proceed that way. Or we might have the opportunity of scheduling a separate debate if that were found necessary. I think that would work out.

Mr. Stokes: Here’s the House leader.

Hon. E. A. Winkler (Chairman, Management Board of Cabinet): Mr. Chairman, I have been informed of the discussion that has taken place while I was attending to other matters. Because of the agreement that exists and the consideration of estimates, I’ll do my utmost to have agreement on some time for the debate that has been requested between now and some time early in December.

Hon. Mr. Clement: There are a couple of matters I haven’t mentioned, Mr. Chairman, particularly dealing with the funding of research and moneys paid for looking into alcohol-related disorders which the member has touched upon.

As I understand it, the grants and funding that go to the Addiction Research Foundation come out of the general revenues. They certainly don’t come out of my budget per se and they don’t come directly from revenues generated by the Liquor Control Board. It is my understanding they come directly from the general or consolidated revenue fund.

Mr. B. Newman: The social services likewise fund the institution.

Hon. Mr. Clement: They may; the other ministry may well do it. The funding dealing with the institution you referred to, Brentwood in your Windsor-Walkerville area, I would think would be pretty well on the same basis. It definitely does not come out of my estimates before the members here this evening.

Mr. Chairman: The member for Windsor-Walkerville.

Mr. B. Newman: Mr. Chairman, would it be correct under this vote to discuss the Mortmain and Charitable Uses Act?

Hon. Mr. Clement: It should really come under the vote dealing with the companies branch.

Mr. B. Newman: Okay.

Vote 1301 agreed to.

On vote 1302:

Mr. Chairman: The hon. member for Windsor-Walkerville has the floor.

Mr. B. Newman: This pretty well indicates each item separately. I think we should start off with securities in item 1.

Mr. Chairman: Item 1, securities. The member for Riverdale.

Mr. Renwick: Mr. Chairman, as I said, most of the matters that relate to the securities industry in the Province of Ontario are more properly and efficiently dealt with when Bill 75 is before the assembly. I assume it will be sent out to committee and we will have an opportunity for a proper debate on it.

However, I did raise earlier this year a matter which certainly is not covered in the draft bill and is a matter of some concern to me, both in the particular situation in which it occurred, and also as a matter which I think is fundamentally and basically wrong. It relates to a letter -- again, my comments are not directed toward the particular companies engaged in this transaction, which I’m sure was quite properly done, strictly in accordance with the necessary company formalities and the necessary formalities and registration requirements and so on of the stock exchange and of the Securities Commission.

But the principle, it seemed to me, was quite wrong. I’m talking about what was evident from the prospectus which came out at the time of the amalgamation of Campeau Corp. with Interurban Properties Ltd., and I’m indebted to Mr. J. Donald Kidd, a gentleman in Ottawa, for bringing the matter to my attention. I wrote to the minister at that time, on Jan. 3 of this year, and I sent on to him the prospectus.

What happened in that case was that Mr. Robert Campeau holds one million second preference shares of Campeau Corp. These shares carry 10 million voting rights out of a total voting right of common shares and second preference shares of 16 million -- well, for practical purposes, 16,700,000 -- votes. The net effect is that Robert Campeau, through his ownership of those one million second preference shares with 10 million voting rights attached to them, together with the common shares which he owns in that company, controls 11 million-odd shares out of a total 16,700,000 shares.

As I said, I’m not concerned at all about anything being improperly done. What happened, of course, was that these one million second preference shares were created and issued at 20 cents apiece to Mr. Campeau, so for $200,000 he gets one million shares and they get 10 voting rights for each share. So he has 10 million voting rights, which far outweigh the voting rights of anyone else.

The reason for it is that the Royal Bank of Canada, a banking institution as distinct from the public who are requested to invest in the Campeau Corp. through ownership of its common shares which are traded on the stock exchange, made as a condition of granting the kind of credit to the Campeau Corp. that Mr. Campeau should control the votes of the corporation. That was the condition and that’s why that particular class of shares was created, issued at an exorbitantly low rate of 20 cents per share and carrying an exorbitantly high voting ratio of 10 votes for every one share held.

I went on to say:

“I quite appreciate that all the corporate formalities were fulfilled, but it does seem to me that the point is a serious one. It would appear to me that any public company should not be able to be traded publicly on the stock exchange where this kind of disproportionate voting arrangement exists, regardless of the reason for it.

“The essence of a public company surely should be that it should be possible for the public -- that is, the shareholders -- to change the management of the company. It should be possible to devise a protective feature for the Business Corporations Act or for the listing requirements of the Toronto Stock Exchange to make certain that such allegedly public companies would not be subject to this kind of restrictive, highly controlled, and artificial voting arrangement.”

Well, the minister replied to me, and I’m not going to read his letter because it wasn’t directly dealing with the point. I then wrote back to him again:

“My concern was not with respect to that aspect of the problem. [This is my letter to him of Jan. 31 -- that is, whether there was any breach of any provisions in the Securities Act and the Business Corporations Act. There wasn’t.] My concern relates to the way in which this private banking arrangement between Campeau Corp. and the Royal Bank, whatever the merits and motivations for that arrangement may have been, vitiates the ability of the shareholders if it became necessary to change the board of directors of the company and the direction of the company. It would appear to me that once a company such as Campeau Corp. becomes a public corporation with a widespread shareholding and listing on the Toronto Stock Exchange, this type of voting arrangement should not be permitted.

“It does not appear to me to be a matter necessarily for legislation, but a matter for the Toronto Stock Exchange in its listing requirements to indicate quite clearly that it is the policy of the Toronto Stock Exchange for publicly held corporations listed on the exchange to be subject to the residual right of shareholders at the annual meeting to change the board of directors and therefore the control of the company.

“It appears to me that this private arrangement must give way to the public interest, and the way in which it should be accomplished is that it should be made a condition precedent to the listing of the shares of such a company on the Toronto Stock Exchange.

“I am most interested to have your further comments [and so on and so forth].”

In any event, I had a further correspondence from the minister which I don’t need to read into the record because he undoubtedly has it in his file.

I was interested, within a very few days after my last letter to the minister at the end of January, to pick out a clipping in one of the February issues of the Globe and Mail by Irvine Lutsky, saying that control shares rules are undergoing ONSC study. It said:

“There may be some changes in Ontario Securities Commission disclosure requirements dealing with control shares of companies as a result of recent hearings dealing with Stuart House International Ltd. of Toronto.

“E. A. Royce, chairman, said in an interview that the commission is considering new requirements for disclosure when control shares are pledged as loan collateral. This could take the form of both the borrower and the lender being required to report to the commission any loan transaction in which control shares are collateral for the loan.

“During the Stuart House hearings it was disclosed that the controlling shareholder pledged all of its shares of the company as collateral for loans. The controlling shareholder held more than 60 per cent of the issued shares. Stuart (Nassau) pledged control shares to support its own margin accounts [and so on.]”

The two are not the same -- they are different situations -- but obviously the same kind of question arose. It did seem to me that there should be consideration, and I asked the minister in my letter to him to ask the Securities Commission and the exchange to indicate quite clearly that the principle -- which I was striving to articulate to the minister in the quotations from the letters I have just read into the record -- should be acted on.

I can think of no valid argument to support the proposition that that kind of private banking arrangement between the Royal Bank of Canada and Campeau Corp. should supersede the public interest in a company that is a public corporation, whose shares are widely distributed and are listed on the Toronto Stock Exchange and are perforce subject to the over-riding requirement of disclosure and control through the Securities Commission.

I don’t know whether anything ever happened about it, but I would certainly like to have some indication that my letter was dealt with by the commission and by the stock exchange, and I am told that I am crazy -- that’s fine; it won’t be the first time. But I would like a reply telling me specifically that they have turned down my suggestion, or that they are going to study it, or that they are going to consider it as a matter which should be implemented through the listing requirements.

I don’t want to let the matter just go by. I can’t conceive that if I were the holder of common shares which I had subscribed for or purchased on the market of a company such as Campeau Corp., with the shares listed on the Toronto Stock Exchange, that I should suddenly find my voting rights diluted by the issuance of a class of shares of the nature of the shares that were issued to Mr. Robert Campeau, even though the Royal Bank of Canada has substantial clout with respect to a company -- far more clout than any individual shareholder.

Surely the common shareholders should be in a position, if they wish to do so, to change the control and direction of Campeau Corp. And if the Royal Bank of Canada doesn’t want to play around in that game, then let them lend their money somewhere else. But it is an illegitimate requirement and a deprivation of the kind of basic rights of individual shareholders collectively in terms of their fundamental, basic and, in many instances, their sole remaining right, which is ultimately to change the management of the company, should they choose to do so.

Hon. Mr. Clement: Mr. Chairman, I recall the exchange of correspondence referred to by the member for Riverdale. And as I understand it, there are really two questions touched on by the member in his comments here -- the Campeau situation, if I may refer to it as that, and then the general situation dealing with the pledging of financial institutions such as banks generally.

Now, in the Campeau-Royal Bank matter -- it is my understanding that this is a very common arrangement in financial institutions -- or corporations, I should say -- obtaining funds from financial institutions, particularly when the direction, expertise, background, of a particular individual or individuals is necessary in the minds of the lender to assure the financial success of the borrower company.

And the minority shareholders of the borrowing company are really the ultimate beneficiaries in the long run if the company is successful in its chosen undertaking.

Mr. Renwick: That is the rankest form of paternalism I have ever heard.

Hon. Mr. Clement: It might be rank and it might be paternalism --

Mr. Renwick: It is.

Hon. Mr. Clement: -- but I understand that this is a very common thing.

Mr. Renwick: I understand it’s a common practice -- that’s why I’ve raised it. It’s wrong.

Hon. Mr. Clement: I take the position that it is not basically wrong. A person who enters into any financial undertaking in a minority position, knows that the basic ground rules of bylaws and things like this can be changed without his impeding or inhibiting it.

I am under the impression that this is not dealt with in the new Securities Act, whereas the second matter touched upon by the member for Riverdale; i.e., the pledging, is being dealt with under that particular piece of legislation. But your question is specific in the first instance and general in the second, dealing with Campeau and then the general reference to the pledging of the controlled shares. But with a minority shareholder -- and the hon. member knows more about this certainly than I do, in view of his discussions and studies in connection with the select committee -- it’s difficult to know whether to frame your legislation to inhibit the progress of the company or the wishes of the majority in deference to the minority.

I think it’s academic, although it does have some very practical impact on those minority people who don’t like the arrangement.

Mr. Renwick: I’m not going to pursue the matter longer, if the minister doesn’t understand that watering common stock is an offence in many jurisdictions if you dilute the financial interest of the common shareholders. You’ve watered the voting rights of the common shareholders in this case, because Mr. Campeau was also a minority shareholder.

He didn’t control the company at the point in time when he made the deal with the Royal Bank. But the condition of making the deal was that the Royal Bank of Canada was able to say to the board of directors of the company which he was in a position to control -- because of the ownership of his shares and because he had a captive board of directors, as is the case in many companies -- “We want Mr. Campeau to have a total control of this company, so you issue him 200,000 shares at 20 cents a share and give him 10 voting rights for every one of the million shares so he gets 10 million votes.” Did the other shareholders have an opportunity to participate in that particular issue at 20 cents a share? Of course not. It’s watering stock and it’s diluting one of the fundamental rights of a common shareholder -- to be able to vote his shares along with other shareholders for the purpose of changing the direction and management of that company. This was a deliberate design on a public company which was listed on the Toronto Stock Exchange, in order to protect the private interests of the Royal Bank of Canada.

If you can tell me that the Royal Bank of Canada is the bank which is controlling Campeau, and that that’s acceptable to your ministry, then I say you had better thoroughly think about the whole question of the listing of public shares on the Toronto Stock Exchange. I can assure you that if that arrangement were made and we were the government and one of my colleagues was the minister of your ministry, under the Ontario Securities Commission that company would be delisted. It’s just that simple, and because it’s common doesn’t make it right.

It was common in the United States of America and in Canada, until the securities commissions were established, for the boards of directors of companies to dilute, by watering the common stock, and I’m not going to see the re-emergence of that practice even under the aegis of such an almighty institution as the Royal Bank of Canada and have it condoned as acceptable business practice. It is wrong, and unless your Securities Commission starts thinking very clearly and very conceptually about the common shareholder, his right to vote, the residual right which he has to change the board of directors, then I’m saying to you that it’s about time you cleared house in the Securities Commission and got somebody to have an outside, broad-ranging look at it.

It is wrong. Mr. Campeau should not be sitting with 10 million voting rights in that company by the issue of 200,000 preference shares at 20 cents a share. It’s just wrong, and if your ministry doesn’t understand it then you are in serious problems in your Securities Act, in a number of the other compromises which are inherent in your new draft Securities Act, which we’ll have occasion to talk about at that time.

We’re not inching forward. We’re not inching forward to adapt a Securities Act to the modern needs of the business community. We are trying to draft the Securities Commission and the Toronto Stock Exchange listing requirements for the purpose of the ultimate protection of the public investor in the Province of Ontario, not for the protection of whatever deal the Royal Bank of Canada or any other chartered bank may want to make with that publicly listed corporation.

Hon. Mr. Clement: Mr. Chairman, I’m just going by my own memory of the correspondence that we exchanged some months ago in connection with this. As I understand it and recollect it, and it is subject to correction, the proposal was put forward to the shareholders of the Campeau Corp., or whatever it is, for approval prior to the acceptance of the arrangement by the Royal Bank. So disclosure was made, the shareholders had an opportunity to vote on it, to accept it or reject it. It was accepted and the deal proceeded further.

There were two conditions also, I understand, that the shares were redeemable and must be redeemed by Campeau back to the company at the same price if he dies within 15 years, or if he left the company within 15 years, and this fact was known to all the shareholders. It was an assurance, as I understand it, to the shareholders of that company that they would have the leadership and expertise of this particular individual for at least 15 years or the shares came back, and so it was done with notice. That is my recollection of it.

Mr. Renwick: All I am simply saying is that your final note to me on Feb. 8 was, “I requested observations of both the president of the Toronto Stock Exchange and the chairman of the board of governors as well as from the chairman of the Ontario Securities Commission. When I hear back from them I’ll speak to you concerning the same. Yours very truly.”

Then I had a further letter from you on April 22, enclosing replies from the Toronto Stock Exchange, and it’s all just plain gobbledygook. It should never have been allowed to happen. I’m saying to you, you’ve got to get somebody who understands the securities laws, understands the fundamental need to protect the investor, and not let the Toronto Stock Exchange connive in that kind of arrangement as though it has no significance whatsoever for the purpose which it is about to fulfil. I’ll deal with it when we’re in committee on the Securities Act.

Mr. Chairman: Any more comments on item 1, securities?

Mr. F. Young (Yorkview): Yes, Mr. Chairman. I would like to ask the minister if he has had brought to his attention the situation in regard to the Scurry Rainbow convertible debentures after the takeover by Home Oil of that particular company, and if any action has been taken about it?

Hon. Mr. Clement: I would just beg the indulgence of the chairman and the member for a moment if I may.

I can’t recollect the Scurry Rainbow one in particular, but I will undertake to get it back to the member within 24 hours. I just can’t remember it.

Mr. Young: Perhaps then, Mr. Chairman, I can put on the record a bit of correspondence in connection with this. This letter, first of all, from William A. Hutchison of A. E. Osler Gendron Ltd. to Mr. Edward A. Royce, the Ontario Securities Commission, dated July 16, 1974. And I think this puts the situation pretty clearly:

“Recently Home Oil Co. Ltd. made an offer of $27 per share for all outstanding shares of Scurry Rainbow Oils Ltd.

“The offer, beneficial to common shareholders, caused great financial distress to the convertible debenture holders. The convertibles were quoted prior to the offer at $93 to $97, and after the expiration at $78 to $80.

“Home Oil, in fact, to all intents and purposes, destroyed the marketability of the Scurry Rainbow common shares, 87 per cent of the stock tender, thus reducing the convertible debentures to nothing less than a straight term bond.

“Had Home Oil Co. Ltd. honoured their commitment to the convertible debenture holders, they could have (a) redeemed the bonds as prescribed in the prospectus; (b) offered a substitution debenture convertible into the common shares of Home Oil Ltd.; (c) reduced the conversion of the convertibles to $27 per share, thus in effect redeeming a debenture at par, that is $100.

“Again, in the interests of the debenture holders, we feel that Home Oil Co. Ltd. should be directed to make amends to the debenture holders. We look forward to your reply.”

Before I read that reply, I just want to quote a few excerpts here from a sheaf of letters that came to my hands from the brokerage firm. These letters are from holders of the convertible debentures. Just a paragraph:

“This bond was purchased by me as a low yielding instrument in order that I might have the opportunity to participate in the growth of Scurry Rainbow as their exploration was fulfilled.”

I believe these were five per cent convertibles. So it was a low yield, but it looked good evidently to the holders of the convertibles. Again quoting:

“Instead I am left with, as you say, a straight term low coupon debenture. Home Oil has deprived me of the instrument which I originally purchased. I believe that Home Oil, at the least, should redeem these debentures at par, that is $100.”

Here is another letter:

“It is my assumption that the conversion privileges have now become worthless under the present provision and that this issue from here on to redemption date can now be classified as only a low interest vehicle that, under the present inflationary cycle, could end up in 1988 as being worth less than half of even the present dollar value.

“I believe that these debentures should have either been called at the time of takeover and paid out at the $100 unit, plus accrued interest, or offered a substitute convertible debenture convertible into the common shares of Home Oil Co.”

Now, I have more here, but that gives the sum and substance of it. But a letter is here from the Ontario Securities Commission to Mr. William Hutchison.

“Dear Sir:

“Mr. Hutchison’s letter herein, dated July 16, 1974, addressed to the chairman, has been referred to me.

“The takeover bid by Home Oil Co. Ltd. for all outstanding common shares of Scurry Rainbow Oils Ltd. at $27 per share was made in compliance with the takeover bid requirements of the Securities Act of Ontario and the tender offer requirements of the United States legislation.

“I have noted your comments with respect to the convertible debentures. The commission has no power to direct Home Oil Co. Ltd. to make amends to the debenture holders of Scurry Rainbow as suggested in Mr. Henderson’s letter.

“Sincerely yours,

“E. C. Howard,

“Director.”

Mr. Chairman, through you to the minister, this is a situation where a great many people bought the convertible debentures in good faith. They believed they were investing in the future growth of the Scurry Rainbow company and the future growth of Canada and could, at the proper time, convert their bonds into common shares of the company. These people, in good faith, bought these debentures believing in the future.

Yet here we have a situation where a company, through a simple takeover, has rendered the value of these convertibles much, much less and they now become simply a low-interest-bearing bond and of course the value on the market is going down steadily.

It just seems to me if it is true that the Act was complied with here, then there’s something fundamentally wrong with the Act, and that an amendment here is very desperately needed. I would hope that something can be done by the minister speaking to Home Oil and urging them and perhaps ordering that some restitution be made because there’s no question that the holders of these debentures have been literally robbed of a large value of their equity and robbed by a simple act of a company which ignored the interests of the people who had invested in Scurry Rainbow.

I would like to hear the comments of the minister in this regard because this seems to me to be a barefaced bit of robbery which evidently, according to Mr. Howard’s letter, is allowed under the Act. And this to me is incomprehensible.

Hon. Mr. Clement: Mr. Chairman, I was not personally familiar with this one until the member for Yorkview mentioned it here tonight. I am advised that the situation which he has described just now was in compliance with the existing legislation, under the securities legislation, and that it was also in accordance with the rules and so on that apply to the Toronto Stock Exchange. In other words, Mr. Howard’s letter to the member was correct and that, in fact, a number of people did lose their conversion privileges -- as he has described here in the House this evening.

The commission is aware of this, arising really out of this Scurry Rainbow matter, and is devising policy now which will be made public before the end of the year to preclude this sort of thing from happening again.

Now, the member has also touched on another area as an incident of this: Should there be legislation to compel the restitution of this sort of thing? Because the takeover bidder complied with the legislation there is no way, of course -- I know the member is not suggesting it -- we can bring in legislation compelling this retroactively. Whether that should be done in any future legislation would be a matter of policy. I’m rather inclined to think that restitution under these circumstances would not be ordered. The hole -- and it is a hole -- will be plugged, so therefore there will be no necessity for it.

There is no way I can bring in legislation to compel these people who complied with the law to make amends. If someone feels that he has been harmed, he would have his rights in the courts. However, it would appear that they would probably be unsuccessful if the law has been complied with in this particular takeover, the situation the member has described.

I would like to look at it personally and get in touch with the member tomorrow, but this is the advice I received from my official here this evening.

Mr. Young: Mr. Chairman, what the minister says may be true, that the law is complied with in this kind of a situation. But the law certainly is an extremely unjust one and how a company of the size and reputation of Home Oil could engage in this kind of sheer skulduggery is hard to understand. Surely a word from the minister and some urging on the part of the minister are needed, that for good relationships in the future between Home Oil and the public, as well as Home Oil and the government, they should make some restitution in this regard and make the kind of arrangements so that these people will not suffer the penalty which they have suffered because they believed in the future of Canada, in the Securities Commission and in Scurry Rainbow.

I just don’t understand why this kind of thing can’t be negotiated by the minister on behalf of the convertible debenture holders and certainly I would hope that the minister is going to introduce legislation very quickly to plug this kind of loophole so this kind of thing cannot happen again. But surely the minister can undertake to do something to bring the debenture holders and the company together and to work out some sort of satisfactory arrangement so that it is not going to cost the company that much. It is certainly going to add to their reputation for fairness and for decent dealing in the marketplace.

I hope the minister will take this under advisement and at least bring these people in and talk to them in no uncertain terms about the necessity of restoring their reputation in the marketplace.

Hon. Mr. Clement: I will take that under advisement.

Mr. Chairman: Shall item 1 carry? Carried. On item 2, pension plans, the hon. member for Windsor-Walkerville.

Mr. B. Newman: Mr. Chairman, at the outset I want to express my deep appreciation to Mr. Bentley of the minister’s staff for the tremendous co-operation I have received from him in the past. He is a very good addition to your staff, Mr. Minister. He is extremely co-operative and always willing to help, and I found it a pleasure to talk with him.

I want to ask, regarding negotiations between the auto workers and “the big three” -- Ford, Chrysler and GM -- whether the pension arrangements are “30 and out” or “35 and out” in years of service.

Hon. Mr. Clement: It is 30 and out at age 55.

Mr. B. Newman: The age category is attached to the arrangement? How many plans are registered that are using the 30 and out at 55?

Hon. Mr. Clement: I can’t tell you exactly. I know the car industries are -- Ford, Chrysler and GM -- but I can’t tell you offhand how many others there are. We can get that information for you; it is available, but I just don’t have it here.

Mr. B. Newman: You can give it to me at some other time. I just wondered whether it was only the unions of “the big three” that had negotiated such a pension agreement on behalf of their members, or if that was spreading to other segments of the industrial world.

Is there any consideration being given on the part of the ministry to making pensions portable? Say an employee works for General Motors for 20 years and, for one reason or another, he changes his loyalty and works for Ford, Chrysler or some other concern that has a similar type of pension scheme, is there any consideration being given to portability so that he could continue receiving exactly the same type of benefits?

Hon. Mr. Clement: That would be an ultimate sort of a thing, but you would have to have a standard plan for every worker in every pension plan in every industry. I couldn’t say that I could ever foresee that happening under our present arrangements, where there are about 8,000 pension plans in existence in this province. Unless everyone had a common plan, how could I ever give the assurance that everyone is going to get the same thing for the same number of years of service?

Mr. B. Newman: I am not referring to them getting the same thing, but to an individual maintaining full pension rights. He might have 25 years with one company and only seven or eight years in another company; under 10 years there would be no vesting and he wouldn’t be entitled to any pension benefits, whereas if you combined the two periods of service, he would have them.

Hon. Mr. Clement: Well, there is portability between one industry and the other, but it has to be accepted by the new employer, as I understand it. But I want to make it clear that they obviously don’t have the same benefits in the various plans and in different industries. If an employee moves from one industry to another, he doesn’t necessarily get exactly the same benefits if the plan is obviously different. But if he moves into the second industry and they accept him out of the first one, then he is all right.

Mr. B. Newman: Is the acceptance of him in that second industry something that has to meet with the approval of your ministry? Or is it simply an agreement between the two companies that he has worked for?

Hon. Mr. Clement: I am advised that if it is a term of the second industry’s plan that this be permitted, then there is no problem.

Mr. B. Newman: Then there is really no attempt or no encouragement on your part to develop some type of scheme in co-operation with the industry and your ministry so that there could be a little more portability. A fellow in the course of his 35 years of employment could work for three or four different auto industries, I am thinking of my own community where you have Ford, Chrysler and GM. He could end up working eight years in each and end up with nothing. However, if there were some way of combining all three, then he would have 24 years of service and be entitled to some type of pension.

Hon. Mr. Clement: The Pension Commission is working on this thing right now. I agree that the matters touched on by the member for Windsor-Walkerville have in fact happened, particularly in the United States.

The cases are legend over there. A man can be employed in an industry for 31 years and a member of a certain union local, and for reasons of changing employment or some particular reason he moves down the road and has to join another local of the same national union and only acquires eight years’ service there. When he is of retirement age he is unable to collect from either. He hasn’t got the 10 years in the second one, and when he went on pension he wasn’t a member of the first local of which he had been a member for 31 years.

We have learned a great deal from the experience over there. If the member hasn’t read it, I would suggest that he acquire a copy of the book by Ralph Nader, “Your Pension and You”. It explains a lot of the things which have really been an abuse of billions of dollars of workers’ money in the United States.

Mr. B. Newman: Mr. Chairman, I happen to be a bit familiar with that, because I do read Detroit newspapers. It almost brings tears to one’s eyes when you see people who have been trapped in the industrial world after, as you made mention, 31 years of service through a series of companies and still have no type of pension benefits made available to them.

I immediately think that society -- and by that I refer to government -- should develop some type of apparatus to protect the individual so that after working all those years he doesn’t get only the Canada Pension -- that he would be entitled to under our legislation -- but likewise benefits from the contribution he made to the various pension schemes in the industries in which he happened to be employed.

I notice that the US now is very concerned over its pension schemes and has either introduced legislation or there is legislation now going through Congress that would resolve some of the problems.

I know we will never resolve all of the problems, because quite often as we resolve one we only create another. But I am extremely concerned over this. I am likewise concerned over the fact that former municipal employees don’t have any bargaining rights whatsoever after they retire. I know it is nothing that your ministry can come along and do. It could mean amendments to the Municipal Act; it could mean amendments to the Police Act. But once they are retired they don’t have survivor benefits, in a lot of instances, and they don’t have any fringe benefits; they are really stuck.

However, when it comes to the auto union, in the course of its negotiations for improvements in wages, it also works for improvements in pensions for the individual. So the auto worker doesn’t worry about the indexing of his pension, whereas the civil servant working for this government and working for a municipal government has to come cap in hand to government to get an adjustment to his pension.

It’s on an ad hoc basis, so to speak, whereas there should be some sort of arrangement. Maybe it’s the responsibility of the various civil service, municipal and public works unions to have some type of tie-in so that when they negotiate for salary increases from their employers, automatically they are negotiating for their retirees so that they can benefit by an expanding and an inflating economy.

I see policemen, firemen and public works employees in my own community who retired 10 and 15 years ago getting no adjustment in their retirement benefits. It really isn’t fair when you look at the auto worker. No one begrudges him getting all these additional benefits, but he gets them while the civil servant on a municipal or provincial level is trapped. He can’t get it at all.

Possibly there should be some dialogue in your ministry to put the bug in the ear of the minister responsible for the Municipal Act, likewise the minister responsible for the Police Act and any other Acts so that the Civil Service Association or the union could bargain on behalf of retirees.

At least let them not be affected as adversely by inflation as they are today. I only bring that out, Mr. Minister, to show you there is a problem with retirees. There is a problem with pension plans but you don’t have control over the pension plans I am referring to, or at least you don’t have control over the inability to negotiate on the part of retirees.

Mr. Minister, is there ever consideration given to an individual, injured on the job in his later years of employment, to make payments into a pension fund so he could receive full pension on his normal retirement? Say he’s got three or four years to go and he is too severely injured to go back to his employment. He may be collecting workmen’s compensation for that period, then retires at the age of 65 not having the required number of years of service. Because his pension is based on his years of service he gets a reduced pension, whereas if he made a personal contribution to the pension fund, through his union or some other mechanism, he might be entitled to the full pension.

Mr. Chairman: Shall item 2 carry?

Mr. Renwick: No.

Mr. B. Newman: Wait. Let the minister reply.

Hon. Mr. Clement: It depends on the plan. As I understand it, some plans specifically provide for this sort of thing, while others are silent. These are contractual matters between the employer and the group of employees. As these types of situations become known and become common, it usually becomes a negotiable item when the pension plan is being discussed by the bargaining agent, if there is one, namely a union, and the employer. But it is not mandatory, as I understand it.

Mr. Chairman: The hon. member for Hamilton East.

Mr. R. Gisborn (Hamilton East): Mr. Chairman, I haven’t been able to follow the line of contention the member for Windsor-Walkerville has raised.

I would like the minister to explain to me this item under pensions. I understand we have the Pension Benefits Act, the Ontario government assists the administration of that Act, and that amount of money is what pays for the administration of that Act -- $324,300 you have estimated.

Hon. Mr. Clement: Yes, it’s for the Pension Benefits Act. You are quite right.

Mr. Gisborn: I see no notes on the operations of the Act. When was the latest report submitted and tabled? I am raising it because it seems like a lot of money to administer the Act when we have -- is it called an advisory committee of the Ontario Benefits Pensions Act? -- that administers the Act itself.

Hon. Mr. Clement: There are 21 employees working for the commission. It generates revenues of approximately $300,000. The activities are many and varied. If you would like me to go through them I would be pleased to. Would you or wouldn’t you?

Mr. Gisborn: Well, just a brief explanation for my own edification. I understand that any company establishing a pension plan registers it with your department under certain provisions and your Act provides that that company carries out certain obligations to its employees under the Act. This seems to be a lot of money to administer that Act. That is the point that I am raising.

Hon. Mr. Clement: We administer the Pension Benefits Act, and under certain interprovincial and Dominion-provincial agreements we administer the Pension Benefits Standards Act of Canada, the Pension Benefits Act of Alberta, the Pension Benefits Act, 1967, of Saskatchewan and the Supplemental Pension Benefits Act of Quebec on a reciprocal arrangement.

Now, the commission itself deals with the registration of all new pension plans with amendments to existing plans. We have been touching earlier this evening on how amendments are completed, and the necessity for them. They supervise the plans already in existence, respecting the annual information returns, valuation reports, statements of assets and so on. They examine and approve, if in order, all reports on the winding up or termination of any pension plans.

They deal with complaints and inquiries arising out of pension matters. Last year they received 143 written complaints and 3,600 by telephone. They ensure that the plans with members in more than one jurisdiction meet the requirements of the various legislation, and they deal with the preparation of statistical and other matters.

There is a cash flow of approximately $1 billion per annum into pension funds in the province, not into the Pension Commission. The total of the estimate is $324,300; the net cost to the taxpayers is approximately $20,000 or $25,000.

Mr. Gisborn: Might I ask when the last report was tabled? I understand there is a report from the advisory committee.

Hon. Mr. Clement: I think it was 1973, but I can look that up for you.

Mr. Gisborn: Just one other brief question. The estimate for here has nothing to do with the funding of the moneys of those pension plans? No, they fund them in their way. What you do is supervise the actuarial and the performance of their funding.

Hon. Mr. Clement: That’s right.

Mr. Chairman: The hon. member for Riverdale.

Mr. Renwick: Mr. Chairman, I want to spend a few minutes on this particular vote on the Pension Benefits Act and where we are going on it. I don’t pretend for one single moment to have any specific knowledge about the field of pensions, but for about the last year I, as well as a number of people, have been concerned about some very serious problems which are looming at least on the horizon, and in some cases have appeared, with respect to the whole administration of pensions in the Province of Ontario and raise serious questions about the adequacy of the Pension Benefits Act.

On the odd occasion I disagree with my colleague who has just spoken, the member for Hamilton East. I am curious as to whether or not we can safely rely on such a small administrative body to deal with the growing concern about pension matters.

The extent of it is really rather startling. In the statistical information that we had from the ministry a few days ago, on page 14 it indicates that there were about 7,985 plans registered -- this is at the end of 1973 -- that in 1973 469 plans were discontinued, with 459 new registrations. There are now apparently in the Province of Ontario about 1,100,000 people covered under pension plans subject to the administration of the pension benefits commission under the Pension Benefits Act.

The increase in the funds being invested by pension plans is obviously staggering. A study sponsored by the Toronto Stock Exchange noted that pension fund assets grew from about $3.6 billion in 1960 to more than $13.5 billion in 1972 and are expected to reach about $30 billion by 1985.

Mr. Stokes: Most of it invested in the US.

Mr. Renwick: Of private pension plans in Canada in 1960, there were about 8,900 plans. In 1970 there were about 16,100 plans. I am not going to go into various types of plans because I am not competent or able to deal with it. The crunch, however, requires the serious forethought of government on how they are going to deal with it.

I think anyone would consider it trite to say that any person approaching pension age or receiving a pension is very much concerned these days about the purchasing value of the dollars which he will receive through his pension, having regard to continuing inflation and what is becoming an accepted theory of pension: not as a sort of payoff at the end but a deferred payment of benefits which they could have received in other ways during the course of employment.

That is going to exert immense pressure on existing pension plans and be an inhibiting factor against the introduction of plans in areas now not covered by pension plans. The contra side of that problem is, of course, that the depression, another incident of the inflation of the bond and stock market, has been such that the return on the investment funds is creating a serious and substantial deficiency in many pension plans. This is going to have to be covered at some point by cash payments from the companies involved in the plans.

Mr. D. M. Deacon (York Centre): Did you say inflation of the bond and stock market or inflation on the markets?

Mr. Renwick: I said the effect of inflation on the bond and stock market. One aspect of it was the very great depression in stock and bond prices and in the returns received on the investment when you compared the cost of the securities which many pension plans hold in their funds with the present market values.

I would like to have stated that more dramatically. But the crunch is going to come in the pension field. It is going to be felt in company-union negotiations. It is going to be felt throughout the government service in negotiations for pensions. It is going to be felt in the demands being made by persons on pension for increases in their pension payments through some form of cost-of-living allowance or demand that an additional bonus be paid.

But whenever the actuaries start looking at each of these plans on a regular basis they are going to insist that additional dollars be put into the pension funds to keep them solvent. I note very carefully in the last report I have of the pension commission for the year ending Dec. 31, 1973, that it tends to reflect that very concern.

The report seems to deal with solvency more than anything else. It states that the Pension Benefits Act has been in force for nine years. “The Pension Commission’s main responsibility is to ensure that pension plans meet the statutory conditions prescribed for solvency.”

One of the questions I want to raise with the minister is: Are the statutory conditions in the Pension Benefits Act at the present time sufficient to ensure the solvency of the fund? They are also designed of course for the investment of pension funds and for the preservation of employee settlements.

The major function of the commission now is to ensure that pension plans continue to operate in accordance with the legislation, particularly in the area of solvency of the plan. I am delighted to know that the Pension Commission is responding to the obvious need to be concerned on the whole question of solvency.

There seems to me to be a number of legislative things which have to be done in the Act. I think it is probably very clear that the 45-and-10 rule is going to have to become a 40-and-5 rule. I don’t know about that, but I tend to think that that is probably one of the amendments that the government may very well already be considering.

I am extremely concerned about the fact that on this question of solvency, any company can terminate its pension plan, as I understand it, unless it has a contractual obligation as a result of management and union negotiation to maintain the plan.

I understand there are many plans, which if they are going to be faced with this solvency problem requiring them to put up substantial amounts of cash into the pension fund, are going to be faced with the question of whether or not the company can continue.

As late as September of this year, in the Financial Times of Sept. 9, there is a statement of one company -- I haven’t had an opportunity to check, but I do not believe that it happens to be in the Province of Ontario. The article says:

“Domco Industries is a flooring manufacturing company with 500 employees. It abruptly suspended its pension plan because the cost of meeting the plan’s financial requirements were more than it could bear. Domco’s decision was taken as a last resort. If it had not ended the plan, the company would have had to go out of business. This not only would have wiped out 500 jobs, but may have also cut into the livelihood of former employees already receiving pensions.”

It indicates quite clearly in the article that “fortunately at the present time not many companies appear to be faced with that kind of drastic solution.” But that is the most drastic result of all.

I am simply saying that a similar event occurring in the Province of Ontario -- and I stand to be corrected on it -- would mean that any employer, subject to contractual arrangements with a union, is in a position where it can unilaterally terminate the pension plan. And that applies, despite the amendments which were passed last year dealing with the transfer of business from one company to another company where an effort was made to permit the purchasing company to continue on with the programme if it treats the period of service as continuous, so far as any given employee was concerned.

It didn’t touch upon the root problem of the unilateral right of most employers to terminate the pension plan as and when they wish to do so.

The consequences of termination, of course, presumably under the Pension Benefits Act, are worked out as equitably as possible in the event of termination. But there is nothing which provides that an employer embarked upon a plan cannot terminate that plan.

I was reading the “eternal optimist” speech to the Canadian Pension Conference at the Constellation Hotel by your colleague, the Treasurer of Ontario (Mr. White). He was indicating quite clearly that whatever was wrong in the United States, of course, wasn’t wrong in Canada; and that really so long as the United States and the legislative authorities in the United States adopted the Ontario Pension Benefits Act, that everything would be perfectly fine.

However, it is very significant to note that just within the last day or so the superintendent of pension legislation research at Manufacturers Life Insurance Co. has indicated that it may well be that the Pension Benefits Act of the Province of Ontario should be amended to contain the kind of provisions brought into force on Labour Day by the proclamation of the United States Employee Retirement Income Security Act of 1974.

I take that to mean that what they were doing is setting up some kind of an insurance protection so that if a company had to discontinue its plan there would be some insured benefits from an insurance fund available to protect the employees and their interests under that plan. I again don’t know the details of it but Mr. Tarver is a recognized authority in that particular field and he indicated quite clearly that that is a very needed amendment to the Pension Benefits Act in the province.

I had the opportunity to receive today through the courtesy of the Minister of Labour (Mr. MacBeth) the report which has just been released on the amendment to the Human Rights Code which we passed some time ago, but which was not proclaimed in force until the whole question of the effect of discrimination -- by reason of sex, marriage or age -- on pension plans was thoroughly canvassed. I am simply delighted to read, although again I don’t pretend to understand the immense technicalities, the interim report of the task force which was appointed to decide at what point in time that amendment to the Human Rights Code could apply to pension plans and other employee benefit plans. I note that it is recommended that April 1, 1975, be the date on which that amendment which we passed in 1972 to the Human Rights Code should be proclaimed in force.

It seems to say a number of right things which I guess all of us wish had been part of the law of the Province of Ontario for a long time, and that is that there should not be discrimination in insurance plans, pension plans, employee benefit plans, and other such incidence of the terms and conditions of employment -- either on the basis of marital status, on the basis of sex, or on the basis of age. There are 84 recommendations, all of which are couched in extremely technical terms.

It was obviously a very difficult task to have performed and I note that you are inviting papers to be submitted commenting on the various proposals. I only hope that that will be pressed on with by the Minister of Labour with great vigour and that we will get the acceptance of non-discriminatory bases throughout the pension plans and employee benefit plans in this province.

If I could return briefly, Mr. Chairman, to the question of the returns on pension plans. There was a William M. Mercer Ltd. report that after the effects of inflation, real earnings in most funds in Canadian pension plans were in the neighbourhood of 3.1 per cent annually from 1963 to 1972. With the recent poor performance of both bond and equity markets it is likely that this poor record has worsened. When such statistics are released there is a predictable cry that pension funds are being mishandled. I don’t know whether they are or whether they are not being mishandled, but we hear a lot of comment in the press when such a low rate of return on the investment is reported by the investment managers of funds which are part of pension plans.

I had another reference to the rate of return which indicates that it is considerably lower than that at the present time. There is a reference in the Financial Post within the last month or so to say that in Canada a study just released by B. J. Vincent Co., actuarial consultants, shows the median annual yield on equity pooled pension funds managed by major life insurance companies over the five-year period ended July, 1974, was 1.7 per cent. For trust companies the yield was 1.6 per cent. In the same period the yield on stocks composing the Toronto Stock Exchange industrial index was 2.2 per cent. This dull performance record is influencing many companies to shop around aggressively for professional money managers who can improve the yield on pension funds.

I think I don’t need to go on any further in elaborating the kind of concern which I have. It basically relates to the solvency of the pension funds for a large number of reasons, some of which I have commented upon.

It seems to me that with the need to give consideration to the protection of the employees from the deficiencies in our present legislation -- the economic problem of covering the deficiencies in the pension plans to preserve their solvency -- the government should seriously consider appointing a task force or a royal commission or some body to examine now the whole question of the private pension plan field in the Province of Ontario; to examine the relationship between the private pension plans and the government pension plans; to examine the impact of the actuarial requirements of meeting their experienced deficiencies; to determine whether or not there is a significant threat to the viability of any number of plans in the province; and to look into the question, which is always topical when these questions are raised, as to whether or not the investment in the pension fund is being invested in such a way as to maximize with care and security the return on the investment portfolio.

I don’t think we can pretend for one moment, with the ageing of our population, that there isn’t going to be a serious crunch in the demands, on the one hand, of those in the labour force for adequate pensions and, on the other hand, the difficulties which will be experienced by employers in meeting the demands, in the negotiation of improvements in the plans, let alone in many cases the institution of new plans, because there appears between 1972 and 1973 on those statistical figures to have been no marginal change in the number of people covered in the Province of Ontario. We recognize that we are entering into a very tough negotiating time with very difficult -- indeed, in some people’s opinion intractable -- problems related to the administration and supervision of pension funds in the Province of Ontario.

I certainly would appreciate it if the minister would take a moment or two to speak in response to the concerns which I have tried to express in a field in which I am not particularly competent, but which I sense instinctively or intuitively from reading and from hearing what has been said. In view of the inadequacy of pensions and the pressures that are constantly being dealt with in the last six or eight months, I think it is most important that the government recognize the social implications of the problem, and the economic implications of the problem and try to explain what is a very difficult field by the appointment of some body, which in some way could bring some order out of a very difficult topic and make it a lucid one, and to provide the kind of assurance and new insights which may be required to meet this ongoing and continuing need of our population.

Mr. Chairman: Shall item 2 carry?

Mr. Renwick: No, I would like the minister to comment.

Hon. Mr. Clement: Mr. Chairman, I have listened with interest to the member for Riverside. He touches on some very important items, particularly I think on the matter of the payments to the retiring and retirees of a pension plan. With escalating costs as they are, how do you fund it? I think he is well aware of the actuarial problems in trying to determine how and who should fund these plans.

You made reference to a company called, I believe, Domco, which was a Quebec company which folded some two years ago. We had no involvement in that other than that there were, I believe, 10 or 11 people who resided in Ontario but worked out of it.

Mr. Renwick: I was quite sure it was not an Ontario problem.

Hon. Mr. Clement: There are a number of matters that the Pension Commission is considering right now in terms of new initiatives and requirements for the future. Reinsurance is one of them. I think you touched on that. Perhaps there are certain areas that we should touch on. Changes in the funding rules may be required as economic changes are brought about.

I don’t profess to know anything about pension plans, other than that the Pension Commission is under the very strict obligation that the basic ground rules set forth by the legislation are, in fact, adhered to for the very valid reason that people are depending on these plans for their very existence at some future time.

The Pension Commission is presently still assessing a number of very detailed briefs which were generated as a result of the green paper, circulated in November, 1972 --

Mr. Lawlor: October.

Hon. Mr. Clement: -- as to the 40-and-5, and we should have some observations to offer in due course to this House in connection with the submissions which are made as a result of that green paper.

I just received my copy of the Minister of Labour’s comments today contained in the task force chaired by Mr. Robert Johnson. I am sorry I haven’t had an opportunity to read it. I didn’t get it until this evening, both in summary and the long form, but I will find it very interesting to read.

One thing causes me concern. I don’t know what the recommendation is in the paper and I may be anticipating, either correctly or otherwise, but where do you draw the line on discrimination for reasons of a sexual nature as to male v. female? Where do you draw the line there and on the very logical and proven statistical data on lifespans or life expectancies because of differences in sex? I don’t know how you resolve that and I’ll read with interest because I think that --

Mr. Renwick: The report seems to recognize the actuarial distinctions which may have to be made.

Hon. Mr. Clement: I haven’t looked at it. I have had some conversations with people who have been in to see me from the pension industry -- really only about two people -- who formulate plans, who make presentations of plans, and this is something that they will welcome so that their thinking might be clarified.

The biggest problem as I see it today is the question of how to fund these things as the purchasing power of the dollar deteriorates. I wish I knew the answer to that question. It isn’t only relevant to pension plans, although these are the people who seem to feel it the hardest. It’s relevant to other similar areas.

I do appreciate your comments and you could have confused me. You are very, very modest; you said you didn’t know anything about pension plans, but you obviously demonstrated that you know a great deal more about them than I do. I don’t think we are that far away in age differences. Perhaps you are not feeling as well as I am today and you are more pension-plan oriented than I am on this particular occasion. I don’t know the reason.

An hon. member: Mutual admiration.

Mr. Lawlor: These exchanges of modesty cause me to blush.

Mr. Renwick: Perhaps I have a little more foresight, or I’m not so busy, so that I can worry about these things.

I would hope the remarks I have made about this problem will be sufficient to ask you to consider the appointment of a minister’s committee or some such body that will have public hearings and receive briefs but will try, more than anything else, to come up with the kind of understandable report that the ordinary person can read.

I think it’s fair to say that, when you’ve got a stable economic society, without wide fluctuation in the markets or in the value of the dollar; when the federal government isn’t printing more and more paper money, and all the other things which lead to instability in our society, people generally accept the pension arrangement because they can make plans for the future. But now you’ve got people moving from an income-earning position into that group that require support called “fixed-income people”. I think their question is to what extent that obligation can be shifted to government pension plans.

It’s going to be difficult to avoid the conclusion that the government is going to have to pick up the tab unless it can be illustrated clearly that employer-employee relations require the kind of plans where pension costs will be considered deferred payments and industry will bear its fair share.

In addition, the ministry always likes to say that, so far as the so-called consumer is concerned, it’s engaged in educating people. I would guess there are very few people who understand even the terms referred to in pension plans.

If you look in the back of the Minister of Labour’s report -- the report of the task force under the chairmanship of the deputy minister -- there is a glossary of terms which I defy any person to understand: Participation requirements, pension formerly, pensionable date, postponement retirement, pregnancy benefits, unit benefit pension plans, unit benefit formula, uniform discount factors -- all of those are jargon.

Mr. Stokes: It must have been written by a lawyer.

Mr. Renwick: I think people have got to understand what their pension benefits are in clear and understandable language. They must understand the implications of the problem.

If it weren’t for the fact that we would be having an election next year it might well be a topic a select committee could look into. But my guess is that the best, quickest and most efficient method is a minister’s committee to look into the matter. Perhaps Mr. Tarver is the kind of man, since he gave evidence before the U.S. Senate on various aspects of our pension plans. Maybe you should also have a representative from one of the major trade unions that are knowledgeable about the pension plans, such as the Steelworkers or the auto workers, and a representative from government, a chap --

Mr. Stokes: Hugh Peacock.

Mr. Renwick: -- like Hugh Peacock. You have one of them as a member of the pension commission now, Gordon Milling from the Steelworkers. There are a number of people representing that interest who could do a first-class job for the minister.

Forewarned is forearmed. Now is the time to give serious consideration to that kind of general look, before a problem gets worse. It may very well get worse. Certainly the volume and demands will be enlarged over the years because even in a stable society, with rising expectations people are going to expect more dollars during their retirement than most pensioners are getting at the present time.

Mr. Chairman: The hon. member for York Centre.

Mr. Deacon: Yes, Mr. Chairman, I have been very interested to hear this discussion on the funding of pensions and how we should be protecting people. The more I examined the question of pension plans, the more I felt that they should almost be confined to deferred payments paid by the company and employees into funds and then managed by whoever are chosen by the employees to manage those funds -- employment-management committees.

I can well remember finding a situation where you can buy these insured plans where the company’s contribution is very low at an early stage because, if it’s a new company, the employees are generally younger. But as they get on in years and if the company has difficulties, what seems to be a very assured position for the employees can vanish overnight.

I also object to the whole question of vesting as a means of forcing people to stay on in a company. I feel that portability is a much more important thing. If somebody doesn’t want to stay with a company, he is not going to be much good for them anyway. I don’t think using pension schemes as a means of persuading people to stay on in the employ of a company is a very wise management policy. But that’s beside the point here. I am concerned about whether this pension plan branch does anything to look after the problems of employees of government structures or educational structures as well as private organizations -- if they have problems as to interpretation of their rights. Do they help other than just private funds or do they deal with government situations?

Hon. Mr. Clement: You mean for a person to obtain information about his or her own plan?

Mr. Deacon: If there is a dispute and there appears to be a very literal interpretation used, where really the spirit of the agreement is not being followed, does this organization go to bat on behalf of those who may have a grievance, whether it be a private pension plan or a government plan?

Hon. Mr. Clement: Yes, that is one of the functions which the commission looks after. Perhaps you weren’t in the House or you might have been here and I wasn’t aware of it, but --

Mr. Deacon: I thought I understood that, but I wasn’t just sure.

Hon. Mr. Clement: Yes, you will get the employee who has a complaint of one kind or another: He says his funds are locked in; there is an inability to withdraw contributions after long service and all this sort of thing. There will be a dispute and he will come to the board, either through correspondence or through a steward or a union representative, to make his complaint known. The board then attempts to rationalize it with the employer or the group involved so that the matter is resolved.

Sometimes, I can tell you, it isn’t just the matter of someone going against the employer. Sometimes you will find that there is a disagreement between employer and pensioners and they will come before the pension commission. Early this spring, as I recollect, there was some disagreement on interpretation of a certain section of the Act. The pension commission took one view and the automobile manufacturers took another and meetings were conducted and I suggest the matter was resolved to the ultimate benefit of everyone.

Mr. Deacon: I have had a couple of situations where I had hoped to get more help than I was able to. Maybe I should have gone to work a little more closely with the pension branch. This was in relation to a dispute with one of the community colleges where I felt there was a very unfair approach taken by the college in dealing with a person who had been employed at a fairly late stage of life on the understanding that he would be provided an opportunity to continue his employment up to the age of 70. In fact that person’s services are still desired and used, even though he is well over 70. But there is no way that he can get on to a proper pension basis because of the interpretation that is given to the years of service in the way he is being employed.

It seemed to me most unfortunate that sometimes we have, not only in private institutions but in our government institutions, a very literal and unfair approach taken to interpretation of these plans that makes it almost impossible for individuals to meet the expectations they are led to have at the time of their employment. I’ll go to the branch to see if I can get some help in regard to this matter.

Mr. Chairman: The member for Lakeshore.

Mr. Lawlor: I have decided not to speak, thank you, Mr. Chairman.

Mr. Chairman: Shall item 2 carry? Carried.

Item 3.

Mr. J. P. Spence (Kent): Mr. Chairman, is this the vote that cemeteries come under? I would like to bring to the attention of the minister the cemetery boards in our part of the Province of Ontario.

Before the session adjourned in June, I had partly discussed with the minister the concerns of the cemetery boards, which have to hand over the perpetual care funds to his cemetery branch. We find that these cemetery boards are all made up of dedicated men. When they were named to the cemetery boards, generally the cemeteries were in a bad condition. These members gave up their time, gratis, to beautify the cemeteries and raise funds for the perpetual care fund, and also built a healthy amount of money in their treasury.

Now, of late years, I understand the inspectors from your cemetery branch have been informing these boards that they’ll have to hand over these perpetual care funds to the cemetery branch to administer. Many of these boards resent this after they have given us their time, money and a great effort to make a beautiful cemetery. Some of them tell me that if they have to hand over this perpetual care fund to your cemetery branch, they’re going to resign from the board and let you administer the whole cemetery.

I must say the boards that spoke to me about this have done a wonderful job for the cemeteries and they are very concerned. They say that they can do the work but are not able to administer the funds, which seems to belittle them to some extent.

I wonder, Mr. Minister, if something could be done. These cemetery boards have done a tremendous job and have even encouraged people to leave money in their wills to the cemetery, so this is why I am stressing that these boards are made up of very dedicated men. I think, Mr. Minister, they resent it and I would like to see if you could see fit to amend the Act or do something that could encourage these dedicated men to continue with their work. They think that if they can do the work gratis they’re certainly capable of administering the funds.

I wonder if you have anything to say that might encourage them. I know that you likely weren’t here when the Act was passed, but you’re the minister now and you may have new ideas, different views. And I know quite well, Mr. Minister, that you know there is a problem among cemetery boards in certain parts of this province.

Mr. Breithaupt: Before the minister replies on that particular point, Mr. Chairman, I’m wondering if he could give us the rationale in this matter as to why the funds are required to be turned over rather than a proper audit performed, and also as to the reasons -- presumably through some failures in some instances -- that led to that particular decision having been made, and whether in fact some problems arose due to management or just due to boards and individuals disappearing and leaving the responsibility. If so, perhaps we could hear about that, and get the rationale behind the present policy.

Mr. Chairman: Mr. Minister, would you care to reply to that?

Hon. Mr. Clement: I couldn’t remember the exact year but the superintendent of insurance, under whom the Cemeteries Act falls, handed me a copy, and he makes specific reference to it.

As a result of this problem which has been described by the member for Kent, a select committee of this House was set up many years ago, and it reported on Feb. 19, 1954. There seem to be only one or two of the present membership of this House who sat on that committee at that time. The chairman was Mr. James N. Allan. The only other name I recognize as a member of the House today is Mr. John Root.

The whole concern was security of the funds for perpetual care. I don’t think that our ministry is concerned, or has any genuine reason to be concerned, about theft of those funds. I think it is a matter of concern for potential mismanagement of those funds. The legislation was introduced and became effective, as I understand it, as of 1955. Here we are 19 years later and it has been demonstrated, certainly to me, that many cemetery trustees, particularly in the rural areas, are just finding out that this is the law, and they are somewhat annoyed. Perhaps this doesn’t say much for --

Mr. Stokes: It hasn’t been supported for 19 years. That’s the thing.

Hon. Mr. Clement: It has been the law of the province for 19 years and many of these rural areas haven’t been aware of it. There has been no reason for it to be drawn to our attention. The fact of the matter is that in many instances the moneys, I think, have been fairly well managed, if not well managed.

If there is no complaint, then everything is fine. What happens in some instances is there is a complaint. The grave of a loved one is not tended properly and you as the survivor make a complaint and find out that there is no money for the perpetual care fund -- or insufficient money -- and then decide that the government should do something about it. What’s the matter? How come there isn’t money?

Why isn’t there money? It turns out that perhaps moneys have been invested in undertakings that really are not approved investments. This causes me concern because the Trustee Acts sets out what approved trustee investments are. If many of our good citizens haven’t heard of this legislation in 19 years, I doubt if they will be very familiar with the terms of the Trustee Act.

As I say, the whole matter is one of concern for the security of the funds. They can take and put the perpetual care fund in the hands of the public trustee or in the hands of a corporate trustee, both of whom charge a fee. And this seems to be one of the facets of complaint that a fee is charged.

The people in most instances very sincerely feel that they shouldn’t have to pay a fee because they would rather manage the fund themselves. It has been the branch’s experience, so I am advised, that certain funds which have been turned over to corporate trustees for management have, in fact, earned far more than they did when they were in the hands of a few cemetery trustees, and the cemetery in itself has been the beneficiary of that improved income.

I don’t know how to resolve it. I would be the last person to point the finger at people who have served on cemetery boards for a number of years, always without any remuneration, and who very often, in most instances, to my own knowledge and as you say, go out and actually cut the grass and do the physical chores around the cemetery. In most instances they are family people.

But what do we do? In view of the unanimous recommendations of the select committee in 1954 and of the legislation which came in in 1955, perhaps this is a good point to entertain alternatives. Perhaps the time has come for an alternative suggestion or suggestions as to how these matters could be handled. It’s awfully easy to say perhaps bonding would do, because the cost of the bonds, I am sure, would probably outweigh any savings that the trustees would effect by doing their own investing, as opposed to having the corporate trustee or the public trustee invest.

In any event, I have an open mind on it and I am grateful to the member for Kent. I have had four or five members of this House come to me with this specific type of thing in the last two or three years. It isn’t just a singular issue. It’s a matter that I think is touched on perhaps in a dozen or so rural communities in this province.

Mr. Chairman: The member for York Centre.

Mr. Deacon: Mr. Chairman, I am very interested in the minister’s comments and I am also very pleased that the minister in his usual way has indicated that he is prepared to listen to suggestions to eliminate this cause of concern that a lot of people have.

First of all, I think the general principle of the legislation, to begin with, to safeguard the perpetual care funds, was very wise indeed. In fact, we found the province was quite littered with cemeteries which had been abandoned and left without proper funds to maintain them. I am sure that the people to whom my hon. colleague from Kent refers are people who actually have been maintaining excellent care of the cemeteries for which they are responsible.

I would also like to commend the branch for the work they have done, because I think they have used a great deal of tact in not pushing and imposing themselves rapidly. Maybe they should have been pushing harder at the literal interpretation of the Act, as the hon. member for Thunder Bay suggests they should be doing. I think they have used considerable discretion and tact. That’s been my experience.

I also feel that in many cases these people who are responsible have shown far better judgement in the management of their funds than the professionals have. I know that on the whole the performance of professionals hasn’t been too bad, but if you watch the way the markets have performed in recent years, you will find that the fluctuations are much more extreme than they formerly were and you will also find that possibly this is due to the fact there is a much greater concentration of management of moneys in the markets than there formerly was, and the people who are these professional managers act as sheep. When you have a concentration of control it can be very, very dangerous in the economy.

I am pleased at the minister’s suggestion that we might look to other means whereby we can leave the control in the hands of these people under certain circumstances. They would have to pass a little trustees’ course, for example, as to what a trustee investment is and what is a legal investment for life insurance investments, so we actually know they know what they are talking about. Maybe there are means whereby we could amend that Act, and I think the hon. member and I are among those who will probably be submitting some suggestions to the minister.

I do want though to express my support for the manner in which the Act has been administered in the past. I think we will do our best to be sure that we don’t offend and actually remove the potential benefits from administration of these funds by some of the local people.

Mr. Chairman: The hon. member for Thunder Bay.

Mr. Stokes: Yes. I want to speak very briefly on this, Mr. Chairman. I was one of the members who had this brought to my attention, although I didn’t go to the minister with it. I went to someone in the cemeteries branch -- a chap by the name of Mr. Francis? No, Mr. Francis was the man who was going around the province, and I spoke to his boss -- I couldn’t get Mr. Francis. I got somebody in charge of the cemeteries branch down here.

I wasn’t being smart-alecky when I said it hadn’t been administered for 19 years, because I can say quite truthfully that some of the small cemetery boards in my riding had no knowledge of any Act at all; they didn’t even know there was a Cemeteries Act in existence. So, when someone came knocking on their doors suggesting that they were going to relieve them of some of their money, they phoned me immediately to see if this guy was legit.

You know, they thought he was some con artist going around the province. So I said: “Well, did you ask him for his card?” They said. “Oh, yes, he had an official-looking card, all right.” I said: “Well, what was his name?” Then I looked it up in the directory and I found out that he was legitimate, but I wanted to find out the rationale behind it.

I find out that it hadn’t been administered too well, or at best the communications hadn’t been too effective when you get cemetery boards that have been in existence for 35 years and some of those people have been on there almost that long and had never even heard of the legislation. So, I think it’s a breakdown in communications.

I am sure that your Mr. Francis, who was coming back to have a meeting with them, alleviated a lot of the initial fears that they had about turning a certain percentage of their funds over to the public trustee to be held in trust for the very good reasons that you explained.

I think a lot of the problem is that it hadn’t been explained properly. When you have people who have been sitting on boards for 19 years without even knowing that the Act was in force -- but not enforced -- it is a clear indication that there was a breakdown in communications and you weren’t too serious about enforcing your own legislation.

I think a lot of these problems could be cleared up if you would notify these boards that there is legislation in existence and of the provisions of it and the rationale behind it.

Mr. Chairman: The hon. member for Windsor-Walkerville.

Mr. B. Newman: Mr. Chairman, I want to ask the minister if there is any attempt by the Americans to take over our cemeteries. I can recall discussing this with you about two years ago, and you made mention at that time that to the best of your knowledge the Americans were not getting into our cemeteries in Canada and purchasing them.

Do the same conditions still exist? The Americans are not going in and purchasing Ontario cemeteries, are they?

Hon. Mr. Clement: As far as I am aware, the situation has not changed since we had our discussion many months ago. I would think that subsequent changes in other legislation might well affect them and make it somewhat unattractive to them. I am thinking of changes in our Business Corporations Act dealing with directors and requirements for the majority of the people on the board to be resident Canadian citizens, I am thinking of the expanded liabilities that have been imposed on the shoulders of directors.

I have just received a note from the director who says there is only one cemetery in Ontario now owned by US holdings, and that happens to be in your city of Windsor.

Mr. B. Newman: This was brought to my attention. I think it was a year or two ago when I discussed it with you and you mentioned to me that to the best of your knowledge at that time there was no such attempt. But seeing that they were in the city of Windsor I thought possibly they may have expanded their operations and gone a little farther inland.

May I ask you, Mr. Minister, if you are considering legislation to regulate pet cemeteries? You find this in the United States more and more. It is becoming quite common that people who have lost a pet, rather than disposing of it in the traditional fashion, decide that they would like to dispose of it in some pet cemetery. It is big business in some of the states.

There has been a request of me to find out if there is any legislation or any regulations that governed the establishment of one. Your ministry replied to me that all they would have to do is meet with the zoning conditions of the municipality and have the authority from the MOH. Now, are you considering anything or don’t you think there is going to be any greater demand for this type of facility for pets that have passed away?

Interjections by hon. members.

Hon. Mr. Clement: I make an unqualified answer and I’m not considering that at all. I read with interest some weeks ago of a man, I think in the city of Montreal, who set himself up in business now as a pet undertaker. After reading that article I felt that I truly understood the meaning of a bowser bag. No, we’re not considering anything on it right now.

Mr. B. Newman: You can look to the future, Mr. Minister, and see that you are going to have others set up in the Province of Ontario.

Mr. Minister, I received a communication concerning the Ontario Cemeteries Act, which allows non-profit cemeteries to sell funeral supplies such as wreaths, vaults, grave markers and monuments. Now, the party complained that these people have a big economic advantage over him in the fact that they do not have to pay any business tax, realty tax or income tax and that he, as a private businessman, has to pay all of these taxes whereas non-profit cemeteries can sell all of these ancillary pieces of equipment and wreaths, monuments and so forth and he has to pay tax on all of that.

Mr. Renwick: This is the sort of thing you would want a select committee on.

Hon. Mr. Clement: The Toronto Board of Trade I think it was, or the Metro Toronto Board of Trade, wrote to dealers asking them to communicate with their provincial and federal members regarding the preference that non-profit cemeteries had over the other kind in dealing with these things -- bronze plaques, bronze markers, wreaths, memorials and so on. Quite recently, or sometime after that, as I understand it, a number of dealers sent out a letter advising the recipients not to communicate with their MPPs and MPs and that the matter would be resolved in due course.

I have had, I believe, three or four letters; no more than that. You’ve had two and I believe one of the other members spoke to me in the summertime about it, but other than that I have nothing further I can offer the House. That’s the extent of my knowledge per the advice of my director.

Mr. Stokes: Mr. Chairman, I wonder if I might prevail upon the minister to introduce the gentleman who is sitting in front of him. You write to these people, you get wonderful co-operation from them and you see them sitting there and you don’t know who they are.

Hon. Mr. Clement: No, it’s a very good point. I’m sorry I took it for granted that everybody knew who was here. Sitting across from me is Mr. Gordon Grundy, the superintendent of insurance --

Mr. Stokes: Yes, he has been very helpful.

Hon. Mr. Clement: -- and a man who is known to many members of the House. On my right I have my head accountant, Mr. Ted Johnston, from the ministry, and on my left is the deputy minister, Mr. Ken Young.

Mr. Chairman: Does item 3 carry? Item 4?

Mr. Renwick: No, item 3.

Mr. Chairman: Item 3?

Mr. Deacon: Mr. Chairman, I just want to say one thing about the comments I’ve heard from the various people in the insurance industry and people who’ve had complaints about the insurance industry. They have made some very, very complimentary remarks about the trust and loan company branch. I think that it should be recorded that it’s one of the few branches that relates to protection of consumers and their interests and I’ve yet to hear a complaint about them.

Mr. Chairman: Item 3?

Mr. Lawlor: Mr. Chairman, this is the superintendent of insurance vote; the automobile no-fault policies might be discussed, I trust?

Mr. Chairman: You mean on item 4?

Mr. Lawlor: No. I think that this is the vote and I want to make sure.

Mr. Renwick: Item 3.

Mr. Lawlor: Is it not correct that we should discuss no-fault at this particular point, if we’re going to discuss it at all?

Hon. Mr. Clement: If it is discussable it would seem that it would come under item 3.

Mr. Lawlor: That’s the major concession made this day by the minister! You’ve taken it to heart, Mr. Chairman, and we’ll discuss it at this stage. The government has made, under the insobriety of this particular minister, the nudging moves towards no-fault policy, which, of course, is a particular field --

Mr. Stokes: He really knows how to hurt a guy, doesn’t he?

Mr. Lawlor: -- reserved for the New Democratic Party, and a power on which we find any infringement totally impermissible.

Mr. Breithaupt: That’s insobriety, is it?

Mr. Lawlor: However, if you adopt our policies we will not cavil to any great extent. I trust that the minister is well aware of the proposals made by the Insurance Bureau of Canada. And of a fairly lengthy “Symposium on No-fault Insurance,” published in the Law Society Gazette in March of this year, which outlines a seminar I attended at the Four Seasons Sheraton on Feb. 8 this year, in which certain proposals were made which won the howling retribution of the lawyers. I couldn’t refrain from going to the microphone towards the end because this was the first occasion on which I’d ever been present in which the legal profession found itself wholly at odds with the insurance industry and its proposals.

Part of it was self-seeking, as usual, of course. Namely, that the insurance industry, in moving toward no-fault, in a very constrictive way, were going to wipe out general damages and the whole concepts of consequential damages -- pain and suffering basically, but a whole host of other things; loss of consortium and loss of pleasure in life and all those things that are rolled together in the great snowball known as general damages. That was going to be eliminated and that was anathema to the boys in question.

On the other hand, apart from the self-serving aspects, their case was extremely well taken on point after point, particularly in the area of personal injury compensation. I’ll give the more direct facts in a moment, but in a general way it came to this: While the insurance industry in this regard had been beating its breast for a generation, saying that this automobile insurance is a money-losing venture as a whole, the proposals were designed in this specific instance to make it a fabulously profitable one for them. Why they wanted to stay in at all always passes one’s imagination, but having decided to stay, they stay with a vengeance.

In other words, they stay in in such a way that, on the premium dollar they’d probably have to pay out something like 27 cents at the very most -- although extraction, even by the legal profession and even by those who have worked for them in close harmony for many generations, those who extract the information and the various computer printouts as to how they arrived at their findings and their premium dollar, would be totally bypassed; would totally frustrate the legal boys.

And if they are frustrated in this particular regard, then I think it passes all dreams of discovery, even, perhaps, by the minister of the Crown here. After all, your department, in this particular regard, are a fairly passive bunch, aren’t they? They prepare a green paper by way of the submissions made to them by the industry themselves and, as I understand it, with very little investigation, they take the statistics as supplied and go from there in terms of compiling them and printing them.

But as far as an investigatory staff is concerned, or one which surmises or apprises the valuations made, that is not within your purview. And that fits in extremely well with your philosophy of earlier today of a basically hands-off policy, with respect to great structures of industry in the province, which is a purblind, reactionary stance and which, if you’re minister long enough, you might just be dissuaded from to a greater extent than what you presently are.

That would be a great enlightenment -- it would be like the breaking through of sunshine. You then become living 1974, maybe even 1975, and that would then equip you to be a viable Treasurer for the Province of Ontario. As things presently stand, I have my renegings and severe reservations about John White, who is Nibelungenlied enough without having to be replaced by somebody who really believes in the system if it doesn’t work and has some kind of mythic concept of what happened in 1850 as still extant in the world today.

I want you to take a look at what Linden says in this regard. He doesn’t make any particularly incisive criticism of the bureau’s stand, but he does give a series of recommendations as to what might be done, retaining the tort law concept and not going holus-bolus for a full and plenary no-fault policy which would take the matter completely out of the courts.

I don’t understand the New Democratic Party’s position to be that either. In other words, I understand our policy is to still leave a measure of tort liability and permit suits in courts in amounts that exceed the sums that are forthcoming under whatever the scheme may be, whether it is $20,000 or $5,000 for personal injury claims or whatever it may be in this regard.

Just take a look at Linden, and I think you’ll give a good deal of credence to that fellow, despite the fact that he’s a well-known Liberal who parades his colours like a peacock in the reservoirs over here at the university. You can’t walk up to the man and discuss anything. The first thing he tells you is “I am a Liberal,” and after that you don’t know where to start.

He would eliminate the gross negligence requirement in the passenger. It took you generations to get to gross negligence. Maybe it will only take you three or four years to move to take out this gross thing called gross negligence and allow regular negligent risk as appraised by a jury and on a reasonable man and foreseeability test to operate in this particular area, as anywhere else. This is still a capitulation to the insurance companies of which we have accused you ad nauseam.

An hon. member: And justly, too.

Mr. Lawlor: We would abolish the defence of inevitable accident. You should move in on that particular area with your legislation. We will have a brand new Insurance Act very shortly. I take it that that will give complete coverage to this particular area of law, too -- that is, the motor-vehicle claims section inside the Insurance Act. Am I correct in that understanding?

Hon. Mr. Clement: I said I believe that we would be introducing it over a period of years through section-by-section changes that would update it completely.

Mr. Lawlor: That’s what you have been doing for the past 50 years.

Hon. Mr. Clement: Yes.

Mr. Lawlor: Section by section and then when you get them passed you never proclaim them.

Hon. Mr. Clement: It’s kind of a perpetual sort of thing.

Mr. Lawlor: Well, it keeps whoever the minister is busy, apparently, in this House bringing in piecemeal legislation.

Hon. Mr. Clement: Yes.

Mr. Lawlor: And the very feeling of progress just emanates through this chamber.

Mr. Stokes: Like the Warble Fly Act.

Mr. Lawlor: All right. The Law Society of Upper Canada proposed and asked that this particular defence of inevitability be eliminated 10 years ago.

He is very much concerned that interspousal immunity should go -- the husband and wife relationships with respect to driving a car and whose fault and all that. That is part of the great programme which is not so much your concern about the whole of family law and about the Attorney General’s responsibilities in this particular regard. It’s an area in which you would have some responsibility, and if you would whisper in his ear, he might get on with the job.

We would improve the way in which we assess damages. We must end the discrimination against women in the law of torts which require a driver who kills a wife and mother to pay far less a figure than one who kills a husband and a father. His statement is that any life that is lost in an automobile crash should be worth at least $25,000, and I am inclined to think that that would be fairly just.

He makes a host of other recommendations I would ask you to look into.

I’ll take the last few minutes to point out how hollow -- I’m not inclined to use the word fraudulent, although I just used it -- but really threadbare the IBC recommendations are. The recommendations I am sure are before you. This is the powerful industry that has dictated all your thoughts or the thoughts of previous ministers. Therefore one must be circumspect and hit hard with respect to these proposals being invalid, not simply because they have been rejected holus-bolus by every element from the most roseate right to the most vermilion-hued left of the legal profession, but because of the public impact and what they are seeking to do.

What they achieve is, through OHIP and public pension schemes of all kinds, and through loss provisions with the Workmen’s Compensation Board, the payment of virtually nothing, while deriving the full premium. They use the no-fault concept as a loophole or escape hatch to reward their whole position.

For instance, our present accident benefit plan covers medical and rehabilitation expenses incurred within a four-year period. Under the IBC there is no time limitation. This is an improvement, but would appear to be significant only in very rare cases. So it runs all through their proposals. The IBC proposal takes away OHIP’s right of subrogation, which is its right to recover from a wrongdoer or his insurer for expenditures caused by his negligence.

The annual subrogation recovery of OHIP is approximately $8 million to $9 million. If there’s no right for OHIP in the moneys that it has paid out to an injured motorist to recover that from the one who is at fault by way of subrogation, then in effect OHIP is subsidizing the insurance industry of Ontario to the extent of $9 million a year. And so it goes in the course of every proposal in this legislation.

So far does it go that some examples are given by a lawyer by the name of T. H. Rachlin. Here is one: A pedestrian, a teacher, struck by a drunk driver receives two fractured legs and a fractured left arm. He has several operations and is hospitalized for three months. He is able to return to work after five months; the proposals are that you have to be out for six.

He is left with continuing intermittent pain and a slight limp and he cannot fully straighten his left arm. There is no compensation under the Insurance Bureau proposals because there is no pain and suffering recognized. So he gets nothing under that head. He is right-handed. He has had much pain and suffering and lost many of the pleasures of life. Because his work is not physically demanding his ability to earn a livelihood is not affected. Their attitude is that unless he is permanently, seriously disabled and can’t so much as lift a telephone, he doesn’t receive a dime in benefits. While acknowledging his injuries are permanent his doctor says he will not be left with any serious symptoms, whatever “serious” means.

OHIP pays his hospital medical bills in full. The wage continuation plan available through his employer pays his salary in full during his time off work. He has contributed to the premiums of both OHIP and the wage continuation plan. He receives not one cent from the IBC no-fault benefit and his right to sue the drunk driver for compensation for his injuries is completely taken away. And that is just?

Mr. Chairman: Would this be a convenient time for the member to break off?

Mr. Lawlor: I adjourn the debate. Thank you, Mr. Chairman.

Hon. Mr. Winkler moves the committee rise and report.

Motion agreed to.

The House resumed, Mr. Speaker in the chair.

Mr. Chairman: Mr. Speaker, the committee of supply begs to report certain resolutions and asks for leave to sit again.

Report agreed to.

Hon. E. A. Winkler (Chairman, Management Board of Cabinet): Mr. Speaker, before I move the adjournment of the House, as announced we will do the estimates of the policy minister for the resource field tomorrow and on Monday, again as announced, we will do the no-confidence motion in the name of the Leader of the Opposition (Mr. R. F. Nixon), and on Monday evening we will do the estimates of the policy minister for social development.

Hon. Mr. Winkler moves the adjournment of the House.

Motion agreed to.

The House adjourned at 10:30 o’clock, p.m.