The House met at 2 o’clock, p.m.

Prayers.

Mr. Speaker: Statements by the ministry.

Mr. E. W. Martel (Sudbury East): This ought to be a performance.

SUPPLEMENTARY ACTIONS TO BUDGET

Hon. W. D. McKeough (Treasurer and Minister of Intergovernmental Affairs): Mr. Speaker, no member of this Legislature can be unaware of the fact that on June 23 the government of Canada tabled a budget -- a surprising document, a document irrelevant to the needs of Canada and Ontario --

Mr. Martel: What an observation.

Hon. Mr. McKeough: -- a document that increases the tax burden on our citizens, that fuels inflation, that is mischievous in terms of the clear interests of the people and the provinces.

The critical fact is that it has the capability of stalling the recovery of our economy in the second half of this year. It has made it necessary for us to reinforce the forward economic thrust of the Ontario budget of April 7.

The Ontario budget of April 7 was selective. It was selective in terms of time, it was selective in terms of the points of impact in our economy. It was specific to the needs in lagging sectors, to the special needs of people, to the slowing of inflation, to the expansion of job opportunities in Ontario.

It was designed to have its major impact in the last half of 1975, to accelerate recovery during this period, to taper off in terms of its impact as the economy gained strength.

It was specific to the defined requirements of the economy. It was specific to sectors that particularly required stimulation or help -- the automotive industry, construction of needed homes, reinforcing incomes and purchasing power of people, strengthening small business and farming, increasing investment and productivity and demonstrating the leadership of the government of Ontario in the matter of expenditure restraint. It was carefully planned to strengthen the Ontario economy and assist the people of the province in a period of excessive inflation and growing unemployment.

It was, sir, gravely undercut by the June 23 budget of the government of Canada.

The price of energy was raised -- $740 million in a full year. A 10 cent levy was placed on every gallon of gasoline. Inflation was escalated. The rate of job creation was slowed. Costs to consumers were increased.

It called for new action by Ontario to compensate for its wrong direction and its gross inadequacies. I was instructed by the Premier of Ontario (Mr. Davis) to reassess the prospects of the people and the economy of Ontario in the light of this federal budget -- a budget clearly adverse to the interests of Ontario, and indeed of Canada.

So, sir, in response, I am tabling two papers today as part of this statement. One of these deals with Ontario’s experience under federal-provincial cost sharing. As I see it, this is the most serious long-term aspect of the federal budget. The federal government imposed abrupt and arbitrary ceilings on its financial support of national medicare. It also announced the termination of cost-sharing agreements for hospital insurance in the future.

The Ontario paper clearly illustrates the degree to which Ottawa has used its fiscal surpluses to lever provinces into expensive sharing arrangements against their declared priorities. The federal budget is one more case where provinces are left to carry on with reduced federal support. I foresee that under this new regime Ontario and other provinces will be severely strained to maintain existing standards of health care. I suggest, therefore, an early meeting of Ministers of Health to consider the implications of the federal budget on the future of essential health services.

Mr. S. Lewis (Scarborough West): The Treasurer knows there won’t be one.

Hon. Mr. McKeough: Further, on behalf of the Ontario government, I now offer to assume complete responsibility for health care in Ontario. The Ontario government, in so doing, will assume all future financial risks in exchange for 17 points of the personal income tax. Furthermore, Ontario is serving notice that it cannot afford and does not intend to enter into any new spending areas the federal government chooses to introduce as shared-cost programmes.

The other paper accompanying this statement is entitled “The Energy Factor and Ontario’s Economic Recovery.” This paper reviews the impact of the June federal budget on the prospects for Ontario’s economic recovery. My statement today is our response.

Mr. Speaker, my 1975 budget plan called for $430 million in fiscal actions to reinforce consumer spending, increase investment and productivity and expand housing. Having fully committed Ontario’s resources we anticipated that relevant policies by the federal government would assist economic recovery in 1975. The federal budget, however, has flattened emergent economic growth, negatively altered expectations and significantly reduced the resources available to the province.

I estimate that the fall-off in revenues will amount to $100 million in 1975-1976. In spite of the fact that our income is reduced, Ontario must now shoulder a grossly unfair proportion of the responsibility for economic stimulation and public sector control. Ontario must increase its initiatives in housing to reinforce this vital sector and compensate for the shocking inadequacy of the federal commitment.

We are determined to meet these additional needs, sir, and to compensate for the federal failure to ensure a healthy economic upturn. We are determined to achieve this purpose without increasing total government spending and without adding to inflationary pressures. The revised budget plan which I am tabling today, therefore, provides $178 million for expansion initiatives to be financed by a reordering of our priorities and by cutting internal government expenditures.

The government of Ontario accorded the highest priority to housing programmes in my April budget. Total funding in this vital area was increased to $526 million.

Our package of housing initiatives included $1,500 grants to new home buyers, $87 million for senior citizen and socially assisted housing units, $43 million for the Ontario Housing Action Programme, $41 million for the HOME programme and $208 million for the Ontario Mortgage Corp. We reduced the sales tax on building materials, eliminated the sales tax on machinery used in construction and increased our capital investment in sewer and water facilities to service new and growing communities.

We expected our actions to be matched by a parallel federal commitment. In fact, the federal budget provided $200 million in additional funds for housing for all of Canada. It did little to reduce mortgage rates or to stimulate mortgage funds. Given this federal failure, Ontario will act to ensure a supply of reasonably priced homes for the people of Ontario. The government will increase housing supply in four ways.

Senior citizen units: Ontario cannot and will not tolerate the inadequate funding in this area. To ensure that our target of 10,600 senior citizens and socially assisted starts is met, Ontario will provide 100 per cent financing for 4,000 units. This will cost an additional $80 million, of which $25 million will be spent this year and $55 million next year.

Accelerated family rental programme: My colleague, the Minister of Housing (Mr. Irvine), has announced a commitment of $90 million for new rental housing under the accelerated family rental programme. Under this limited dividend programme, rents and rates of return are controlled for a minimum of 15 years in return for an eight per cent mortgage. We propose an additional $50-million commitment to generate 2,000 new starts by the end of this fiscal year.

In conjunction with this new direct provincial lending commitment, we will undertake a complementary initiative, an interest subsidy programme to private lenders who invest in limited-dividend rental projects before Dec. 31, 1975.

These measures are targeted to produce an additional 6,000 rental starts for moderate- and low-income families and involve $50 million of provincial direct investment, plus $52.5 million of incentive subsidies over the 15-year term of the programme.

Extended OHAP: To complement these actions, the subsidized OHAP rate of 10¼ per cent will be extended to an additional 9,000 low-cost ownership units. One of the major difficulties in producing reasonably-priced housing for moderate-income families is the cost of mortgage financing. Effective today, interest subsidies will be applied for a five-year period to mortgages on all moderate-income OHAP units started before March 31, 1976.

Private financing commitments of some $360 million will be required before Dec. 31, 1975, if this target is to be realized. We are tabling today a paper which analyses trends in mortgage financing in Canada. It shows that the principal lending institutions have an impressive record in providing financing for housing. However, an even stronger commitment is required. Therefore, we have set up a series of meetings with the lending institutions to outline what this government is doing and what we expect of them. The Premier, the Minister of Housing and myself will start these discussions by meeting with the chartered banks later today.

My original budget significantly increased our funding of water and sewer projects to $138 million in 1975-1976. I now propose an additional $10 million in this essential housing support investment.

In addition, the province’s 15 per cent subsidy to local government systems will be increased by $2 million to meet anticipated demand.

Mr. E. Sargent (Grey-Bruce): Now he is winding down.

Hon. Mr. McKeough: Ontario has enormously expanded its commitment and its funding to the housing sector. The actions I have outlined cover an additional 19,000 housing units which the province will finance directly or assist in financing via incentives to private lenders. This will require additional provincial spending of some $30 million this year, an additional spending commitment approaching $100 million in 1976-1977 and a total commitment in excess of $200 million over the full term of these new programmes. I had expected that 90,000 new housing units would be started in Ontario in 1975. Given the performance and events since my April budget, we are unlikely to exceed 75,000 starts this year.

Mr. Lewis: Oh we are unlikely to reach 75,000 starts this year.

Hon. Mr. McKeough: However, our new measures should ensure 90,000 starts in fiscal 1975-1976.

Mr. Sargent: It was 100,000 last year.

Hon. Mr. McKeough: With these measures, Ontario will have done all in its power to ensure a resurgence in housing activity.

Mr. Sargent: Promises, promises, promises.

Mr. J. M. Turner (Peterborough): Doesn’t the member like that?

Hon. Mr. McKeough: In addition to the major new actions in housing, the government proposes a package of selective measures to assist other sectors of the economy. Student living allowances will be increased from $32 to $40 per week for the upcoming academic year.

Mr. E. R. Good (Waterloo North): That’s already been announced.

Hon. Mr. McKeough: We are allocating an additional $5 million for the repair and maintenance of university and college buildings in areas of high unemployment. To further help job creation directly, we are proceeding with five essential new government buildings in Windsor, Kitchener, Timmins, Dryden and New Liskeard. These capital projects, which involve construction costs of some $20 million, will be built and balanced by the private sector on a leaseback basis in order to minimize the burden on our 1975-1976 finances.

In recognition of severe financing pressures on local governments we have provided an additional $6.4 million. We have provided an additional $6 million to the Ontario Transportation Development Corp. for research on new modes of transportation.

Mr. R. F. Nixon (Leader of the Opposition): They’ll make that thing go somehow.

Hon. Mr. McKeough: To assist beef producers, we have introduced a cow-calf income stabilization programme, which is estimated to cost $8.6 million in this fiscal year. We have approved $27 million for improved benefits to welfare families and GAINS beneficiaries, $12 million to meet salary settlements for the Ontario Provincial Police and $8 million for increased interest charges on the public debt. Ontario will improve its pension benefits for retired civil servants and teachers to the extent of $17 million this fiscal year.

Mr. Lewis: Good, good.

Hon. Mr. McKeough: Mr. Speaker, the expenditure measures I have outlined will increase our 1975-1976 estimates by a total of $150 million. Let me now turn to the revenue side. I am proposing additional tax cuts totalling $28 million in 1975-1976.

The two softest spots in the Ontario economy are housing and automobiles. I have already outlined our measures to assist housing. Let me now outline a major action by the Ontario government to increase jobs and activity in this other key sector, which directly employs 100,000 workers in this province. Effective immediately, I propose to remove the retail sales tax on new car registrations.

Mr. Lewis: Have the government members all just bought new cars?

Interjections by hon. members.

Mr. Speaker: Order, please.

An hon. member: We’ll all have to get Lincolns.

Hon. W. G. Davis (Premier): But it doesn’t apply to the Excalibur. If they are getting a new Excalibur, they can’t get the tax cut.

Hon. Mr. McKeough: This tax cut, which will remain in force until Dec. 31, 1975, will be delivered in the form of a cash rebate from the Ministry of Revenue to the car purchaser.

Mr. Martel: Oh -- here’s the crunch again.

Mr. Lewis: Now, just a second --

Mr. Speaker: Order, please.

Hon. Mr. McKeough: It will apply to all passenger cars and station wagons built in Canada or the United States --

Mr. M. Shulman (High Park): Sending a direct cheque out to each one. Really!

Hon. Mr. McKeough: -- including 1975 models in inventory as well as new 1976 models, but excluding large luxury cars.

Mr. Lewis: Are they putting the Premier’s picture on the cheque?

Hon. A. Grossman (Provincial Secretary for Resources Development): Good idea.

Interjections by hon. members.

Mr. Lewis: The minister and the Bank of Commerce.

Mr. Speaker: Order, please. Could we have fewer interjections? The hon. minister.

Mr. Martel: The hypocrisy of this government is beyond belief.

Hon. Mr. Davis: The UAW is all in favour of it.

Mr. Lewis: No doubt.

Mr. Speaker: Order, please.

Mr. R. F. Nixon: They’ll even like this in the United States.

Hon. Mr. McKeough: This measure will save purchasers an average of $175 on the purchase of a new automobile. This will stimulate sales and increase production and jobs in this important industry. Expansionary benefits will spread throughout the economy. I estimate that this measure will cost some $24 million in the current year.

Mr. R. F. Nixon: Now the big one.

Hon. Mr. McKeough: The June 23 federal budget reduced excise taxes on imported and domestic wines.

Mr. R. F. Nixon: The member for High Park will like this.

Hon. Mr. McKeough: The Liquor Control Board of Ontario will apply its markup structure on this reduced base. I estimate the loss its revenue to Ontario will amount to $4 million in 1975-1976.

Hon. S. B. Handleman (Minister of Consumer and Commercial Relations): Fifteen cents a bottle, the member for High Park will note.

Mr. Lewis: Yes, but that is only on one purchase; what about the rest of the province?

Hon. Mr. McKeough: Mr. Speaker, the supplementary tax and expenditure actions I have outlined amount to $178 million this year. The new housing initiatives, however, will involve large spending commitments in subsequent fiscal years. This makes it imperative that we finance these new initiatives without adding to our original expenditure total or locking the province on to a higher spending plateau. To achieve this goal, I propose internal cuts and hard-nosed reductions within existing programmes.

Let me reaffirm a basic conviction which I stated in my April budget:

“I am convinced that one of the root causes of the current inflation problem in Canada is excessive government spending and unnecessary growth in the size and complexity of the public sector. This has shifted an increasing share of our total resources out of private production uses in the economy and has eroded the taxpayer’s hard-earned income.”

My 1975 budget has reflected this concern. It has continued Ontario’s tough measures to curb the growth of government. I remind members of our 2.5 per cent cut in civil service complement and our restraint in spending in order to set an example of responsible leadership. Now we must take even tougher measures.

We were determined to find within our original spending estimates sufficient savings to finance the $178 million in new measures.

Mr. Martel: Did the government cut its advertising programme?

Hon. Mr. McKeough: We shall achieve these savings without sacrificing the delivery of essential services, without defaulting on our commitments to local governments and without distorting our priorities. We have drawn up a two-part plan to achieve these expenditure cuts and internal efficiencies.

However worthy any existing programme, there is scope within a total expenditure of $11 billion to delete or postpone. We have isolated some $96 million in savings which can be secured this fiscal year. We intend to scale down our land purchases by $35 million, including purchases for the parkway belt, for future highway rights-of-way and for the acquisition of parkland. The Ontario Development Corp. loans will be reduced by $7.5 million. We are postponing $11 million of regional priority spending. We are stretching out capital projects under the health resources development fund for a saving of $12 million this year. The startup loan to the Algonquin Park Authority will be reduced by $4.5 million. We shall proceed less ambitiously on the industrial parks programme for a saving of $4.9 million. The balance of $21.2 million is made up of smaller savings spread throughout the estimates of the ministries.

The second element of our restraint programme focuses on internal government costs. Government administration is a labour-intensive activity which has become increasingly complex, sophisticated and costly. It is in this area that we must achieve the maximum reductions. Management Board has been instructed to implement eight cost-control measures which will produce savings of some $82 million in 1975-1976:

1. An immediate freeze on replacement staffing for all internal administrative functions such as information services, systems, planning, records, personnel, accounts and finance; --

Mr. Sargent: Why not fire them, like they did in New York?

Hon. Mr. McKeough: With normal attrition, this should result in 1,500 fewer personnel in those areas by the end of the fiscal year.

2. An immediate moratorium on new or renewed contracts for management consulting and organizational planning;

3. A 10 per cent reduction in data processing budgets;

4. A 10 per cent reduction in direct operating expenditures (other than salaries and benefits but excluding institutions). This will reduce spending on travel, communications, supplies, services, furniture and equipment;

5. A reduction in internal planning and design operations which support programmes whose real growth has levelled off or declined;

6. A reduction in inventories of supplies and equipment and improved inventory management;

7. Consolidation and rationalization of regional offices;

8. A review of research, statistical, planning, internal services and administrative units with the objective of reducing the number and size of such units, while improving effectiveness.

Hon. Mr. Grossman: I don’t know what I will do without all that paper work.

Hon. Mr. McKeough: These control measures will be painful during the process of “dieting and sweating-down” but will produce a leaner and stronger provincial public service. All ministries will join in a concerted effort to assist Management Board in this eight-part economy drive.

In summary, programme cuts of $96.1 million and internal cost cuts of $81.9 million will produce total reductions of $178 million in this fiscal year. These savings will finance the expansionary measures needed to reinforce economic recovery and to offset the effects of the federal budget.

Before leaving this matter of cost control in government, let me say unequivocally that Ontario expects parallel economy actions on the part of all provincial boards, agencies and commissions as well as local governments and their agencies that spend public money.

On April 7, I urged local governments, both school boards and municipalities, to reduce their staffing, overhead and administrative spending and to defer less essential capital projects. I am pleased to inform members that municipalities have co-operated with the Ontario Municipal Board and managed to strip out $50 million in capital spending intentions for this year. I now ask the local sector to trim its operating budgets. Each one per cent trimmed saves $50 million. I am confident that cuts can be made. By curbing the internal costs of local government in this way, ratepayers will be reassured that they are getting maximum services for their tax dollar.

Under the Edmonton commitment, Ontario has committed the maximum resources to school boards and municipalities that it can afford. Although the province is reducing its complement, I cannot help but notice that local governments are expanding their internal bureaucracies. Unless local government staffing and spending are severely constrained --

Mr. R. Haggerty (Welland South): Like regional government.

Interjections by hon. members.

Hon. Mr. McKeough: -- therefore, the increased financing burden must fall on local ratepayers. Stringent cost-cutting and self-discipline can prevent this otherwise inevitable increase in property taxes on our citizens. Spending restraint will only become truly effective when it becomes contagious. Accordingly, we expect that Hydro, like other government agencies, will prune its operating and capital budgets. On the operating side we expect --

Mr. Sargent: What is he going to do with the increase it wants?

Hon. Mr. McKeough: -- that Hydro will work to achieve a comparable 10 per cent administrative cut. On the capital side, a maximum of $1 billion must be shaved --

Mr. Lewis: That is what we said, $1 billion.

Mr. Martel: Did he borrow that?

Hon. Mr. McKeough: -- from Hydro’s long-run investment programme. This may mean stretching out for two or three years the completion schedule on the four major generating stations included in Hydro’s planned expansion to 1985. I recognize that to some people this implies narrowing our customary margin of reserve capacity.

Mr. Lewis: Exactly. Right.

Hon. Mr. McKeough: Nevertheless, in the long run, Hydro’s customers will benefit from the improved cost structure that should result from the public inquiry now being conducted by the Ontario Energy Board.

Before concluding, let me say a few words about the rate hearing.

Mr. Lewis: Right you are.

Mr. Good: Who is the Minister of Revenue?

Mr. Haggerty: Eighty per cent increase in four years.

Hon. Mr. McKeough: First, I am appalled at the 29 per cent rate increase proposed by Hydro.

Mr. Singer: How many months did it take to --

Hon. Mr. McKeough: Second, let me reaffirm what the Minister of Energy (Mr. Timbrell) has repeatedly said, that there will not be any increase in Hydro rates before Jan. 1, 1976.

Mr. Martel: That is another “saving”. That is like the 90 days inventory deal.

Mr. I. Deans (Wentworth): Jan. 1 is going to be a very big day in Ontario. I would hate to have to pick up the tab.

Hon. Mr. McKeough: Under the hearing process we have established, there cannot be any increase until the costs, revenues and capital expenditure programmes of Ontario Hydro have been exposed to full public scrutiny.

Mr. R. F. Nixon: Not subject to government policy.

Hon. Mr. McKeough: Following the economies we have discussed, I am hopeful that Hydro will succeed in moderating its expectations in the Energy Board application.

Mr. Lewis: That is the first indication; what is he bringing it down to?

Mr. Martel: He said something about the 29 per cent before.

Hon. Mr. McKeough: Mr. Speaker, we are introducing these further economies in the operations of the government of Ontario against the stark background of the extravagance and waste of the government of Canada.

Mr. Lewis: He won’t give up, will he?

Hon. Mr. McKeough: While professing restraint, the federal government’s June budget still adds 10,000 civil servants to its already bloated bureaucracy. While professing economy, the government of Canada --

Interjections by hon. members.

Hon. Mr. Davis: Which is the budget the member refers to?

Hon. Mr. McKeough: -- reneged on shared-cost programmes with the provinces but left untouched its own fat operations.

Mr. R. F. Nixon: The member for St. David (Mrs. Scrivener) talks about dirty tricks.

Mr. Singer: Yes, the member for St. David talks about dirty tricks.

Hon. Mr. McKeough: Paralleling Ontario’s actions would have reduced the federal complement by 2.5 per cent rather than increasing it by 3.1 per cent. This would have saved the taxpayers of Canada over $270 million in payroll costs in 1975-1976.

Hon. Mr. Davis: That’s the good budget the member opposite refers to.

Hon. Mr. McKeough: If they, like us, had cut direct federal operating costs by 10 per cent, they would have saved a further $300 million.

If they had frozen, as we have done, consulting contracts, it would generate further savings for the Canadian taxpayer of some half a billion dollars.

Interjections by hon. members.

Hon. Mr. McKeough: I know the hon. members opposite don’t want to hear this, but they should just pipe down and listen to it.

Mr. R. F. Nixon: There’s a limit to our patience.

Mr. Speaker: Order, please.

Hon. Mr. Grossman: Keep apologizing; go ahead.

Mr. Lewis: Leave them a few seats. Just leave them a few seats. A kind of relic, a legislative relic.

Mr. J. R. Breithaupt (Kitchener): A few more than the NDP.

Mr. Lewis: I doubt it the way things are going.

Hon. Mr. McKeough: In short, Mr. Speaker, the federal government could squeeze $1 billion off its own internal costs with little impact on its programmes or services. Such real rather than illusory restraint would have avoided completely the need for tax increases on gasoline and on unemployment insurance.

Mr. Singer: That is restraint.

Hon. Mr. McKeough: I cannot resist one further observation. How many additional National Revenue staff will it take to administer Ottawa’s 10-cent excise tax, with its incredible uneven applications, rebates, forms and complexity?

Mr. T. P. Reid (Rainy River): Is the Treasurer going to deliver all the cheques personally?

Hon. Mr. Grossman: The Treasurer should give the Liberals a further chance to dig a deeper hole.

Mr. Speaker: Order, please.

Hon. Mr. McKeough: I estimate that more than 1,000 civil servants will be required at Ottawa at a cost of tens of millions of dollars. Private sector costs will be even greater. Surely this tops the list of absurd federal policies, at great cost to Canadian taxpayers.

Interjections by hon. members.

Hon. Mr. McKeough: Remembering that my critic called it a good budget, I say that -- a good budget.

Mr. Lewis: Oh, come on.

Hon. Mr. Grossman: Who said that?

Hon. Mr. Handleman: The member for Carleton East pointed out what a good budget it was.

Hon. Mr. McKeough: My revised fiscal plan for 1975-1976 provides for the financing of the new tax and expenditure initiatives within the April budget expenditure base. These expansionary and employment-generating measures will cost $178 million in this fiscal year. The required funding will be made possible by programme cuts, postponements and internal cost-cutting.

The supplementary actions which I have tabled in this statement will not impose any additional financing requirements in this fiscal year.

Mr. Sargent: Bring in a new budget then.

Hon. Mr. McKeough: The impact of the federal budget means, however, that our revenues will decrease by $100 million, of which $60 million is attributable to reduced profitability of our corporations. The revenue loss will raise our overall cash requirements by $100 million to a revised level of $1,769 million.

Mr. Breithaupt: That is restraint.

Hon. Mr. McKeough: This higher figure is prudently within the province’s fiscal capacity and requires no significant change at this time in our financing strategy.

Mr. Martel: Wait until next year.

Mr. Reid: What’s $100 million?

Hon. Mr. McKeough: Our internal pension funds will generate $1,152 million this year, leaving a balance of $617 million to be financed from liquid reserves and borrowing in the public market. We expect to re-enter the treasury bill market later this month. For the information of members, our first Canadian issue in July was well received. The people of Ontario continue to benefit from this province’s pre-eminent credit rating, which is founded on basic fiscal integrity.

Mr. Sargent: The government has looted and drained every pension fund.

Hon. J. R. Rhodes (Minister of Transportation and Communications): Who is that over there?

Hon. Mr. McKeough: Mr. Speaker, these supplementary actions are a positive and firm response to the economic situation and the vacuum in federal leadership and management of the economy.

Hon. Mr. McKeough: They will help to restore the public’s confidence, which was seriously damaged by the federal budget. We have placed before the members a responsible answer to the federal budget on behalf of our people. We have done so in spite of the severe limitations on our resources. I am firmly convinced that more is needed. I am concerned by the diminishing capacity of provincial governments to continue stepping into the breach when Ottawa fails us. I, therefore, urge the federal Minister of Finance to immediately convene a meeting with provincial ministers of finance.

Mr. Lewis: The government is very lucky; the gods and the Liberals are on its side.

SUPERANNUATION ADJUSTMENT BENEFITS LEGISLATION

Hon. E. A. Winkler (Chairman, Management Board of Cabinet): Mr. Speaker, later today I will be introducing a bill which will apply to pensioners qualified under the public service and teachers’ superannuation funds and which will provide for regular annual pension adjustments based on the consumer price index, with a ceiling of eight per cent per year.

Hon. members may recall the Premier’s announcement last June which indicated the government’s desire to institute such a programme with costs shared equally between employer and employee. Since then, extensive discussions have taken place between the government and representatives of contributors to the teachers’ superannuation fund and the public service superannuation fund. This programme of regular annual pension adjustments has been developed as a result of these consultations.

The provisions of the bill will be made applicable to pension funds where representatives of members have indicated agreement to contribute one per cent of salary to the superannuation adjustment fund. Adjustments will be made effective from Jan. 1, 1976, for those in receipt of pensions from funds designated under this bill.

In this connection, I am pleased to announce that effective Jan. 1, 1975, pensions paid to individuals who were in receipt of pensions from the public service superannuation fund before Dec. 31, 1974, will be increased by eight per cent for those whose pensions commenced in 1973 and earlier. For those who retired in 1974, this amount will be pro-rated relative to the number of months in 1974 during which the individual was in receipt of a pension.

With the introduction of the Superannuation Adjustment Benefits Act, it is anticipated that this will be the last in a series of payments made under the pension adjustment programme instituted by the government in January, 1971.

PENSION ADJUSTMENTS FOR TEACHERS

Hon. T. L. Wells (Minister of Education): Mr. Speaker, following what my colleague, the Chairman of Management Board, has just stated about the new Superannuation Adjustment Benefits Act being introduced today, I am pleased to report that the provisions of the new bill have been endorsed and accepted by the Ontario Teacher’s Federation on behalf of the province’s teachers.

As has been indicated, the bill means that, effective January, 1976, Ontario’s retired teachers will receive annual adjustments to their pensions in accordance with variations in the cost of living.

The adjustments will be based on a ratio using the consumer price index for Canada, and will be limited to a maximum of eight per cent in any given year. If the consumer price index ratio increases by more than eight per cent, the excess will be applied toward a subsequent year when the increase is less than eight per cent.

Mr. Martel: That will help them starve.

Hon. Mr. Wells: As an example, should the cost of living rise 10 per cent in 1976, pensioned teachers would receive an eight per cent increase in 1977 and the additional two per cent would be added in a subsequent year when the cost of living rises less than eight per cent.

For example, should the increase in the cost of living be five per cent in 1977, then the 1978 adjustment would be seven per cent, made up of the five per cent rise for 1977, plus the carry-over of two per cent.

Mr. Shulman: This is a joke.

Hon. Mr. Wells: Under this new plan, teachers’ pensions will not decrease, even though the cost of living might decrease in any given year.

Mr. Shulman: Oh sure.

Hon. Mr. Wells: A negative adjustment which might arise from a decrease in the cost of living will instead be applied against a subsequent year in which the cost of living increases.

To pay for this new benefit for teachers who are currently teaching, the pension contributions by these teachers will be increased by one per cent of gross salary -- from six per cent to seven per cent -- beginning in September of this year. The provincial government, which matches the teachers’ contributions, will also increase its share by one per cent

This full two per cent increase will he put into a new superannuation adjustment fund which will be under continual review by representatives of both the teachers and the government.

Teachers who retired prior to January, 1975, will of course also benefit from this new automatic annual adjustment in the future and, in addition, will receive a pension increase under the pension adjustments programme instituted by this government in 1971.

Therefore, I am pleased to announce that superannuated teachers who were receiving pensions in 1973 and earlier will, effective Jan. 1, 1975, have their pensions increased by eight per cent.

For those who retired in 1974, the increase will be pro-rated according to the number of months during which the individual received a pension in 1974.

These increases will be reflected in the July pension cheques. To pay for the increase in benefits for teachers who have already retired, the government will make special payments from the consolidated revenue fund.

Mr. Speaker, on Wednesday, I will be introducing a bill to make a number of housekeeping changes to the Teachers’ Superannuation Act.

There are a number of further matters related to teachers’ superannuation which are still under study and we will be continuing our very constructive discussions with the Ontario Teachers’ Federation in order that any further changes will be in the best interests of all concerned.

Mr. Speaker: Oral questions. The hon. Leader of the Opposition.

SUPPLEMENTARY ACTIONS TO BUDGET

Mr. R. F. Nixon: Thank you, Mr. Speaker. I would like to put a question to the Premier, based on the policies announced by the Treasurer and based on announcements of recent days. Given the removal of the sales tax on cars, along with the reduction in the sales tax in general, along with the homeowner grants and along with the gas price freeze -- which are all going to lose their force and effect six months from now or in a shorter period of time -- and since the increased costs of electricity are not going to be imposed upon the people of the province until six months from now, would the Premier indicate how he can defend himself against the charge, which I now put to him, that his policies are the crassest kind of political opportunism?

Mr. Deans: Tell us about politics; tell us something about politics.

Mr. Lewis: I don’t know how the Premier did it. To this day I don’t know how this is happening. I will never understand how this is happening.

Mr. Speaker: Order, please.

Interjections by hon. members.

Hon. Mr. Davis: Mr. Speaker, if the Leader of the Opposition, in his total response to all the things his friends in Ottawa have done in the past few days --

Mr. R. F. Nixon: All the government is doing is tiding itself over until the election.

Hon. Mr. Davis: -- and the very responsible approach taken by the Treasurer today and on April 9, and what this government has been trying to do with inflation in the economy --

Mr. Sargent: Why doesn’t the Premier bring the member for Haldimand-Norfolk (Mr. Allan) down to the front row?

Interjections by hon. members.

Hon. Mr. Davis: -- if as his response he wishes to term that as being crassly political, so be it.

Mr. R. F. Nixon: Sure it is!

Hon. Mr. Davis: I only say to him that his problems, as I see them emerging, are going to result from that very immature lack of policy, lack of leadership, lack of intestinal fortitude that he and his colleagues have demonstrated in this past five or six months.

To answer the question very simply, Mr. Speaker --

Mr. Reid: Call an election.

Hon. Mr. Davis: -- this government operates in the interests of the people of this province. If anybody is practising crass politics, it’s those people across the House.

Mr. R. F. Nixon: A supplementary question, Mr. Speaker.

Interjections by hon. members.

Mr. Speaker: Order, please.

Mr. R. F. Nixon: We are glad to know the Premier’s government operates in the best interest of the people. Why was it not operating in the best interest of the people until this budget; and why would it not he operating after this six-month period? Surely the establishment of a more buoyant economy has to be something more than over a very short period in which the Premier is intending to call an election?

Hon. Mr. Davis: What is the question?

Mr. R. F. Nixon: Why doesn’t the Premier call the election now? Because we’re ready.

Mr. Lewis: No, don’t. Wait another two months and there’ll be nothing left of the Liberals.

Hon. Mr. Davis: For once the leader of the NDP is right.

Mr. Speaker: Order, please.

Mr. R. F. Nixon: I don’t want to gain comfort from what is happening to the NDP.

Mr. Speaker: Order, please.

Mr. R. F. Nixon: Why doesn’t the Premier call an election on the basis of this, if he is prepared to go with a six-month Band-Aid approach to our problems?

Hon. Mr. Rhodes: Have a leadership convention and make it interesting.

Mr. Speaker: Order, please. Is there an answer to the question? If not, does the hon. leader have further questions?

An hon. member: It’s hurting.

Mr. D. M. Deacon (York Centre): It will hurt the government.

HOUSING PROGRAMMES

Mr. R. F. Nixon: Since the statement was made by the Treasurer -- he may want the Minister of Housing to respond to this -- I would like to ask the Treasurer how he accounts for the fact that these, let’s say reinforcements of housing initiatives, are reported in the back of this statement as costing us no new tax dollars at all? Are they going to be largely funded by that inadequate additional sum of money which comes from the federal government, that is about $524 million? It says here in the initial budget, I think, that the housing costs for the province are going to be the sum of $181 million, and under the revised estimate it’s still going to be $181 million; is this concealed elsewhere in the budgetary change?

Hon. Mr. McKeough: I think if the member will look at page 6, he will see the direct cost to the province is about $30 million this year with a full-term commitment of $203 million, a good chunk of it coming in the next fiscal year and the years thereafter. In addition to that, there are other commitments under other housing programmes totalling another $100 million, I think. Then we expect, and I think have every right to expect, that the mortgage interest subsidy under the OHAP projects --

Mr. Sargent: Will the Treasurer take those marbles out of his mouth and speak up?

Hon. Mr. McKeough: -- will generate and bring in something like $360 million from the private sector. But to answer the member as to whether any of it is coming from Ottawa; no, nothing.

Mr. Speaker: Supplementary, the member for Scarborough West.

Mr. Lewis: Supplementary, if I may: Perhaps the minister could explain that $30-million figure for 1975-1976 on page 6 a little more closely? Is the minister saying that the $30 million reflects none of the additional federal money -- the $200 million which was announced in John Turner’s budget?

Hon. Mr. McKeough: Yes.

Mr. Lewis: May I then ask what obviously follows from that. Whatever amount of the $200 million Ontario gets -- presumably $60 or $65 million, whatever it may be -- that will be spent in addition to the $30 million or is absorbed in existing programmes; where does it figure into these calculations?

Hon. Mr. McKeough: I suggest the member might ask the Minister of Housing, but it was my understanding that the $50 million, $60 million or $80 million, or whatever it is, is absorbed in existing programmes and this is in addition to it.

Mr. R. F. Nixon: If I might direct a similar question to the Minister of Housing: Since the book put before us by the Treasurer indicates an overall provincial commitment of $181 million, how much money will the minister be spending in his overall programme, and how much additional money will be available? Is it in the approximate area of about $540 million that comes from the federal government, with $181 million from this government?

Hon. D. R. Irvine (Minister of Housing): Mr. Speaker, I don’t know where that figure of $540 million from the federal government comes from. I hope that does come about. Right now we have $442 million from the federal government, which is less than what we have budgeted for. Our budget --

Mr. R. F. Nixon: Plus $60 million.

Hon. Mr. Irvine: Well, we don’t know about the $60 million yet.

Mr. R. F. Ruston (Essex-Kent): The minister is holding it, that is all he is doing.

Mr. R. F. Nixon: It is going to be coming; I think the Treasurer just said $60 million to $80 million.

Hon. Mr. Irvine: I wouldn’t trust the federal government any day of the week.

Interjections by hon. members.

Mr. Speaker: Order please. The hon. minister has the floor.

Hon. Mr. Irvine: When I find those funds are specifically allocated to Ontario, fair enough; but right now we don’t know --

Interjections by hon. members.

Mr. Speaker: Order, please. Order.

Hon. Mr. Grossman: They don’t want to hear the answer.

Hon. Mr. Irvine: Mr. Speaker, under ordinary circumstances, the federal government would allocate to Ontario possibly $50 million or $60 million.

Mr. Singer: That is not in here, is it?

Hon. Mr. Irvine: I am not saying these are ordinary circumstances in this particular year. Apparently they aren’t, because they have shown no priorities to Ontario in regard to housing.

What we are doing in this particular statement is indicating we will furnish funding for the 4,000 senior citizen units that would not have been allowed to be built this year because of lack of federal funding.

We are also providing funding for an additional 2,000 rental accommodations directly, the figure here is $50 million. The call will be going out shortly. That is in addition to the two calls we already have out, which have involved $90 million from the Province of Ontario and have nothing to do with the federal government. We are also going out for another 4,000 additional rental units by indirect subsidy, hoping we can have the lending institutions provide us with a total amount of $460 million which we have to have in this particular fiscal year. If we do all this, we are alleviating a real problem in rental accommodation --

Mr. Haggerty: Get out and build the houses.

Hon. Mr. Irvine: --plus the fact that we have said in this statement that we are proceeding with 9,000 OHAP units which wouldn’t have gone ahead ordinarily without this particular financing being made available.

Mr. Lewis: It won’t cost them anything.

Mr. R. F. Nixon: A supplementary, Mr. Speaker: Surely the minister, if he is going to be fair to the people of this province, who are as concerned about the inadequacies of the housing programme as anyone is, must have asked the Treasurer or is prepared to make a statement himself as to how the additional $50 million to $60 million to $80 million -- the figure the Treasurer used was $80 million -- from the federal government is going to be used to back up a programme of housing with some initiatives or reinforced initiatives here? After all, that is $60 million federally and $30 million from the province, and under those circumstances surely we should expect a fuller explanation.

Hon. Mr. Irvine: Mr. Speaker, I guess the problem is the hon. Leader of the Opposition hasn’t had time to study the statement.

Mr. Singer: Ah, come on.

Hon. Mr. Irvine: Now let me try to explain it to him if I can.

Mr. R. F. Nixon: All I know is the minister has ignored the federal participation of $60 million.

Hon. Mr. Irvine: Let me try and explain it to him. I am going to take a little time with this, because obviously he doesn’t understand the problem. The problem is that the federal government has not given us any funds as far as this province is concerned. We have asked them for $390 million and have received zero as of today.

Mr. R. F. Nixon: The minister has $470 million.

Hon. Mr. Davis: Oh, the Liberal leader should stop apologizing.

Hon. Mr. Irvine: What we want to do is to provide the financing to make sure we have rental accommodation across Ontario. The 4,000 units I mentioned are going straight across the Province of Ontario, the other 2,000 are in the low vacancy area; and those are both rental accommodation. We still have to provide senior citizen and family accommodation. Now what we are doing is, the Province of Ontario has recognized very clearly that there is a need for housing where the federal government has not, and never will I guess.

Mr. Haggerty: Build the houses.

Hon. Mr. Irvine: So what we are saying is, we are taking action to make sure the programmes we have started will be implemented and the people of Ontario will still have the best housing conditions in all of Canada.

Mr. Speaker: The hon. member for Scarborough West.

Mr. Lewis: I don’t have a supplementary, but I do think that the Legislature does deserve an explanation of the apparent disparity in the figures.

Hon. Mr. Irvine: In what way?

Mr. Lewis: The minister’s original estimate for housing was $181 million. His revised estimate, on the basis of the Treasurer’s statement today, is $181 million.

Mr. R. F. Nixon: That is what it says.

Mr. Lewis: Yet on page 5 he says, “This will require additional provincial spending of some $30 million this year.” That $30 million is nowhere reflected in the financial statements appended to the budget --

Hon. Mr. Irvine: Sure it is.

Mr. Lewis: -- nor is any of the additional federal money which he knows he will get. Or has he already offset the provincial expenditures with the additional federal money and failed to say so anywhere in the budget? How does the minister explain it?

Hon. Mr. Irvine: Mr. Speaker, it’s very easily explained. The $25 million we’re talking about for senior citizens is this year’s provincial funding; $55 million for next year to enable us to --

Mr. Lewis: So it was already in the $181 million?

Hon. Mr. Irvine: Let me finish.

Mr. Lewis: That depends. It was already there.

Hon. Mr. Irvine: Let me finish, I said. The $55 million for next year was to enable us to build the 4,000 senior citizen units which we wouldn’t have been able to build because of lack of federal funding. The $5 million is from our programme for limited dividend rental accommodation which is in our budget. That’s $30 million.

Mr. Lewis: Why isn’t it here?

Hon. Mr. Irvine: The total provincial commitment -- and this is what we have to look at -- is a total overall commitment of $205 million, which is a very significant contribution to housing in Ontario.

Mr. Lewis: Where does the minister get that figure?

Hon. Mr. Irvine: Just look at the statement.

Mr. Speaker: Are there any further questions by the Leader of the Opposition?

Mr. R. F. Nixon: I think we have to pursue this to some extent. I have a further question of the same minister. Since it appears he is dealing with an overall budget of about $680 million for housing -- about $500 million from federal sources; $181 million from provincial sources -- how can the minister account for the fact which came forward in this mini-budget, that he was going to accomplish only the 90,000 starts predicted in April even with these additional funds? Is he, as Minister of Housing, prepared to substantiate and guarantee the starting of 90,000 dwellings in this province this year when he is substantially below that level now?

Hon. Mr. Irvine: Mr. Speaker, first of all I think we have to recognize that the Province of Ontario, the government of Ontario, is not responsible and should not be responsible for building all the housing units in Ontario. We think and we say that the private sector has to supply the majority of the units.

Mr. R. F. Nixon: But the government hasn’t done very much in this budget.

Hon. Mr. Irvine: The figures will prove, when I’m through with my statement, that by the end of this year we will have accomplished a great deal as far as the government is concerned.

Mr. Haggerty: Not with 90,000 units projected.

Hon. Mr. Irvine: There’s been much more government participation in housing than ever before. The Province of Ontario has put more money into housing and has started more units than ever before. We are down in starts because the private sector has not had assurance from the federal government that there would be a good economy nor that they will have finances to be able to build themselves nor that people will be lined up to have home ownership. That is where the problem is. If we had a good federal government we would have a good economy.

Mr. Singer: That record is worn out.

Mr. R. F. Nixon: Or a good provincial government.

Mr. Speaker: Are there any further questions by the Leader of the Opposition?

COMMITTEE ON EDUCATION COSTS

Mr. R. F. Nixon: I would like to put a question to the Minister of Education. Since we are concerned about government costs, whatever happened to those reports from the committee on education costs which was established in April, 1971? Why is he sitting on them? Why are they not tabled so that we would know what the committee recommends to cut education costs since surely this is a matter of some concern in this budget pertaining to that?

Hon. Mr. Wells: Mr. Speaker, I think my friend has asked this question several times and I’ve answered it. I’ll answer it very briefly for him again.

Mr. R. F. Nixon: Yes, but he hasn’t tabled the reports.

Hon. Mr. Wells: He’s had four of the reports tabled.

Mr. H. F. Nixon: There are seven.

Hon. Mr. Wells: He has seen those. I have the fifth report. It is being printed and it will be tabled as soon as it is finished and back from the printers. That is being done as quickly as possible.

The other reports are not in my hands and have not been received from the committee, Mr. Speaker. Until I receive them I cannot table them. As soon as I receive them they will be printed and tabled.

Mr. R. F. Nixon: As a supplementary question: Since the cost of this committee since it was established just before the last election is about $670,000 and, according to the minister, the committee is no longer functioning, what is happening to those reports? Why aren’t they made available so that the House and perhaps the minister could do something about their recommendations to reduce the costs of education?

Is the minister not also aware that he gave me the same answer two months ago, he said it was still at the printers? How long is that going to suffice as an answer?

Hon. Mr. Wells: Mr. Speaker, it is a very sizable report and it will be available very shortly. I would just say to my friend I think this government has done many things to reduce the costs of education in the last couple of years, in the interval since that committee has been meeting, and I haven’t heard anything come from the lips of my friend across the way that would reduce the costs of education in this province, except to take the ceilings off education spending.

Mr. R. F. Nixon: A supplementary: Is the minister not aware of our recommendation that he do away with his regional offices as a way to cut out the hierarchy that he himself has established at a cost of $50 million? Why doesn’t he do that? Why doesn’t he listen to our recommendations?

Hon. Mr. Wells: Mr. Speaker, I don’t think my friend even realizes what is happening to our regional offices -- and I hope that the people of the various areas where these regional offices are located will remember that the Leader of the Opposition has said these offices should be done away with, including the office in North Bay and the office in Kitchener.

Mr. R. F. Nixon: All they do is represent the minister on the school boards. Send them all a memo and tell them we are going to close them when we get into power.

Mr. Speaker: Order, please.

Hon. Mr. Wells: We put our regional offices on flat-line budgeting two years ago. They are not spending a cent more this year than they spent last year, and that includes any inflationary costs being borne by those offices. My friend is saying the service those offices give to the local school boards is negligible and he is saying that they can be done away with; I hope the boards in those areas pay attention to that. I still challenge him to tell me where he has suggested a programme to cut costs at the local school board level. All he has ever said is --

Mr. R. F. Nixon: I am talking about the ministry’s costs.

Hon. Mr. Wells: The committee on the costs of education is talking about the local school board level. All the member has ever said is: “Remove the ceilings,” and we reject that.

Mr. R. F. Nixon: They ought to be looking at the ministry’s costs.

Mr. Speaker: Any further questions?

SPENDING REVISIONS

Mr. R. F. Nixon: With your permission, Mr. Speaker, now that the Treasurer is back in his place: Is the reduction of $35 million on land purchases and a reduction in certain regional priority spending going to have an impact on the government’s plan to develop the industrial park at Edwardsburgh? Is that one of the areas with which the government is not going to proceed?

Hon. Mr. McKeough: Mr. Speaker, there was no money in this year’s budget, nor do I think there would be money in the budget for the next couple of years to develop Edwardsburgh. That’s a question of property acquisition, that is going to be up to each ministry to determine.

Mr. R. F. Nixon: What land purchases are going to be cut out that have been budgeted for?

Hon. Mr. McKeough: Specifically?

Mr. R. F. Nixon: Yes, within the $35 million.

Hon. Mr. McKeough: That would be up to the ministries to sort out; to slow the whole thing down.

Mr. Speaker: Any further questions?

Mr. J. E. Stokes (Thunder Bay): A supplementary.

Mr. Speaker: The member for Thunder Bay.

Mr. Stokes: Yes, on page 9 of the Treasurer’s statement there is a portion which says: “We are postponing $11 million of regional priority spending.” Is that in northwestern Ontario, or where is it in the province?

Hon. Mr. McKeough: I would suspect the bulk of it would be in northwestern Ontario, but some of it would be in eastern and northeastern Ontario.

Mr. Stokes: Can the Treasurer give us the particulars of that reduction?

Hon. Mr. McKeough: Not yet, Mr. Speaker. I think it’s mainly a question of stretching out. There are a couple of things which we had originally counted on but which haven’t come ahead quite as quickly. I haven’t got all the details yet, but as soon as they are available I will make them known to the members.

Mr. Stokes: Will the Treasurer assure the House and the people in northwestern Ontario that this $11 million cut won’t stop the much-needed expansion and provision of services for those new communities?

Hon. Mr. McKeough: It may delay that somewhat, Mr. Speaker, I would have to say that.

Mr. Lewis: Supplementary: Of all the places to cut in a budget, surely the infrastructure of the smaller communities of northern Ontario is not the place to start? If most of the $11 million is going to hold back projects in the northwest and northeast, how much assault can the government direct on the north? Has the Treasurer no specifics in mind? Has he no projects he can indicate? Surely the north has a right to know, having counted on the Design for Development to proceed?

Mr. Stokes: The private sector is depending on it.

Mr. Lewis: That’s the wrong place to make cuts in a budget -- northern Ontario.

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

PICKERING AIRPORT

Mr. Deacon: Would the minister indicate if the cut in services includes the services proposed for around the new Pickering airport?

Hon. Mr. McKeough: Which services?

Mr. Deacon: The services proposed to service the new Pickering airport.

Hon. Mr. McKeough: To my knowledge there was nothing anywhere in the 1975-1976 estimates for services to the Pickering airport. It will be very difficult to cut it out if there is nothing there as yet. Even a Liberal economic critic should be able to understand that. In Ottawa, they made a big fuss about cutting out millions that weren’t there. That’s another Liberal policy. I knew we’d get another. The way to cut expenditures is to cut out things that weren’t there.

Interjections by hon. members.

Mr. Speaker: The member for Scarborough West.

MORTGAGE FUNDS FOR HOUSING

Mr. Lewis: I’m not sure the Treasurer should be permitted to enjoy this any more by answering further questions.

I’d like to ask him why he has started with the chartered banks as a way of rounding up additional mortgage money, when his ministry’s own appended paper shows the serious drop in mortgage investment has been on the part of the life insurance companies? Where are the life insurance companies on the Treasurer’s list; and what exactly is he asking these lending institutions to commit themselves to when he meets with them?

Hon. Mr. McKeough: Why did we start with the chartered banks, as opposed to the trust companies or the life insurance companies, the three of which supply roughly 80 per cent of the mortgage moneys? We have no particular reason; we will be seeing them all, by the end of this week I believe, at three separate meetings.

Mr. Lewis: What is the Treasurer asking them? What exactly is he putting to them?

Hon. Mr. McKeough: First of all to see if their original commitments on financing are holding up; and if not, why not, what the reasons are. We suspect that they are. Further, to see what more they think is available; and particularly to try and encourage them to come forward with all of the $360 million involved in the mortgage interest rate subsidy programme, we will be looking to them for that.

Mr. Lewis: I see.

Hon. Mr. McKeough: There is no particular reason why one is first and the other is second.

Mr. Lewis: I understand. The Treasurer is relying primarily on the politics of persuasion to bring them into his $360 million programme. Will the Treasurer go further if they say they are now at their limit? Will he legislate an additional percentage, say from the life insurance companies whose investment has declined so drastically?

Hon. Mr. McKeough: Mr. Speaker, I really don’t think that when my friend the member for Scarborough West, thinks about that even viewing it through the myopic eyes of a socialist -- that he would think that would make great good sense. I really don’t think he does. Just think about it for a little while.

Mr. Lewis: Given the starry eyes of a Tory, just suppose his glancing gleams with the insurance companies or the banks fail to bring forth any additional revenue -- it is entirely possible they are lending at maximum now -- then what does he do? Is he not discussing that with them as well?

Hon. Mr. McKeough: Mr. Speaker, I think the member will recognize, when he thinks about it again, the banks, a number of the trust companies and most of the insurance companies are federally-chartered institutions and not under our control. So think about that.

Mr. Lewis: All right. We could legislate one day, perhaps.

Mr. Speaker: The member for Grey-Bruce, a supplementary question?

Mr. Sargent: Supplementary: If the chartered banks --

Interjection by an hon. member.

Mr. Speaker: Order please; a supplementary here.

Mr. Sargent: If the chartered banks are the place of last resort for the Treasurer, in view of the fact that he has raided the pension fund, the teachers’ fund, the municipal employees’ fund, the federal-provincial employment fund -- he has tapped these funds to the amount of $1.2 billion, which could be called illegally done -- what is the off-setting factor when in the next few years the net provincial cash flow from the Canada Pension Plan is finished, what is the Treasurer going to do then?

Hon. Mr. McKeough: That’s a number of years away, Mr. Speaker.

Mr. Speaker: Further questions; the member for Scarborough West.

Mr. Sargent: Mr. Speaker, I didn’t hear what he said.

Hon. Mr. McKeough: It is a number of years away.

Mr. Sargent: How many years away?

Hon. Mr. McKeough: Roughly 1985.

An hon. member: It’s Monday. The member for Grey-Bruce is not supposed to be here.

Mr. Speaker: Order please, this is not a debate. The question has been asked and the answer given. The member for Scarborough West.

Mr. Sargent: Mr. Speaker, the Treasurer has given us a mini-budget here today and I want some news on it.

Mr. Speaker: Order please. The member may ask a new question if he wishes in a few moments.

Hon. Mr. Rhodes: Read the Globe.

Mr. Speaker: The member for Scarborough West.

INTEREST SUBSIDY PROGRAMME FOR HOUSING

Mr. Lewis: Mr. Speaker, can the Minister of Housing explain a little further the interest subsidy to the mortgage lenders?

Hon. Mr. Irvine: Mr. Speaker, our proposal is to have the interest rate at approximately 10¼ per cent, rather than the conventional 11½ and 11¾ per cent. The lender will be financed directly by ourselves on the differential, whatever it may be. Then the owner of the home will receive a cheque directly on their mortgage payments as a rebate, which we estimate at the present time will be somewhere around $35 to $40 per month.

Mr. Lewis: What does the minister mean, they will receive a cheque? Does he mean he is going to send --

Hon. Mr. Irvine: To the lending institutions.

Mr. Lewis: Who will send the cheque to the owner of the home?

An hon. member: Premier Davis.

Hon. Mr. Irvine: The lending institution.

Mr. Lewis: They will send the cheques to the owners?

Hon. Mr. Irvine: Yes.

SUPPLEMENTARY ACTIONS TO BUDGET

Mr. Lewis: May I ask of the provincial Treasurer, apart from the politics of it, why is he sending out the cheques from government to those who purchase cars before the end of this year? Why was it not possible simply to remove the sales tax?

Mr. Good: Darn good idea.

Mr. R. S. Smith (Nipissing): The cheques go out over the Premier’s name.

Hon. Mr. McKeough: There were a couple of reasons. The experience of the automobile companies -- the member really should ask the Minister of Revenue (Mr. Meen) the answer to this question.

Mr. Lewis: No, no, I would really like to hear it from the Treasurer. I would like to hear it from him --

Hon. Mr. Rhodes: I am going to deliver mine, I don’t know about the Treasurer.

Mr. Lewis: -- all of the panache and the flourish that he brings to those answers. Let him talk to me about my ND socialism.

Hon. Mr. McKeough: It does not, of course, apply to all cars, only to new cars, as the member is aware.

Mr. Lewis: Yes.

Hon. Mr. McKeough: There are some cars and some vehicles to which it does not apply.

Mr. Lewis: Why is the Treasurer writing out those cheques?

Hon. Mr. McKeough: Just for those administration reasons; and it will be very easy, with a three or four part form, to send it out.

Mr. Shulman: Why is the government sending out the cheques?

Hon. Mr. McKeough: For some of the same reasons the automobile companies chose to do so on their very successful rebate plan.

Mr. Shulman: Supplementary.

Mr. Speaker: Supplementary, the member for High Park.

Mr. Shulman: If I may quote from page 13 of his budget, can the Treasurer estimate how many of his “staff” it will take to administer this new rebate plan, “with its incredible rebates, forms and complexity”? It’s slightly out of context.

Hon. Mr. McKeough: I will be delighted to answer that question: Not one.

Mr. Sargent: He is over-staffed now.

Mr. Shulman: A further supplementary, if I may: Is the Premier going to personally deliver the cheques? Is that how they are going to manage it?

Hon. Mr. Davis: I like to keep busy and I would be delighted to visit as many people personally as I can in this province over the next few months, but that really isn’t part of my plan. I have to say no, I don’t think we’ll do it in that way.

Mr. Speaker: The member for Scarborough West.

Mr. Lewis: A supplementary: I take it if I understand it then, that the answer for the consumers of Ontario to the increase of 10 cents a gallon federal excise tax is one of two routes; either buy a new car by the end of 1975, or more wine or imported liquors? That’s the government’s answer to the 10 cent excise tax.

Mr. Deans: Drink more wine.

Mr. C. E. McIlveen (Oshawa): The auto workers will like it.

Hon. Mr. McKeough: Mr. Speaker, the answer to the 10 cent excise tax apparently is going to be longer in coming. It’s going to be three years before there is another general election and then we will kick the rascals out. We’ve tried, but we will.

Interjections by hon. members.

Hon. Mr. McKeough: In this budget we are not by any stretch of the imagination able to undo the damage and the havoc which was done by the opposition’s friends’ budget on June 23. We can’t do that and we are not trying to do it.

Interjections by hon. members.

HEALTH MINISTERS’ MEETING

Mr. Lewis: One last question of the Treasurer: Has the Minister of Health (Mr. Miller) yet informed him, in view of what he said in his budget statement, that when certain of the health ministers in western Canada -- you can guess their affiliation, Mr. Speaker -- were asked to come to this special Health Ministers’ meeting which the government would like to arrange, it was communicated to the Minister of Health here that they would not be used for this government’s political purposes and that the meeting will be held, as it was supposed to be held, in September in Victoria? Does the Treasurer realize that yet? No?

Hon. Mr. McKeough: Mr. Speaker, concerning the Minister of Health, I have had no communication with him. I talked to him at the end of last week --

Mr. R. F. Nixon: The Minister of Health is --

Hon. Mr. McKeough: -- and suggested to him that the Premier felt it would be a good idea for the Ministers of Health to get together, and he agreed; and that’s as far as the discussion has gone. Perhaps there’s some sort of a Liberal-Socialist coalition developing out west; is there? I don’t know.

Mr. Lewis: I gather that is coming.

Mr. Speaker: The member for Carleton East.

Mr. Lewis: Not out west -- we are working on the minister from Alberta.

Hon. Mr. McKeough: You know, part of our conviction in this area -- I don’t think we really wrote this section until after we heard that great speech by the former, former leader of the New Democratic Party --

Mr. Lewis: That’s right, that’s right. That’s nice of the Treasurer.

Hon. Mr. McKeough: -- who really rammed it home to the Grits like I’ve never seen anybody do it. Would we had that eloquence.

Mr. Lewis: Except the Treasurer then decided in this budget, as I understand it, to opt out of all future shared-cost projects.

Mr. Speaker: The member for Carleton East with a question.

ENERGY PRICES

Mr. P. Taylor (Carleton East): Thank you, Mr. Speaker. In the absence of the Minister of Energy, I wonder if the Premier would consider this question? Because the 90-day freeze affects only domestically-produced oil and gasoline --

Mr. G. Nixon (Dovercourt): Here it comes.

Mr. P. Taylor: -- and because the part of Ontario that lies east of the Borden line is supplied by the higher-priced offshore product --

Hon. Mr. Handleman: Read the Act, read the Act.

Mr. P. Taylor: -- is the government doing anything to assure continued supply east of the Borden line by refineries in Montreal, which will receive higher revenues in Quebec and the Maritimes?

Hon. Mr. Rhodes: Signed “John Turner.”

Hon. Mr. Handleman: Has the member tried reading the bills?

Hon. Mr. Davis: I am delighted that at least the member for Carleton East communicates with the minister responsible for energy in Ottawa and probably the Minister of Finance. If he wants to take back a reply to them, let him tell them we’ll do one heck of a lot better job of looking after supply and price in this province than they have done in the past 10 days.

Mr. R. F. Nixon: The Premier is getting paranoid.

Hon. Mr. Davis: I’m not paranoid. It is the truth.

Mr. R. F. Nixon: He is. At the same time, he is irresponsible. He is paranoid.

Interjections by hon. members.

Mr. Speaker: Order, please. Supplementary from the member for Carleton East.

Mr. P. Taylor: Can the Premier leave aside the election rhetoric and tell us whether he has an assurance from the refineries in Montreal that they will continue to supply the area in Ontario east of the Borden line, given the fact that western Quebeckers will be streaming across the border to get the advantage in price?

Hon. Mr. Davis: Mr. Speaker, we expect our policy and our legislation to have application throughout the total province, yes.

Mr. R. F. Nixon: There are spirits under every table.

Mr. Speaker: The member for Wentworth.

STONEY CREEK, SALTFLEET TOWNSHIP BUDGETS

Mr. Deans: Can the minister in charge of municipal affairs inform the House whether the ministry approved of or investigated the budgets of the town of Stoney Creek and the township of Saltfleet for the 1974-1975 fiscal year?

Hon. R. B. Beckett (Minister without Portfolio): Mr. Speaker, the council of the town of Stoney Creek sent delegations in and met with both myself and senior ministry officials on two occasions in an attempt to work out the problems that the municipality had. I think they have done a very good job, considering the problems that they inherited with staff in the past, and I think they are to be congratulated on holding their tax rate as well as they did.

Mr. Deans: I appreciate that, but the minister didn’t answer my question. What I asked was, did the ministry review the budgets of the town of Stoney Creek and the township of Saltfleet in the fiscal year 1974-1975?

Hon. Mr. Beckett: Mr. Speaker, the answer is yes.

Mr. Deans: Supplementary question then: could it be that if the ministry reviewed those budgets an error of over $500,000 could have slipped by?

Hon. Mr. Beckett: Mr. Speaker, the error that the hon. member is talking about was a combination of an under-estimation of government grants and a complete forgetting of a particular contribution that the municipality would have to make. The municipality has now corrected its staff problems.

Mr. Deans: One more supplementary question: What is the purpose of the Ministry of Municipal Affairs or the department of municipal affairs or whatever one wants to call it, reviewing the budgets if a $500,000 error can slip by and it can then be added on to the following year’s revenue requirements and thereby become an imposition on the taxpayers? Why does the ministry review the budgets in the first place, or if it does review them, is there any conscious effort to determine whether the municipality is deriving the kind of revenue it expects and spending the money in the proper way?

Hon. Mr. Beckett: Mr. Speaker, the budget of the municipality itself is not scrutinized by the ministry. This is the responsibility of the locally elected councillors to do and to set their tax rate. If they have any difficulties, we are very glad to try to help them but it is a responsibility of the locally elected councillors to set their own budget.

Mr. Deans: I must ask one other question because he is now telling me something different.

Mr. Speaker: We have had four supplementaries now. The time is just about out and there are many more people who wish to ask questions. The member for Windsor-Walkerville, first of all.

WINDSOR PROVINCIAL PUBLIC BUILDING

Mr. B. Newman (Windsor-Walkerville): Mr. Speaker, I have a question of the Minister of Government Services. Can the minister inform the House as to whether the ministry has plans sufficiently in progress to enable him to call for tenders on the provincial public building that has been announced by the provincial Treasurer here this afternoon?

Hon. J. W. Snow (Minister of Government Services): Yes, I have.

Mr. B. Newman: When does he plan on calling for tenders?

Hon. Mr. Snow: In the month of August.

Mr. R. F. Nixon: He has just discovered how essential these buildings are.

Hon. Mr. Snow: Is that fast enough?

Mr. Speaker: The member for Thunder Bay.

PULP AND PAPER COMPANY EXPANSIONS

Mr. Stokes: Can the provincial Treasurer assure the people of northwestern Ontario that the $250-million expansion of Kimberly-Clark will not be delayed as a result of announcements today in this budget? Can he further assure the people in the Dryden-Ear Falls area that the $200-million to $350-million expansion by the Reed Paper Group will not be delayed as a result of this announcement today?

Hon. Mr. McKeough: Yes, Mr. Speaker, I am sure I can, with almost complete certainty, give that commitment to the hon. member.

Hon. Mr. Davis: The member for Thunder Bay is a great free enterpriser.

Mr. Speaker: The member for Grey-Bruce.

ONTARIO LOTTERY

Mr. Sargent: Mr. Speaker, a question of the Premier; it’s important we have his views on this because we can’t seem to get hold of the Minister of Culture and Recreation (Mr. Welch) with regard to the $40-million revenue he hopes to get from the Wintario lottery. In view of the fact that, according to the press, some of these 37 distributors we have here are making about $15,000 per month on top of the $100,000 they get from the Olympic lottery, I’d like to ask the Premier what commitment he has made to the people that he could not say give this to the local service organizations to run locally, to have the money for their own recreation programmes locally?

Hon. Mr. Davis: Mr. Speaker, I am not that familiar with all the details of the lottery. I am sure the Minister of Culture and Recreation will be delighted to answer the question of the hon. member. I understand his estimates were before the House and concluded on Thursday and I am sure the hon. member had every opportunity to get an explanation.

Mr. R. S. Smith: The estimates were not in the House.

Mr. Good: The question was asked but he didn’t answer.

Mr. Sargent: A supplementary question, Mr. Speaker: Why don’t those fellows know what the hell is going on over there?

Mr. Speaker: It doesn’t sound supplementary.

Interjections by hon. members.

Mr. Speaker: Order, please.

Mr. Sargent: In view of the fact that other lotteries are paying 45 per cent in prizes, this government is paying only 40 per cent, and is paying these guys about a quarter of a million dollars a year to collect it.

An hon. member: Question.

Mr. Sargent: What kind of hold have they got?

Mr. Speaker: The member for Wentworth.

MUNICIPAL BUDGET REVIEWS

Mr. Deans: Mr. Speaker, I have a further question of the Minister without Portfolio in charge of municipal affairs. Does the municipal subsidies branch review the expenditures of a municipality prior to approving the level of subsidy? Can he explain to me why, in answer to my first question, he said they did review the 1974-1975 budget while in the supplementary he said they don’t review them? Could he be consistent and tell me exactly the process?

Hon. Mr. Beckett: Yes, Mr. Speaker. I replied we had reviewed the budget because of the fact that the municipality had come in and asked for assistance on its financial difficulties. That is the time when the 1974-1975 budget was reviewed and it was examined.

Mr. Deans: A supplementary.

Mr. Speaker: All right, one supplementary.

Mr. Deans: Is it not true that the municipal subsidies branch reviews the budget in order to determine the appropriate level of subsidy applicable to that municipality? If it does, how could it have missed a $500,000 error?

Mr. Speaker: I think that question was asked and the answer was given. The member for Waterloo North.

Mr. Deans: It wasn’t answered.

DISPOSAL OF KITCHENER BUILDINGS

Mr. Good: Thank you, Mr. Speaker. A question of the Minister of Transportation and Communications regarding disposal of the buildings on land expropriated by the Kitchener Stock Yard Co.; I sent the inquiry to his parliamentary assistant last week. Two questions: Would the minister give me the terms of the sale of these buildings to Teperman and, secondly, when there was such widespread interest by the farmers in the area to buy these barns by auction or tender, why did he not sell directly to the farmers rather than to Teperman? Now they have to buy them back from Teperman.

Hon. Mr. Rhodes: Mr. Speaker, I am not familiar with that particular transaction. I will be pleased to get the information and respond to the hon. member.

Mr. Speaker: The hon. member for Sandwich-Riverside.

GASOLINE PRICES ON HIGHWAY 401

Mr. F. A. Burr (Sandwich-Riverside): Mr. Speaker, a question of the Premier regarding his recently acquired interest in gasoline prices: What justification is there for the excessive prices of gasoline on 401, namely, 82.9 cents for regular gas, when approximately 75 cents is the usual price throughout southern Ontario and in Toronto one can get regular gas for as little as 68.9?

Mr. Deans: Where?

Some hon. members: Where?

Hon. Mr. Davis: The hon. member asked a question for all of us; where? In Scarborough? Off we go.

I’ll look into that, Mr. Speaker. I have been told that gas prices on 401 and, I guess, at the few stations on 400 sometimes are higher than in some of the communities not too far distant. I will check with the Minister of Energy and with the Minister of Consumer and Commercial Relations and see if we can have some answer for him. I think he’ll find, though, that it is not that unusual but I’ll look into it for him.

Hon. Mr. Grossman: There’s been a great variation in prices in Metro for years.

Mr. Speaker: The member for Nipissing.

SPENDING REVISIONS

Mr. R. S. Smith: I have a question of the Treasurer regarding the statement on page 9, about which he was questioned previously; that is, the postponement of $11 million of regional priority spending.

Since the Treasurer has not announced his Design of Development for northeastern Ontario, and since he said earlier today that there will be cuts in some programmes in northeastern Ontario -- and the only place left for him to cut being in the Dominion-provincial agreement under DREE -- I would ask how much money is being cut out of the DREE programme and whether any DREE moneys will be left in this year’s budget and available from the province, matched by the federal government, to go into northeastern Ontario this year?

Hon. Mr. McKeough: I am afraid that is something I simply can’t answer at the moment, but the regional priority budgets do include more than just DREE.

Mr. R. S. Smith: Yes, but they don’t include more than just DREE in northeastern Ontario, where the Treasurer has not as yet brought in his Design for Development, which was promised by him 3½ years ago.

Hon. Mr. McKeough: I am sorry; I think there are regional priority items in northeastern Ontario separate and apart from DREE, but I could be wrong.

Mr. Speaker: The member for Scarborough West.

UNEMPLOYMENT

Mr. Lewis: A question of the Treasurer: One of the re-forecasts as a result of this budget is a further job loss of some 19,000. What specific programmes does the government intend to undertake to compensate for the accelerated unemployment and its very large pool of additional unemployed?

Hon. Mr. McKeough: Mr. Speaker, I think this is what this statement was all about. We have taken a number of stimulative steps in the housing area. We have taken a couple of steps in the construction area, in terms of additional moneys for colleges and universities in areas of high unemployment and the five buildings. We can see our way clear to doing those things. We would particularly hope, of course, that the sales tax elimination in the automotive area would provide a strong stimulus in that particular industry and the automotive feeder industries. Beyond that, at this moment we have no further plans.

Mr. Speaker: The member for Essex-Kent.

HIGHWAY SERVICE CENTRES

Mr. Ruston: Mr. Speaker, a question of the Minister of Transportation and Communications: Is it true that the service outlets on Highways 401 and 400 pay a percentage of their sales -- in some areas it is around 10 per cent and in others it is 20 per cent -- and is it true that this is based on their gross sales?

Hon. Mr. Rhodes: Mr. Speaker, there are a variety of arrangements and agreements that have been signed with the various companies that operate the service centres along Highway 401 and Highway 400. I cannot give a general percentage because it does vary. There are old agreements that are coming to a close, agreements that are halfway through and some new ones that are being negotiated. They do vary, but there are percentages involved.

Mr. Ruston: Supplementary, Mr. Speaker: Is it not a percentage of the gross sales, though, even if it is only seven per cent or if, as I understand it, it goes as high as 20 per cent in the new contracts in some places? I understand it is based on gross sales, so that if gas is 82.9 cents a gallon, the percentage is based on the gross sales at that price. Is that correct?

Hon. Mr. Rhodes: Mr. Speaker, I believe that is correct. I would like to check on it to be more accurate, but I believe that is essentially correct.

Mr. Speaker: The member for Scarborough West.

MORTGAGE RATES

Mr. Lewis: A question of the Minister of Housing: Will it not add considerably to inflationary pressures in Ontario for the government to pay the difference between the market interest rate and 10¼ per cent to the mortgage lenders, without putting any ceiling on the market rate which they are allowed to charge?

Hon. Mr. Irvine: Mr. Speaker, I don’t think so at this particular time. We have considered the matter. We think we will be able to stabilize the market. I have to say, with the Treasurer and the Premier, that we will know better after we have had our meeting with the lending institutions.

Mr. Lewis: But, by way of supplementary, is not the government inviting the mortgage companies, the loan and trust companies and others, to maintain a very high level of interest, with a guaranteed public funding? Why was the government willing to do that for the mortgage companies, rather than by way of a tax credit to individual purchasers of homes?

Hon. Mr. Irvine: Mr. Speaker, I think the hon. member missed the point I was trying to make earlier, when I said there would be a rebate to the owner of the property. It probably would be every six months; I don’t know at this particular time. It might be monthly or every six months; I am not sure yet. We have to work these details out; I will do that in regulations. In any event, we sincerely hope that the lending institutions will not increase their rates to 12 per cent or 13 per cent because we are subsidizing.

Mr. Deans: What if they do?

Hon. Mr. Irvine: We want the benefit to go to the homeowner; that’s exactly why we are having this interest subsidy. The federal minister, Mr. Danson, tried to do something similar, and apparently couldn’t get it across to his government. We think it will work, and we will have to try it.

Mr. Speaker: The member for Kent.

SAFETY HAZARD AT CPR CROSSING

Mr. J. P. Spence (Kent): Mr. Speaker, I have a question of the Minister of Transportation and Communications. Has the minister any control over the Canadian Pacific Railway where it has a crossing at provincial Highway 21? On one side there are brush and trees growing. There is a signal at the crossing but the public is concerned that it can’t see the oncoming traffic and has brought this to my attention. The brush is hiding the view, which is a great concern. Has the minister any control over seeing that the brush and trees are removed for the travelling public?

Hon. Mr. Rhodes: Mr. Speaker, first of all I would say no, we have no control over the CPR. Secondly, I would think that if there is a safety hazard in this particular area and since it has been brought to my attention, I am sure we can contact the CPR and see that that obstruction is removed.

Mr. Speaker: The oral question period has expired.

Petitions.

Presenting reports.

Motions.

Introduction of bills.

SUPERANNUATION ADJUSTMENT BENEFITS ACT

Hon. Mr. Winkler moves first reading of bill intituled, An Act to provide Superannuation Adjustment Benefits to Persons in Receipt of Pensions Payable out of Pension Funds to which Contributions are paid directly or indirectly out of the Consolidated Revenue Fund.

Motion agreed to; first reading of the bill.

Mr. Speaker: Before the orders of the day, I wish to announce to the House that on Friday last the member for Wentworth raised a matter with the acting Speaker which was reserved for my decision. The member for Wentworth was concerned about the ambiguity of the phrase “special interest” in the report of the procedural affairs committee which was presented to the House on April 29 and later adopted by the House. I dealt with this matter previously on June 20, 1975.

The member for Wentworth is asking that I direct the procedural affairs committee to consider once again the definition of a bill of special interest. I have no authority to refer matters to the standing committees of this House on my own initiative. The member, or any member, if he so desires, may give notice of a substantive motion which would be dealt with in the usual fashion.

The member for Windsor-Walkerville also asked that I deal with the question of ministers being members of standing committees of this House. This matter was dealt with quite fully by Mr. Speaker Cass in the fourth session of the 28th Parliament on page 27 of the Journals. I would refer the hon. member to the last paragraph therein.

Orders of the day.

PETROLEUM PRODUCTS PRICE FREEZE ACT

Hon. Mr. Handleman moves second reading of Bill 133, An Act to provide for an interim Freeze in the Price of certain Petroleum Products.

Mr. Speaker: Does the minister have an opening statement?

Hon. S. B. Handleman (Minister of Consumer and Commercial Relations): Mr. Speaker, I would like just to add a few remarks to those the Premier (Mr. Davis) made in the Legislature on July 3. I believe he outlined in considerable detail the contents of the bill, the reasons for it and how it will operate. I just want to add a few things to what he has already said.

This bill contains very strong measures, measures which are not the easiest for any government to take, but they reflect the outrage of the people of Ontario and the government of this province in the face of the federal budget of June 23.

I know it is too much to expect that that outrage would be shared unanimously by all members of this House, particularly because of the praise of the federal budget by at least two members -- the members for Kitchener (Mr. Breithaupt) and Carleton East (Mr. P. Taylor). I assume they will stand up and oppose this bill and I regret that, but their opposition is based on blind loyalty to the Minister of Finance and the Liberal Party of Canada.

Mr. R. F. Nixon (Leader of the Opposition): What is the minister talking about?

Hon. Mr. Handleman: The federal government acted as arrogantly and insensitively as any government in the history of this country when it brought in that budget of June 23.

Mr. R. F. Nixon: What a ridiculous opening statement.

Hon. Mr. Handleman: We’ve reacted to it with this kind of measure. The leader of the New Democratic Party quite properly said this is not the kind of bill this government would normally bring in and he’s right. I’m not particularly happy about this kind of action having to be taken but it’s the kind of action that must be taken to counteract the destructive budget of June 23.

I want to express now, Mr. Speaker, my own personal disappointment in the Minister of Finance. I’ve been a pretty close observer of the Ottawa scene and from pretty close range.

Mr. R. F. Nixon: The minister has four Tories listening to his disappointment.

Hon. Mr. Handleman: I’ve watched him tiptoe through that Department of Finance, maintain his political balance, and do a tremendous job of not having to take any of the flak which usually arises as a result of a federal budget. This time he just collapsed completely. The thing that really disappoints me in Mr. Turner’s performance is he didn’t walk out of that cabinet room with his head held high as a private member and simply disown the measures which he brought in on June 23.

Mr. Speaker, the bill which is before the Legislature today does not pretend to solve Canada’s or Ontario’s energy problems. It provides for a short term pause to enable the government to assess the situation and to examine the options for future courses of action. It’s in that light that the bill should be debated.

I trust the debate will bring forth some constructive suggestions --

Mr. R. F. Nixon: Why is the minister taking such a ridiculous partisan stand?

Hon. Mr. Handleman: -- because I’m going to need assistance in the administration of this Act, Mr. Speaker.

Mr. R. F. Nixon: Nobody is listening to him.

Mr. Speaker: Order, please.

Hon. Mr. Handleman: I expect that kind of constructive suggestion; of course we’re partisan on this thing. One has to be when faced with that kind of an organization in Ottawa which really doesn’t seem to care anything about the welfare of the people of Ontario.

Mr. R. F. Nixon: The minister must be faced with some concern about his re-election to be talking in such a ridiculous manner.

Mr. Speaker: Order, please. I wonder if the hon. minister would return to the principle of the bill.

Hon. Mr. Handleman: Mr. Speaker, I don’t want anybody to feel we’re going to depart from the principle of this bill; we will try to administer it as fairly and equitably as possible without imposing undue hardships on those who are most vulnerable in our society. We’re firmly committed to the enforcement of the bill and, if necessary, to the imposition of sanctions on those who knowingly violate it. I’m looking forward to the debate on second reading and to any suggestions for improvement which may emanate during the course of the debate.

Thank you, Mr. Speaker.

Mr. Speaker: The hon. Leader of the Opposition.

Mr. R. F. Nixon: Mr. Speaker, I feel the minister, who has just given what you called for as an opening statement, has really abused the rules. Maybe in his windup statement he could get that way but simply because he happens to be a minister on the front bench he sort of takes two kicks at the cat. He says he justifies his partisan stance because it seems to be necessary under these circumstances. I don’t agree with that.

As a minister who is going to be applying this particular piece of legislation he has administrative responsibilities. He sounds ridiculous sort of parroting the party line which has been set for him by his masters further up the bench. I can’t understand, when he is asked for an opening statement on the bill, why it is not a matter of clarification as is required under the rules, rather than the kind of diatribe he treated us to. I think it downgrades the Legislature and I say to you, Mr. Speaker, it downgrades my opinion of the minister.

A year ago, in 1974, when the Premier acceded to a price increase without having the knowledge and information available to him which would have permitted him to predict the increase in the price of gas at the pump, the federal government, working with the companies across Canada, had a price-fixing arrangement which was designed to allow the companies to sell out their holdings of petroleum in many forms which had been acquired under the old price. I believe the 45-day limit, as it has come to be called, was established then. By agreement the federal government, when it approved the application or the indications from the government of Alberta that a further increase was needed this year, applied the same procedure so that there would not be an increase until about the middle of August under normal circumstances.

This bill extends that freeze for another 45 days and I believe that it is a warranted freeze. I believe the government of this province should have taken a strong stand in 1974, as it did in 1975, in order to stop the move toward the world price which the government of Alberta has been pressing on all the other governments ever since it realized it could do this for its own revenues and in support of its constitutional jurisdiction over the petroleum resources it has.

There are a number of matters of some concern, particularly when we see that along with the announcement of this freeze there is an appointment of a one-man royal commission. We still don’t know who the commissioner is, nor what his terms of reference will be, but from a statement made by the Minister of Energy (Mr. Timbrell) last week, we understand that he is going to deal only with upward pressures on the cost of petroleum applicable in this province from the day of the freeze and also not including the price increases dictated by the government of Canada in conjunction with the producing provinces.

In other words, he will be doing what the Nova Scotia counterpart of our Energy Board has been doing now for about 18 months, and that is carrying on a continuous review of the requirements of the petroleum companies for increases in the price at the pump that come under provincial jurisdiction.

In this party we feel that the Legislature should be debating, in conjunction with this bill, another one which expands the powers of the Ontario Energy Board, rather than that of a royal commission, so that both now and in the future the energy board will have the powers to carry on a continuing review of energy prices and be able to make recommendations to the government so that only those increases which are justified are actually going to come about in this province.

The other serious omission is that in the posturing by the Premier, the Treasurer (Mr. McKeough), the Minister of Energy, and now by the Minister of Consumer and Commercial Relations, they are not prepared to accept their undoubted responsibility to have the same impact on the cost of electrical energy in this province. Mr. Speaker, I realize that this is not involved in this bill, but this is one of the very serious deficits in its inclusions. It is ultimate hypocrisy for the government here to damn and castigate the government of Canada for allowing the price of petroleum to go up when, in fact, they are not prepared to take similar strong actions to control the price of electrical energy in this province, over which they have direct and unarguable jurisdiction in a policy and a practical way. I have called it hopeless hypocrisy, and I would say to you, Mr. Speaker, that is precisely what it is.

We have heard the Treasurer indicate that he finds appalling the proposed 29.6 per cent increase. The leader of the NDP indicated this is the first step toward the roll-back of hydro prices. I hope it is. In the procedures the government is going through to win back some of the favour that they lost with the electorate over these past many months, this may, in fact, be something they will do before an election, because it is unconscionable that they should permit hydro increases even to be debated on a basis of an increase of 30 per cent when they put forward the strong argument that it has inflationary pressures which we, in this jurisdiction simply cannot support and cannot undertake.

So the flaws we feel are in this bill are that the bill should have in conjunction with it sections which give these additional powers to the Ontario Energy Board which we, as a Liberal government, would grant to the Energy Board without delay. We also believe that the government should have a position in the area which is undoubtedly its responsibility, having to do with the cost of electrical energy. We regret sincerely that the government is not taking a stand which is even partially as strong as that it is taking in the control of the costs of petroleum.

As far as this bill is concerned, the freeze in the price ends on -- what is it? Under the provisions it cannot go beyond Nov. 30, but it ends, in fact -- unless it is extended by the Legislature or by order in council -- on Sept. 23. It is obvious -- and I got into a lot of trouble for talking about this a few days ago -- this kind of a control on heating fuel is meaningless. The winter heating season will not begin until sometime in October and it will have a tremendous impact on all parts of this province, but particularly in the north. There is no way that we can prevent this sort of an increase to have an effect on homeowners and the costs of homeowning responsibility by the allowing of the price to change in such a dramatic degree at the time when this provision runs out. Obviously the Ontario Energy Board is going to have to have continuing powers and we should grant those powers before the Legislature rises next week or the week after, or whenever its business, according to the government, might be concluded.

I am also very much concerned at the initiatives taken by the government of Ontario with regard to the whole matter of oil pricing. In this regard, as far as petroleum is concerned, we are a have-not province and among the poorest anywhere in the world. We pump a little bit of oil actually out of an oil field in my constituency. I don’t know, Mr. Speaker, whether you are aware of the oil field at Gobles, Ont., where the oil is pouring out -- hardly in sufficient quantities to make us a serious producing province, but there it is.

Mr. J. E. Stokes (Thunder Bay): The sheik of Brant.

Mr. R. F. Nixon: Yes, almost that. It may be that the jurisdiction over oil ought to be on a county basis so that we could do something for the good of our constituents. It points out on a basis of national requirements it is a shame and I believe an inadequacy in federal policy and an inadequacy in the constitution of our country itself that the application of oil pricing policies should be so balkanizing our provinces, destroying national unity in a very real way and creating provincial sheikdoms of a type which is in the long run going to be destructive to our confederation.

Mr. J. E. Bullbrook (Sarnia): There is nothing small about that.

Me. R. F. Nixon: We have said, Mr. Speaker, and I put it before you one more time because we feel that it is a reasonable alternative, that the spokesman for Ontario should have taken a stand a year ego, reiterating it this year with the support of Nova Scotia and hopefully Quebec, which are provinces that don’t have a lot of petroleum but are by no means bereft of energy resources, saying that in the face of the international crisis and the undoubted pressures that are brought to bear in a very divisive way on our nation, having to do with the OPEC decisions and the international cartel which has dislocated the national goals of many countries in the world, this province should have taken an initiative calling for a national energy pool in which our uranium could have formed one of the cornerstones.

We are not bereft of energy and in the long run our uranium and the technology of Ontario Hydro and Atomic Energy of Canada may be far more valuable than the petroleum resources of all of Canada. Alberta has these tremendous, although rapidly depreciating and depleting, petroleum resources. BC has natural gas resources, the major part of which is being exported to the United States. Saskatchewan has petroleum and gas. Quebec has tremendous water power resources and whatever one thinks about the development at James Bay it is going to provide a great new pool of energy that can be turned to the benefit of Canada, as well as Quebec. Any thought of exporting that elsewhere surely should be considered as a national priority and not one that falls thoroughly and wholly within the purview of the province.

Newfoundland, a have-not province in every way but this, has in Churchill Falls one of the major hydro-electric developments in the world. Nova Scotia has coal and unfortunately we are not using very much of it here. The Bay of Fundy can be made to serve Nova Scotia and New Brunswick. Prince Edward Island has a lot of potatoes there, but it has an energy problem that is probably more serious than any other province since it has to buy it from offshore sources almost exclusively.

My point is this, Mr. Speaker, that this country is anything but bereft of energy resources. We are almost self-sufficient as far as petroleum is concerned. Our exports of petroleum have dropped dramatically. A year ago we were prepared to accept as fact that the additional export tax on the petroleum that we were selling to the United States would be sufficient to balance the additional costs of a one-price system for gasoline and heating fuel across Canada. Because of the drop in those exports, the government of Canada, through a decision which we do not support, has imposed an additional 10-cent tax, an excise tax, so that this national price policy can be maintained.

We have energy resources which, if pooled and properly directed on a national basis rather than a provincial basis, can make us self-sufficient now and in the foreseeable future. We would have wished that this province, together with other provinces, could have taken a provincial initiative so that this sort of self-sufficiency could have become a part of national policy.

I regret very much that the government of Canada did not see fit to take this initiative a year ago when the divisive concept of provincial pricing of energy was maintained as a part of the reading, and the proper reading, of the constitution. At that time, the Premier of Ontario, as a latter-day Father of Confederation, was prepared to approve of a substantial increase in the cost of petroleum per barrel, much larger than the one that has been proposed by the government of Canada under the recent legislation which gave it those price-fixing powers.

The Premier, of course, in a great flight of circumlocution when we accused him of giving in too easily last year said, and it is a part of his official statement; he “acquiesced with active reluctance.” This is the kind of construction that he is prone to put on some of his decisions which now, in retrospect, do not please him. They indicate the entire lack of consistency in his approach to this particular policy area, which has such tremendous ramifications for this province where the major consumption of petroleum and energy takes place.

We should have joined Nova Scotia in strong opposition to price increases a year ago. We should have accepted, as a part of provincial policy, that we do not approve of any move towards the so-called world price established by the OPEC cartel; that is the most artificial kind of finagling on an international basis among the sheiks and those who have access to the tremendous quantities of petroleum resources which are controlled by the OPEC cartel.

An hon, member: Or a sheik.

Mr. R. F. Nixon: But for anybody to consider that as a supply and demand world price, surely, is unacceptable to us. We should have insisted a year ago -- with all of the powers that do lie with this province as a cornerstone, along with Quebec, of Confederation -- on a national policy which would have made us self-sufficient in overall energy resources; which would have kept us away from the divisive approaches to energy pricing which is presently being debated and which required the introduction of the bill which is before us at this time.

So we feel that there has been a policy alternative which has not been brought to bear by any of the provinces, or the government of Canada. We hope it is not too late for this kind of approach.

The involvement of Ontario’s uranium is particularly significant, since this is already under national control. The idea of us wrestling it back, so that we can have a cudgel to wield against the other provinces in a kind of divisive concept of energy pricing, is unacceptable if there is an alternative based on national pooling of energy resources.

This bill, of course, is a stopgap. But in my opinion it is more than that. It is a piece of political manoeuvering that is going to, I suppose, save the average consumer something like $5 over the 45 days in which it would be applied. It’s going to do little or nothing as far as home heating problems that face all of Ontario and, particularly, the northern part of this province are concerned.

While the royal commission concept is one that this government uses repeatedly, we still feel that it would be better for the Legislature to act in giving adequate powers to the Ontario Energy Board to review the upward price pressures that the oil companies may find themselves subject to. So, it is only by the justification from those companies of legitimate price increases that they must cope with that increases at the pump would be permitted.

It’s been suggested that we should do something to roll back that 10 cent excise tax. The leader of the NDP has indicated that, by retroactive legislation, we could extract from the oil companies their windfall profits from a year ago. It’s a nice concept. Maybe with that sort of legislation we could find money which would keep the prices from going up for another year, or some reasonable period of time. While there is nothing wrong with the concept as it’s put forward as an alternative, I personally believe two things about it. That is, retroactive legislation of that type would be unacceptable to the Legislature and to the thinking citizens of the Province of Ontario. And much as I regret the 10 cent excise tax, for obvious reasons, we are still prepared to say that the government of Canada governs in this province as well as the others.

I feel its policies in energy pricing have been divisive, both last year and this year, but it undoubtedly has the power to levy those taxes if, in its judgement, it is necessary. It has pointed out that this means a federal tax of 10 cents a gallon and a provincial tax of 19 cents a gallon. The constitution certainly does not give the provinces any special corner on direct taxation, but the federal government has exclusive powers of direct taxation. It has the powers and has seen fit to use them here. I don’t know of any power of this Legislature which could roll back that 10 cent excise tax.

I do recall, of course, that the government of this province imposed a seven per cent additional tax on all energy but when it found the people of the province were very much opposed to it, it withdrew it after a number of days. Evidently the government of Canada does not feel this tax is that unacceptable and it appears it is not going to reconsider its decision. That is for the government to decide and I think it is an unfortunate circumstance because it does have a dislocating effect on our own economy here.

However, that is a fact about which we don’t seem to be able to do anything. This bill does extend for an additional 45 days the freeze on the price at the pumps which would otherwise have gone up because of the increase to $8 a barrel in the well-head price of petroleum from Canadian sources.

We are prepared to support this as stopgap legislation. We feel it falls for short of our requirements and it may be that the government will take further action or, if an election intervenes, we will be in a position to take the kind of action which I’ve outlined in my remarks this afternoon.

Mr. Speaker: The hon. member for Wentworth.

Mr. I. Deans (Wentworth): Thank you, Mr. Speaker. I have two or three comments I want to make about the bill. This is another example of the kind of crisis legislation we’ve been seeing in this Legislature over the last year or year and a half and it concerns a lot of us. It’s not that the intent of the bill is necessarily bad; the intent of the bill is one which we happen to agree with. Unfortunately, it seems as if the consumers of the Province of Ontario are to be forced to suffer almost to the point of suffering no more before this government is prepared to take any action.

I’ve long felt, this party has long felt, that the government has a responsibility in the protection of consumers. We’ve stated it over and over again in the course of the years I’ve been here and probably stated it long before I arrived. We’ve consistently pointed out that the government’s rule is surely to guarantee those people in this province that they are not gouged by the private sector or, for that matter, gouged by the bureaucracy of government. If the government has failed, as I think it has, it has failed over the years in setting up and putting in place the kind of mechanisms which would ensure that we wouldn’t have to bring in this kind of crisis legislation at a time like this.

Frankly, I feel this government had adequate opportunity in the last two or three years to recognize what was occurring in the energy field and to put into place the price review mechanism which would have enabled us in the Province of Ontario to take account of rising costs and to try to rationalize the entire energy source in the province.

I think over the years the government has steadfastly refused to recognize that it had a responsibility in placing curbs and in trying to moderate the influence of the private sector on the lives of the people of the province. It failed at every single turn. There’s hardly a single essential commodity in the Province of Ontario on which this government has taken any action to ensure there will be price stability.

I don’t quite understand what it is about the government that it has to wait until the very last moment before it begins to take action. It sat back and it watched the spiralling costs of housing and did nothing to try to moderate it. It sits back and it watches the ever-increasing rents and it takes no steps to moderate them. It sits back and it watches while prices rise on the consumer front and it takes no steps to moderate them. Then, just because it happens to be three or four months in advance of an election, the government moves with what I call crisis legislation in an attempt to appease an enraged public.

I want to say that’s not the way to govern a province. That might be politically satisfactory for a short period of time but in the long haul this isn’t the way it should be done. The whole review process requires an entirely new approach to government, an entirely new sense of the responsibility of government toward the protection of the consumer. It’s not nearly enough to say that because this is a flagrant abuse we will move, while on the other hand failing to take any corrective action in other equally flagrant abuses occurring in other parts of the private economy.

I want to suggest, first of all, that one of the most difficult tasks of a government -- this one in particular -- seems to be the gathering together of accurate statistical information. Over the course of the last two or 2½ years, this government has consistently failed to come up with the statistics to show what was happening within the oil industry. While I recognize that practically all of the sources of petroleum products are outside the Province of Ontario, the impact on the consumer in the Province of Ontario is so great that this government had a responsibility to have an accurate assessment available on a day-to-day basis of not only the availability of the sources but also of the capacity of the oil production machinery to produce what we need.

This government had a responsibility to ensure for the consumers in the Province of Ontario that there would not be the kind of gouging allowed that has been allowed. When the first opportunity arose 1½ years ago, I think, the government went to the negotiating table with inaccurate statistics and without a complete understanding of the field and came away having been hoodwinked by other governments which were in a better statistical position. I think that that is where this government has to begin.

First of all, it has to recognize that in certain essential commodity areas there is a responsibility on government to establish price review mechanisms which will take into account any attempts by the private or the public sector to take advantage of the consumer without any opportunity for a review.

Having done that, having made that kind of a commitment in all of the essential areas, then the government has a responsibility to amass the statistical information necessary to make accurate decisions. In the case of energy and in the case of petroleum products in particular, that includes a review of the procedures used by many of the major oil companies in retailing their gasoline and petroleum products to the consumer. Whether I’m speaking on behalf of a number or a few, I am convinced that price-fixing takes place at the retail levels within many of the major retail outlets. I think that it is time that this government, recognizing that it has a responsibility at the retail price level, took some initiative and investigated that aspect of it.

I want also to say that it is much more difficult in the first instance for a government of Tory philosophy to move towards price review and perhaps easier to go to price freeze because the price freeze can be explained away as being a temporary measure. But the facts are that in order to protect consumers over the long haul we must have the kind of price review mechanisms that we have raised and put forward and discussed in this Legislature.

Over the last two or three years I have watched while this government played games with the Liberal government in Ottawa and with the oil companies. They weren’t entirely honest with the public in the Province of Ontario about the way in which negotiation, if any, took place between governments and these major oil concerns.

Mr. Bullbrook: The member is right. They played games with Saskatchewan too. This is the problem. One just can’t tell who is on first any more.

Mr. Deans: One can’t tell who is playing and who isn’t.

Mr. Bullbrook: They played games with the oil companies, with the federal government, with Alberta and with Saskatchewan.

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

Mr. Deans: Thank you very much. I appreciate that. As I was saying, this government has played games over the last two or three years and hasn’t been entirely honest with the public of Ontario about its intentions or, for that matter, hasn’t been entirely honest in living up to its responsibilities, at least at the retail level.

I think there is a need in the Province of Ontario for an overall energy policy. I think we’ve said time and time again that there has to be a reasonably accurate assessment made of the sources of energy and that there has to be also a reasonably accurate assessment made of the energy needs. That includes all forms of energy. Whether they are found in the Province of Ontario or whether they are imported from out of the province we have to rationalize our energy policies so that we can meet emergency conditions and we haven’t done that. That ought to be part of what should be going on at this particular time. It ought to have been going on over the last two or three years when it was evident to most people that we were facing a critical if not an emergency situation and it was likely to get worse rather than better.

We happen to think the government has taken only marginal steps by introducing this piece of legislation. The government hasn’t done very much to aid the public of the Province of Ontario. We happen to think because the government of Ontario has a responsibility at the retail price level, it would have been entirely possible for the government to have offset the 10 cent excise tax by establishing a price in the Province of Ontario at which gasoline and other oil-based products would have been sold to the consuming public.

We think that could have been done and we think it should have been done. That should have been done just as much as the government should have imposed the 90-day freeze. We think that would have been an initiative of this government which would have served the public of Ontario well. We recognize the fault lies primarily with the federal government. We recognize that the federal government’s actions were inexcusable. We recognize that what the federal government did by imposing the 10 cent excise tax was to impose a tremendous hardship on a great number of people in the Province of Ontario.

The imposition of that tax will have an adverse effect on a number of different areas of the economy including the vacation trade which is building up over the province and on which we spend considerable sums of money trying to sell. We recognize that the 10 cent excise tax will be reflected in every single commodity even although commercial and industrial users will be able to obtain a rebate. There is no question in my mind that industrial and commercial users, simply by virtue of having to go through the bookkeeping operation, will raise the cost of the products they sell. It has always been the practice and whenever a tax is imposed there is always the additional cushion added in by every retailer, wholesaler and producer and so even the 10 cent excise tax will be reflected in higher prices in the province though it ought not to.

I suggest in bringing in this legislation, the government should have brought in companion legislation which would have established a price in the Province of Ontario which could be charged at the retail level during a particular period of time -- 90 days if that’s the wish -- and that during that period of time tough and serious negotiations should have been carried on between this government in Ontario and the federal government in Ottawa with an eye to finding a way around the imposition of the excise tax at all. To have allowed the excise tax to be applied against every motorist in the province at this time is adding further hardship when people are already finding it extremely difficult to make ends meet.

Frankly, I feel we can’t go on forever with this kind of ad hoc-ery which this government seems to have adopted as its policy. The government can’t expect to sit and react to every situation after it occurs. Surely, within the many tens of thousands of people who work for the government there are people who are capable of reasonably accurately predicting what is going to happen.

The government has to recognize that if it is going to take on the mantle of the consumer’s protector, it has to do it on a much more overall basis. One can’t simply isolate those two or three areas -- in this case only one area -- where the consumers will hurt immediately and take some temporary measure in the hope of appeasing them to a point beyond an election. If the government is serious about consumer protection, if it’s serious about trying to ensure that the consumer dollar in the Province of Ontario is not further eroded by the greed of major corporate power we are going to have to put into place consumer review mechanisms which will guarantee that in advance of any price increase there will be an adequate and proper investigation, not only of the increase itself but of the need for the increase and the costs of production. If the government does that in the many areas of essential items, then it can truthfully say it is protecting the consumer.

This kind of legislation doesn’t protect the consumer; it simply delays the inevitable. It’s very much like what the government has done throughout both of the budgets it has brought in during the last four months. It has delayed to a point later in the year what will be a severe restriction on the consumer dollar.

You know, Jan. 1, 1976, will be a landmark day in the Province of Ontario because on that day the cost to the consumer in a number of vital areas is going to go up considerably because that day has been chosen by this government as a sort of judgement day for tax.

Mr. J. R. Breithaupt (Kitchener): The day of reckoning.

Mr. Deans: That’s what is going to happen in this case too. The government can’t continue to delay without putting into place the kind of operation that will guarantee review on an ongoing basis. That’s what has to be done.

We welcome this only because it is the only measure we could have expected; in fact, it’s even beyond what we could have expected from this government. But, in its temporary nature, surely it must be only the first step. If, as a result of this, the government moves on to establish the kind of consumer protection across the board in essential areas that we envisage are the responsibility of government in the protection of the consumer, then of course it will have been worthwhile. But if this is simply window-dressing; if this is simply an attempt to garner more votes at the expense of the Liberal government in Ottawa, then it is not worth the paper it’s written on.

We’ll judge it more late in August and early in September when we see what kind of action there is from this government in trying to ensure that the consumer will not be gouged by the private sector, that the protection of the consumer is an ongoing responsibility recognized by this government and to be fulfilled by legislative proposals. That’s when the measure will be judged and that’s when the decisions will be made.

Mr. Speaker: The hon. member for Sarnia.

Mr. Bullbrook: Thank you very much. I am going to be able to be brief, Mr. Speaker, because of the fact that my leader has amply and more than adequately covered the position to be taken by this party.

I want to say something to begin with, if I may. We certainly support the principle of this legislation. It’s appropriate in the circumstances. But, during the question period the other day, I attempted to elicit from the Premier of this province some indication as to the sincerity of the motivation of the government in connection with this type of legislation, because it was only Jan. 1 of this year that the Ontario Energy Board authorized a significant elevation in the cost of natural gas to the consumers of Ontario. Very shortly there will be another elevation to the consumers of Ontario of the price of hydro-electric power.

In putting this to the Premier, I asked him if he was so significantly motivated now, why wasn’t he motivated at that time. His response to me, as the minister carrying this bill will recall, was that the increase of the base rate structure for the natural gas distributing companies was based on a hearing for the Ontario Energy Board; that the Energy Board, of course, made that judgement; and that although they have a right, as does any executive in any of the provinces, to suspend or not approve the decision and recommendation of the Ontario Energy Board, they chose not to. As I understand the response of the Premier to me, he said in effect that this is the reason no interference was made.

There are two things that crossed my mind at that time, and this is why I had to say to him, with the greatest respect, “One wonders about your integrity of purpose.” There are two things that crossed my mind.

First of all, the terms of reference established by this government and directed to the counsel hired by them and by the Ministry of Energy in connection with the application for rate increases, had nothing to do with economic impact of the rate increase. That is the most significant aspect.

The Ontario Energy Board does not have the function of an economic tribunal in assessing the economic impact of rate increases in the natural gas distribution field. It looks basically at the criteria of cost, of production and distribution, and all the matters concurrent therewith -- capital requirements, the cost of borrowing, the normal maintenance expense and other items that are validly taken into consideration.

Such isn’t the case in connection with the price freeze on gas. In what can only be characterized as a highly inflammatory series of statements by the Premier of this great province in connection with the federal government, he based the posture of the government solely on the economic impact of the people of this province and the necessity to protect the customer. Those aren’t the criteria the Ontario Energy Board takes into consideration in establishing the rate structure for natural gas, nor are they the criteria that the Ontario Energy Board will take into consideration Mr. Speaker, upon a reference by the Minister of Energy under the appropriate section of the statute of the Ontario Energy Board of an application by Hydro for a rate increase.

So one has to say to himself, why, at this time, does the government of Ontario deem it so necessary to protect not only the consuming public but the economic vitality of this province, if it didn’t see fit to do so in connection with matters that are solely, exclusively and patently within their confidence and jurisdiction? Had the announcement been made by the Premier of this province of the intention of the government to freeze these prices, concurrent with an announcement that there would be a freeze in connection with the rate structure of Ontario Hydro, as chargeable directly to the consumers of Ontario, or to its public utilities, and a roll back to Jan. 1, 1975, to the then rate structures of the natural gas distributing companies, one could see some sincerity of motivation.

I found it very difficult during the course of those two questions that I attempted to put to the Premier of this province, to get that type of response from him, which seemed to me -- and I say it most respectful of his position -- shallow and full of a lack of understanding of what he was talking about. If it is the intention of the government to protect the consumer, so be it. That is its function, and we are prepared to go along with it as a matter of principle. But if that is an intention based on integrity, and not the most crass political motivation, then the government should have gone much further, and covered those aspects of the energy economy that it could fully and wholly cover without any difficulty.

If I may, I want to voice something during the course of the debate on principle of this bill that my leader touched upon, just shortly. But I must say that I worry, as one member of the legislature. I wonder if my colleague, the member for Riverdale (Mr. Renwick), or my colleagues, the members for York-Forest Hill (Mr. Givens) and Kitchener, or any other member in this House feels as I do, and worries about some of the statements that have been made in this chamber.

I realize that we are into difficult circumstances and difficult times. But I wonder, Mr. Speaker, if it serves this nation well to hear Her Majesty’s first minister in this province carry on in the fashion that he has. One has to wonder about it when we saw the lethargy and inertia that was exhibited by him a year ago in connection with this very matter.

Some hon. members: Right.

Mr. Bullbrook: But so be it; if he has come to grips with his responsibility, fine. But, really, is there anything to be gained from that type of vituperation?

I really like to think that whether or not our constitution is truly a contemporarily efficacious document, it still is our constitution, and I like to think that if they are going to attempt to tear apart a budget position by the government of Canada, they do so sitting, having been elected by the people of Canada to undertake that responsibility. I like to think that’s why Mr. Broadbent -- now the chosen leader of the New Democratic Party -- has a responsibility there.

Surely we have a responsibility on all sides of this Legislature to make comment, but I worry myself at the continuing fracturing -- a seeming fracturing at least -- of our nation by swipes from Quebec City when it’s worth their while, or Edmonton when it’s worth their while, or Victoria when it’s worth their while, or Toronto when it’s worth their while.

The fact is, I am accused at times of being a centralist, but it does bother me more than a little to evaluate the distribution of $8 per barrel of crude and to see that distribution as follows: to the provincial taxing sources, 49 cents; to the federal taxing source, $1.99; to the producer, $1.57; and $3.35 as a royalty payment to the people of the producing province. Somewhere along the line, it seems to me that those people meeting in Charlottetown 108 years ago didn’t intend that the basic resources of this great nation could be sequestered by a group of people within a defined political area --

Mr. D. A. Paterson (Essex South): Geographical area.

Mr. Bullbrook: -- no, political area, namely a province, and say, “These assets belong to us and no others.” They didn’t intend that the people of Alberta could say, “This oil is for our benefit and for the benefit of no others.” They didn’t intend that Ontario should say, “This uranium is ours and for the benefit of no others.” As a matter of fact, we didn’t say that. We led the way here in this great province, led the way in an appropriate and proper understanding of the ramification back in 1900-and-whenever-the-appropriate-year-was -- Leslie Frost understood at that time that we couldn’t take that type of provincial, truly provincial, position in connection with assets of that nature.

I don’t pretend to be a political historian or a constitutional lawyer, and certainly not an economist, but surely I must voice the feeling that if Premier Lougheed is prepared to say, “These assets are ours, we will sequester that royalty for ourselves, for the people of Alberta, and for no others,” then surely it invites our Premier to say, “It’s our nickel and you will have none of our nickel, and you will have none of our uranium, or our copper, or our lead, or our zinc, or our forest products. And try to build your world-scale polyethylene plant in Alberta without our nickel or our zinc or our lead or our steel. Try to do that.”

It seems to me that we just can’t go on forever blinking our eyes to the basic fact that we have attempted by agreement to come to a solution for which there is no great solution, except an undertaking on our part collectively, as provinces in unison and in partnership with the federal government, to say what is in the total best interests of our nation, recognizing at the same time, as I do, that I don’t support the almost unilateral abandonment of the provinces that is sometimes undertaken by the federal government. We have not only got to look at resources and income. It is time the federal government had a look at the provincial responsibilities, Mr. Speaker, and the financial impact concurrent with those responsibilities.

I wanted to say these things because I’ve been saying them out in the hustings once in a while. I’m called a centralist for saying that. If I wanted to be a centralist I would never have undertaken running for the provincial Legislature. If my desires and interests were not here, I would have run for the federal House of Commons. But I felt, frankly, that my interests do lie here.

One’s prime loyalty, without being dramatic, has to be as a Canadian. A secondary loyalty, if not equal in importance for us, as well as the Premier of the province, is to the people of Ontario. I say this to you, Mr. Speaker, if on every issue in which there is concurrent jurisdiction -- post-secondary education, health, transportation, labour and now resource matters -- we’re going to have this continual confrontation between the two levels of government, I certainly do wonder where we go.

It’s very edifying for Mr. Lougheed to receive $3.35 of the $8. It’s wonderful for the people of Alberta that they have no retail sales tax. It’s wonderful for them. I say that surely somewhere along the line that wasn’t the intention. I realize the distinction between a unitarian form of government, a republic, and a confederation in which we live. I just don’t think that in this continual ad hoc-ery we satisfy either the Province of Ontario or the people of Canada.

I wanted to voice support of the bill as matter of need for the consumers of Ontario. I wanted to say I worry about the motivation, but notwithstanding worrying about the motivation, I support it. More importantly, I think we’ve got to come to grips with some basic issues in Canada. No longer can we go on decade after decade.

I always regarded John Robarts, frankly, as one of the great Canadians. I read to a gathering in Windsor, I believe it was, some three weeks ago part of the opening statement that he made at the Confederation of Tomorrow conference. That was the whole intention of that. Sometimes governments are accused of grandstanding. Sometimes provincial governments are accused of grandstanding. But I really feel, and I didn’t have the closeness that many members of this chamber bad to that man, that he had an insight and recognized that unless we do start to work on a redefinition of our constitutional responsibilities in Canada we’re going to develop into a fracture that might be irreparable.

I don’t think it would be, but I surely would want to see some government, no matter which is elected after October of this year, dedicate itself, whoever the Attorney General of this province is, to some type of new initiative so that we can get away from this constant bickering, which the public is fed up with, and which the public doesn’t understand unfortunately; but it looks to us for solutions and leadership.

Mr. Speaker: The hon. member for Riverdale.

Mr. J. A. Renwick (Riverdale): Mr. Speaker, I would like to speak briefly about this bill which is in front of us. I assume the bill is introduced by the Minister of Consumer and Commercial Relations either because it’s designed to protect the consumer or because of his role as the minister responsible for commercial affairs. I suppose it’s because it’s for the protection of the consumer, in the eyes of the Conservative government.

It’s quite fascinating, really, when one looks at the point in time in which the government decided to move to try to protect the consumer against these exorbitant increases in the prices of oil and natural gas and also the tax consequences of the changes which have taken place. I think we must be very clear that the bill really only deals with about 20 per cent, or perhaps a little bit more of the total impact of the tax and price increases in petroleum products, in gasoline and in heating oil that have occurred over the last two years.

I refer, of course, to one of the supporting statements by the Treasurer in his budget today, which points out in one of the tables that as a result of the 1974 tax and price increases a family, heating with oil and driving 10,000 miles per year, had an additional price impact of $151. Of course, the government did nothing to protect the family against that increase.

The projected 1975 tax and price increases on the same family -- that is, the family heating with oil and driving 10,000 miles per year -- was $126, making a total impact in the two-year period of some $277. That’s on an average family in the Province of Ontario with the characteristics as I have described them. Of course, of the 1975 tax and price increases, the only portion that we are dealing with is something in the neighbourhood of the five cents of the 15 cents, or if the oil companies had their way, perhaps of six or seven cents of the 10 cents excise tax, plus the five cents which the increase of $1.50 per barrel of oil, translated into a gallon at the pump, would mean to the consumer.

So this bill -- if my rough and ready arithmetic is substantially accurate -- is dealing with about $42 of the total of a $277 impact which the consumer has had to face in the Province of Ontario in the last two years in these two areas. Similarly, if I may use the other example which the Treasurer’s supporting papers gave to the House today, a family heating and cooking with gas and driving 10,000 miles per year, suffered a price impact in 1974 as the result of price and tax increases of $124, and in 1975 of $148, for a total of $272. Again, using the rough and ready figure of about one-third of the 1975 tax and price increase, we have, for practical purposes, in this bill been asked to deal only with about some 20 per cent of the total impact of the $272 cost increase in the last two years.

I think it is essential, within the perspective that we are dealing in this bill, that nobody misunderstand that. We are only dealing with a marginal part -- about 20 per cent -- of the total impact that has hit the consumer in the Province of Ontario in the last two years in the field of oil and natural gas, and they are the Treasurer’s own figures which would support that.

So the government’s concern is really only with respect to one-fifth of the total cost that the consumer has had to bear in the province as a result of the default by the government. I found it relatively fascinating, because very seldom in the course of the day-to-day work of the assembly does one ever have an opportunity to be perhaps current with what was taking place.

Strangely enough, at the request of the leader of this party, about 15 months ago I prepared a memorandum for the members of our caucus dealing with the failure of the Davis government at that time to protect the consumer on the price of gasoline and natural gas. It was shortly after the conclusion of the first ministers’ conference at the end of March, 1974. I think our concern and the concern which has been expressed by the leader of this party for many months now -- consistently, accurately and with a great deal of prescience --

Mr. Stokes: Prescience.

Hon. Mr. Handleman: Omnipresence.

Mr. Renwick: -- has now been, in a sense, picked up by the Conservative government but at a point in time when, as my colleague, the member for Wentworth, has stated, one can only deem it to be a crisis measure.

In that memorandum -- and I want to quote briefly from it -- which I did at our leader’s request in April last year, I was trying to deal with the constitutional basis for the regulation of the price per gallon of gasoline and heating oil to the consumer in Ontario. Strangely enough that particular memorandum accurately reflects obviously what the law officers of the Crown must have concluded was the constitutional position or they would not have introduced the bill which we are considering today. I said in that memorandum and I want to quote a couple of paragraphs from it:

“Premier Davis and his government are obviously determined to shirk any responsibility for the extent of any increases in the price per gallon of gasoline and heating oil to the consumer as a result of the decision of the conference of first ministers in Ottawa at the end of March to fix the wellhead price of crude oil at $6.50 per barrel throughout Canada for the next 15 months.

“The purpose of this memorandum is to state the present constitutional authority of the Ontario government to fix consumer prices for gasoline and heating oil in Ontario.

“The Ontario Legislature can enact legislation fixing the price of these commodities to the consumer in Ontario and legislation for this purpose could include provision for public review of the pricing policies of the oil companies in fixing consumer prices.”

I commented about the competing and, perhaps, co-operative jurisdiction or the divided jurisdiction of the federal government with respect to the export trade and with respect to interprovincial trade; and the jurisdiction of the provincial government with respect to prices in the Province of Ontario.

I concluded at that time, “The Ontario Legislature has the power now to legislate unilaterally to fix domestic prices of gasoline and heating oil to Ontario customers.”

I am not going to take the time of the House to deal with it at any great length but in the constitutional authority of Laskin’s book on constitutional law in Canada there was some very real indication that in all likelihood an area such as the area we are trying marginally to deal with must be seen as really the paramount responsibility of the federal government. I don’t think that in the Province of Ontario, exercising our legislative authority within the scope of the constitutional powers granted to this assembly, we can really deal with a problem which in its totality transcends provincial management.

I don’t think it’s possible really for this Legislature, over a long period of time, to deal with the international oil companies. I don’t think it’s possible for the Legislature of the Province of Ontario to deal with the supply of natural gas in any effective way for the purpose of protecting the consumer.

We are anxious to support this bill not solely in any mistaken belief that we can, for any long period of time, protect the consumer by our legislation in the way in which we are talking about it. We will support it because we felt it should have been done 15 months ago. We will support it because during those 15 months the work and the study which is now going to be expected to be accomplished in a period of three months by the royal commissioner, when he is appointed, could well have been completed by this time.

We are extremely sceptical about the capacity of any royal commissioner, regardless of who he is, to be able to obtain the information on the basis of which he will be able to make substantial recommendations to this government. It would appear to us that most of the information is going to come from the international oil companies. Most of the information is going to be information which cannot be checked in any very real sense. There’s a certain limited amount of information available at the National Energy Board. There’s very little public information available about the economics of the petroleum industry. Our concern is, as the president of Gulf Oil said the other day, that what they lose now they’ll pick up again later on. This moratorium which this government is imposing cannot be allowed to be a substitute for a difficult, I admit, but necessary co-operative effort between the government of Ontario and the government of Canada and the other provinces.

I think I regret very much the tone of hostility and combativeness which has crept into the position of the Tory government in the Province of Ontario in matters related to its relationship with the federal government. I know there are strong feelings about such matters, but it seems to me, in any confederation such as we conceive it to be, that in areas of this immense importance there have to be matters of ongoing and continuing co-operation under the constitution rather than in the area of competitive vying for position by one government against the other. We all allow, of course, for a certain amount of partisan give and take about matters such as these, particularly in what is likely an election year.

The government has got to drop the posture which it has and begin to realize, regardless of the aggravation caused to the government by what appear to be inappropriate and irrelevant policies of the federal government in this field, it has an immense responsibility to the confederation to make certain that the confederation works and functions. The problems aren’t legal problems. They may have to be seen within a legal context because it’s a law of the assembly which is going to be passed or a number of laws and regulations passed by a number of the jurisdictions in Canada. But, for practical purposes, we’re talking about the solution of profoundly difficult social and economic problems.

It seems to me, Mr. Speaker, that the government must of some necessity say to us not just that the royal commissioner is going to make certain investigations and submit a report to the government but what it is that it really wants from the royal commissioner. Do they, in fact, want the royal commissioner to recommend to the government that there be an ongoing monitoring or reviewing or surveyance of the domestic prices of gasoline, propane and natural gas in the Province of Ontario? Do they want that? If so, are they going to ask the royal commissioner, in relation to the terms of reference that were stated by the Minister of Energy the other day, specifically to realize that for all time to come in the Province of Ontario this government must finally monitor and review the prices which will be charged?

Mr. Speaker, in a province such as this we can’t possibly regulate, through the Ontario Energy Board, the prices of natural gas and electric power for various purposes in the province and leave the petroleum industry free and clear from such regulatory power, because the third part and a most important part of the energy consumed in the province is of course from that petroleum industry.

Mr. Speaker, we can’t forget that we have not as yet devised, either at the provincial level -- and we can’t possibly do it -- at the federal level, at the level of the United Nations, at the level of the Commonwealth, or wherever you want to do it, methods by which we can effectively deal with international corporations of the immense size as are represented by the international petroleum companies.

Even in Canada today, Imperial Oil has now become the largest domestic corporation in Canada. It’s now in second place of all of the companies. The only one that’s out in front is the Ford Motor Co. of Canada, and the only reason the Ford Motor Co. of Canada is larger than Imperial Oil is that it chooses, as a matter of policy, to channel all of its foreign subsidiary operations through Ford of Canada before they go to the United States. A substantial component of Ford of Canada’s assets is involved in subsidiary operations in other countries. But not Imperial Oil. Imperial Oil is the largest single corporation in Canada at the present time.

I’m quite certain that anyone who knows the rudiments of the kind of leadership position that such a company provides in the petroleum field will indicate that a number of the others in varying degrees must of necessity follow Imperial Oil. If the minister thinks we in this assembly are capable of clearly controlling Imperial Oil on our own, he’s entirely wrong. That corporation will never ever be controllable by this assembly.

All that we can require, and all that we can insist on having from the government for our support of this bill, is an assurance from the ministry that following this stopgap or moratorium measure, which should have been taken 15 months ago and is now belatedly being taken to the extent of protecting the consumer in Ontario up to about 20 per cent of the price and tax impact that he suffered in the last two years, the government expects and anticipates to control, by monitoring them publicly over a period of time, the prices of natural gas, gasoline, propane and other petroleum products in Ontario.

In the course of the debate that has gone on since June 23, we tried to indicate to the government that it should have fixed the price exclusive of the excise tax at June 23, and that that should have continued to be the price for the period of time. The answer we got was, “You can’t do that.” Well, the government can do it. The minister is quite familiar with the imposition under the Excise Tax Act of the taxes which are imposed by the government under the general rubric of excise taxes; it is a tax on the producer, the manufacturer or the importer and it is not a tax on the consumer.

The minister has chosen to say that he is not going to interfere with the position which the oil companies will take to pass on that tax to the consumer. We have said, “Forget whether it’s 10 cents, 15 cents or 18 cents; look at the price. Require them to justify the price.” We can’t do it by isolating a 10-cent tax impact on Imperial Oil. We can’t do it by isolating the five-cent increase per gallon at the pump as a result of the $1.50 increase per barrel. We can’t do it that way. The government has got to be prepared to look at the total picture of Imperial Oil and the operations of the other petroleum companies in Canada, and then to decide, in the overall light of their operations, together with what their plans are for exploration and development, whether or not there is a justifiable claim for an increase in the price. That’s the way the government has got to look at it.

But it has taken the course that it is going to fragment it and is going to pretend that this five cents is some special five cents and that the excise tax of 10 cents is irrelevant and doesn’t apply to this. So far as I can see, in the terms of reference of the royal commission or in anything which has been said in the introduction of this bill -- which was a companion piece to the appointment of the royal commission -- nowhere is there really any indication that the pricing policies as such of the oil companies are going to be subject to any kind of a review.

As far as I can tell, he’s going to report on the relationship between certain increases and the interests of the consuming public with due consideration to the adequacy of the federal government guidelines as they apply to Ontario, the financial requirements of the industry, existing inventories and continuity of supplies.

Although this bill has to do with prices, there’s no reference specifically to the word “prices” in the terms of reference as they were given to us, as I understand it, by the Minister of Energy. So I want some assurance from the minister, when he replies in this debate, that it is his purpose to have an ongoing and continuing review through the Ontario Energy Board -- if that is the appropriate board, or however he may refashion that board -- that there will be a continuing responsibility to monitor each and every increase in the price of gasoline at the pump as they do now with the price of natural gas and other products.

I don’t share very many things in common with the Leader of the Opposition these days, but I do happen to share the one view that the Minister is going to have to reorganize the Ontario Energy Board. He is going to have to give it a proper overall monitoring authority with respect to all the sources of energy, which have such a drastic impact upon the consumers in the Province of Ontario.

As I said, Mr. Speaker, and as the member for Wentworth has said, we will be supporting this bill on second reading. I trust the minister will give us some further explanation of the proposed basis and method under which price increases will be permitted by way of regulation under the bill, because that seems to me to be an essential part of the minister’s explanation to us. I refer particularly to the power being given to the cabinet to make regulations prescribing the conditions under which a price greater than the price determined under section 2 may be charged by a seller for petroleum products.

In a very limited way we congratulate the government on at least taking some small step to recognize that even a Tory government can sometimes intrude on the affairs of the international petroleum corporations. That’s quite a credit to the Tory government. They don’t see it that way. They sort of fidget in their seats and are very irritated at the thought that they were ever placed in the position that they would have had to do so.

Apart altogether from what the federal government did in its budget, this government would have had a responsibility to the people of the Province of Ontario to monitor the price of petroleum products as it has monitored and is monitoring the prices of natural gas in the province -- to the extent it is within our control. So one can’t blame the federal government for finally moving into that area of energy supplies in Ontario, which is a correlative part of the overall energy picture of the province.

I say, grudgingly, that we congratulate the government for at least moving to get its feet wet. I do hope that the moratorium doesn’t prove to be illusory so far as the continuing public surveillance on behalf of the consumers of Ontario of the price of these products.

Mr. Speaker: The member for Rainy River.

Mr. T. P. Reid (Rainy River): Thank you. Mr. Speaker, I will delight you by saying my remarks on the bill will be brief. Particularly after listening to the efforts at a new budget today, it seems to me that what we heard this afternoon from the Treasurer probably should have been done and could have been done in his April 7 budget and we wouldn’t be having some of the problems we face in the province today.

I’m a little concerned about the bill in the regard, as was mentioned when it was first proposed in the House, that it’s not really going to do much for the people in northern and particularly northwestern Ontario as far as gas prices go. The previous speaker indicated that this bill most probably and properly should have been introduced some 15 months ago when we were faced with the increase then.

I’m sure the minister has heard before -- he’s had letters from me, he’s had my questions in the House and from others -- that we in northern Ontario have already been paying 10 to 15 cents a gallon for gas over and above what the rate is in southern Ontario. I understand that today the price of a gallon of gas in Ignace, for instance, is 91 cents for regular gas. Previous to the 10-cent excise tax being put on, our gasoline was anywhere from 12 to 15 cents a gallon higher than in southern Ontario.

Last spring, around the end of February and March, I took it upon myself to write to some of the oil companies and ask them ii they could explain their pricing policies to me. Obviously, some of the increase in the price of gasoline or one of the larger component parts, especially as it applies to northwestern Ontario, is the transportation costs, particularly when that gasoline comes from Winnipeg by truck, which seems to be about the most expensive way to ship it. I must say the companies were most generous in their answers, although I’m not much clearer than I was then. The other component seems to be the dealer markup, which seems to be somewhat higher than it is in other centres across the province, no doubt due mainly to the fact that they are working on a smaller volume and have to have the higher markup to meet their costs and make a reasonable living.

It seems to me, Mr. Speaker, that one of the weaknesses of the bill, as indicated in the questions in the House when the bill was first introduced, was the fact that there isn’t going to be any special investigation as regards the price of gasoline in northern Ontario. I’ve already given the reasons why I think this is necessary. We have been paying higher prices for many years. Maybe the explanation is just as I said, but the difference in transportation costs is really only about 2.6 cents a gallon, as far as I can figure from the figures given to me by the various oil companies, and the rest of it may be two to three or sometimes four cents a gallon markup by the retail dealer, the man who sells it at the pump.

It seems to me, therefore, that there is another nickel or dime somewhere in there that is being charged the consumer in northwestern Ontario that isn’t accounted for. It seems to me that it’s the minister’s responsibility, and has been previous to this time in any case, to look into the price of gasoline and home heating oil and so on in northern Ontario. In answer to a question that I posed to him some months ago and reiterated last week, he indicated that someone in his department -- I believe it’s Mrs. Stafl, if I’m correct -- has been compiling figures on the cost of living in numerous commodities in northern Ontario, and we’re going to get if not the report at least an announcement by the minister shortly.

It seems to me that is a weakness in this particular bill. I was home in my riding on the weekend and many people said, “Oh, the government is going to stop the increase,” and I said, “No, they’re not going to stop the increase. The bill only provides for the postponement of that increase.” Without trying to be overly partisan, as the minister knows I am not, one cannot help but note the extension date is no longer than Nov. 30. 1975. My constituents, being well-informed and intelligent, naturally have returned me to this House twice. They say, “That sounds to me like a rather strange situation when we are expecting an election in October and does the government think that’s going to fool anybody?”

I was interested in the comments of the member for Riverdale because I don’t profess to be any constitutional expert. I have also read something in regard to the legislation in Nova Scotia; the Minister of Energy keeps informing us it really hasn’t had any effect and the price in Nova Scotia is higher than the price in Ontario. To my mind that seems to beg the question because we are dealing primarily, if I am not incorrect, with two different sources of oil. Is Nova Scotia getting its oil from Alberta and Saskatchewan?

Hon. Mr. Handleman: No, I live in Ontario and I get mine from the same place.

Mr. Reid: The minister is shaking his head so I thought I had the facts wrong.

Hon. Mr. Handleman: Listen to your friend from Carleton East.

Mr. Reid: In any case, the only point I want to make is that apparently, at least so far, the Nova Scotia legislation has been intra vires the powers of the province and it has been used effectively in Nova Scotia. One can debate perhaps what the relative increase in price might have been without the legislation but most people seem to agree -- if I am I not incorrect again -- the Financial Post seems to agree that the price of gasoline in Nova Scotia without the legislation that province brought in would have been much higher than it is now, regardless of the price vis-à-vis Ontario.

I fail to see, Mr. Speaker, why Ontario has not moved in that regard because without that concomitant legislation I think the minister would agree the bill is largely a sham and is putting off the inevitable, unless the government is prepared to take some more concrete steps.

Really, Mr. Speaker, I’d like to confine my remarks to that one. We have to support the bill; it is 15 months too late. Obviously there is no sense going into the history of the Premier’s confusion between the well-head price and the citygate price and so on but I think a serious shortcoming of the bill is the fact there isn’t going to be any special investigation of the price, particularly in northwestern Ontario. I would ask that perhaps the minister give us some assurance today that his ministry at least is conducting its own separate study of the particular cost of gasoline and fuel oil for home heating purposes in northern Ontario.

Mr. Speaker: Does any other member wish to speak before the minister replies? The member for Scarborough West.

Mr. S. Lewis (Scarborough West): Mr. Speaker, I would like to add a few comments to the debate on second reading of this bill. Like others, they need not be extended. It seems to me there are three essential contexts to the bill and the first is conceptual.

On the conceptual context, the simple initiative of the freeze of the prices as they now stand, we applaud the government and it is for that reason we will support the bill. It was said immediately after the government initiative was taken that it had stolen some of the thunder from the New Democratic Party because it chose to intervene on behalf of the consumers and because it intruded on the rights of the private sector in a way which is unfashionable for Tories to behave.

We don’t mind the wind taken from our sails on occasion. As a matter of fact, we would encourage it happening as often as possible. Unlike some other political parties we exist not solely in terms of the lust for power. On the road to forming a government, parties sometimes make useful social and economic contributions and if one of them in this instance has been to encourage the Tories finally to intervene on behalf of the consumers of Ontario and to recognize that the rights of the oil companies aren’t sacrosanct, then that for us is a measure of success and a good deal of pleasure as well. I begrudge it not for one moment.

The occasional little twitches in the direction of the democratic left which this government makes to salve its own conscience and to do useful things for society aren’t something that stampedes us into anxiety. There is a whole world that still exists between what it believes and what we would do, and that will never be bridged. I am very pleased and my caucus is pleased that on this occasional instance, on this individual instance, this government has taken initiatives which, though they violate sacred Tory writ, are nonetheless in the interests of the public good and must therefore be supported.

I don’t know how often the Premier of Ontario drew the distinction for us between the rights of the oil sector and the rights of Ontario Hydro or the rights of the natural gas sector, indicated at excruciating length and with the kind of arguments written on the heads of mediaeval pins. I don’t know how often he said to us that he could not intrude or would not intrude on the private sector, that it operated differently from the public corporation on the one hand and the virtual monopoly on the other.

Finally the government succumbed. Common sense, logic and an imminent election drove it to succumb. It intruded on the private sector and imposed a freeze. I dare say the freeze will work so-called hardship, in the government’s terms, on some of the oil companies. Some of them probably have only 85 days inventory instead of the 90 days and they will absorb the difference momentarily. That didn’t stop the government because there is such political value in doing what it did. It is also protecting momentarily the consumers in Ontario after an endless battle on the part of the opposition parties to bring it to that point. That too is worthy of support.

The second context is obviously the political context. I don’t doubt, as the Premier sat up all night and ruminated about what he might do publicly to retrieve favour or to respond to John Turner’s budget, that he compared the 90-day freeze with Spadina in his own mind. He thought there was something so dramatic, so important for the public as a whole and so valuable in terms of the decision-making appearance for the Premier that this was an important step down the road. And I will tell him it may have been a terribly important step down the road.

I always have this curious personal wish to abstract myself, to disengage from the political process and somehow look on it from outside. If I were doing that, I would have to concede that the nadir of Tory political fortunes may now have passed, and that this bill is an important step in its gradual inching back and groping back to a position of political respectability -- maybe not power again, but at least some public respectability. It may, in fact, be a very important bill in the elimination of the Liberal Party in Ontario as a serious contender. I don’t dispute that either. This government may have done it, courtesy of John Turner, the ultimate irony of all.

I have wondered a number of times in the last 10 days or two weeks since the budget on June 23, as the Premier sat at that table back in April when the conference was held over oil and he came to the impasse, whether he could ever have dreamed of such a scenario. He must have hoped, he must have prayed and he must have fantasized about the possibility of John Turner doing something as stupid and destructive and damaging as he did, but he could never have believed it possible. Not in the wildest expectations of the Premier could he have imagined that the federal Liberals would become a direct political extension of his need to “do in” the provincial Liberals. It’s really quite remarkable. I don’t know whether the Premier has John Turner on retainer, but if he doesn’t he should have, because he is the best bloody Tory of them all and he is doing quite a remarkable job on their behalf.

I don’t want to detract from what the Liberal Party in Ontario is doing on the government’s behalf. I have often felt that if they expended one-tenth the energy on their own behalf as they do to prop up the government in power, they might be a little better off; but alas --

Mr. Reid: The NDP are the ones who are propping up the government.

Mr. Lewis: I thought I would finally get a few interjections; I was hoping I would get one or two.

Mr. Reid: The NDP are the ones who are propping them up.

Mr. Lewis: You see, I am not so obsessive about power as the Liberals as the elusive dream comes -- you know, the renaissance in February and the collapse in June. Only the Ontario Liberal Party could have fashioned that -- and the Gallup was before the federal budget.

Mr. Reid: Keep hoping.

Mr. Lewis: I can’t help but be pleased in my own way because it tickles my fancy, if nothing else, I must say.

Mr. Reid: The member for Scarborough West has no prospects himself.

Mr. Lewis: Our prospects are always perilous; I have never denied they are always difficult for us.

Mr. Reid: And the member’s in particular.

Mr. Lewis: Thank God they don’t have the heights and the catastrophic troughs of the Liberal Party’s prospects in Ontario, with that lovely rhythm which they find so addictive. God bless them for their capacity for self-immolation.

Mr. Speaker, there is a third context which I want to put to the minister, and that’s the economic context. I suppose, to paraphrase, I might say to him that all the perfumes of Araby won’t wash the oil from his hands. What has happened, of course, is that this bill is a desperate effort to recoup what the government lost for the people of Ontario over the last 15 months.

I don’t have to be overly repetitive about it, but it is true that the arrangements entered into by Ontario last year cost us jobs, lost us an addition to the gross provincial product, made arrangements for no review of the procedure whatsoever, resulted in an attack on the consumers like all the other attacks that have occurred, represented a capitulation to the oil companies and demonstrated a degree of colossal government incompetence.

The government really did a very bad job last year, and with some adroitness it is attempting to recover it now. But the economic blow which was delivered to the Ontario economy, courtesy of the failure of the Premier 15 months ago, may not now be recovered by his awakening in July, 1975. It’s a longer haul and road than that back to public respectability for the government.

This year, with the election looming and the government’s need to find a target -- and it found it; boy, the government knows a target when it sees one, and it identified it -- we finally have this bill. The government had several alternatives, and it discarded most of them in terms of this bill. The minister could have brought in an energy tax credit to offset the federal legislative initiatives. The cabinet may well have discussed that behind the scenes. I don’t know. The government has other tax credits; it seems a logical extension. The government may have discussed it and decided to discard it. An energy tax credit is an interesting mechanism as a way of offsetting the pressures on low and medium income groups. However, that was not the government’s initiative.

The government could have decided in a reduction in the provincial gasoline tax. That, too, they probably discussed and discarded. I suspect because of its unequal applicability. It would be of some value to the consumers. It would be of particular value to commercial and industrial users. It may be that the simple reduction in gasoline tax didn’t strike the government as a sufficient way of responding.

The government could have, we said to them at the time, considered an actual or equivalent rollback of the 10-cent excise tax, by applying the freeze at midnight, June 23, and forcing the oil companies to absorb the increased costs until the government had decided to consider an alternative policy. That consideration of alternative policy would have consisted of a careful pricing review over that 90 days, an open public pricing review, including the 10-cent increase in the excise tax. The government chose not to do that as well, for reasons I am not entirely sure of.

There was obviously a feeling in the Premier’s mind, the Treasurer’s mind, and, therefore, the government’s mind, that a tax imposed federally, like the excise tax, should logically be passed on and should not be countered by the province. They obviously felt -- and I say to them that they probably felt it in good faith -- that the area of their response was on the $1.50 a barrel. But apparently that was the extent to which they were prepared to go. We think they’re wrong. We think they should have gone to the excise tax as well; that they should have done something as unorthodox and as dramatic as rolling back the excise tax until they had reviewed the entire price mechanism. They chose not to.

I believe, cynically perhaps, that part of the reason for their choice was the value of clubbing the federal Liberals by pointing to the fact that they had brought the 10-cent excise tax on, and it was probably politically useful that that tax be applied and felt every time the consumers go to the pump to fill up. So it both followed the government’s ideology and served its political purposes, and anything that does both is perfectly acceptable to it. I tell them something -- it would be acceptable to us as well, although we choose not to fight on the same grounds.

There is a feeling in the government that there be something constitutionally difficult about it all, and there is a feeling on the part of the leader of the official opposition that he would not have wanted the excise tax rolled back because of the confrontation which has developed with Ottawa, or would have been implicit in that in developing with Ottawa.

I want to say something about that for a moment. I am terribly concerned, I’m really terribly concerned, about the battle that is developing between Queen’s Park and Ottawa at this point in history. This is a very difficult subject to get one’s teeth into it, and it obviously has very little public application because most people don’t worry about this kind of rhetorical confrontation, but we’re very anxious about it. The Tories here have dug their heels in and applied to Ottawa, with the election in mind, a strident and histrionic rhetoric, legitimately angry, but wildly overdone.

The federal Liberals deserve a lot of anger. It was a stupid and insensitive budget. I cannot remember one which compares with it. I respect this government’s response, but I say to the minister, and, therefore, to the government, don’t drive it too far, because the implications for Confederation are severe. There are enough strains on this country already without a gratuitous confrontation from Ontario.

I don’t know quite how one deals with it, and I really appreciate this government’s position. I understand their right to say to me, “What the hell would you do?” Because, as a matter of fact, the excise tax application and the $1.50 a barrel, and all of the indifference to consultation that that meant is exceeded even by John Turner in the refusal in the limits put on medical care insurance payments and in the phasing out of Ontario hospitalization in five years’ time. I mean, I must admit that, as a direct effort to dismember Canada, it’s not Lougheed and Davis who have been in it up until now; it’s Pierre Trudeau and John Turner, and it really makes me anxious.

I was made even more anxious when I heard the Premier of Ontario say today that, therefore, we want tax point equivalents; that, therefore, we will opt out of and we will not even countenance any further cost-shared programmes in Ontario, given the behaviour of the federal government. Mr. Speaker, the federal government, as this bill represents, has been arbitrary, capricious and stupid. But shared-cost programmes are what have been used in this country to make it possible for people in the less advantaged areas to maintain minimum standards of health, education, social services, you name it. When the wealthiest province in Canada raises the red flag to the federal government and says no to everything, then we invite real damage to the country.

I say to the minister that at some point in some way we should cool the confrontation. I know it serves political advantage. This government has done it effectively; very well. It has tied the provincial Liberals into the federal Liberals inextricably; they will never get out now. We understand that, but now is the time to pull back. While admitting the irritation with their behaviour and indicating the damage to Ontario’s economy, how about a statement of good faith which says: “Despite the behaviour of the federal Liberals, we still want to make it work, and we are prepared to continue to try”?

I appreciate that it is a tough position in view of the provocation, but I appeal to this government not to let electoral considerations determine its every word; and that, I think, is a fairly important point.

The final thing the government had available to it and that it decided to do, was a freeze in the economic context -- a freeze which was designed to exhaust the inventories which exist -- accompanied by the announcement that it would appoint a royal commissioner to make further recommendations.

Well, a royal commissioner is not the best idea, but it is an idea. Given the preoccupation of the Ontario Energy Board with the Hydro rate hearings, I suppose the government needed another mechanism, and the royal commission is certainly one of those mechanisms. So let’s see what happens.

My colleagues, the members for Riverdale and Wentworth, have expressed obvious concerns about whether or not the royal commissioner can do the job. Maybe in 90 days it will be possible. We are going to attend those hearings and watch them like an economic hawk to make sure that not all the information comes solely from the oil companies, but that there is a public interest and a public review entertained as well.

It is a pity that the government is stopping the freeze after 90 days. It would have made sense to use the device of the freeze to recapture the windfall profits that were made last year when the oil companies went beyond their inventories by some 70 -- well, I forget how many days it was, but it would have taken us through until the end of 1975, yet another Jan. 1, 1976, so that New Year’s day might have become New Year’s nightmare. I must say Jan. 1, 1976, is certainly a banner day, as many have pointed out before me, since every programme is destined to end at the moment in time.

We support the freeze. We hope that the royal commission leads to further reviews. We suspect the government will have no alternatives; that there will always have to be a mechanism of review now in Ontario. Even though the government has finally confronted the oil companies, we hope it manages to survive. And let us tell this government that if ever it needs some steel in its back or gold in its teeth when it is facing the oil companies, come to us. We will provide the ingredients, because they bother us not at all.

One of the greatest wishes in my life, which may never be realized -- who knows? -- is to bring upon the carpet of the Legislature the oil companies and confront them in the interests of the consumers of Ontario, something this government has never been prepared to do before. But with the sense of repentance brimming on the eve of the election, it is doing it now. Where energy policy is concerned, generally, the New Democratic Party parts company with this government on pretty fundamental grounds.

I think I want to say this, because it is important it be said in this debate at this time. We believe, and will forever believe, that the only way we will ever have adequate exploration, adequate security of supply, and legitimate prices south, north and for the consumers, is when we bring the energy resources of Canada into public ownership. I know that is a concept that would wilt the few remaining hairs on the head of the Minister of Consumer and Commercial Relations, but for us it is absolutely central to conviction.

Hon. Mr. Handleman: Conceptually, no problem; factually, it is.

Mr. Lewis: But all of this could be handled by the public ownership of the energy resource sector. There will never be a conclusive answer to the pressures of Alberta, the pressures of Ontario, the demands of Saskatchewan, the politics of Ottawa, OECD and the general helplessness which everybody feels in terms of the international oil cartels. The only way government is going to handle the indispensability of energy resources is through public ownership. Admittedly, it will have to be a Canadian initiative rather than a provincial initiative, but that conviction has to be put at this time.

There is something terribly offensive, Mr. Speaker, about taking $100 million of Ontario’s money and giving to Syncrude so that we put up 80 per cent of the capital costs and get 30 per cent of the equity. There is something wrong about that. The contributions of Ontario, Alberta and Canada by way of outright dollars, by way of tax concessions and by way of the ancillary services, pipelines, etc. reflect 80 per cent of the capital cost for 30 per cent of the equity. As democratic socialists, we say to government add in another 20 per cent and let us run it ourselves because it should be in the public sector. Then this kind of bill would never have to come before the Legislature.

The second point I want to make is that Ontario Hydro is a corporate animal which also has to be brought under control. It was a pleasure to see the budget today beginning to lean in that direction. I have no doubt now that the prediction that was made last week that the government is going to reduce the Ontario Hydro rate increase when it comes before cabinet was entirely accurate. I have no question in my mind that the Treasurer is accepting some of the arguments that have been put to him by the opposition. That too is as it should be as the government reluctantly but gradually defends consumers of Ontario.

Much has been made of the uranium industry in this province. That too should be in the public sector -- the use of uranium in nuclear reactors, carefully appraised in terms of the lives of the men involved who explore for the uranium and in terms of the possible social cost to future generations.

Whenever I engage in an energy debate these days, I think to myself of my colleague from Sandwich-Riverside (Mr. Burr) and how much sense he is making, God bless him -- day in and day out, seeming to be eccentric, seeming to be ahead of his time, looked upon indulgently and patronizingly by all kinds of members of the Legislature and the media. But the reality is that his thrust for wood energy and solar energy is clearly the direction which the United States and even Canada will have to take.

If ever there was a man ahead of his time, it’s the member for Sandwich-Riverside. Every time we get into a debate of this absurd kind where we spend all our emotional, intellectual efforts dealing with Imperial Oil, I know that he has got to be right because what is good for Canada cannot be good for Imperial Oil. It won’t work that way; it must therefore work his way.

Mr. Speaker, I reiterate that we support the bill. It’s not the best solution by any means, but it’s an interim. It reflects crisis intervention, it reflects ad hoc-ery, it reflects the pressure of an election, it reflects the desperate effort to retrieve public favour and maybe it will help in that regard. But in terms of the bill it is supportable. We would go further with it. We assume a permanent review mechanism flowing from it. We know that at some point the government is going to have to face the oil companies directly and not pay homage to them forever. But it has started, and when a party like that starts, it’s like some kind of apocalypse. Who would have believed it possible six months ago? So how dare we begrudge it today?

Mr. Speaker: The member for Essex-Kent.

Mr. R. F. Ruston (Essex-Kent): Mr. Speaker, I want to say a few brief words with regard to Bill 133 to price-freeze petroleum products. It is most unfortunate that we have to have put in the last few days a 10 cent excise tax on gasoline. It’s regressive. It falls most heavily on lower income Canadians. It has nothing to do with the ability to pay or need to use. It makes no distinction between driving to work or driving to the golf club, or wherever one wants to go for pleasure driving. It’s a most regressive tax.

We can’t support that type of a tax, but since the government of Canada was elected to administer the tax to Canada then, of course, we accept it in the same way the people have been accepting the things that this government has been doing for the last four years and for which they are about ready to kick it out. So this is what we have to accept. It’s a matter of fact that they were given the power in the last federal election and, as much as we dislike the tax they’ve put on, I think we have no alternative but to accept it.

I would just mention that before this government calls the election, Ottawa will probably put two or three cents on to the postage stamp or something, so the Tories don’t have to worry. They generally do something like that when there is an election coming on in Ontario.

Mr. F. Drea (Scarborough Centre): They’re the member’s friends. He elected them.

Mr. Ruston: One doesn’t need enemies when he has friends like that.

Mr. Drea: They’re the member’s friends.

Mr. Ruston: I don’t know; Mr. Stanfield isn’t such a great friend to this government. If I remember correctly --

Mr. Drea: He didn’t put three cents on the postage stamp.

Mr. Paterson: How about the sales tax on building materials?

Mr. Ruston: Yes, the sales tax on building materials, for instance; there’s the thing that Mr. Stanfield was always going to take off but this government here never did. So the party affiliations are quite remote in some areas, there’s no doubt about that.

However, with regard to this, I would suppose that Mr. Turner gave the Premier another election platform. If members recall, back in 1971 when the Premier said that the Spadina Expressway was to be stopped and cities were for people, he said, in other words, to those people living in Oshawa and the city of Windsor and places like that, “We don’t want your cars in Toronto. Get them to heck out.” A lot of the people haven’t forgotten that. They didn’t think about it for a year or two, then they started thinking, “Is the Premier of Ontario saying ‘We don’t want any cars in Toronto’? How are we going to make a living in making them?”

Mr. Drea: Did the member write that?

Mr. Ruston: I know the member for Scarborough -- what is it, east?

Mr. Lewis: Oh, Centre.

Mr. Ruston: The member for Scarborough Centre is a little hepped up right now about what I’m saying, but I’m just telling him the facts and he doesn’t want to accept the facts.

Mr. Drea: I just don’t want the member to be foolish.

Mr. Ruston: Of course, there is another way to save some gas. I understand that perhaps the only way Mr. Turner would remove the 10 cents per gallon is if the provinces would agree to lower their speed limits to 55 mph. I understand this province is one of those which would not agree to lowering the speed limit when they were discussing this a few months ago in Ottawa.

I can say that to drive from my residence to Toronto and back is 432 miles. I will say that my car is a little hefty on gas, but if I drive what I would call the maximum allowable now -- and I won’t say what speed that is, but with the traffic -- in other words, so I don’t have big trucks passing me all the time; and we know what their speed limit is -- I would use about 27 gallons of gasoline. Mind you, there are American cars passing me all the time. Their speed limit in the United States is 55 mph yet they drive up to 80 mph over here.

If I was to make that trip at 60 mph it would cost me 90 cents less than it did before the tax was put on. So there is one way of cutting down, but apparently the Minister of Transportation and Communications (Mr. Rhodes) is not agreeable to that. Maybe it’s something we should be looking at.

I don’t think the people will do it themselves, because I don’t think any of us want to drive down a highway at 60 mph and have every truck on the road going by us at 70 mph. It’s very annoying to have all these big trucks out in the left-hand lane passing all the time. So I don’t think the people will do that. The only way they are going to do it is by legislation, and if we’re going to legislate it would have to be a 60 mph limit in order to keep the traffic flowing evenly. That’s an alternative, of course, to cut down on the use of gas.

It would appear that the excise tax was put on to discourage the use of gas because they allow a 10-cent refund to all those using gasoline who can claim it for income tax purposes. It is rather strange the way they put it on, and one sometimes wonders if one knows all the ramifications of what’s going on.

I suppose also that we’re not well informed about the actual amount of petroleum products in our country and in Alberta. I can recall going to Alberta in 1940 when oil was just starting to flow in the Turner Valley oil field at that time and they hadn’t really got going at all in the Edmonton area where the big production was. It is interesting to hear different people’s opinions as to how many years we have left, but I would suppose there may be a little more there than they try to let on.

With the income that Mr. Lougheed is obtaining now -- $3.37 a barrel -- from royalties and tax, if the oil was to run out in 10 years, I guess they’d have enough to keep the province for the next 50 years. They have an income of about $2 billion a year in royalties and taxes on their oil, so they’re doing pretty well on that.

Mr. Speaker, it is interesting too that we are discussing this bill today, when the Treasurer has brought in a mini-budget and removed the sales tax on new car registrations, which has less as its object to try to improve sales of automobiles. Looking back to 1971, the Premier said, “Cities are for people.” Now he’s removing the tax on automobiles to say, I guess, “The cities are not for people, they’re for cars.”

At the same time, a lady who goes out to buy clothes for her children to go to school this September -- and she may have three or four children -- if they are a little large for their age, then she will have to pay the five per cent sales tax on all their clothing. It seems to me that clothing is just as essential as an automobile. I don’t know the priorities here when the government takes the tax off a car and does not take it off essential clothing; I think one is as important as the other.

You have to have a car to get to work, and you have to have clothing to go to school. So one really wonders about their thinking here. I don’t think one has much priority over the other one. I think one is as important as the other; they are both in the same boat. It seems to me that if they take it off the one, they should have taken it off the other one as well.

The other thing, of course, is that it will end in 90 days. I suppose one could go back to the decisions made by some of the parties years ago; some of those decisions were in force for 60 days. I think there was one in Ontario which had a little rhyme of some kind; Mr. Drew, if I remember correctly, had one similar to the one in Ottawa at that time. But this one is to remain in force for 90 days plus 60 days by approval of the Lieutenant Governor in Council. I suppose that would give him an allowance so that in case he does not call an election until the middle of October, they could extend it to the end of November.

The other thing is that all these things are ending up either in November or the end of December. One wonders what is going to happen on Jan. 1. I suppose this will be the first New Year’s that the people aren’t really going to want to celebrate -- unless they just want to celebrate the last one; I don’t know. With all the things that are going to happen on Jan. 1, I’m afraid that the turkey dinner might not taste as well as it might at other times because of the way this is.

I certainly support the idea of freeze on the other five cents, but the confusing part is that so many people think that with a freeze put on, the gas will go back to the price it was before, but it doesn’t affect the excise tax. It’s quite confusing to many people, who thought the price would be going down to the original price it was two weeks ago.

Mr. Speaker, I don’t think I care to go on any more right now. I would suppose that many of these things we could cover in a budget debate and since we have a new budget, a mini-budget, I suppose we’ll get into discussions at another time.

Mr. Speaker: The member for Thunder Bay.

Mr. Stokes: Just for a few moments, Mr. Speaker, I want to put in yet another plea for the residents of northern Ontario. Inasmuch as we do welcome the freeze of five cents until Sept. 3, I think it’s imperative -- absolutely essential -- that the commissioner, when he is dealing with the pricing and looking into the overall conditions in the industry at the present time in the Province of Ontario, that he deal with the situation in northern Ontario. When one considers that the differential, even before the 10 cents excise tax per gallon imposed in Turner’s budget on June 23, was anywhere from 10 to 15 to 17 cents per gallon between the price that was being paid in southern Ontario and northern Ontario, this isn’t going to make any difference at all to the differential. The differential is still there. And, as usual, the people resident in northern Ontario are still getting it in the neck.

Mr. Lewis: But not in the tank.

Mr. Stokes: Yes, not in the tank, in the neck.

This applies equally as well to the cost of home heating oil. Mr. Speaker, notwithstanding the freeze that this bill imposes, I have places in my riding now where they are paying 50 cents per gallon for home heating oil. There isn’t a day goes by that I don’t get a letter from a senior citizen or somebody on a fixed income saying, “Where is it going to end? When is the government going to intercede on our behalf?”

Now, this government should not think it is doing us a great favour by suggesting that there is just going to be a moratorium, not a freeze, just a moratorium on an increase for 90 days. Because make no mistake about it, either on Sept. 30 or Nov. 30, or at the first possible opportunity, the oil companies are going to be in there with both feet in the trough trying to extract every last penny out of the consumer. If this government thinks that this interim measure is going to win it any political favour in the long run, I think it is deluding itself. The people in northwestern Ontario that I presume to speak for have been fed up to the teeth with the high cost of essential home heating oil and essential gasoline. I don’t know how often we have to remind people here in the south how absolutely essential it is that we have gasoline and other petroleum products at prices that we can afford to pay.

When we consider that we have to go anywhere from 50 to 150 miles -- in some cases 300 miles -- just to drive to a hospital or to seek medical and dental attention, this government considers this as joy riding down here in the south. It is absolutely essential that this government and particularly this minister -- the Minister of Consumer and Commercial Relations -- understand that it is absolutely central to equity for people in the northern part of this province that they get a break with regard to the high cost of gasoline and home heating oil.

While we will support it, I consider this bill indeed too little too late. Gasoline in my home town right now, No. 2 gas, is 88 cents a gallon. We heard the member for Rainy River saying it was 91 cents a gallon in Ignace. Well, I can show the members places where people were paying $2.50 a gallon. I phoned an official of the Department of Indian Affairs and Northern Development to ask if the 10 cent excise tax imposed by John Turner on June 23 was applicable. He said, yes, it was.

Mr. Drea: That’s all right. The member for Essex-Kent is going to put it on postage stamps.

Mr. Stokes: I’m wondering just how serious this government I and this minister is about protecting the interests of the people in northwestern Ontario, where we were paying 12 to 15 cents more than those people in the south even before the initiatives taken by Turner in Ottawa on June 23.

I don’t think that this government is going to be off the hook simply because it places a moratorium on the proposed five to seven to eight cents a gallon that would have become effective some time this month. It’s not going to be let off that easily. I would suggest that if this government is serious in coming to grips with the high cost of petroleum products in the part of the province that I represent, it should insist that the commissioner be allowed under his terms of reference to go in and make an in depth and comprehensive analysis of the cost of the different components in gasoline and home heating oil that prevail in northwestern Ontario.

The minister and I engaged in a dialogue on this very subject when his estimates were in committee just a few weeks ago. I pointed out to him that an official from Imperial Oil said that the differential in the tank truck cost in southern Ontario and in the city of Thunder Bay amounted to 1½ cents a gallon. There are so many people who like to say, “You are farther north and it’s inevitable that it will cost more for that kind of product in northwestern Ontario.”

I don’t accept that, because a good deal of the product that we get doesn’t necessarily come from the refineries in Sarnia. A lot of it comes directly from the refineries out on the prairies. For anybody to suggest or try to justify the 10 to 15 cents per gallon differential between southern Ontario and northern Ontario by using the transportation costs as an excuse just won’t wash. One can ship petroleum products by Trimac, by tank truck, by boat up the Great Lakes and by railway tank car. The cost isn’t any more than 1½ cents to three cents a gallon any place in this province. If anybody suggests the transportation component is the culprit in this differential, we just don’t buy it. We know about railroads and we know about transportation costs. We’re not going to accept this as an adequate argument for the differential.

It is simply the case that we are being ripped off. I think it is the responsibility of this minister to make all of those people, right from the wellhead to the pump, justify each and every increase. If he does that, I think he will find somewhere along the line that somebody is getting far more than his fair share at the expense of people in northern Ontario.

As long as we are paying 88 cents a gallon for gasoline in northern Ontario at the present time while they are paying at least 10 cents a gallon less than that east of the Ottawa line, we, the consumers in northern Ontario, are singly subsidizing the offshore petroleum products going to all of the consumers east of the Ottawa line. Why should we in northern Ontario subsidize those living east of the Ottawa line to a much greater extent than any place else right across the whole country? When the federal government imposed the $5 per barrel royalty, presumably to ameliorate the high cost of offshore oil, that applied equally to us in northern Ontario, but to a much greater extent. If we were paying only as much as they are for the more expensive offshore oil from Venezuela and from the other OPEC countries, we would have accepted that in northwestern Ontario. But we are actually paying 10 cents per gallon more in northwestern Ontario than they are paying in Cornwall, Ottawa and Montreal, notwithstanding the fact that oil is coming from offshore at the world price. We are actually paying 10 cents a gallon more in northwestern Ontario than they are paying for the more expensive offshore oil. How do I explain that to my constituents?

This minister more than any other minister of the Crown has the responsibility to insist on monitoring the price of gasoline and home heating oil as it affects the consumers in northwestern Ontario. We welcome this, but I think that he, along with the Minister of Energy, should insist that the commissioner do an in-depth very detailed and very comprehensive study of all of the components that go to making the cost of gasoline along the northshore of Lake Superior 88 cents, the cost of gasoline 91 cents and even more in some of the other communities in northern Ontario; and home heating oil, at 50 cents a gallon, anywhere from 10 to 15 cents a gallon more than the people are paying here in southern Ontario. If he really wants to be serious about doing something for the consumers in northwestern Ontario, he can do no less.

Mr. Speaker: Does any other hon. member wish to speak to this bill? If not, the hon. minister.

Mr. Lewis: My goodness! What perfect timing!

Hon. Mr. Handleman: Thank you, Mr. Speaker. I am not too sure I am going to get finished. Members may have to come back to hear my concluding pearls of wisdom.

The Leader of the Opposition started off and very grudgingly said his party would be supporting the bill. I was pleased to hear that. As I said in my opening remarks, I am somewhat surprised at that, in view of the praise that has been leveled at the federal budget by some of the members of that caucus, but we are pleased they will be supporting this bill.

There was some suggestion, as the Leader of the Opposition did say when the bill was first introduced and when the Premier made his statement in the Legislature that the question of Hydro was relevant to this situation. Of course it is not. Hydro has made a proposed request for an increase. The request will be heard in public. It will be supported by some facts and opposed by others, and public interest will be served by that process. In this situation, no such process took place. We were suddenly faced with this vast increase without any options.

As to whether or not the commissioner will recommend a continuing monitoring, as requested by the member for Riverdale and repeated by his leader, I think it is somewhat premature to give that assurance to the House. The terms of reference are at the moment fairly broadly drawn. Within those terms of reference, it is my view that the commissioner can look into a variety of courses of action. He will recommend those which, in his opinion, are best suited to the situation. I also assume that he will be looking into heating fuels, since that formed some element of the criticism of the Leader of the Opposition.

I was very concerned about the comments of the Leader of the Opposition about balkanizing Canada, and this was commented on by the member for Sarnia too. I just want to remind the Legislature that it was the Premier of Ontario who first called for a national oil policy and first called for a meeting of the first minister to discuss this problem. In fact he first focused attention on the fact that it was a developing problem.

I do not wish, and I am pleased that most members did not take the opportunity, to turn this into a full debate on energy policy, because that is not what the bill involves. It is a temporary bill and I quite agree it was brought in in a crisis situation, a crisis brought about by actions not of our making.

On the things Ontario has tried to do is to minimize the divisiveness, which has been mentioned by the Leader of the Opposition and the member for Sarnia, by reluctantly accepting the 1974 increase. It’s quite possible, with the benefit of hindsight and with a little less trust in the goodwill of the federal government, we might not have gone along at that time.

I was very interested, as I always am, in the comments of the member for Scarborough West because he articulates his party’s position so well. I’m particularly pleased by his approval of what he sees as the conceptual basis for the bill.

We may argue as to the concept. We accept this as crisis legislation, ad hoc-ery, no question about it. We had to respond quickly to a very serious situation which arose unexpectedly and very quickly. We do not categorize the oil companies as the villains of the piece. We think they are caught in a squeeze; they are caught between the demands of an appetite for revenues in Ottawa and the consumer interest and the interest of the economy of Ontario. In there, somehow, the oil companies have found themselves.

Certainly they have objected to what are doing. On the other hand, they are law-abiding people. I quite agree with the member for Riverdale when he says this Legislature can’t control the multinationals completely; but they have addressed themselves to the problem after their initial reaction to it. For the most part they have been co-operative in supplying information to us. They have promised us they will co-operate in every way they can to enable the freeze to work. We took the step; and it may very well have been politically advantageous, but we took it because it was the right thing to do at this time.

We were criticized for things like the land speculation tax and the land transfer tax which apparently were not politically advantageous. But we made those moves and I supported them because they were the right thing to do at that time and they worked.

It would have been nice if we had known last year that we were going to be in this position this year, as the member for Scarborough West says. It is too late to go back to that now, but I wanted to explain one of the reasons. We did think of acting on the 10 cent excise tax; I think I should explain our position to the hon. member, because I think he is sincere in saying we should have rolled back to the point of midnight Oct. 23, 1974.

The Department of National Revenue in Ottawa has created for itself -- or the Minister of Finance has created for it -- an administrative nightmare which ties the excise tax to end use. I don’t see how one could possibly, under the --

Mr. Lewis: To end use?

Hon. Mr. Handleman: To end use; to the end user. The excise tax will be charged at the manufacturers' level. The end user would receive a rebate of the excise tax which he pays, depending on his proof of end use. If we were to roll it back it would mean there would be a 10 cent a gallon excise tax paid to the federal treasury and no rebates paid whatsoever, since nobody would have paid that tax in Ontario. To me that would be a complete rape of the consumer and the economy of Ontario. It would simply not be justified if we were to give that windfall revenue to Ottawa.

We still think it can be negotiated, notwithstanding the adamant stance taken by the federal Minister of Finance. We will still continue to meet. I don’t think we have refused. It may very well be we are frustrated by the kinds of attitudes which we perceived in Ottawa, but even today the Treasurer called for two additional meetings to discuss matters which arise from the budget.

I think we want to continue the dialogue with Ottawa. We will try to restrain some of the frustration we feel, because every time we do talk to Ottawa the answer is no or simply the back is turned on us.

The member for Riverdale asked me to give him some assurance there would be a continuing review; again, Mr. Speaker, I don’t feel I can commit the commissioner to that recommendation. It may very well be the only option open to us, as the member for Scarborough West has said, but I don’t think I am in the position to make that assurance. The question of energy policy is not my portfolio.

This bill is my responsibility and I would say to the member for Wentworth the reason it was given to me is we do have some associations with the gasoline stations, particularly through our energy safety branch. We have inspectors going in there and we are, of course, responsible for protecting the consumers of Ontario.

The member for Rainy River brought up the northern pricing policy problem, and I must say the member for Thunder Bay had brought it up previously in estimates. He had pointed out in some considerable detail the problems which do arise in northwestern Ontario. Again, I don’t believe this bill pretends to be an attempt to meet that particular problem.

I also want to say right now that if there is a rip-off -- and we have looked into it since the estimates -- it is not a rip-off by the large oil companies. The large oil companies are selling their gas to their customers in northern Ontario at a reasonable price compared to southern Ontario, having regard to the freight differential or the location of the customer. To us, the problem appears to be -- I think it will manifest itself when we issue the report on northwestern needs -- the question of low volume and lack of competition at the retail level. The service station owner and operator must make a living in the north the same as anyone else.

Mr. Stokes: Because of lack of competition?

Hon. Mr. Handleman: There appears to be a lack of competitive forces to keep the price down. There appears to be a need to keep the price high so that the individual service station owner can earn a living wage on a limited volume. Therefore the markups, and I think the member for Rainy River pointed this out, are considerably higher than they are, say in southern Ontario or eastern Ontario.

I am getting somewhat parochial for the moment and I want to point out to the member for Thunder Bay that the northwest is not subsidizing eastern consumers any more than the rest of Ontario is; and there is no question whatsoever that the rest of Ontario is.

Mr. Stokes: They pay more.

Hon. Mr. Handleman: They are paying more, but it is not going to that subsidy. It is going to the service station operator as far as we have been able to determine. It is not going to his supplier and it is not going to the oil company, so the money is staying in the north. It isn’t a consumer rip-off.

I wanted to point out again, because of the Nova Scotia situation, that it was brought out that the people in Nova Scotia have higher prices than the people who are buying off-shore oil in eastern Ontario and Quebec. We do not feel the Nova Scotia experience is anything for us to emulate.

As far as the member for Essex-Kent is concerned, I wanted to point out to him that if the price of postage is increased by the federal government, we may take action under the Business Practices Act, because if ever there was an unconscionable business transaction it would be an increase in postage at this time.

Mr. Ruston: I wish somebody would. I just got a call from him and he said he was not going to do it.

Hon. Mr. Handleman: Under completely false pretences of being able to deliver the mail they would be charging more for it, and I think we would take some action.

I also want to point out that one of the reasons US drivers in Canada drive 80 mph is that they are doing the same at home, notwithstanding the fact there’s a 55 mph speed limit, they are driving at those speeds there. The only reason they ever obeyed that law was for patriotic reasons at a time when there was a shortage.

Mr. Ruston: The minister is misleading the House. The people in the United States are driving within the limit.

Hon. Mr. Handleman: The 55 mph speed limit has been rejected by my colleague, the Minister of Transportation and Communications, as representing any kind of conservation measure which would be acceptable to the people of Ontario or even effective in any way.

Mr. Speaker, it does seem there is unanimous support for this bill. I would therefore like to conclude my remarks by saying I hope there will not be extended debate in committee.

Mr. Speaker, thank you very much.

Motion agreed to; second reading of the bill.

Mr. Speaker: Shall this bill be ordered for third reading?

Agreed.

THIRD READING

The following bill was given third reading upon motion:

Bill 133, An Act to provide for an Interim Freeze in the Price of Certain Petroleum Products.

It being 6 o’clock, p.m. the House took recess.