Legislative Assembly of Ontario

The House resumed at 8 o’clock p.m.

RETAIL SALES TAX AMENDMENT ACT (CONTINUED)

House in committee on Bill 30, An Act to amend the Retail Sales Tax Act.

Hon. J. P. MacBeth (Minister of Labour): Mr. Chairman, before the House proceeds for the evening, I would like to draw to your attention in the west gallery a group of Scouts from the 17th Toronto Boy Scouts Troop from the Church of Christ the King on Rathburn Ave. They are here this evening, sir, under the leadership of Mr. Warrington, Mr. Brannan, Mr. Rippon and Mr. Thompson. I would ask the House to greet them in its usual style.

On section 4:

Mr. Chairman: When the committee rose we were debating Mr. Renwick’s amendment to Bill 30. The hon. member for Wentworth had the floor.

Mr. J. E. Stokes (Thunder Bay): He was breathless then and he still is.

Hon. A. K. Meen (Minister of Revenue): He has two hours.

Mr. I. Deans (Wentworth): I did indeed. I tell you that this bill leaves me breathless, Mr. Chairman.

Hon. Mr. Meen: After three hours?

Mr. Deans: I am taking deep breaths but I am not yet ready.

Hon. Mr. Meen: The member just took too long over dinner.

Mr. Deans: I got sort of tied up on my way in; that was my problem.

Before supper I had tried to make two or three points that I know the minister agrees with but he obviously publicly can’t agree to. If there is to be any benefit at all that would flow from a bill such as this, the benefit is likely not to flow to anyone in Canada, certainly not to anyone in Ontario, in any significant amount.

Hon. Mr. Meen: I don’t think that’s so.

Mr. Deans: The fact is, and the minister knows it, that the cost of taxation is all taken up in the cost of any of the items manufactured. The cost of the replacement of production machinery is very much a cost that is calculated into the final selling price of the product. The determination by the majority of companies of if and when they should replace or enlarge their operation is very much calculated in the cost of doing business. The elimination of the tax on production machinery is not something that will either reduce the cost of the commodity or for that matter make doing business any easier; because it won’t result, if history is to be any measure, in a reduction in the cost either of manufacturing or of the selling price of the product.

The problems that I have with it, and I put them to the minister earlier, are these. If it were intended to stimulate the economy, quite obviously the economy that it will stimulate will be the economy that benefits directly from the production of the production machinery. That economy is likely to be in the US or in Sweden or in Germany.

If it’s a matter of the stimulation of productivity, then productivity has not, in most industries, reached its maximum level in Canada at this point. The unemployment we face and are facing currently is the result of a decrease in productivity or the production of products. The purchase of new or additional machinery in order to stimulate productivity is not necessary, simply because the machinery already in existence and in place is capable of producing much more than it is currently producing. Therefore, it could be said that we ought not to be moving into additional stimulation in these purchases until such time as we reach a reasonably high level of production.

If it is intended to stimulate investment, then that investment, of course, will flow out of the country to the area where the production machinery is being manufactured. In the matter of jobs, the only jobs created by the further automation will be jobs related directly to the production of the machinery itself rather than jobs related to the production of any end product that the machinery might be used to build, or to develop, or to produce. I would like to ask the minister if he could this time -- I don’t recall if he was the minister the last time -- produce for us some of the background material to substantiate the position they have taken.

I would like to know, first of all, how many jobs does the government anticipate will be created in the Province of Ontario as the result of the elimination of the sales tax on production machinery? What’s the short run goal, let’s say, over the next six months? What’s the long-term goal over the entire 21 months that the tax will not be in effect in the province?

Can the minister indicate to us what is the level of investment in production machinery that he would normally anticipate would be undertaken in the province in any normal company fiscal year? He can pick any 12-month period he wishes.

Could he then indicate what additional investment is anticipated, on the basis of any reasonable production of statistics, as the result of the elimination of the tax? Can the minister indicate to us what increase in productivity he would anticipate might take place --

Mr. P. D. Lawlor (Lakeshore): He hasn’t a clue.

Mr. Deans: -- during the 21-month period.

Mr. Lawlor: He wouldn’t know if we asked him.

Mr. Deans: And could he then identify the industries, either in a general way or in a particular way, that would likely take advantage of the elimination of the tax. Could he tell us where the markets are that will consume the additional production; whether they are domestic, or whether they are offshore, or perhaps in the United States; and in what particular areas he sees the Province of Ontario benefiting? Can you tell us in dollars how much you expect will be invested in addition to that which may well have been invested in any event? And can you then tell us where there are markets for this additional product that will be produced as a result of this new machinery that will be put in place?

Mr. Lawlor: Don’t wait for his reply. It will be completely amorphous.

Mr. Deans: Because these are the questions that have to be answered before you can make this determination.

Mr. Lawlor: They never have been yet.

Mr. Deans: We have got to know, first of all, whether there is any basis for a calculation of lost revenue to the Province of Ontario; whether you can identify, as surely you must be able to, in which industries there is likely to be some major purchases undertaken; whether those major purchases are going to be undertaken as a result of this tax incentive or whether, as in the case of the Steel Co. of Canada and many other places, those were decisions that were made a number of years ago to enlarge or to develop new industrial effort.

I think that we are no longer going to accept in this Legislature just a simple, carte blanche statement from the minister that this is a good thing.

Mr. Lawlor: He is looking it up in the back of the book.

Mr. Deans: Because frankly we don’t think it is a good thing. You can read the book. I have read the book. I have read the appendix and tried to decide on what you based your calculations to decide if this was, in fact, going to be beneficial to the Province of Ontario. I can’t find any evidence in that book, the budget of early this month. or in any other statistic or in any other statement of the government, any indication at all with regard to additional jobs, with regard to additional purchases, with regard to benefits and where the benefits might flow with regard to the increased productivity that you talk of or with regard to where those commodities will go to be sold.

Those are the keys. If you can produce those kinds of figures, I suppose it might be solved. We might agree; not that it matters to you, I’m sure. Nevertheless, we might, just for the sake of the record, at least agree that it’s a worthwhile endeavour.

Mr. Lawlor: A little intellectual honesty.

Mr. Deans: I tell you something: I don’t happen to think for one minute, any more than I thought three years ago, that there’ll be one additional job produced in the Province of Ontario as a result of this measure, any more than there was any job produced as a result of the machinery tax rebate.

I can’t believe there is any more production machinery produced in Canada today -- significantly more -- than there was three or 3½ years ago when you produced the machinery tax rebate programme. At that time it was evident that the majority by far, probably 80 per cent or more --

Hon. Mr. Meen: That was not the same kind of programme as this.

Mr. Deans: It was the same kind of programme.

Hon. Mr. Meen: It was an abatement against income tax.

Mr. Deans: It was the same kind of programme. It was an attempt to stimulate the purchase of production machinery for the purpose of the production of jobs.

Mr. Stokes: Obviously the last one didn’t work because you didn't try it again.

Mr. Deans: Don’t tell me that wasn’t the same kind of programme. You may have couched it in different terms, you may have brought it in under a different programme; but the fact of the matter was that the intent of that programme was to encourage the purchase of production machinery by industry with the end result, supposedly, that there would be more jobs in the Province of Ontario. I well remember the debate; I took part in all of it. I can tell you that as I now read through the debate which took place at that time I could probably have turned to you and said: “There is the Hansard. Put it on the record. It’s equally applicable.” Because it is.

I want to know from you, if you could answer these points I raise; I have some other questions.

Hon. Mr. Men: We went through all this on second reading.

Mr. Lawlor: That’s $400 million down the drain.

Mr. Deans: Could you answer those four questions for me?

Hon. Mr. Meen: In short, I have been listening to the member for Wentworth for the last hour before dinner and now for the last --

Mr. Deans: Not so.

Hon. Mr. Men: -- 10 or 15 minutes.

Mr. Deans: Only 25 minutes.

Hon. Mr. Men: That’s all right; I enjoy listening to you. The point I’m making, Mr. Chairman, is that this is really the same debate we went through on second reading.

Mr. Deans: Not so.

Hon. Mr. Meen: I don’t have the figures the member is talking about.

Mr. Deans: Why?

Mr. Lawlor: Of course you do.

Hon. Mr. Meen: I am the administrator of this Act. I’m not the economist of this province.

Mr. Lawlor: You’re here to justify your legislation.

Hon. Mr. Meen: You’re talking about the budget and these are the very points you should be putting to the Treasurer (Mr. McKeough), either in a budget speech --

Mr. Deans: How can we? He’s not here.

Hon. Mr. Meen: All right, but the Treasurer will be here. As a matter of fact, he will be here tomorrow.

Mr. Deans: But it’s too late, the bill will have passed.

Hon. Mr. Meen: You could have asked him for the replies during the debate on second reading.

Mr. Lawlor: He couldn’t explain it either. None of you can.

Hon. Mr. Meen: I would simply say to you there are many factors involved besides whether or not you’re going to attract heavy production machinery which, as the member for Wentworth suggests, is made outside Canada; and he suggests that’s the only advantage. That’s not the only advantage.

Mr. Deans: What are the advantages? Tell us about them.

Hon. Mr. Meen: You’re suggesting that you’re going to retire existing equipment to create other jobs. What we’re saying is there are those who were planning to expand their plants to go into other product lines. The specious argument the member for Wentworth has been using is that this kind of tax relief will be used to alter manufacturing techniques and thereby put people out of work.

Mr. Deans: That’s right.

Hon. Mr. Meen: We’re saying that’s not the effect. I suppose that could happen in some areas but I’m saying the initiative behind this, the thrust behind it, is to get more manufacturing going in this province. Not different manufacturing, more; more product lines and different articles to be produced. It’s fine to have a surplus of certain things but it’s also great if you can produce other articles presently being imported and employ more people to run the flew machines. You’re still going to be running the old --

Mr. Deans: There isn’t enough time.

Hon. Mr. Meen: The lead time is sufficient on this.

Mr. Deans: It is not sufficient.

Hon. Mr. Meen: That’s why this is designed differently from the abatement in retail sales tax which is immediate in its effect and is for the limited period of nine months. In this instance, this is for a period all through this year, all through next year and into 1977.

Mr. Deans: No, 21 months.

Hon. Mr. Meen: Well 21 months, but then there’s the delivery period after that. It allows a substantial amount of lead time for companies planning on doing certain things and creating certain expansions, getting into other lines to manufacture articles which were not previously manufactured here. The Ministry of Treasury; Economics and Intergovernmental Affairs developed these figures. Don’t ask the Minister of Revenue to produce them.

Mr. Deans: I have to.

Hon. Mr. Meen: I don’t have access to those figures. I don’t have that staff. That staff is in Treasury and Economics. I would say to you that they are the ones who have ascertained that this kind of assistance will be well felt in the industries.

Mr. Lawlor: Pure cop-out. What is your ministry there for?

Mr. Stokes: You are asking us to pass your legislation; you should come here prepared to answer the questions.

Hon. Mr. Meen: We voted on the principle of this on second reading. Now what we are doing is dealing with this matter section by section. I’m happy to try to explain it, Mr. Chairman, and I assure you, I’ll do the best I can, as the man who administers this Act, to explain the mechanisms of it. But, if you are going to get into the principles and the background of it, then of course that is the basis for the debate on second reading.

Mr. Deans: Mr. Chairman, I object to that --

Hon. Mr. Meen: I told you that you wouldn’t agree. I knew that.

Mr. Deans: We are expected to deal with legislation in second reading and in committee, and the minister who has carriage of the legislation is supposed to be able to speak about and for the legislation. I might say to you that this is the problem of getting an omnibus bill that deals with a, number of different points and entirely. different principles. This bill reduces the sales tax for the purchase of normal things from seven per cent to five per cent, and you also have a bill which eliminates the sales tax on production machinery. We couldn’t possibly deal with all of those on second reading. Even if we could have dealt with them on second reading, we would still be dealing with the same minister. The minister has to be answerable, whether he likes it or not. He cannot hide behind it any more. The Treasurer cannot hide behind this minister; he cannot bring in this garbage and then expect us to accept that the minister is not able to answer for it. The minister has got to be able to --

Hon. Mr. Meen: That’s what we have a budget debate for.

Mr. Deans: No, but that isn’t.

Hon. Mr. Meen: Ah, but it is.

Mr. Deans: That is quite unfair. This is a particular taxing measure that has been brought in in the Province of Ontario --

Mr. Lawlor: You are taking it clause by clause; we are zeroing in on this and we want to know.

Mr. Deans: There is no point in us dealing with this three months after it is passed; that is what the budget debate means. There is no point in us talking, three months after the bill is passed, about the inequity of the bill, or how it won’t do what it was intended to do. The only time we can deal with that is now. Since you are the minister with carriage of the bill, I want to know from you, first of all, how many companies in the Province of Ontario you anticipate will take advantage of this in the next 12 months.

Mr. Lawlor: Don’t ask any more questions. Stop right there.

Hon. Mr. Meen: I told you, I do not know. I don’t have the figures.

Mr. Deans: How many jobs do you expect will be produced as a result of this bill?

Hon. Mr. Meen: As the Treasurer has said, Mr. Chairman, budget-making is imprecise at best.

Mr. Lawlor: He doesn’t know. He doesn’t have a clue.

Mr. Deans: I see. How many dollars do you expect will be invested in the next 21 months that would not otherwise have been invested in the Province of Ontario?

Hon. Mr. Meen: The same answer prevails.

Mr. Deans: The same answer? I see.

Mr. Stokes: This is not your finest hour.

Hon. Mr. Meen: Oh come on. We went through all this.

Mr. Deans: Yes, that is right, and we are going through it again. Do you anticipate that there will be a number of companies established in the province to produce production machinery as a result of this bill?

Hon. Mr. Meen: That is the general idea.

Mr. Deans: I see. How many do you expect? How many people do you expect will be employed in them? No answer?

Hon. Mr. Meen: Well, I told you --

Mr. Deans: Okay, let the record show that the minister doesn’t know.

Could I ask you then in what areas you anticipate that these companies will be set sip? What kind of production machinery do you anticipate these companies will set up to produce? You don’t know that either?

Hon. Mr. Meen: You might ask the Treasurer.

Mr. Deans: I don’t want to put words in your mouth. If you know something, speak up.

Hon. Mr. Meen: Oh, come on.

Mr. Deans: You don’t know that either?

Hon. Mr. Meen: You are the one who is making the speech. Come on, make it.

Mr. Deans: No, I am not making the speech. I want to know.

Mr. Stokes: He is going to have a dialogue.

Mr. Deans: How many jobs do you expect might be eliminated in the Province of Ontario as the result of the purchase of automated machinery to replace existing machinery?

Hon. Mr. Meen: Well, now, who would know that?

Mr. Deans: Well, I am asking. You brought in the bill!

Hon. Mr. Meen: Who is suggesting the replacement of existing equipment? You are the one who is making that suggestion.

Mr. Deans: What I want to know from you is, do you know anything at all about the projected impact on the economy of the province of this piece of legislation?

Hon. Mr. Meen: No.

Mr. Deans: No?

Hon. Mr. Meen: Very simple. I can tell you the estimated --

Mr. Chairman: Order please. I wonder if we could get back more specifically to the amendment --

Mr. Deans: We have moved that it be deleted --

Hon. Mr. Meen: Great. Let’s have a vote.

Mr. Deans: We now want to get some proof as to why it ought not to be deleted. This is an absolutely futile exercise. What is the point of bringing in the legislation if you don’t know anything about its impact? What is this place?

Mr. Lawlor: It’s the last word in arrogance. that’s what it is. He doesn’t give a damn. He couldn’t care less.

Mr. Deans: What is the point of coming forward with legislation that is a cornerstone of a budget --

Mr. Chairman: Order please. A lot of these points were covered on second reading.

Hon. Mr. Meen: They were all covered on second reading.

Mr. Stokes: The minister wouldn’t conduct his own household affairs this way.

Hon. Mr. Meen: I would set my own budget too.

Mr. Deans: One could only speak to the principles contained in the bill.

Mr. Chairman: Order.

Mr. Deans: I’m now asking specific questions related to this section of this bill. I think the public of Ontario has the right to know how it is that you intend to benefit the Province of Ontario by giving this money away.

Mr. Lawlor: The Minister of Revenue needs your help, Mr. Chairman, but he doesn’t need it that much.

Mr. Deans: Surely that’s not too much to ask. Surely to heaven we can expect that somewhere along the way someone from that front bench there who has the responsibility for the management of the province can tell us why we’re eliminating this tax for the next 21 months; what the calculations were that resulted in the decision being reached and what the substantiation was in terms of employment, in terms of dislocation, in terms of new purchases and in terms of investment. Surely it’s not too much to ask whether there was any study conducted into whether or not this would be more likely to benefit the Province of Ontario in terms of new job opportunities than it would be likely to be of non-benefit to the people currently working.

Hon. Mr. Meen: I understand that to be the case.

Mr. Deans: Then would you please produce for me the statistics to tell me that’s the case? I have some 100,000 people sitting in one riding who want to know.

Hon. Mr. Meen: Oh come on now.

Mr. Deans: I’m asking for them. You might laugh about this but I’m not kidding you; this is not the way to deal with public business. If you’re going to have the responsibility for bringing forth legislation, then surely we have the right to expect that you will have an answer to at least one of what you must agree are the pertinent questions related to why this piece of legislation should pass.

I’m sorry, I trust you in many things but it’s not nearly enough for you to stand up and say: “I believe the Treasurer has made the right decision.” I wouldn’t expect you to say otherwise. I think he has made the wrong decision. We’ve got a stalemate.” I want you now to tell me, as you’re privy to his information and I’m not, how he arrived at the decision that the elimination of this tax would be beneficial.

I don’t want you to sit there, I want you to tell me. I don’t have the information from him. He doesn’t tell me. He doesn’t know, in fact, He’s just as bad as you are. He couldn’t stand up and tell me the answer to these questions because he doesn’t know and because he doesn’t care. But I think you do.

Hon. Mr. Meen: That’s not so.

Mr. Deans: Okay, then give me the answers.

Hon. Mr. Meen: Mr. Chairman, I’m certain that the Treasurer does care. He has put into his package, which we call the budget, all the pluses and all the minuses, the increases in revenue anticipated from various quarters and the decreases which we are proposing in certain quarters, long term and short term. He has come up with these various elements of incentive for the economy of this province. To say the Treasurer doesn’t care is a rank injustice to one of the finest men in this Legislature.

Mr. Deans: Then I take it back. He cares.

Hon. Mr. Meen: Of course, he cares.

Mr. Deans: Then tell me how he came to his decisions. Since you know he cares, you must surely have access to the information that he had that brought him to the decision that this is a wise move to take. He has given you the job of getting this through the House. All right, fair enough.

I want you to tell me what it was that was available to him by way of information with regard to the amount of additional investment, with regard to the degree of replacement that’s likely to take place, with regard to the amount of unemployment this replacement may cause, with regard to any new industry which has indicated it might set up in the Province of Ontario, with regard to the areas in which this industry will set up in the manufacturing of what kinds of products, with regard to the salability of the end product and the markets available for it in the Province of Ontario; and with regard to how much additional production we can expect and whether or not that will be in addition to the existing low level of production as the result of unemployment and diminished markets or whether that will be in addition to the production capacities of the industries already in effect. I want to know how many more dollars are going to be invested.

I want some answers to some of the questions that surely we’re entitled to have answered before we are expected to pass a bill which reduces the treasury of the Province of Ontario by $220 million. Good heavens, man, that’s not too much to ask for! You’re asking us to approve the reduction of the treasury of the province by some $220 to $250 million. I’m now asking you to give me justification as to why I should approve it.

I don’t want to hear the Treasurer is a nice guy. I don’t want to hear that the Treasurer cares. I want to know the background to it. That’s what this clause-by-clause discussion is intended for.

I don’t want to know from you that it’s drafted properly or that you’ll collect it. I heard about your collection methods earlier today. I don’t like them. With Quinn, I heard about how you collect. I heard about your $200,000-plus you haven’t collected and you’ve taken liens against which aren’t even first liens.

Mr. Stokes: First mortgages.

Mr. Deans: First mortgages. You’ll never collect as long as we all stand in the Legislature; I heard about those. I don’t have much faith in your method of collecting, but I’ve less faith in giving you the power to do this unless you can tell me why it is and what the substantiation is? Please try; that’s what this is all about.

You may be surprised to know we all got elected for a different purpose. I got elected to find something out. You got elected simply to toe the line. I don’t toe anybody’s line.

I want to know why it is that we in the province are going to be short $250 million. I want to know what benefits will flow from it and I want to know tonight. I’ll be here for a long time and so will you, so we might as well get used to it. Why don’t you try answering it?

Hon. Mr. Meen: I wonder if the member might try listening again?

Mr. Deans: I’ll try.

Hon. Mr. Meen: The fact of the matter simply is that this is part of the Treasurer’s total package. This happens to be one of the incentives to industry to get in there and in the next 18 months or 21 months get into expansion work they wouldn’t otherwise get into; to start the production of goods we are presently importing; to start the employment of people who otherwise might be unemployed. This is what we are trying to do.

Mr. E. W. Martel (Sudbury East): You might follow some of the select committee reports.

Hon. Mr. Meen: The Treasurer has taken this route along with the other portions of his budget. I do not have the specifics. They are not in my ministry.

Mr. Lawlor: That is pitiable. That is pathetic. That is hopeless. You are a responsible minister of the Crown. You had better pull yourself together.

Hon. Mr. Meen: My ministry administers the taxing statutes. It does not have the economists on the staff who make these kinds of studies.

Mr. Stokes: It is a pig in a poke.

Hon. Mr. Meen: That’s the kind of study which is done in the Ministry of Treasury and Economics. If the member wants more than that, he is simply going to have to ask the Treasurer.

Mr. Deans: But I can’t, Mr. Chairman. I can’t ask the Treasurer because the Treasurer isn’t here.

Mr. Lawlor: Yes, that’s right.

Mr. Deans: I can’t pass this bill until I know the answers to these questions.

Hon. Mr. Meen: You are not going to pass it.

Mr. Deans: Because they are the questions that have to be answered.

Let me try again. Let me go back. You and I both remember the machinery tax rebate, okay? I know we do because we were both here and we talked about it. Can you recall the debate on the machinery tax rebate in which we were informed that this was going to produce additional employment in the Province of Ontario? That was one of the things.

It was going to be used to purchase new machinery and that new machinery was going to create new employment. I would think that you, being a responsible minister dedicated to the cause, would at least have taken a look at that taxing measure and its impact to determine whether or not this is similar, which it is, and whether or not this has the likelihood of success over and against what happened with that particular measure.

Can you tell us, so that we have some way of measuring it, what benefits flowed to the province by way of increased employment or by way of additional purchases as the result of that measure which was almost identical in impact to this measure?

You can’t? You don’t know? Is it fair for me to say that the minister doesn’t know? Other than blind faith can you give us any reason why we should support this measure? Can you give us any single statistic; any piece of substantiating evidence which would justify me, as a member of the opposition, going to my constituents and saying that the government convinced me that this was an appropriate step to take. Is there anything at all that you know that you can tell me that will allow me to go and tell them that? Any single thing? Is there?

Hon. Mr. Meen: Of course, there is. And I have already told you.

Mr. Deans: Then will you tell it to me?

Hon. Mr. Meen: You always turn off your hearing aid.

Mr. Deans: I don’t turn off my hearing aid. I don’t wear a hearing aid. I heard you say that the Treasurer decided that this was an appropriate piece of the overall package that makes up his idea of how we will stimulate the economy.

Hon. Mr. Meen: Right.

Mr. Deans: And now we are dealing with this appropriate piece. Will you tell me what makes it appropriate? Tell me what makes it appropriate. Now I understand the reduction from seven to five. I understood --

Hon. Mr. Meen: I’m not sure you understood that.

Mr. Deans: Let me tell you I understood, though didn’t necessarily agree with, the homeowner grant. I understand the additional benefits to the aged and to certain segments of those on social assistance. I understand those things. Okay? They make some sense. There is a certain amount of conventional wisdom around that tells me that those measures may be beneficial to someone, somewhere, in substantial enough terms to justify doing it. Now I want you to tell me about this piece of legislation. I want you to tell me why I should vote for it. That’s your job. Tell me why I should be supporting it. Tell me anything about it that makes it worthy of support.

Hon. Mr. Meen: I’ve given you the answers five times already.

Mr. Deans: You have not given me a single answer. How many jobs is it going to create?

Hon. Mr. Meen: What is the answer you want?

Mr. Deans: How many jobs will it create?

Hon. Mr. Meen: I’ve told you.

Mr. Deans: You don’t know. You don’t know how much of the investment will be new. You don’t know where the jobs will be created. I’ve asked those questions. This is ridiculous. You are not even fit to carry the legislation through the House. You don’t know anything about it.

Mr. Chairman, I ask you -- I appeal to you -- what right does a minister have to come into this House and tell us he knows nothing about the purpose of the legislation, can’t provide any substantiation for why we should support it, and then expect us to vote for it?

It is a requirement of the ministry that they stand up and substantiate their legislation. It is a requirement. It’s traditional and is required of the ministry that they be prepared to answer for their legislation, in terms of its correctness --

Mr. Lawlor: That’s what responsible government is all about.

Mr. Deans: -- with regard to the way it is drafted, and with regard to its correctness in terms of the impact that will be felt and the substantiation for it.

Now, this minister can’t do that. Therefore, this bill should be stood down until some minister can come into the House and tell us the answers to some of the questions we are asking. It isn’t right -- it is anti-democratic, if you will -- to expect members of this Legislature to vote on a bill for which there has been no substantiation put forward.

Mr. Chairman: The hon. member for Riverdale.

Mr. J. A. Renwick (Riverdale): Mr. Chairman, I really don’t think that the minister is going to stand the bill down, and that we are going to have to deal with it as best we can within the very limited way in which this minister sees his portfolio.

I’d like to try to go at the problem somewhat differently, because the ministry is going to continue this legislation long after the date of expiration set out in the bill. We have seen, time and time again, this kind of benefit granted to industry with a time limit. And then we get an extension, and another extension, and another extension, until it becomes embedded in the mythology of our time.

That’s what has happened with the fast write-off provisions over the years, going back many many years. They were revived in an accelerated form by the federal Minister of Finance in 1972. And he has persisted in them since that time, and this government has gone along with it.

I think it’s fair to say that the objectives, which were stated as long ago as 1972 by the federal Minister of Finance with respect to the fast write-off provisions, are in substance the objectives which this minister expects, for his government, to be achieved by these measures. I don’t think for one moment that it is possible for him to say, when we come to a particular clause in a particular bill, that we can be constrained to dealing with it only in terms of the mechanics. If the mechanics is what he is talking about, there’s very little problem with the mechanics. In fact, there is no problem at all. The only problem is that it’s scattered throughout with the opinion of the minister which of course is not exactly the kind of taxing statue we admire.

The minister can’t stand up on behalf of his government and say to us, “I will deal with the provisions of the proposed new paragraph 49, providing for these immense exemptions,” and tell us that we’re engaged in a game of semantic checkers to see whether or not the mechanics will work or not. We can deal with that later on. The minister has got to tell us whether or not the objectives that the mythology of the Liberal government at Ottawa and the mythology of this government at Queen’s Park persist in will be achieved. Otherwise, why should we vote for this particular exemption?

May I say to the minister that one of the methods of providing tax benefits by transfer payments is the grant of exemptions to industry. it’s the same thing as a transfer payment. If the bill did not collect this revenue, the only way it could be passed back to industry and at least it would be an honest way -- would be to raise the money and the revenue and pay it out selectively to those industries that can prove their need, and not in some aggregate way across the board.

It is very interesting to note that the progressive men in the US Congress have finally persuaded the government and the chief of the budget that one of the schedules to the federal budget would be a statement of the total cost to the taxpayer of all of the benefits granted by way of exemption throughout the Internal Revenue Act of the United States.

Let me put it another way, and quite simply: The profit of a business is what is determined in accordance with sound and generally accepted accounting principles applicable in the circumstances and applied consistently with the preceding years. It is trite to say that you first look at that profit and then adjust it for all of the special rules of the Income Tax Act or the Corporations Tax Act, as it happens to be here in the Province of Ontario with respect to corporations. It’s those adjustments that we try to get a grip on to understand why those concessions are made, why those concessions continue and why they become embedded in the tax system.

It is much simpler, of course, for us to talk to a government which fails to make transfer payments to people who require the additional income at a level and at a rate of increase that will be sufficient to meet their economic needs. It is very easy for the Treasurer to introduce, to sponsor and to stand in his place to deal with the first home buyers’ grant of $1,500 because he’s talking about giving $1,500 to a selected number of people dealing with the bump that has gone through the population of the Province of Ontario since the baby boom of the post-war period.

It’s all very fine when he stands up and attacks us and claims this or that, and he goes through his usual tirade in talking about people getting $1,000 in cash, then maybe another $250 and another. But, when it comes to $106 million in this fiscal year and a programme of $410 million over the full term of the programme -- the term of the programme being until Jan. 1, 1977, with delivery before Jan. 1, 1978 -- when we come to talk about why that concession should be granted to industry, the Treasurer is never in the House. We are never able to come to grips with him, and I don’t accept and the minister doesn’t accept that the budget debate is the time to do that, because the Treasurer is never in the House during the budget debate.

The time when you deal with taxing measures is when the measure is before the House, and that is what we are doing tonight. That is what we are going to try to do now.

I want to say to the minister very clearly that his colleague -- and they are both members of the same government -- did it deliberately. The Treasurer said in addition that “I shall propose tonight additional incentives to strengthen business investment and productivity.”

And he goes on further on to say that his estimate of that will be $100 million in direct cost reduction on the purchase of taxable items. And I quote: “Ontario business will enjoy $100 million in direct cost reductions on the purchase of taxable items.” I’ll comment in a moment as to how we are ever going to see those cost reductions reflected in the consumer goods which are manufactured as the end result, which is supposed to be one of the purposes of the budget.

He then says very gaily that “$100 million will be divided up.” Housing will get $25 million; construction, $25 million; industry and commerce, $50 million. Later on in his budget speech, a few pages later, he deals with this particular provision. And I still can remember his nod to the Minister of Industry and Tourism (Mr. Bennett) while he read the budget: “Over 25 per cent of this amount will benefit export-oriented industries.”

Well, the minister says to us, “I don’t have the retinue of economists that the Treasurer has.” Isn’t it strange that the retinue of economists that the Treasurer has and the staff that the government has at its disposal would happen to find that this $100 million will be divided one-quarter to domestically-oriented industry, one-quarter to export-oriented industry, one-quarter to construction and one-quarter to housing? The very fact that they put that facile allocation of $100 million before this assembly means they do not understand that kind of aggregate solution is not a solution to what must, of necessity, be a selective problem.

All right, I want the minister at some point to justify to me how we are to reach the conclusion that 25 per cent is to go to housing, 25 per cent to construction -- which I presume is non-residential construction -- 25 per cent to domestically-oriented industry and commerce, and 25 per cent to export-oriented manufacturing industry?

Secondly, I want him to tell me how are the costs going to reflect in the prices to consumers? There is nothing to indicate that prices to the consumers of the ultimate goods are going to change one iota.

I don’t pretend for one single moment that this game of “Two for the Seesaw” of inflation and recession is something which I understand any more than the minister or any more than the Treasurer understands, but the reason we don’t understand it is that you are locked into some kind of a mythological view that the capital investment programmes of industry, the construction programmes of those in the construction industry and the residential housing market are determined by the kind of tax concessions that you put forward. There is nothing whatsoever to suggest that the change or drop in the prices of the consumer products are reflected in any large measure whatsoever.

Let me just quote very briefly from a good socialist document, the monthly Economic Letter of the First National City Bank for February, 1975. They are dealing in this particular article with changes in prices and how they are reflected at the far end of the scale.

“There is a tendency to think that finished goods prices should be the first to reflect changes in the pace of economic activity; prices in the wholesale, manufacturing and raw material sectors should respond later as the impact of declining final demand ripples backward along the processing and distribution chain. But the fact is that price changes really flow in the opposite direction, from the earlier to the later stages of production and distribution. Prices for raw materials tend to respond first and show the largest changes, while prices at each subsequent stage of processing respond later and by smaller amounts. This pattern was characteristic of much of the post-war period, regardless of whether prices were rising or falling.”

It goes on very clearly to make the very simple proposition that in managed industries, where the prices are managed, the first thing you do is you cut your production and you maintain your price, you lay people off work and you try as best you can to cut your overhead. There is no way, there is no way. that ultimately the price of the goods to the consumer will be markedly reduced.

We have had the example of the bonus to the car buyer because they have an over-inventory of automobiles in the United States. The bonus is marginal; a couple of hundred dollars or $150. There is never any real attempt to move that inventory at a price which will give the consumer a reasonable and decent break. It was used simply as bait, and every time when the automotive industry or any other industry -- not the marketplace -- makes the decision that it cannot sell its products because demand isn’t sufficient, it keeps the price up and it cuts the production and lays off the workers. And there is no reverse process by which you granting them further tax concessions is going to protect the job of any person, nor is it going to provide new jobs.

It is just that simple, because by the time this tax concession is absorbed in their productive process, by the time the end product comes off the assembly line or is produced and available for purchase in the marketplace, if the demand is there, the price will be maintained. If demand is not there, the price will be maintained but the production will be cut back.

I think that’s what my colleague, the member for Wentworth, was trying to say to the minister; that you do not produce employment in this fashion. You cannot possibly produce it in this fashion.

Let me just very, very briefly look at two or three matters which are rather interesting. Again, they are socialist documents and therefore should have the ear of the minister. I’m talking about the Monthly Review of the Bank of Nova Scotia for July, 1974; the Monthly Review of the Bank of Nova Scotia for October, 1974; the Business Review of the Bank of Montreal for January, 1975, and “The Canadian Economy 1974-1975” of the Canadian Imperial Bank of Commerce.

What do these documents say? What these documents say is to emphasize again what my colleague, the member for Wentworth, has said -- that capital investment plans are a long way down the pipe and a long way up the pipe. They’re made over a long period of time, with respect to the increase of the industrial capacity of the particular business in relation to all of the conditions under which its conducts its business.

You’re asking us to provide this tax benefit as if in some way it’s going to affect the investment intentions of the major segments of industry. Well, let’s just have a look at a couple of the areas that the ministry is talking about.

“Business (fixed investment) -- percentage change from the previous year in nonresidential construction and machinery and equipment.” It gives the figures from 1968 through to the end of 1973, and makes the forecast for 1974 and 1975. The dollar figures which I use are in millions of current dollars, except as noted. Well, I won’t be noting any.

In 1972 it’s $13,262 million; in 1973 it’s $15,599 million. In 1973 that represented 13.1 per cent of the gross national expenditures of the country. The forecast for 1974 --

Hon. Mr. Meen: It’s the same as capital construction.

Mr. Renwick: This is “business (fixed investment)”, made up of non-residential construction and machinery and equipment. In 1974, the figures rise to $19,270 million, and in 1975 it is forecast that they will rise to $22,920 million.

The percentage figures from the previous year for those years which I’ve quoted are: for 1972 over 1971, 8.4 per cent; 1973 over 1972, 17.6 per cent; 1974 over 1973, 23.5 per cent; 1975 over 1974, 18.9 per cent.

And that, roughly speaking, is divided -- not exactly, but I’m not going to quote the figures -- roughly 50-50 in non-residential construction -- a little less than 50 per cent -- and slightly more than 50 per cent in machinery and equipment.

It also gives the figures for residential construction in the private sector as well. But the whole of this particular forecast for the economy in 1974-1975, which duplicates annually what it has done years before -- 1973-1974, 1972-1973, 1971-1972 -- is to indicate that the investment intentions of industry are extremely buoyant, extremely dynamic and --

Hon. Mr. Meen: That was at last July, though.

Mr. Renwick: This was September and October. All right, just remember that the Treasurer’s budget was made up of a lot of things a little bit later on in the year, but not very much. But let’s at least take that as a starting place.

Mr. Deans: That’s where he started considering it.

Mr. Renwick: All right. The Business Review of the Bank of Montreal, January, 1975: “The Slowdown Continues.” It lists all of the various areas where there has been a slowdown and weakening in the economy: Retail sales, housing slowdown, deterioration in foreign trade, the fall-off of the industrial production index, the index of real domestic products; the question of the employment statistics; the question of both job vacancies and unemployment; price inflation; and it goes on to deal with all of the areas which are of concern -- which are of very real concern -- to the Bank of Montreal about what is going on.

But then it goes on to say:

“At the long end, the federal government survey of the investment intentions of Canada’s 220 largest firms indicated that heavy demand for funds will continue into 1975. The surveyed firms intend to spend some 30 per cent more than in 1974. While much of the increase will, of course, be accounted for by inflation, the programme nevertheless means a substantial volume gain, 16 per cent, perhaps greater than the physical capacity of the construction industry, especially if strikes and work stoppages prove to be heavy.”

Whether or not there would be substantial cutbacks to the programme, however, became a moot point because of the tax hassles and so on, but the initial response from the oil industry -- and they were dealing with the royalty question at Ottawa -- to the changes which were made was favourable.

“Regardless of whether cuts occur in the investment programme as a result of government tax policy, it is also threatened by severe cost escalation; as one example, again in the oil and gas area, huge expected cost increases were announced. Projects which formerly were costed in the billion-dollar area now are estimated at $2 billion, and with future oil prices and government policies uncertain, a number of companies were considering their commitments.”

Mr. Chairman: Order, please, The Chair has been following the hon. member’s remarks with a great deal of interest but it seems to me that you have been getting back for some time to the principle of the bill rather than the clause by clause. I would ask you to direct your comments to the amendment.

Mr. Renwick: I am dealing, Mr. Chairman -- and I don’t intend to go on at much greater length -- with a clause which grants an exemption to industry which will cost the treasury of the province some $410 million. I have a few questions that I tried to put to the minister in the course of my remarks and I want very much to be able to complete them.

I may say that the Bank of Nova Scotia bad this to say about the long-range programme of business investments -- nothing at all to do with taxes:

“On the basis of the large projects looming up in the energy sector and of a continuing rapid growth in many other capital outlays, there is a widespread expectation that the capital programme will remain sizable through the rest of this decade. Until quite recently it had appeared there was danger of a bunching of major projects around one or two years in mid. decade; but with the likely timing of some of the largest of these, notably the Mackenzie Valley pipeline, having been pushed further out, it now seems that the pressure of spending may be spread over a number of years.

“All told, and with due allowance for further inflation of project costs, the total investment programme between the years 1974 and 1980 could require financing in the order of $300 billion. This would imply the movement of a consistently large share of gross national product into total fixed investment, perhaps about 24 per cent. In periods of peak investment activity this share has been as high as 25 per cent, though never for very long.

“A continuing growth of the economy could, in fact, generate the bulk of the savings required, but it would be unrealistic for domestic financial markets to be fully adequate to this enormous task, particularly in the case of the largest individual projects for which some foreign funds will be required. Challenges are also implied for the country’s supply of skilled labour in the pool of available technical resources.”

I want to come to what seems to me to be the unspoken reason for this particular exemption which has been granted. The government of Ontario has invested and undoubtedly will have to provide the funds. If this is the way in which they are going to provide the funds, if they say it and lay it on the table, that’s fine.

They’re going to have to provide the kind of investment incentive, if that is required, for the project called Syncrude. Is it really, Mr. Minister, that on the $250 million worth of orders to be placed in the Province of Ontario, according to your colleague the Minister of Energy (Mr. Timbrell), some $100 million had been placed but much more is not? Is what you are saying that in connection with that project, in order to persuade the oil companies to provide the knowhow and the technology and to continue to participate in it, you have had to say to them that the people in the Province of Ontario who manufacture and produce for them the equipment and machinery which will go into their production are going to be granted this substantial exemption so that the big oil companies in the Syncrude project, which still have the substantial and controlling share of that project -- if my memory serves me correctly a substantial interest in it -- are going to have that kind of a tax benefit? Is that what we are really saying?

Are you really saying that because of the size of the various projects, not only in the oil industry in Canada but the natural gas industry in Canada and the expansion programme of the hydro-electric power system -- not that they’re going to ultimately ever benefit the consumer by it -- you’re going to provide these benefits in order that those industries will provide the capital equipment which is required?

Is that what’s happening? And if that is so, why don’t we say it? We say it and say it very clearly.

Is it really fair for the minister to say to my colleague, the member for Wentworth, that it may happen in the odd industry they will become more capital intensive and less labour intensive; and that they will introduce more automated equipment and more modern equipment, requiring less of the labour component by the kind of stimulus which you’re stating that you’re going to provide?

Those questions remain unanswered. Mr. Turner, some months ago, in 1972, stated that the purpose of the fast write-offs, which you’re perpetuating in the Corporations Tax Act, was to improve the competitive position of Canadian manufacturers in international trade. The Treasurer said the same thing. Mr. Turner said it was to create jobs, to stimulate capital investment and to reduce production cost and prices. The Treasurer said the same thing.

The study that was made of the effect -- on the basis of the statistics from StatCan -- of the effect of the two-year write-off and reduced tax rate for Canadian manufacturers in 1973 showed there was no evidence that those write-offs did anything with respect to increasing jobs or with respect to stimulating foreign trade. It couldn’t possibly have. We have one of the largest deficits on foreign trade at the present time that has existed for some time. As for stimulating capital investment, it didn’t need any stimulation. They were already going to spend many billions of dollars on capital investment, and while it might reduce production costs it would never reduce prices to consumers. You will never be able to show that any such price reduction ever took place because of the quotation about the way in which, “by the time the price change comes out to the consumer at the end of the line it is negligible.” There is no change -- no such change that will ever benefit the consumer.

The minister says and the Chairman says that we must look at the bill. Section 49 provides a very broadly-based power in the minister. As understand it, he can’t make any selections whatsoever -- although there is the strange provision at the end that he can provide “prescribed by the minister to be excluded from the exemption conferred by this particular paragraph.” Presumably that gives him a wide authority over what he can or cannot do in the course of exercising his discretion under this bill. Many times it talks about the opinion of the minister.

Mr. Deans: He hasn’t got an opinion. He doesn’t know anything about the bill.

Mr. Renwick: All I would like to put on the record are the figures from 1972 over 1971, 1973 over 1972, and 1974 over 1973, of the effect on employment in the manufacturing industry of the fast write-offs, of which presumably this is going to be a part. The year-to-year percentage change was: 1972 over 1971, before the fast write-offs, 5.1 per cent; 1973 over 1972, 5.2 per cent; 1974 over 1973, 2.3 per cent. There was no indication whatsoever that the percentage change in employment as a result of those write-off provisions was substantial, was significant or altered what would have taken place without them.

I think we are entitled, Mr. Chairman, to say in the course of the debate on this section 49 and in speaking to the amendment which I moved on behalf of this caucus, that the proposed paragraph 49 be deleted. I think we are prepared to say that you are almost totally completely wrong.

You are not going to achieve any of those objectives, because what industry would do of its own volition in the conditions in which it exists in the Province of Ontario, knowing that the government always speaks for business, it would have done in any event. The minister, I think, has to answer to this House why tonight we should be giving $106 million for the rest of this year; and for the period ending at the end of 1976 a total of $410 million.

That is a transfer payment, because the payments by government basically are made up very simply by salaries, by wages, by transfer payments directly made, by the purchase of goods and machinery and equipment, and by granting this kind of exemption to industry when industry doesn’t need it.

Does the minister understand that we have just come through a period of time when the corporations in this country have made the largest percentage profits in many years --

Mr. Deans: In history.

Mr. Renwick: -- when there is no indication whatsoever that the cost of basic commodities to the consumer is coming down? The only area in which the marketplace operates in any sense -- and then only in a limited sense -- is in the commodity market. It doesn’t operate in any other place. There are already built into the cost of living problems of every Canadian, items which are never going to come down again regardless of what you do about supply. I quote:

“Although food items have continued to how the largest percentage gains in the Canadian consumer price index this year [that’s 1974] the rate of increase has, in fact, been slackening for the past six months.

“It is non-food items, particularly housing and transportation, that in this period have been leading the index higher. Household operation costs, for example, are running some 13.4 per cent higher in October than a year earlier, public transportation was 11.2 per cent higher and clothing was 9.8 per cent up. Unlike food, where occasional price declines alternate with price rises in response to changes in supply, these items seldom show significant declines so that once a general upward movement is built up it becomes difficult to reverse or even to moderate.

“The wide-ranging lists of increases in the pipeline over the next few months virtually assures that non-food items will continue to show uncomfortably large price gains. This would sustain a fair part of the momentum in the whole consumer price index even if food prices increases should moderate further, as seems quite possible.”

All we are saying is until your government looks at the consumer; until the government designs some method by which these benefits will come through to the consumer; until the government decides upon some method by which it will orient its tax attitude toward housing, not toward construction, not toward commerce but toward the price the consumer will pay for all of the items which go into the cost of living -- be they capital items for the consumer or consumable items for the consumer -- until you orient your thinking that way, you will be taken in every time by the mythology, the continuing mythology, of the domination of the business community over the tax structure of this country. There is no other way by which you are ever going to orient your thinking any other way.

You’ve got to think about that. You are a member of the government. It’s your bill. You are giving them $406 million. You are not guaranteeing one thing.

Mr. M. Cassidy (Ottawa Centre): Not a job.

Mr. Renwick: You are not saying that we are going to require this to be done. You are not saying this is the effect which is to happen. You are not saying we will selectively allocate, if necessary, for the production of jobs. You never ever do it that way. It’s funny; with the $1,000 grant to the homeowner, he’s got to complete his house purchase and then apply.

You never ask that of industry. You never say to industry: “You install the machinery and equipment in your plant. You buy the new machinery and equipment. If you can show you are reaching any of the objectives we want you to achieve over a period of time, come and ask us. Give us an application and after the event we will assess whether or not you qualify.”

You do it for the first-time home buyer. You don’t let him march to the bank and make an assignment of his right to receive the $1,000 so he can use it as part of the down payment. You don’t do that at all.

Mr. Stokes: You do it with ODC. You say, “Show us some jobs.”

Mr. Renwick: You always give the benefit to industry in advance. You never demand any performance from them. You always give it to them over a long period of time and you always give to them in massive amounts. And they don’t need any of that mollycoddling from this government in any way, shape or form. That’s what is wrong with this section and that’s why we have moved that it be deleted. I presume now that the minister will try to answer at least some of the questions which, in a rather long discourse, I’ve tried to pose for you.

Hon. Mr. Meen: Mr. Chairman, I must say that I have enjoyed listening to the member for Riverdale on these points. I think I should also say that it is regrettable that a tax bill, such as the amendments to the Retail Sales Tax Act, has to be in the form of an omnibus bill in which we’ve purported to have second reading and debate in principle. Certainly the member for Riverdale has touched on some points here tonight that I hadn’t heard fully elaborated on, or as fully elaborated on, and I’ve enjoyed listening to him.

It’s perhaps regrettable that a function of the Minister of Revenue and the function of the Treasurer anti Minister of Economics are separated in this government. That’s the fact, and as a consequence I don’t have the kind of knowledge to answer some of the questions of economics which he poses.

I’ve listened with interest to his quotation from the Bank of Nova Scotia quarterly, and I was interested in some of the figures he was indicating there. If I read them correctly, they appear to be indicating, at least as of the January edition, that the growth rate -- instead of being some 25 per cent -- was down to 18. And when one sees a diminution in the rate of growth, one starts to worry. What the Treasurer and his advisors have been telling us is that in this budget he has had these several thrusts to get the economy rolling again. I don’t think anybody, on this side of the House at any rate, pretends to be a magician, or to have a crystal ball. All we can do is use the best advice available to us through our economists and other specialists in this area. I don’t think for one minute that we’re suggesting the reduction in retail sales tax on the acquisition cost of production and construction equipment will demonstrate a --

Mr. Stokes: I’m glad the member for St. Andrew-St. Patrick (Mr. Grossman) is back.

Hon. Mr. Meen: -- direct or linear reduction in the cost of the articles. By the time those articles come into the marketplace, other costs may very well have influenced the price upward. Certainly I don’t know; I’m not any economist. I agree with the member for Riverdale -- both of us happen to be members of another profession -- but I’m not that skilled to try to analyse the results that flow from the various studies these experts have made. The fact of the matter is that this is the Treasurer’s attempt -- part of the thrust in his budget -- to get the economy turned around, to get more jobs. That’s one of the objectives -- more jobs, more production and a better competition in the foreign marketplace to the extent of some 25 per cent. If it costs us $108 million during the first year in lost revenues there --

Mr. Stokes: Why doesn’t the minister reduce the personal income tax if he wants to stimulate the economy?

Hon. Mr. Meen: -- that will be because there will have been an enormous increase in the purchases of manufacturing and production equipment.

Mr. Cassidy: No, no; it is a give-away.

Hon. Mr. Meen: And I’m suggesting to you that if that is so, that will have created many jobs.

Mr. Deans: It won’t.

Hon. Mr. Meen: The hon. member was asking about Syncrude. As I understand it, if Syncrude were to place orders here in Ontario, that would require the manufacturers to obtain new production machinery. Well then of course we will benefit from that, and we will then get the manufacturing undertaken here in Ontario. But I think the member may have been suggesting, and I raise this question myself, whether this kind of credit would apply to production machinery manufactured here if it was sold to Syncrude for use outside the province. And of course the answer to that has to be no, it does not.

Mr. Chairman, I guess we could debate these principles for many hours. I don’t know how much more I can say that I haven’t said about five times already as to the thrust of the whole of the Treasurer’s budget; a substantial part of which is reflected in the retail sales tax amendments before the members tonight, and particularly significantly here in section 4, subsection 3.

I think it is a very important section in the bill and one which all members should endorse. It is not a give-away. It is there as an incentive. The province has other programmes under ODC and the like for direct assistance of a demonstrable nature. This is a different kind of thrust. It is an attempt to get the economy moving in these areas with out injecting ourselves into --

Mr. Stokes: But at least those programmes demand showing certain jobs.

Hon. Mr. Meen: -- every one of the applications that would otherwise have to come before us and be administered by some tribunal of government.

Mr. Renwick: Mr. Chairman, I guess I can’t ask the minister to state whether this will or will not be the case, but if he is returned in the next election and if I am returned in the next election, I will make him a bet, if I am allowed to do so under the rules of the House.

Mr. Deans: I tried that.

Hon. Mr. Meen: He tried this before.

Mr. Chairman: Who will the member have holding the money?

Mr. Renwick: The Chairman will hold the money.

Mr. R. Haggerty (Welland South): Put it on the record.

Mr. Renwick: Isn’t this, in fact, a step toward implementing -- even at this late date -- the recommendation of the Smith committee? It was that the present exemption from sales tax be reviewed and revised so that all purchases of machinery equipment and other goods that enter into direct cost of manufacturing and producing will be exempt, and purchases of all goods entering into indirect cost of manufacturing and producing will be taxable.

Isn’t this an implementation of the first part of that recommendation and isn’t it true in all likelihood that in 1976, and if your government is returned -- which, God help us, it won’t be -- that the minister will be extending this particular exemption ad infinitum and that it will become embedded in the tax system?

Hon. Mr. Meen: Mr. Chairman, you as Chairman, and a number of others here tonight --

Mr. Stokes: How much is he willing to bet it won’t?

Hon. Mr. Meen: -- who sat on that committee, will remember that section. But I think the hon. members will also recognize that one of the goals of the government is rather to move in the other direction to try to avoid exemptions of one sort and another. This is an exemption for a specific purpose and for a limited period of time. I don’t think it is the intention, whatever. I think that if I were a betting man -- and I am not -- I would be prepared to take the hon. member for Riverdale up on that one. Because I think, if anything, we are probably moving in the other direction.

Mr. Renwick: A bottle of scotch.

Mr. Chairman: The member for Lakeshore on the same amendment?

Mr. Lawlor: Yes. Just a brief statement. The government of Ontario in the year 1961 brought in a sales tax. Until that time it had resisted doing so. Most other jurisdictions in the North American continent had done so. The revenues that proceeded from the succession duties and corporation taxes and from the income tax was sufficient unto the day at that particular time. Then in 1961 you brought it in at three per cent.

Since that time it has usurped and overwhelmed and practically wiped out the death tax concept. The corporation tax has become a negligible entity, really, in terms of the overall picture in the province. We are relying for about $1 billion a year now on sales tax, on a scale much greater than any other field. The only one even remotely comparable to it is the income tax for the Province of Ontario.

In 1969, in the teeth of -- I wasn’t going to speak on this matter until Smith was brought up -- in the teeth of what was recommended in the Smith committee, and by the committee of the Legislature upon which the hon. minister and myself sat, the government brought in a tax on production equipment. It made certain exemptions, but nevertheless it was brought in, A howl went up in 1969 when this was done. Our report was submitted in 1967. We made the distinction between direct and indirect.

Hon. Mr. Meen: It was 1968.

Mr. Lawlor: In 1968?

Hon. Mr. Meen: It was Sept. 16, 1968.

Mr. Lawlor: I was looking at the recommendations of the committee here on this reform and this is dated September, 1967.

Hon. Mr. Meen: You are dealing with the Smith report.

Mr. Lawlor: No, on our report. Anyhow I don’t know how this date got in here because we got elected in 1967.

Hon. Mr. Meen: That’s right. We will get elected again too.

Mr. Lawlor: In any event, you have brought it in. Now what you are doing is pulling back upon a piece of legislation you brought in six years ago --

Hon. Mr. Meen: Only temporarily.

Mr. Lawlor: -- which you thought had validity then. It would have been an interesting thing, in the course of this debate, if I had done just as much preparation for the debate as the hon. minister has done by going back and taking a look at what the hon. Charles McNaughton in those days used as his nostrums with respect to the position of the tax, its validity, its justification and its absolute necessity for the good of the province. I would have quoted ironically a few passages which I am sure must be sitting around on that, saying how beneficial the thing is. Now we hear from you just how disbeneficial it all is.

This is a nub point, a crunch issue, for us over here, because I think that as responsible members of the opposition we have to have some kind of verification of what the government intends to do with the tax revenue. We have to put our finger on it and say there are tangible, beneficial, known results. The fact of the matter is your earlier legislation would have given one to believe that you at that time did not believe that these results were commensurate at all, or as tangible as all that.

The experience of Turner up in Ottawa who has had his finger in the works for an awful long time and from which they have learned a good deal by the processes of experimentation, much of which have been quoted by my colleague in the House tonight, would again lead one to believe that the thing’s a fallacy. It’s pigeonholed with insufficiencies. You would think you would have learned.

We can only attribute motives. We can only say that being a part of big business you reward your friends. At every opportunity you get, justified or unjustified, you hand out the largess, particularly in an election year. When you sit over there mute of malice or, maybe worse than that, bereft even in terms of ignorance and give no justification at all, what else do you do but confirm already harboured suspicions in this regard?

You are saying in effect that you thumb your nose at the opposition. You say, “Go blow your horn, boys. I have got the votes when the moment comes. I am not even going to stoop, not to conquer but even to recognize their existence.” That irks us. That causes a pain in the belly and we have to get rid of our thing. We have to go through a process of catharsis over here. You can see how this debate goes on in this particular context.

If you would just learn a little bit, you would put your head together with the Treasurer’s, if he is ever free enough to do so, and generate a few things.

You have done this before on that whole business where you prolonged the debate for bloody weeks over the Land Speculation Tax Act because of the same insouciance, the same bang back. It is a supercilious type of thing and it just doesn’t work.

We beat you to the ground on that particular thing and you almost became a human being. It was wonderful to behold. Humility began to take over from humiliation and at that particular stage you begin to fly. The Premier (Mr. Davis) even kept you in your job for a little while longer. For a while there it was pretty rickety, wasn’t it, lad? You were right on the verge there, because you came in precisely ill-equipped, bereft of answers to what were legitimate questions asked by the opposition.

All right, I don’t wish to prolong this debate any longer. Thank you very much, Mr. Chairman.

Mr. Renwick: Mr. Chairman, my colleague, the member for Lakeshore, made what is a very clear distinction. That is, that the fallacy involved in this type of exemption, of which there are many others scattered throughout the taxing statutes dealing with corporations, is the fundamental difference between this party and your party and the governing party in Ottawa. I doubt if I have ever seen a more succinct statement of the fallacy than the statement made on May 7, 1974, by the federal minister:

“The first element in our strategy against inflation has been and continues to be the expansion of supply. The central feature of that policy has been in place for some time.

“Our fiscal and monetary policies have been designed to bring the economy up to full capacity and growth. We have taken measures to increase the capability of the economy to produce sufficiently the goods and services which are needed. This not only increases our production capacity, it also creates remunerative and satisfying jobs, relieves shortages and reduces costs. The reduction of taxes on manufacturing and processing is clearly bringing about just such a massive increase in capacity.”

You read his statement of the other day and you’ll understand, perhaps, and get some inkling of why that is a succinct statement of the fallacy of the thinking of your government and the government at Ottawa, which distinguishes our party from your party.

Hon. J. W. Snow (Minister of Government Services): That’s why you’re not in power.

Mr. Renwick: At least we’ll level about it. The reality is that some day -- given the opportunity to express and to say what, in a difficult field, we’re trying to say inadequately -- some day the people in the Province of Ontario are going to understand it. I think they don’t understand it because they’re never levelled with.

The government never, ever, gets into a debate about this kind of problem. The government never, ever explains what the justification is for the give-away to the industry. The government never attempts to get any performance, and the government always hides this kind of part of the tax debate in this mechanical form in which we’re dealing with it on a clause-by-clause basis.

Mr. Stokes: The minister says all he has to do is collect the money.

Mr. Renwick: Our party, at the federal level, got hurt badly in the last federal election, not because of what we’re saying here tonight and what our colleagues in Ottawa were saying then about the Turner budget, but because of what your colleagues in the federal Conservative Party did with respect to their solution for the economic ills of the country. “Two for the Seesaw,” recession, inflation. Your party and its federal counterpart put up a prices and incomes control policy that was not thought out, unworkable, unintelligible, inappropriate.

And we got hurt in that two-way fight. I don’t make any bones about it, of course we got hurt. We lost seats. We lost a significant number of seats.

One of these days we will be able to state, in a way which is intelligible, that until we protect the consumer in the Province of Ontario; until we recognize that it’s his ability to buy the goods and services generated by the economy of the Province of Ontario -- of Canada as a whole; until we learn that that’s where the reliance for our economic stability stands, we’re always going to be faced with the problem of the export-oriented industries that can’t back it overseas. Because, for some reason or other, we pay high enough wages for people to live at a decent standard. That’s why your government will always be able to say that really the problem is in the United States. If the United States is all right, we’ll be all right.

Well, you and I know the United States isn’t going to be right for a long, long time, after the experience of the last 15 to 20 years. We know that, but we can’t keep blaming the external world. We’ve got to realize that the only place to put the tax concession is to the individual citizen of the province, so that he can consume. When we do that we’ll have a self-reliant economy. And your government won’t be able to frighten people about losing jobs, about anxiety, about law and order, about violence. You know, it is all part and parcel of the same thing. You actually think, as your government sits in this House in these weeks preceding the election, that if you can create enough anxiety out there that somehow or other they will let big brother continue as the government of the province. We don’t believe it.

Hon. A. Grossman (Provincial Secretary for Resources Development): Aren’t you trying to create anxieties?

Mr. Deans: No.

Mr. Renwick: That is exactly what you are doing -- and you do it all the time.

Mr. Deans: We don’t have to create them.

Mr. Cassidy: You create the anxieties.

Mr. W. Ferrier (Cochrane South): You create so much anxiety that we don’t have to do anything.

Mr. Renwick: Let me return to the kind of thing that delights this particular committee. One of the conditions of the exemption -- and it is very interesting that you don’t really trust your friends -- you are thinking that they may scrap a couple of contracts and redate them or rewrite them. It’s a very interesting one. So very politely done. As a matter of fact, I don’t find any penalty if anybody is caught doing this.

Isn’t this an interesting condition of the exemption:

“The contract for the rental or acquisition of which is, in the opinion of the minister, made for the purpose of obtaining the exemption conferred by this paragraph in substitution for or as the result of the cancellation of a substantially similar contract entered into before April 8, 1975.”

We call that fraud. That is what we would call it. Why, Mr. Minister --

Mr. Lawlor: Don’t distract him.

Mr. Renwick: If there is a money matter, the Minister of Natural Resources (Mr. Bernier) always wants to get in on it.

Mr. Stokes: He is an old Minister of Revenue.

Mr. Cassidy: He’s setting the new minister straight.

Mr. Deans: He tried the last time and failed. He was the guy who carried the machinery tax rebate and failed.

Mr. Renwick: Mr. Minister, I always like to get one amendment in each bill. Okay? We have got a nice little technical amendment here that I would like to have included.

Hon. Mr. Meen: We are dealing with your one amendment. What do you want to do with it? How do you want to handle it?

Mr. Renwick: I am going to move another one afterwards because I don’t anticipate that the amendment on behalf of our caucus is going to pass.

Will you consider, so we won’t have to waste a lot of time about it, amending item (f) to cover not only a contract which has been substituted for an earlier contract, but also the direction that is referred to somewhere in the earlier part of paragraph 49; that is, the second part: “. . . pursuant to a direction for the fabrication or manufacture thereof made or given after April 7. . .”

In order to make it understandable to you, I would amend clause (f), as one of the conditions, to read as follows.

“The contract for the rental or acquisition of which or the direction for the fabrication or manufacture of which is, in the opinion of the minister, made for the purpose of obtaining the exemption conferred by this paragraph in substitution for or as the result of the cancellation of a substantially similar contract or direction entered into before April 8, 1975.”

That might catch a few more of your friends.

Hon. Mr. Meen: Mr. Chairman, I think there are other provisions in the Retail Sales Tax Act -- unfortunately, I don’t have my consolidation of the Act here, but I was asking my staff if they could give me some help on it. I think there are some general provisions in the Act providing penalties for fraud or misrepresentation. I would find myself in sympathy with the hon. member for Riverdale if in fact there is nothing that would catch this section. But I think it is already covered. However, I can tell you this much: I certainly will give it consideration, which is all he was asking me to do.

Mr. Renwick: I will send it to you.

Mr. Lawlor: That is just the one point. What about the other one?

Hon. Mr. Meen: I have already answered the other one.

Mr. Renwick: What about my point about the direction?

Mr. Martel: Mr. Chairman --

Mr. Chairman: You are speaking to Mr. Renwick’s amendment, are you?

Mr. Martel: No, I am speaking to the original amendment that Mr. Renwick moved.

Mr. Chairman: Well, the only amendment the Chairman has before him is the original amendment.

Mr. Martel: Right. That is the one I am speaking to, Mr. Chairman -- not the one he has just sent down.

Mr. Chairman: We must deal with the first amendment before we can accept another one.

Mr. Martel: I want to deal with section 49. I really find it difficult to believe what the minister has said. My colleagues have indicated that contrary to creating jobs we suspect over here that, in fact, the purchase of any new equipment, of course, will result in just the opposite effect and, in fact, it will reduce the labour force. I can well recall railroading back in the early 1950s. They started to automate then.

Hon. Mr. Snow: You were still wet behind the ears.

Mr. Martel: I might have been, but they started to automate then. In my own community, in one shop alone they wiped out a force of 190 men down to about 10, which prevails to this day. I can also recall working with my colleague from Sudbury for Mother Inco. In 1971 their profits were in the neighbourhood of $108 million after taxes, with almost a 20,000 man workforce. Last year their profits were about $310 million, or $330 million, I guess, with the reduction of 5,000 men. One has to accept the fact that the type of equipment that is installed in this day and age, whenever you replace equipment, is that type of equipment which will, in fact, reduce jobs.

When the minister gets up and says it’s going to create jobs we over here want to know how. They estimate that. What type of logic is behind the belief that it will create more jobs? I cite the Inco example of 20,000 employees in 1971 reduced to 15,000 by 1974; the profits tripled and the workforce is reduced by 5,000.

I am always intrigued with this minister, because I well recall the bill which went through last year dealing with the land tax. It’s interesting, Mr. Chairman, that the Minister of Revenue last year admitted that he hadn’t read the select committee report on land. The government legislation flew in the face of all of the recommendations of the select committee, on which sat the Minister of Housing for a while, now the Minister of Consumer and Commercial Relations (Mr. Handleman), and the Minister of the Environment (Mr. W. Newman). That report moved against taxation, and yet this minister got himself in hot water and I guess that bill was debated for the better part of two months, and we’ve seen the minister eat crow on it.

The minister has made a great deal tonight about the desire to create jobs as being the basis of this move. One wonders where the Minister of Revenue and the Treasurer have been with respect to at least eight reports advanced by the select committee on economic and cultural nationalism alone; a committee dominated by seven Conservatives and on which there were two Liberals and two New Democrats. Those reports dealt with mining, electrical, land, advertising, and each of them made a whole variety of recommendations which would, in fact, have led to more jobs.

Mr. Chairman, if I might, we might just look at the mining one for a moment, because we’re talking about equipment. That select committee recommended that if the private enterprise system in Ontario did not move to create mining equipment in Ontario, that the government of Ontario do so. We don’t produce, as you know, Mr. Chairman, mining equipment owned by a Canadian corporation. Oh, possibly a few little widgets might be developed by some Canadian firm in Ontario, but that select committee recommended that we start to get into the production of mining equipment in a heavy way as a government if the private enterprise system failed to do so.

We’re giving away $410 million over the next two or three years in this piece of legislation. If the minister was sincere about wanting to create jobs then, in fact, he might have taken the $410 million that we’re going to play with here and give away, and introduce a Crown corporation which, in fact, would have produced mining equipment which could have gone to satisfy the Canadian need and be utilized also, as the select committee found out, for world export. We are probably the second leading economy in natural resources --

An hon. member: No, first.

Mr. Martel: Not second, first? We don’t produce any mining equipment ourselves. It’s smaller countries that do it, like Atlas Copco from Sweden. The select committee recommended that sort of move by this government. If the minister were interested in creating jobs, there’s an avenue which would have created a world market for us -- the spinoff from research and development, which was a second report of this select committee, and the research and development and what it would have led to.

What I’m saying is you’ve got before you at least eight reports of a committee on which seven of your colleagues sat; two of them are now cabinet ministers. We spent the better part of three years just studying six or eight industries where sound investment could have gone to create jobs in this province.

You admitted you didn’t read the land one last year and it’s obvious this government hasn’t read the seven or eight reports with respect to investment, with respect to advertising, with respect to colleges and universities, with respect to architecture or any of those reports which would have led to the creation of more work.

As my colleague, the member for Lakeshore, says, one then has to become cynical and suspect that the government of Ontario is paying off its political friends ahead of time. The fat of the land going to their corporate friends will, I suppose, show up in corporate donations because they have not moved despite, I guess, several millions of dollars for that select committee work. Not that much? The Clerk shakes his head. Anyway that work is going down the drain because the government doesn’t read.

I listened to an interesting programme last night, Mr. Chairman. My colleague, the member for Riverdale, has already mentioned the protection of the consumer. Last night on a programme called “Marketplace” it indicated that legislation in Australia now insists that corporations have to justify their increases. Kellogg’s, a small company, attempted to justify the increased prices of its commodities, and why it wanted to increase them. When it went before this specific committee it was discovered that the cost of advertising was greater than the cost of labour. When it was questioned on that, for its reason to substantiate that, there was no saving to the consumer. There was to the company, to ensure that people didn’t go back to eating bacon and eggs and continued to buy Kellogg’s cornflakes.

That’s what my colleague, the member for Riverdale, was talking about. None of the money you are giving away -- the $410 million -- will show up in jobs or will show up in savings to the consumer because most of the investments have already been made. As I said, they fly in the face of everything the select committee reported on in trying to create new terms and new types of employment for this province.

Obviously the government hasn’t looked at it and I become cynical, as a member of that select committee, because it’s obvious it was just a sop to keep the back-benchers busy. I’m afraid that’s the way it is, because on the land tax which this minister brought though the House, the committee urged the government not to move in the direction it did ultimately, and that was though tax.

It flew in the face of the 31 recommendations, I guess, which were in that report. It’s obvious the other six or eight reports will not be acted upon by this minister because the only thing Tories and Liberals seem to understand about economics is more giveaway.

Mr. J. A. Taylor (Prince Edward-Lennox): That is your party.

Mr. Martel: No, more giveaway to the corporate sector.

Mr. G. Nixon (Dovercourt): You want everything for nothing.

Mr. J. A. Taylor: Never satisfied.

Mr. Cassidy: They are never satisfied.

Mr. Martel: Mr. Chairman, it was interesting that while we were in England we visited ICI, which is the parent company of CIL, I guess. Dr. Barrett -- I believe that was his name -- said, “You Canadians are rather silly and naive. You think the creation of new jobs in certain designated areas is because of the giveaway programme you’ve got. That’s so immature it is not even funny but if you Canadians are so stupid that you want to give the money away, then we are going to ask for it.”

He added, “Our location of a plant in any specific area has nothing to do with your giveaway programme. It’s the infrastructure already there in your society which induces us to go to an area. But if you want to play giveaway we’ll have our hand out and we’ll take it but it doesn’t determine whether we are going to locate there or not.”

Mr. A. J. Roy (Ottawa East): Are you saying that the DREE programme doesn’t work?

Mr. Martel: The DREE programme, with the cost of jobs, was ridiculous.

Mr. Roy: You had better talk to your member from Cornwall.

Mr. Martel: I’m telling you it’s ridiculous.

Mr. Roy: Do you know what the unemployment was there?

Mr. Martel: The only thing you Liberals and Tories understand is more giveaways.

Mr. Roy: You’d better talk to your member from that area.

Mr. J. A. Taylor: Get off it. Stop kidding yourself.

Mr. Roy: It was $7 million over how many years?

Mr. G. Samis (Stormont): That’s less than a swimming pool in Oakville.

Mr. Roy: Are you saying that none of that money brought jobs into your riding?

Mr. Samis: Sure it brought them jobs.

Mr. Roy: Well, you’d better talk to your colleague then.

Mr. Samis: But look how long it took.

Mr. Chairman: Order, please.

Mr. Martel: Mr. Chairman, my friend might check with his friend in Nova Scotia where they gave Michelin X -- how much was it?

Mr. Chairman: Would you like to proceed on the amendment?

Mr. Martel: It was $75 million or $80 million and they didn’t know how many people were employed there.

Mr. Chairman: Would the member for Sudbury East like to proceed, as far as the amendment by Mr. Renwick is concerned?

Mr. Roy: The mistake was made in your riding.

Mr. Martel: Mr. Chairman, I just want to say that there are other ways; you don’t have to buy into the economy. If you are going to pay for it, surely to God you should own it.

Hon. Mr. Meen: No.

Mr. Martel: Surely to God you should own it. You’d make a lousy businessman then.

Mr. Roy: Why do you think he is Minister of Revenue?

Hon. Mr. Meen: Why do you think he would like to be?

Mr. Chairman: Order, please. Would the member for Sudbury East get back to the amendment, please?

Mr. Martel: I am right on the amendment, Mr. Chairman.

Mr. Chairman: Let’s come to order and proceed.

Mr. Martel: I’m right on the amendment and trying to --

Mr. J. A. Taylor: Come on, let’s go. Let’s get some action here.

Mr. Martel: I want to make the point that you are not going to create jobs with giveaway programmes. You might look to the reports that are before you, and start to follow the recommendations there, particularly in the mining one. In all seven or eight of those reports there was a whole series of recommendations to create employment in this province and none of them recommended giveaway programmes.

My colleague, the member for Wentworth, and I worked very hard on that select committee to make sure we didn’t recommend more giveaways. In fact, we moved very hard so that if government was going to invest, it would have equity. Surprisingly enough, your colleagues on that committee -- two of them are cabinet ministers; one of them is the chief government whip; and two of them are parliamentary assistants today, I guess -- all agreed with it. I wonder what happened from the time those reports were tabled to the present time when we continue along the same old line of playing Santa Claus.

I would like to hear the minister tell me because I sat in here in 1969 when we talked about more jobs if we gave away more money for new equipment. As we questioned the member who was later to be Treasurer on the jobs that that created, he couldn’t give it to us. When we questioned him and the man who followed him as to what the giveaway programme of $57 million meant in terms of jobs, again the member for London South (Mr. White) admitted: “We don’t think it created a job; but we can’t prove it.” In fact all of your giveaway programmes don’t do a thing.

Hon. Mr. Meen: That was the ODC.

Mr. Martel: I beg your pardon?

Hon. Mr. Meen: That was the ODC.

Mr. Martel: Yes, that was ODC, right. I’m saving the whole mentality is giveaway. You always come to the House and ask us to give away more, but you never are in a position to give to us even after it’s been in effect -- that was just a slip by John White to say that it didn’t create jobs.

Hon. Mr. Meen: No, he was expressing some candour. We weren’t able to produce the figures.

Mr. Martel: No. you haven’t been able to. One afternoon the member for London South made a slip and said: “I’m not sure if it has created a job.”

All we are saying here is that you tried this programme before. What were the effects then and on what do you base it now? How many jobs? Why do you want us to give $410 million away? You must have some projection. Maybe it was something you drew out of thin air. Maybe it was, but surely you must have something? The Treasurer must have told you one or two things. I implore you not to go through this charade the way you went through the land tax bill. You just sat there and took a terrible lacing for two months and were never in a position to answer, because the Minister without Portfolio (Mr. White) the other day gave you the instructions, “Carry the bill, no matter what.” Now you’re in the same position and you can’t give us an answer. It must be embarrassing.

An hon. member: The poor old Minister of Revenue.

Hon. Mr. Meen: Pardon?

Mr. Martel: I would ask the minister to tell us.

Hon. Mr. Meen: Where was the member when I answered before?

Mr. Martel: I heard. The minister didn’t tell us anything.

Hon. Mr. Meen: The member for Sudbury East wasn’t in the House.

Mr. Martel: Why don’t we stand the section down until the Treasurer comes around and tells us on what he based it? Then maybe there would be some credence to us even debating this, because at the present time there isn’t even any credibility in debating this section, Mr. Chairman.

Mr. Deans: I want to go back for just two or three minutes to talk about the employment angle, because I think that’s probably important at this particular point, given the unemployment that we’ll likely be faced with. I was sitting listening to the debate and thinking about the $400 million. I had miscalculated. Earlier on I was talking about $200 to $300 million; I had forgotten it was going to be over $400 million. I wondered what sort of things might have been done with $400 million, and I want to make a suggestion to the minister.

I believe that this move is wrong, as you know. I think it will likely create less employment rather than more. I’m saying, given my own view of it, a view that’s shared by a number of other people -- some of them with a great deal more knowledge in the field of economics than I will ever have -- but given that they too think that this might be counter-productive in terms of employment, that it might drag investment dollars out of Canada, that it might not do the things that you think about, let me tell you something about it.

Do you realize that if you had taken that $400 million that you’re prepared not to collect and if you had put that into housing you could have created 20,000 housing units under the HOME programme; 20,000 housing units? I can’t recall the exact figure -- I asked for it but I don’t have it at the moment -- but given that each house employs about let’s say two man-years -- I’m not positive that that’s real -- and given that each house, as a side effect, employs on a five-to-one ratio for all of the other subsidiary industry that’s related to house building, have you stopped to think of the numbers of jobs that you could have created in this economy by using that money in the field of housing?

Not only that, but have you stopped to think of the impact, the social impact that that $400 million would have had in the provision of accommodation for people at a cost that they can afford? Have you stopped to think that that $400 million would have been returned, every single penny of it, to the coffers of the province with interest; that it would have been an investment, not a giveaway, and we would have been able to monitor the value of it and we could have told right to the last job how many new jobs were created in the Province of Ontario with the investment of $400 million in mortgages?

When you look at the range of potential things that could have been done with the money that you’re prepared not to collect, and any reasonable understanding of the impact of the elimination of a tax, either in the short run as you have indicated, or in the long run as my colleague from Riverdale has stated, and given all of the wisdom available to us in terms of the studies that were conducted with regard to other taxing measures that have been set aside, presumably for the purpose of stimulating the economy and encouraging production development, if you had really wanted to create jobs and, at the same time, if you had really wanted to meet a social need, and if you had wanted to use the money in such a way that the money would not have been a giveaway but rather would have been an investment in the development of the province, the alternative was so clear.

The alternative use to which the money could have been put was so clear: You could have created 20,000 $20,000 mortgages, which is the level at the moment under the HOME programme; you could have made that money available at six per cent and you would have ended up with 20,000 housing units and your $400 million plus the interest. You would have benefited from that by untold numbers of jobs and you would have met a social need at the same time.

Hon. Mr. Meen: There are only jobs in the construction of those houses. It is of a transistory nature.

Mr. Deans: No, that is where you are wrong.

Mr. Martel: There are electrical jobs.

Mr. Deans: That’s the trouble with this government; it doesn’t see beyond the nose on its face. There aren’t only jobs in the construction industry. There are jobs in the manufacturing industry for all of the items of trim that go into the business. For example, all of the plumbing industry benefits and all of the electrical industry benefits. There is a great segment of the manufacturing industry that benefits. The furniture industry benefits.

Mr. Cassidy: Furniture, appliances.

Mr. Martel: Heating.

Mr. Deans: Thanks very much. The heating industry benefits. If you want, I could go down and I am sure I could produce a list of 50 different industries that would benefit substantially from the investment of $400 million in Home Ownership Made Easy mortgages. That is the five to one that I am talking about. Those are five jobs that are created outside for the one job that is actually seen as being in the house building industry.

You couldn’t under any circumstances, with any calculation, show me a similar benefit that will flow from the elimination of this tax in the manufacturing sector. There is no way. There is no other sector of the economy that stimulates the economy to the same extent as the development of accommodation does. It has such a spin-off effect.

You could have made that $400 million available at any rate of interest. You could have chosen your own. You could have begun a brand new programme, for God’s sakes. If you can do without that $400 million over this next 21 months, you could have done without it over a longer period of time.

That’s why I can’t support the kind of measure, because it isn’t well thought out.

Mr. Martel: It wasn’t thought out at all.

Mr. Deans: You have no proof. I can produce for you, if you can just wait until I get the statistics, in actual jobs the numbers of jobs that I could create with the use of the $400 million. I can do it in 10 minutes.

Mr. J. A. Taylor: You couldn’t do anything in 10 minutes.

Mr. Deans: I can tell you how many jobs I could create, if I were the government, with $400 million.

Mr. Martel: Who do you trust?

Mr. Deans: I could tell you, better than that, how many families I could house. I could tell you, better than that, by normal projection how many additional jobs will be created throughout the manufacturing sector as the result of that stimulation.

Mr. J. A. Taylor: You couldn’t say hello in 10 minutes.

Mr. Deans: More than that, I can tell you the saving to the average family in terms of dollars saved, based on the interest rates that I would charge for the money that you are going to give away. And I would get back every penny of the money that I would invest.

You tell me that that doesn’t make more sense. You tell me that my stimulation, which will create more jobs in manufacturing, won’t result in those manufacturing industries benefiting to a far greater extent than they will with the seven per cent elimination of tax. You just tell me it won’t.

Hon. Mr. Meen: Where is the member going to build those homes?

Mr. Deans: You tell me it won’t.

Hon. Mr. Meen: What do you mean? You tell me where you are going to build those homes.

Interjections by hon. members.

Mr. Deans: You tell me. Listen, I will show you where you can build them all, every single one of them.

Mr. Cassidy: You will have houses coming out of your ears.

Hon. Mr. Meen: They are building right to capacity now.

Interjections by hon. members.

Mr. Deans: What I am saying to the minister is --

Interjections by hon. members.

Mr. Ferrier: You can build them up in Timmins.

Mr. Martel: The Minister of Housing (Mr. Irvine) says there are all kinds of building lots for sale.

Hon. Mr. Meen: They want purchasers with the money to buy them.

Mr. Deans: I’m doing what I shouldn’t do. I am offering the minister an alternative, an alternative use that the money could be put to that will create more jobs.

Mr. Martel: And provide housing.

Mr. Deans: More jobs that will be a far greater stimulus to manufacturing and will meet a social need. In addition to that, the money I am going to invest will all be returned, plus interest.

Mr. Martel: That’s a fact.

Mr. Deans: You will get every penny back.

An hon. member: Back to the drawing board.

Mr. Deans: All you have to do is charge five per cent if you like. You can make it available to income groups of $10,000 and less and charge five per cent. You will get it all back, every penny of it.

Now you tell me that that’s not a better method!

Mr. Stokes: You will be re-elected with an overwhelming majority.

Mr. Deans: You tell me that’s not a better measure than this garbage you are bringing in tonight.

Hon. Mr. Meen: Tell it to the Treasurer.

Mr. Deans: Pardon?

Hon. Mr. Meen: Tell it to the Treasurer.

Mr. Deans: I am telling it to you, because it is your bill.

Mr. Cassidy: It is your bill.

Mr. Deans: I am saying to you that you are wrong.

Mr. Martel: We would tell it to the Treasurer but he isn’t here.

Hon. Mr. Meen: Read Hansard.

Mr. Cassidy: For the record, Mr. Chairman --

Mr. Deans: I want to make it clear. I am now doing for you what you couldn’t do for me.

Mr. Martel: You couldn’t do it for yourself.

Mr. Deans: I am now telling you what to expect. This is the difference between my research and yours, okay?

Every house creates between 130 and 150 man-days of employment.

Mr. J. A. Taylor: What’s that got to do with the bill?

Hon. Mr. Meen: Big deal.

Mr. Stokes: What do you mean, big deal?

Hon. Mr. Meen: Then what happens? The house is built and the guy is out of work.

Mr. Stokes: You won’t create one man-day with your project.

Mr. Cassidy: We don’t know of any job that will be created by your measures.

Hon. Mr. Meen: Let’s get back to the bill.

Mr. Stokes: Mean old Arthur Meen.

Hon. Mr. Meen: You only say that because you love me, Jack.

Mr. Deans: Okay, my 20,000 houses will create 2.6 million man-days.

Listen, what’s the matter, don’t you like it? My 20,000 houses will create 2.6 million man-days of employment; man-days.

An hon. member: Where did you get that?

Mr. Martel: Who woke you up, Claude? Who woke you up?

Mr. Deans: That’s at the bottom end.

An hon. member: Back to the drawing board, Art.

Mr. Deans: Now let me go on. Those are direct jobs; those are direct. Those are the actual jobs that my 20,000 houses, using your $400 million as an investment, will create. For every one job in the house-building industry -- let’s be really conservative -- we create three jobs outside; three jobs outside, okay? That means that my housing policy, using your $400 million that you are prepared to give away, will create 7.8 million man-days of employment outside. All right? Now I have got two million --

Hon. Mr. Grossman: Let the record show that the member is doing all this off the top of his head.

Mr. Deans: I am not doing it off the top of my head. I happened to get the research office to look for it, so now I am telling you, that I will create 2.6 million man-days of employment with the building of the houses and I will create 7.8 million man-days of employment in subsidiary industries.

Hon. Mr. Grossman: He is counting on his fingers.

Mr. J. A. Taylor: You couldn’t create a half day’s work for yourself if you tried.

Mr. Deans: Now I want to ask you something. Isn’t that a better programme than yours? Can you produce a single job for me? Can you give me a statistic -- anyone of you sitting under the gallery -- can you give me a statistic to compare with that in the manufacturing sector? Can you show me one single job?

Mr. Roy: Well, he’s got a job.

Mr. Deans: Can you show me one single job?

Mr. Stokes: Come on, Allan. You are a superminister.

Hon. Mr. Grossman: Remember when I used man-days and your party laughed?

Mr. Stokes: You couldn’t prove it. We can.

Mr. Deans: I can prove it.

Mr. Chairman: Order, please. The member for Wentworth has the floor. Order.

Hon. Mr. Meen: The instant economist.

Mr. Deans: Those are the first statistics you have heard tonight. Now there you are.

Mr. Chairman: Order, please.

Mr. Deans: So now I put to you --

Mr. Chairman: Let’s get on with the debate.

Mr. Deans: I am putting the proposition to you this way: You have no justification for your bill. We can’t support it on this side of the House --

Hon. Mr. Grossman: Shame.

Mr. Deans: -- but what I want to do is, I will make you an offer you can’t refuse. I will provide you with the programme that will create 10 million man-days of work.

Hon. Mr. Grossman: You know where those offers come from.

Mr. Stokes: How can you refuse?

Mr. R. G. Eaton (Middlesex South): You mean “person” days.

Hon. Mr. Grossman: Yes, what is this “man”? What do you mean? It’s “person” days?

Mr. Deans: I will provide you with the opportunity --

Mr. Martel: Why doesn’t the minister give us one figure to work with?

Mr. Deans: Tell me, Mr. Minister, are you interested in creating employment?

Hon. Mr. Meen: Who isn’t?

Mr. Deans: Are you interested in creating employment, both in the area of the greatest social need and in the subsidiary industries and manufacturing?

Hon. Mr. Meen: That’s the whole thrust of the budget, to get the economy turned around.

Mr. Martel: Show us how many jobs you’re going to create.

Mr. Deans: Are you interested in using a programme that won’t cost the Province of Ontario one red cent?

An hon. member: The stimulation of the economy.

Hon. Mr. Grossman: Mr. Chairman, is this still the Retail Sales Tax Act?

Mr. Deans: It sure is. What’s the matter? Are you getting a bit worried?

Hon. Mr. Grossman: Holy cow!

An hon. member: Are you finding it hard to follow?

Mr. Ferrier: It’s the $400 million you’re giving to your fat cat friends.

Mr. Deans: What I’m saying to you is, how about allowing us to invest $400 million in 20,000 mortgages at six per cent for people earning less than $10,000 a year? We’ll create 10 million man-days of employment in the period of time it takes to build the 20,000 units. Can you better that?

Mr. Mattel: The minister certainly won’t because he won’t be here.

Mr. Deans: How can you refuse? There’s an offer you can’t refuse. Are you telling me you don’t want to give people out there houses at a cost they can afford? Are you telling me you’d rather give the money to your corporate friends?

Hon. Mr. Meen: Because we want them to be able to buy the houses. We want to create jobs.

Mr. Deans: Are you telling me you can create more jobs than I’m telling you I can create with the same amount of money?

Hon. Mr. Meen: You can’t substantiate yours any more than I can.

Mr. Cassidy: He certainly can.

Mr. Stokes: You refute those figures.

Mr. Mattel: You haven’t put a figure on the floor yet tonight.

Mr. Deans: It takes 130 man-days to build a house.

Hon. Mr. Grossman: What about the woman-days?

Mr. Deans: I don’t need your interjections because they’re not appreciated by anyone.

Hon. Mr. Grossman: That’s awful. Wait till women’s lib finds out what you said.

Mr. Deans: It takes 130 man-days to build a house. You get 20,000 houses for $400 million. You can charge six per cent interest on the mortgages. You can recover every penny plus interest. You can create 10 million man-days of employment, 2.6 million of them directly attributable to the building of the house and 7.8 million of them in industry related to house building.

Mr. Martel: That’s 180,000.

Mr. Deans: Do you want a programme that will work?

Hon. Mr. Meen: We’ve got one that will work. This is our programme.

Mr. Deans: Do you want a programme that will stimulate industry? Do you want a programme that will stimulate your manufacturing friends’ concerns?

Hon. Mr. Grossman: You can’t charge six per cent or five per cent.

Mr. Deans: You can do it at four per cent. You can give the money away. You can give them the mortgage money and just get it back and you wouldn’t have lost as much.

Hon. Mr. Meen: Come on, Mr. Chairman, let’s get back to the bill.

Mr. Deans: Can you do better?

Hon. Mr. Meen: We’ve got a great programme right here. Why don’t you let it work? Let’s just see how it will go.

Mr. Deans: No.

Hon. Mr. Meen: You’re sceptics. You don’t believe that what we’re proposing will work.

Mr. Deans: I’m telling you that what I’ve just suggested to you would be more of a stimulus to the economy.

Hon. Mr. Meen: That’s your opinion.

Mr. Deans: No, it’s not only my opinion. It’s shared by the member for Sudbury East.

Hon. Mr. Meen: Oh, well, the great expert.

Interjections by hon. members.

Mr. Deans: In fact, I wouldn’t be surprised if the member for --

Mr. Stokes: It sure would help the lumber industry in the north.

Mr. Deans: -- Thunder Bay agrees with me.

Mr. Martel: We can make nickel-plated nails.

Mr. G. Nixon: Let’s have a little order.

Mr. Deans: You don’t want these people to get the houses? You don’t want these people to get low-mortgage houses? You’d rather give the money away.

Mr. Chairman: Order, please. Will you speak to the minister, please?

Mr. Deans: I’m speaking to him.

Mr. Chairman: Speak to the minister. The minister is not on that side of the House.

Interjections by hon. members.

Mr. Chairman: Speak to the minister through the Chair will you, please, from now on?

Mr. Roy: Speak to the Chair.

Mr. Deans: Let me ask you, Mr. Chairman. Wouldn’t you like to give a chance to these young families who can’t get accommodation in the Province of Ontario?

Mr. Chairman: It is not the Chairman’s job to express opinions.

Mr. Deans: Can I take it from that that you wouldn’t like --

Mr. Chairman: You’re not taking anything from that. The Chairman is neutral in this case.

Mr. Ferrier: He’s trying to do something good for York North.

Mr. Deans: I see. Then, through the neutral Chairman, is there anybody in this House who wouldn’t like to see 20,000 six per cent mortgages available?

Hon. Mr. Meen: Wouldn’t it be great?

Mr. Deans: Is there anybody in this House who would rather give the $400 million to industry? Give it away without any guarantees of results?

Mr. J. A. Taylor: There’s a $1,500 grant to stimulate housing.

Hon. Mr. Meen: How would you like it?

Mr. Deans: I’m asking if there is anybody who would rather give it to industry without any guarantees of results?

Hon. Mr. Meen: No more private loans.

Mr. Deans: There are no guarantees from this minister. He said so. He can’t produce a single statistic, not one.

Hon. Mr. Meen: It is the incentive.

Mr. Deans: Is there anyone who doubts --

Interjections by hon. members.

Mr. Deans: Mr. Chairman, through you, is there anyone who doubts that the increased purchasing resulting from these additional man-hours of work -- person-hours of work -- wouldn’t be a stimulus to the economy? Is there anyone who doubts that? Is there anyone who doubts that those additional 10 million person-hours of employment with all of the earning that goes with it, wouldn’t stimulate every sector of the economy with the purchasing that would be undertaken?

Mr. Roy: You have a receptive minister now, ask him the question.

Mr. Deans: I am asking you. Is there anyone in the House who would deny that it makes more sense to invest the $400 million and have it returned to the province over a period of time?

Mr. J. A. Taylor: You don’t want housing and you know it.

Mr. Chairman: The member for Wentworth is getting repetitious now. He has asked the same question.

Mr. Deans: No, no, it is a different question.

Mr. Chairman: Yes, you are.

Mr. Deans: It just sounds the same.

Mr. Chairman: You are getting repetitious.

Mr. Ferrier: The Chair is becoming argumentative,

Interjections by hon. members.

Mr. Deans: Well, I have to tell you that there is an opportunity for you to do some good, and it will win you as many friends as this will. It’s a better offer than you have made tonight. There are more statistics involved there --

Hon. Mr. Meen: That is a matter of opinion.

Mr. Deans: I will take them up. In fact, you give me the money and I will do it; I will make it work.

Hon. Mr. Meen: I wouldn’t trust you with the money; no offence intended.

Mr. Cassidy: The electors will decide that. They will judge your stewardship.

Mr. Deans: I have got to tell you -- I put to you that this programme would create more stimulation --

Mr. Stokes: Put it to him.

Mr. Deans: -- more purchasing, more employment, would meet a greater social need, and would return to the province every dollar plus interest. Now, don’t you think that makes more sense than this giveaway?

Interjections by hon. members.

Mr. Stokes: And you adopt that programme. We will trust you.

Mr. Chairman: Is the hon. member for Ottawa Centre speaking on Mr. Renwick’s amendment?

Mr. Cassidy: Yes, Mr. Chairman. I just want to make two or three comments; I don’t want to speak for a long time about this. I have been listening with concern to the debate and watching with concern the kind of policy the government is seeking to adopt, and I have been trying to work out in my mind how it is that a remission of sales tax over a period of 2½ years can be thought to help the economic situation of the Province of Ontario in this current year. In addition, I have been trying to work out how it is that a remission which is designed to increase the purchases of investment equipment will help to create jobs in Ontario for that part of the investment equipment which is imported from other parts of the world. This is an important question.

Mr. J. A. Taylor: That same point was made by many of your colleagues.

Mr. Cassidy: As a matter of fact, at a good guess, about one-half of the machinery and the equipment that is used in Ontario is manufactured abroad; it comes in from Sweden, West Germany --

Mr. J. A. Taylor: We have heard all that. If you were in the House you would have heard that all afternoon.

Mr. Cassidy: I was busy downstairs, as a matter of fact. I think it is a valid point and can be raised right now.

Mr. Ferrier: Call that fellow to order.

Mr. Cassidy: Has the minister answered it?

Mr. Chairman: Order, please. Would the member for Ottawa Centre speak through the Chairman, please?

Mr. Cassidy: Thank you, Mr. Chairman. Perhaps you can shut up the member for Prince Edward-Lennox, who should concentrate on his sheep.

Mr. Roy: On what?

Mr. Cassidy: On his sheep.

Mr. Roy: Is he one of those?

Hon. Mr. Grossman: So you are insulting sheep farmers now, are you?

Interjections by hon. members.

Mr. Cassidy: No, Mr. Chairman, there is a serious problem here. If there was any stimulus to the machinery industry created by this particular remission of tax, half of it at the very least would be felt in the machinery industry of the United States, of Japan, of Sweden, of West Germany, of Britain, and of other nations which provide the investment equipment which is used here in this country.

Ontario is not even a heavy producer of investment goods. We have a certain number, but if you go down to the warehouses and the showrooms on King St., and out in the east end and the west end where this kind of equipment is shown off, the minister knows very well that this equipment is in large measure produced abroad and brought into Canada, because we are not as intensive in the engineering trades and in the machinery trades as we are in certain other fields. In one or two areas, such as paper equipment, we are outstanding, but in many areas we do not produce the kind of equipment that is needed.

Secondly, this stimulus is spread over a 2½-year period and will not be concentrated during the time when, according to the Treasurer’s analysis, we need the extra employment, which is this year.

Thirdly, there has been nothing said by the minister up until now, both from what I have said and from what I understand he has said, to indicate there will be any discernible change in the level of investment by private industry during 1975. In other words, quite apart from the question about whether additional jobs will be created in the production of goods and services once the equipment is installed, Mr. Chairman, there is the question of whether there will be additional jobs created in the machinery-producing industries this year. I suggest the moneys that will be paid out this year will be moneys that will simply be a subsidy or a gift to industry, for their investment intentions were already formulated at the time of the budget, and there will be no change in them.

It is possible to argue that next year, or the year after, there might be a few extra pieces of equipment purchased out of this $418 million. There might, in fact, be as many as 100 or 200, maybe even 300 jobs created in the machinery industry because of this particular measure, but that’s a paltry response. That’s a paltry kind of return on the hundreds of millions of dollars which it is proposed to spend in order to give this particular gift.

Can the minister explain something to me? I’ll sit down at this point and try to get an answer from him to this. It struck me that it may be that Bill Kelly and his friends have been talking to the cabinet and suggesting that it’s about time that some solicitude was shown the private industry because of the need to go and hit them for the 1975 election.

Mr. Ferrier: They’ve already been hit.

Mr. Cassidy: Maybe they’ve already been hit, but they want to hit them again.

Mr. G. Nixon: Get off the old gutter talk.

Mr. Cassidy: What? It is not gutter talk, as a matter of fact. There has been a quid pro quo, and you know it. There has been a quid pro quo with private industry. It has gone on. Tollgating has been going on, and it works both ways.

Mr. J. A. Taylor: Vicious innuendoes and slurs.

Mr. Cassidy: Mr. Chairman, the members back there, from their response, are simply confirming the fact that before every election the bagmen for the Conservative Party go around and they say to their erstwhile friends: “Here’s the government business you’ve had. Here’s what we’ve done for you; now it’s your turn to come back and deliver to us.” They tell them the amount of contracts they’ve had and they strike a percentage on that particular figure and they say: “Okay now. Hand over. Deliver.”

Mr. J. A. Taylor: Hogwash.

Mr. G. Nixon: Shame.

Mr. Ferrier: That is the tollgating.

Mr. Cassidy: That is the tollgating that goes ahead.

Mr. J. A. Taylor: Shame on you.

Mr. Cassidy: There’s a kind of a tollgating that occurs with the manufacturing industries as well, but I ask myself --

An hon. member: You’d better.

Mr. Cassidy: It’s true. You know it. What I ask myself though, is this --

An hon. member: That’s what Shouldice said.

Mr. Cassidy: In committee, right now, we’re passing legislation which will limit the amount of money that can be given by any corporation to a maximum of $8,000 in an election year and $4,000 in an off year. That election bill is going to get passed. It’s been promised by the Premier and I have every confidence it will come back and get passed here within the next week or two.

If that is the case, and if the $15,000 that was being collected from some contractors and the $25,000, $30,000 and $50,000 that was being collected from some large firms will no longer be accessible to the government; if there is a kind of rough measure of equality imposed on industry after this election expenses bill is passed, then what need is there for you to gratuitously hand out $400 million to these guys in order to ensure their support in the 1975 election? The reward is incommensurate with the returns that are expected, I would suggest, in this particular case.

Hon. Mr. Meen: You know not whereof you speak.

Mr. Cassidy: It’s true.

Mr. J. A. Taylor: You are twisting the truth. You distort and twist the truth.

Mr. Cassidy: Mr. Chairman, the point has been made that the economic effects from this particular piece of legislation are indiscernible, cannot be discerned; that past experience has indicated that there is very little if any impact; that there is no guarantee that jobs will result in return for the moneys that are being given out; that the most likely place these funds will go is into the profits of the corporations; that the reason that companies are not investing is because of the fact that they don’t see adequate demand in order to justify their increased investment; and if there was more demand here in this province, then you would see the investment that the Treasurer and his sidekick, the Minister of Revenue, appear to find wanting.

All of these things have been said, Mr. Chairman, and We are simply groping and trying to find some explanation, regardless of all of those facts, for the government insisting on giving a $400 million piece of giveaway to the private manufacturing and construction sector.

The member for Wentworth said, at some length, that you ought to be putting the money into housing. I subscribe to every word that he says. If you intended to confine the benefits to job creation in the manufacturing sector, then I would have to ask the minister why is it that this opportunity of directing industrial development into eastern and northern Ontario was simply bypassed. It would have been possible --

Mr. J. A. Taylor: You don’t want development there. The member for Sudbury called them giveaway programmes; now you are for it.

Mr. Cassidy: I’m just saying that if you insist on giving it to manufacturing then you should see that the jobs are guaranteed to be created, and you should talk about the location of those particular industrial --

Mr. J. A. Taylor: That comes under the ODC programme.

Mr. Cassidy: The ODC thing isn’t working, and you know it.

Hon. Mr. Snow: Sure it is.

Mr. J. A. Taylor: It is working in my riding.

Mr. Cassidy: It is not working in most parts of eastern Ontario, and I am sure it is not working in the north.

Interjections by hon. members.

Mr. Cassidy: The ODC has a sum of $30 million or $40 million a year to play around with in the form of loans. This is a giveaway. These are funds that are given as an incentive to industry. The ODC, the EODC, the NODC has nothing at all to compare with this, Mr. Chairman. One has to ask oneself, what kind of priorities are there in this government when on the one hand they give loans ostensibly to direct industry to various parts of the province, the results of which are that most industry continues to concentrate down here around Metro Toronto, while on the other hand, when it comes to an industry locating in the areas that are overdeveloped, like Metro Toronto, they give giveaways in the form of the remissions of taxes to the tune of $400 million.

There is an extraordinary solicitude for the private sector which is reflected in this particular piece of legislation. That is why we simply cannot go along with it. We look to the government -- in vain, I fear -- to withdraw this particular measure and to bring in measures which are effective, which will have an immediate result and which will create jobs that we can measure and see this year, when they are needed, when unemployment is at such a high level.

Mr. Chairman: Are there any more speakers to the amendment?

Mr. Renwick: Mr. Chairman, since it is almost 10:30, I would move the adjournment of the debate. I would move that the committee rise --

Mr. Chairman: If you’d just excuse me for a minute, I wonder if we could not dispense with your amendment tonight. We have an amendment to be moved by the member for Welland South; if there are no more speakers on your amendment, we could go on to his and he could adjourn the debate. Is that agreeable?

Mr. Renwick: As long as I understand what the procedure is.

Mr. Chairman: The procedure will be that we are finished if there are no more speakers on your amendment.

Mr. Renwick: No.

Mr. Chairman: Okay. I’ll accept your motion to adjourn the debate.

Mr. Cassidy: We should have an answer from the minister, Mr. Chairman.

Hon. Mr. Meen: Mr. Chairman, the member for Ottawa Centre has raised some points which we’ve been chewing over here for hours now. I guess he hasn’t had a chance to hear the whole debate. I gather he was down at the other committee. But he really is missing the point when he is talking about the creation of jobs.

Hon. E. A. Winkler (Chairman, Management Board of Cabinet): What’s new?

Hon. Mr. Meen: We are talking about a credit on the purchase of machinery. The hon. member, I think, may not be all that far off, for all I know, when he pulls out of the air a figure of 50-50 for heavy machinery that would be imported as opposed to heavy machinery that would be manufactured here --

Mr. Cassidy: That’s right, so half the jobs created would be outside Canada.

Hon. Mr. Meen: -- and which would generate employment directly. But the point the Treasurer is making in his budget is not that the manufacture of that machinery will generate jobs, but rather that that machinery, be it manufactured here in Ontario or be it imported, is then going to go into a factory that will continue to employ people -- not just today, not just tomorrow, not just through the period of time during which this is a credit, but for years to come. It will be modern machinery, producing new products on the market in better competition on the foreign market, where the Treasurer estimates a 25 per cent effect from this and in the long run a very handsome return to the province.

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

Motion agreed to.

The House resumed, Mr. Speaker in the chair.

Mr. Chairman: Mr. Speaker, the committee of the whole House begs to report progress and asks for leave to sit again.

Report agreed to.

Hon. E. A. Winkler (Chairman, Management Board of Cabinet): Mr. Speaker, tomorrow we will proceed with consideration of the taxing bills as previously announced.

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

Motion agreed to.

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