The House resumed at 8 p.m.

Clerk of the House: The second order, resuming the adjourned debate on the amendment to the motion that this House approves in general the budgetary policy of the government.

BUDGET DEBATE (CONTINUED)

Mr. Speaker: The hon. member for Cambridge.

Mr. Davidson: Thank you, Mr. Speaker.

Mr. Roy: You should get better applause from your caucus.

Mr. Davidson: I appreciate the applause of those who are here but it’s quite noticeable that the benches of all parties are empty.

Mr. Roy: Especially yours.

Mr. Davidson: Be that as it may, I can recall one evening when you had only one member in the House.

Mr. B. Newman: Be glad we just clapped for you.

Ms. Gigantes: This is quality, Albert.

Mr. Davidson: Mr. Speaker, I suspect I should first of all apologize for not being present earlier this afternoon. Being a newer member of the House, I didn’t realize that the orders of the day could change so quickly and I had been advised by one of our people that perhaps I would not be getting on until 8 o’clock this evening. I apologize to the House for that delay and I would ask members to accept that apology in the spirit in which it’s given.

In dealing with the budget for 1976 as put forward by the Treasurer of Ontario (Mr. McKeough), one must question where the priorities of the Conservative government lie with regard to the people of this province. In the light of what happened yesterday, perhaps what I am about to say may seem a little redundant. However, in looking at what the acting Minister of Health (B. Stephenson) has said, in replying to certain questions that have been put forward in this House, I feel that it probably still has merit in saying it.

The closing of viable community hospitals, reduced transfer of payments to municipalities, boards of education and social service agencies, certainly cannot be considered beneficial to the vast majority of people in this the Province of Ontario. No longer can it be considered a place to stand for, in the closing of community hospitals, the government has kicked down the very foundation of many small towns and rural communities perhaps to the point that they shall never rise again.

Nor can we say that it is a place to grow for, in reducing the budgets of social service agencies and attacking those most in need, the government has taken the heart and hope away from many and, without these, the incentive to grow is diminished. For without hope, one no longer tries, and without heart, they slowly die. That is quite an epitaph for the Tories of this province to leave behind them and, yet, they go on undaunted in their quest to demonstrate restraint to those who are not now in need nor, perhaps, ever will be, certainly an uncaring budget for an even more uncaring government.

On the issue of hospital closings and health care cutbacks, one can most certainly sense this attitude on the part of the Conservatives. It apparently matters not to them that health services throughout the province will deteriorate. They cannot close hospitals, they cannot cut back on hospital beds and services and expect anything other than that to happen, contrary to government assurances that such is not the case. Nor do they seem to care that up to 5,000 persons may be put out of work as a result of their action.

Oh, yes, they claim they will provide assistance for those people so displaced but I’m quite certain that the member for St. Andrew-St. Patrick (Mr. Grossman), a Conservative, would be the first to say that such is not the case, at least for those employed by the Doctors Hospital. I’m sure, also, that the same applies to all those persons no longer employed as a result of the government’s action. They are not now assisting nor are they intending to assist in providing job placement opportunities.

And what of the residents in the areas where these hospitals are closed, or have been forced to cut back? Is there no concern on the part of the government that as a result of their action doctors may leave the various communities, thereby depriving the population of any form of medical service? Does it not matter that the added travelling distance to the nearest hospital could be a matter of life and death?

I say to you now, Mr. Speaker, that if only one person dies as a result of this government’s action it is one life too many to give for the few dollars they will save. And let us not say it will not happen. It may be a small child. It could very well be an aging senior citizen. It might be the result of a farm or industrial accident, but it will happen and, when it does, the death will be on the conscience of each and every one of them on that side of the House for it will be them, and them alone, who are responsible. They could have stopped it from happening.

We then get into the areas of municipalities and boards of education. The reduction of transfer payments to municipalities and boards of education are again an area of concern to those of us in the New Democratic Party. I do not feel it necessary to go into detail, for this has been more than adequately carried out by the member for Welland-Thorold (Mr. Swart) and the member for Beaches-Woodbine (Ms. Bryden).

I would like to say, however, that the Treasurer is fooling no one with this move. We are all well aware that he’s simply shifting the burden from the provincial government to the municipal politician. There is, in fact, no saving to the taxpayer, so what he does not pay at the provincial level he or she now pays at the municipal level, and while the Treasurer is able to show reduced deficits for Ontario, the taxpayer simply pays the same or more out of the other pocket or the other purse. It is estimated that municipal taxes will increase by approximately 15 per cent this year. In addition to this, certain services to which the taxpayer has been accustomed will no doubt be cut back or curtailed. Again, a fallacy on the part of the Conservative government.

In the field of education the results could very well be higher pupil-teacher ratios, a reduced number of specialized teachers and reduction of specialized teaching facilities. The most important asset we have in society today is the children in this province, yet this government chooses to use them in their game plan to show restraint. They play with their lives as one would play a game of chess. Let me make one thing perfectly clear, Mr. Speaker. You do not, under any circumstances, use the children of this province as a pawn in any game without expecting severe repercussions. The actions of this government in the field of education and the consequential results will, to the relief of many, be one more nail in their coffin put there by their own hand.

We now go into the field of OHIP premiums, perhaps the most regressive tax which appears in the budget. The increase in OHIP premiums from $11 to $16 per month for a single person, and from $16 to $32 a month for family rates -- here again we have a financial attack on those people least able to afford it and in an area most needed and required by them. I for one question the figure of 88 per cent paid by employers in this province. But even if what the government is saying is true, it does not, in any way, relate to the full story.

Anyone who has any knowledge of collective bargaining is well aware that if an employer pays all or any part of the OHIP premiums for his employees, he does so with reluctance and after being assured that the employees will settle for a wage package lower than expected. In other words, an employer settles on a figure he is prepared to give. It can all go into wages or it can be broken down into wages and fringe benefits. If the employees feel they need the fringe benefits, the wage portion of that figure is reduced accordingly.

Let it be recorded, Mr. Speaker, that no employer gives OHIP premiums or any other fringe benefits to his employees. I can assure you that after some 20 years in the labour movement I have yet to see an employer suffer from enlargement of the heart when it comes to paying his workers. So the increase in OHIP premiums will be treated accordingly. If the additional cost is picked up by the employer it will result in lower wages to the employee. If you do not feel this to be true, Mr. Speaker, I would suggest that you simply make inquiries of those persons now involved in contract negotiations.

In addition to this, the one thing the Treasurer failed to mention is that OHIP premiums paid by the employer are considered income to the employee and therefore become tax payable, while the employer is allowed to deduct the premiums as a cost to the company. It becomes apparent then that the Treasurer has once more looked after the interests of his corporate friends; once again the actions of this government have been directed against the working people of this province, and once again they will suffer the consequences.

I would like now to go into a few local issues before I sit down, because I had promised I wouldn’t speak too long on this. As for the riding of Cambridge, their lack of faith in the Conservative Party of Ontario became apparent in January, 1973. It was at this time that the Conservative Party, then as now the government, took a double-fisted punch at their constituents and thought they had won a victory. The passing of time, however, has proven them to be wrong.

What happened in 1973 that so turned a riding which they had held for 24 years against them? What happened in a riding where the Speaker of the House had been so prominent for 12 years that turned that riding against them? The answer is simple.

[8:15]

Hon. Mr. Snow: A very temporary arrangement. Even Thunder Bay.

Interjection.

Mr. Davidson: As of Jan. 1, 1973, the communities of Galt, Preston and Hespeler were amalgamated into the city of Cambridge. That was the first mistake. At the same time, the area was put under regional government, and that was the second mistake. In carrying out this programme, the government had neither asked nor had it considered asking the constituents of the area their feelings on the matter. We were simply told that we had the option to choose between the names of Cambridge and Blair as our city name and that we were to become a part of the region of Waterloo. There was no input from the people; no referendum of choice; no option to decide other than what the government had dictated.

Then as now the vast majority of the people were happy with the way things were. They did not want to be amalgamated nor did they want to become a part of the region, which included the Kitchener-Waterloo area. Their reasons were genuine, without question. Amalgamation would have resulted in the loss of local identity and regionalization would have resulted in the loss of autonomy. Three years later we find they were right in their thinking.

A recent survey carried out by me and based on the returns from 2,000 constituents points out the following: That 80 per cent of the population in the riding of Cambridge are dissatisfied with regional government while only 13 per cent are satisfied. The remaining seven per cent either were new to the area or did not answer the questions.

More than 67 per cent of those who responded were in favour of an immediate review of regional government in our area; 14 per cent thought a review was not necessary. Of the remaining 19 per cent the majority felt a review would only cost them more money and the government, as usual, would do nothing to change things. So much for the faith in the government.

The reasons for their feelings are many and varied. They cite a deterioration of local services, increased taxes and lack of local autonomy as the three main reasons for their dissatisfaction. Picture, if members will, a person who now finds it necessary to travel all the way to Kitchener-Waterloo in order to fill out forms or receive a service they used to receive at the local level. Or a welfare recipient who was told to report to the regional welfare office and must find transportation to the Kitchener-Waterloo area. In many cases, it’s a rather difficult task as they don’t own a car nor do they have the money for public transportation.

Imagine a local person who was told that in order to collect assistance it would be necessary for her to report to the regional office each morning and if they could not find work for her she would then collect the assistance she required. This woman, the mother of small children, was required to travel more than 25 miles a day in order to sustain her family. All of this because there was no local office she could report to.

The other services, police, fire, and ambulance, have also deteriorated during this period. Only recently, we handled a case in which a woman had a heart attack. The family doctor ordered her to a Kitchener hospital -- St. Mary’s by name -- and halfway to Kitchener the ambulance was met by one coming from the Kitchener area. In the middle of a highway, in a blinding snow storm, they transferred this woman from one ambulance to the other. In checking it out we found, of course, that this was not supposed to be normal procedure but it does point out the confusion which reigns in the minds of the people, even those who are trained to know better.

There are other problems which have developed as the result of amalgamation and regionalization. Citizens who once lived in the township and are now a part of the city pay taxes to the city yet they do not have the benefits of sidewalks, paved roads, etc. In addition to this, though they now live in the city, they are being charged a rural hydro rate and many are put in the position of having to pay their bills at the Guelph or Paris offices. This after three years of being put into a supposedly workable programme. I can only say that in the minds of the majority of people living in the riding of Cambridge it is not working and they want a review of their situation right now -- not two, not three, not four years from now, but right now.

There are other situations which are taking place which make a person wonder -- and I mean really wonder -- as to whether or not this Conservative Party of Ontario is harbouring a secret death wish of some sort.

Mr. Foulds: Yes, sir. Just look at them; corpses, all of them.

Mr. Laughren: The people have been appointed coroners.

Mr. Davidson: We have the situation where the Minister of Natural Resources, a man well renowned, I suspect, throughout the province for making decisions in opposition to the majority of other people’s decisions -- issued a licence to a gravel company to allow it to extract gravel, in opposition to an OMB recommendation, against the wishes of the city council, and in defiance of the citizens of the area.

Mr. Deans: He is a law unto himself.

Hon. Mr. Bernier: That is not totally correct.

Mr. Deans: It’s typical of this government.

Hon. Mr. Bernier: Distorting of the facts and half-truths.

Mr. Davidson: We then go into the situation where the Minister of Correctional Services (Mr. J. R. Smith) announces the closing of the Grandview School for girls --

Mr. Laughren: The Minister of Natural Resources is an expert on distortion.

Hon. Mr. Bernier: Sensationalism and innuendo; that is all you are offering.

Mr. Davidson: -- and the transformation of this facility, or at least part of it, into an adult male jail.

Interjections.

Mr. Davidson: Now there are many questions that one could ask. For example, having made this decision and having considered all of the angles, one should first of all question --

Interjections.

Mr. Speaker: Will the members of the New Democratic Party and the Minister of Natural Resources stop heckling the member for Cambridge?

Hon. Mr. Bernier: Be responsible for a change.

Mr. Laughren: The minister is being provocative by his presence.

Mr. Davidson: Thank you, Mr. Speaker.

In announcing the closing of Grandview School and the transformation of part of this facility into an adult jail, one would have thought that the ministry would have had some consultation with people within the riding.

Mr. Laughren: It never has.

Mr. Davidson: Let’s take a look. Is there any discussion with the local council prior to the making of the decision?

Mr. Deans: No.

Mr. Davidson: The answer is no, there was no discussion with the local council. Did the ministry conduct any impact studies on the reaction of local citizens within the area? The answer is no. Does it matter to this government that this property is directly adjacent to the William Anderson School for Retarded Children?

Mr. Deans: Not a bit.

Mr. Davidson: The Carol Currier Residences for retarded adults, of which there are two, and a building which houses the Children’s Aid Society are also nearby. Again, the answer to all of those questions apparently is no, they apparently do not care.

In addition to this, the Minister of Colleges and Universities (Mr. Parrott) comes into town and announces the closing of the Doon branch of the Conestoga College School of Nursing. As a result, 38 first-year students will now have to go to Kitchener, Strafford or Guelph in order to complete their training.

Mr. Deans: And there won’t even be jobs for them when they graduate.

Mr. Davidson: Surely the ministry could have phased out the programme over a period of two years and allowed these students the opportunity of completing their education at the school and the hospital in which they first started? It would have made more sense and it surely would not have created the hostility which now exists in our area.

Mr. Wildman: He should supply them with free tickets to California as well.

Mr. Davidson: So here we have a Conservative government which continues to budget against the working people of this province while allowing its corporate friends the benefit of exemptions and loopholes, a government which continues to show an arrogant attitude when it comes to dealing with the people of this province --

Mr. Deans: And supports organized crime.

Mr. Davidson: -- a government which by its actions and manners apparently feels that it was elected to rule rather than govern this our Province of Ontario. I suggest the day is not too far off when they will regret every move that they have made.

Hon. Mr. Bernier: He is just an overnight guest.

Mr. Speaker: The hon. member for Kent-Elgin.

Hon. Mr. Bernier: Now we are going to hear some common sense.

Mr. Spence: Mr. Acting Speaker, the hon. member for Lake Nipigon (Mr. Stokes), I wish to congratulate you on being elected as chairman of the committee of the whole House.

Mr. Deans: Just wait until he picks on you.

Mr. Spence: Listening to you and watching you carry out your duties as chairman, you have proved to me to be fair and impartial in your decisions.

Mr. Foulds: He should pick on the Liberals as much as he does on the NDP.

Mr. Spence: I must say you have no small task. I know it’s a difficult assignment. I wish you well in completing your term of office. I haven’t got a large crowd this evening.

Hon. J. R. Smith: He is an optimist. That’s positive thinking.

Mr. Spence: But I never was known to draw any large crowds in my whole life, so I’m not disappointed. I’m so pleased to see so many present. However, I have a few matters to discuss that have come to mind from time to time. I would like to bring to you and the hon. members some of the things that have come across my mind about the government and actions that have taken place in this assembly.

There has been a great deal of discussion about the government’s restraint programme. It’s almost amusing to listen to the self-righteous Treasurer (Mr. McKeough) and his colleagues when one remembers that for a very long time now the members of the opposition have consistently warned the government about the danger of inflation and the necessity for financial responsibility. As you know, Mr. Speaker, our warnings were ignored by the government and the spending spree continued.

As far back as the year 1969, the former Treasurer of the Province of Ontario, Charles MacNaughton, admitted that we faced a fiscal nightmare in expenditures in the future. But even his words had no visible effect on the government’s financial policies which seemed to be founded on the idea that the only way to solve this problem was to spend more of the taxpayers’ money.

In 1975 the Treasurer brought down a budget which loosened the provincial purse strings even more than usual. His explanation for this was that we were facing an economic slowdown and the government tax measures, such as a temporary reduction of the retail sales tax, the first-time homeowner grants and the automobile sales tax rebate would stimulate the economy. The Treasurer has claimed that these tax measures achieved his objective of stimulating the economy. Although this seems to be a debatable point, for my part I’m not a financial expert and I don’t propose to attempt to argue this point with him.

However, I do now because the Treasurer has told us in the budget statement that these measures led to a loss of provincial revenue of approximately $500 million. I know again, because the Treasurer tells us so, that the increase in OHIP premiums is going to raise approximately $228 million extra in revenue this year. In other words, if the government hadn’t introduced the so-called stimulations to the economy last year, which we all know were nothing more or less than pre-election goodies -- the OHIP premiums were nothing more than a pre-election gimmick --

[8:30]

Mr. Eakins: They paid for it with their health.

Mr. Spence: -- perhaps, even for the next year or so, because the cost of $228 million extra revenue from OHIP premiums is about 50 per cent of the revenue loss of the sales tax reduction, the homeowners’ grants and the automobile tax rebate.

Just last week there was an article in the Globe and Mail about a certain Mr. Chasteau who earned $150 a week and now has to pay $384 annually in OHIP premiums for himself and his family. There must be many other taxpayers in the same position and I can’t help but wonder how they feel, knowing that one of the reasons they are faced with this increase in premium payments is because they are, whether they want to or not, helping to subsidize someone who bought a new car last year to cash in on the tax rebate. I wonder whether, as Mr. Chasteau tries to balance his budget to pay his increase in OHIP premiums, he will say to himself: “I mustn’t complain about this because I have helped someone buy a house.”

On the other hand, I can well recall newspaper stories last year in connection with the first time homeowner grants. Some people didn’t actually need the grant to help with the down payment, because they had enough money. But they took the grant anyway and sometimes used the money to buy drapes and broadloom for the house. At least one couple admitted they used the grant money to take a holiday in Florida. I wonder how, Mr. Speaker, Mr. Chasteau and the people like him will like the idea of having to pay for someone’s new drapes, new broadloom or a holiday in Florida -- something that they themselves, probably, will never be able to afford.

It’s always very interesting to compare this government’s actions before and after provincial elections. During the 1971 election campaign, the government promised that there would be no increase in taxes if the Conservatives were re-elected to power. Just a few months after their election victory the Treasury increased taxes on automobile licences, marriage licences, birth certificates, tobacco, liquor and many other items. They also increased entrance fees to provincial parks and also to Ontario Place, quite substantially.

Prior to the last election, the government brought forward with the budget election goodies to which I always referred after the election. We heard of the restraint programme, the increase in transfer payments to the municipalities. Now we have greatly increased OHIP premiums and the increase in semi-private and private hospital coverage payments, among other things.

On the subject of the OHIP scheme, it’s interesting to note that with the Treasurer’s enriched premium assistance provisions, almost one in four in Ontario will receive full or partial premium assistance -- not taking into account those people who will receive premium assistance because they are on the provincial and municipal welfare assistance. There are some 509,000 individuals, or families, who qualify for assistance because their annual income is less than $2,000 a year and with a further 98,000 below the $3,000 limit.

It doesn’t say much for the government’s record of handling the affairs of Ontario that so many people in a wealthy province such as Ontario have annual incomes at this level.

I did mention a minute ago, Mr. Speaker, the transfer of payments to municipalities. When the Treasurer read us his budget, on April 6, it was hard for me to grasp what that meant but, after a week or two, I had looked into it and I could see that the Province of Ontario is transferring its debts from the Province of Ontario to the municipalities in the Province of Ontario, increasing the taxes to the homeowner, the renter and the land owner.

I must say in my own riding we have many weekly papers and it was amusing to read some of those articles in these weekly papers on the weekend. One weekly paper says:

“If you think property taxes are high, wait until you get this year’s tax bill. So far only interim tax bills have been issued by the village and the township which call on everyone to pay a part of their year’s taxes based on last year’s figures. Now that the board of education has struck its budget, which will increase mill rates considerably, everyone is in for a rude awakening when they receive their next tax bill, one-quarter mill rate higher for education.”

Also the county rate has increased and so have municipal rates, to cover inflation mainly. The increase in the board of education rate is caused mainly by a one-third increase in teachers’ salaries and by the government reducing its subsidies, and inflation. The increase in the county rates results mainly from inflation and some lower government grants.

This year is predicted to be a poor year on the farm. Farm taxes, high despite the provincial government paying half of the 15 or 20 per cent mill rate increase, are not something anyone will relish when they receive the second tax bill. This really is of concern to municipal councils and township councils in, I would say, every part of the Province of Ontario.

It’s always very interesting to compare this government’s actions before and after elections.

An hon. member: Especially afterwards.

Mr. Spence: Especially afterwards. Now we have one of the most expensive medicare systems in the country. Surely the time has come when the provincial health care system should be thoroughly investigated or reviewed.

Hospitals are being closed down. Now this is a real concern to rural Ontario. It is a shock to those counties and those municipalities where hospitals are slated to be closed down. I might say this is poor planning on the part of this government. I might say that people in those vicinities where the hospitals are, have put forth effort in fundraising programmes and walkathons in order to raise money. It really is a disaster to those communities.

I might say OHIP premiums are greatly increased yet still we hear of abuses of the system by private laboratories; of doctors, about 800 of them, receiving $100,000 annually; of oral surgeons earning more than $80,000 a year through OHIP. In recent years a number of groups have recommended various methods of improving the effectiveness of our medical coverage and medical care in the province but the government has made no attempt really to investigate these recommendations; nor has there been any evidence of any improvement in the administrative efficiency of the system or the Ministry of Health itself.

Apart from the reduction in health care services involved in closing down community hospitals, there is another problem which has to be taken into account and that is the fact that in many instances a community hospital is frequently a very important source of employment.

I was visiting a hospital during the period when the Minister of Health (Mr. F. S. Miller) was travelling around the province closing hospitals.

Mr. Eakins: Without notice.

Mr. Spence: Many employees approached me at the hospital I visited one morning. They feared they would lose their jobs because of the cutbacks. Nurses’ aides, domestic helpers and others -- some of them women in their late 40s and early 50s -- were really worried that if the hospitals were to be closed they would be unable to obtain jobs because of the lack of opportunity and the disadvantages of age.

I might say that I think for many years our local communities will talk about the hospital closings in much the same way as they talk about disasters such as floods and fires. To a small community, the closing of a local hospital is a real calamity.

In last year’s Throne Speech the government indicated action would be taken to ensure that the farmers, at least, would be able to recover their production costs. We were told that measures would be introduced to provide farmers with reasonable assurances of the continuing operation of their vital enterprises.

This assurance by the government was clearly of very little value because in the last year’s budget only $20 million was allocated for income protection for the Ontario farmers. This amount was not even sufficient to cover the losses of the cow-calf producers and the Minister of Agriculture and Food came back in March asking for supplementary funds of $4 million to cover this cow-calf programme.

Again this year, the Throne Speech made special reference to the problems of the Ontario farmer. We were told that provincial legislation would be introduced to establish a voluntary farm income stabilization plan.

Mr. Wildman: To cost $25 million.

Mr. Spence: However, there was no provision for this income stabilization plan in the budget presented by the Treasurer on April 6. Although it has been estimated that such a plan would cost something in the region of $100 million, last week in the Legislature the Minister of Agriculture and Food indicated that estimates would include an item of $25.6 million for a farm income stabilization plan. However, he subsequently admitted that last year the total payout for the cow-calf programme was in the region of $22 million.

Obviously, this is yet another example of the government’s strange bookkeeping. From the comments of the Minister of Agriculture and Food, at that time it would appear that once again, if and when supplementary estimates are required to cover the income stabilization programme --

Mr. Haggerty: He promised that for two years.

Mr. Spence: -- and the cow-calf programme, this government will make the usual excuse that Ottawa’s commitment was not fulfilled or trot out some other excuses about circumstances beyond its control or market fluctuations --

Mr. Wildman: Sabotage your own cow-calf programme.

Mr. Spence: -- or an unexpected enthusiastic response from the farm community to the government’s initiatives.

Mr. Haggerty: More like the fullness of time, Jack.

Mr. Spence: That’s right. Once in a while it would be nice if the government could acknowledge the fact that if credit is to be accepted when things go well, blame must be accepted when plans go astray. However, I suppose that is too much to expect.

[8:45]

For Ontario as a whole, the 1975 crop receipts were estimated to be higher than 1974 totals by approximately two per cent while livestock receipts were some nine per cent higher. However, although Ontario’s farmers received 9.5 per cent more for their products in 1975, their operating costs increased by more than 11 per cent and depreciation charges increased by more than 12 per cent, with the end result that a 2.7 per cent decrease in net profits was experienced compared with the year of 1974.

The Ministry of Agriculture and Food estimates that the average net income on Ontario census farms for 1975 was $9,200. Hopefully, prices in 1976 will remain at a high level, but operating costs are estimated to increase steadily, as has been the case in the past, with the anticipated result that realized net incomes for the farmers are expected to fall by approximately 9.6 per cent in the year of 1976.

Like other sectors of the economy, our agriculture industry is seriously affected by the prevailing inflationary conditions. It is very difficult at this stage to estimate what effect the federal government’s anti-inflation guidelines will have.

If the people of Ontario are to continue to have available an abundant supply of food at prices that are comparatively reasonable, farmers must have a fair chance to make an adequate income from the production of food, so that they will not be forced to leave their farms for opportunities to make better incomes in another industry or another business.

In the past, farmers have been severely affected by increased energy costs, inflation and rapidly rising production costs. These conditions, combined with the fact that consumers generally are very concerned about the rising retail prices of food, have given rise to the serious discussion of some form of farm income protection programme. It is no longer sufficient that the Ontario farmers continue to produce food as efficiently as possible and that their products be marketed effectively and efficiently. The farmers must have some assistance.

Mr. Wildman: What about seatbelts?

Mr. Spence: I will get to that a little later. I’m coming to it.

Hon. J. R. Smith: They’re a good idea; they’re saving lives.

Mr. Speaker: Order, please.

Mr. Spence: Some attempt must be made to share their production risks, because of the immense difficulties they experience in attempting to reconcile the pressures from the general public to keep retail prices under control and the greatly increased cost of production.

There is a great deal to be said for a type of insurance programme where premiums would be paid by producers, and by the government on behalf of society, into a fund which would be used to repay the farmers when their returns from the marketplace are less than those agreed upon as being a reasonable cost of production.

It is inexcusable that this government should continue to make announcements in successive Throne Speeches that the farmers of this province are to be protected in some way against inflationary costs and fluctuating market conditions, when the government apparently has no intention whatsoever of following through on these new so-called commitments. The Ontario farmer is not interested in promises and empty words. He wants action.

About 100 years ago, some 75 per cent of the Canadian people lived in rural Ontario. Today, something like 80 per cent of Canadians live in the cities. The annual rate of urbanization is greater than in any other industrial country in the world. In spite of the Minister of Agriculture and Food’s recent comments, farms continue to go out of production. Moreover, our young people continue to go to the cities to find work.

This trend is a two-edged sword. Small towns and communities have difficulty in paying for municipal improvements because the tax base is reduced. At the same time our big cities are finding that the tremendous numbers of people moving in from the rural area, as well as from other countries, are putting too much pressure on facilities such as housing, schools, hospitals and roads. Somehow we have to find a way to reverse the trend or at least to reduce the rate at which it continues.

The Liberal Party of Ontario has been calling for co-ordinated provincial development programmes since 1967. The government undertook in the 1973 Speech from the Throne to preserve our physical resources as an urgent requirement, promising land-use control. This promise is almost non-existent. Land freezes are imposed, property is assembled for industrial parks, new townsites have been designated, highway corridors eat up valuable farm land and residential or industrial development is permitted on prime farm acreage.

Obviously any effective land-use planning has to be co-ordinated by the government, including the municipal governments. Population studies have to be made and the right of the individual taxpayers must be protected. On more than one occasion, some form of government land-servicing programme has been suggested as a means of opening up or improving specific areas for residential or industrial development while at the same time providing some protection for our farm lands.

If provincial land-servicing programmes were established, the government could in consultation with the municipalities delineate specific areas where it is agreed that residential, commercial or industrial development is desirable and necessary. The availability of comparatively inexpensive serviced land in underdeveloped areas would encourage location of secondary industries with the attendant residential development in the vicinity of new employment from its sources.

As I said before, I’m by no means a financial expert. However, I know enough to have been completely unimpressed by the Treasurer’s statement on budget night that the Government of Ontario will not require any public borrowing in 1976 or 1977. This might have been considered a major financial achievement if we hadn’t all been well aware that this was only made possible because of the availability of in-house pension funds, of the Canada Pension Plan, teachers’ superannuation and municipal employees’ retirement funds.

I understand the Treasurer was taken to task on this subject at a meeting of the Toronto Association of Business Economists just a few days after the presentation of the budget. Where would all Canadian provinces and municipalities be today if they had not been able to borrow from the Canada Pension Plan? Certainly the provincial government of Ontario has not been slow in taking advantage of these funds. I think it’s very interesting to note that of $9.42 billion lent to the provinces from the fund in recent years, Ontario, one of the wealthiest provinces, has borrowed approximately $5.2 billion.

The Treasurer also went on to say that the government pension funds should not be required to be actuarially sound, an unusual statement. This may be true because as long as there is a government there will always be a taxing power to obtain the funds necessary to pay the pensions. However, I am seriously concerned to hear that the Treasurer takes this attitude, because my village will have to be paid for by taxing future generations and due to inflation and indexing of benefits, the liabilities are increasing. In fact, the amount of liabilities of all pension funds guaranteed by the Province of Ontario, including those of Crown corporations such as Ontario Hydro, will, if the government persists in the present policy, represent a colossal drain on the future taxpayers of this province.

It is understandable that, for political purposes, a government should concern itself primarily with the needs and wishes of the present-day taxpayer, but I question the government’s right to mortgage the future. Perhaps we should give some thought to what this government and its predecessors in recent years have done for our young people.

They have given our young people a per capita debt of $708, according to the most up-to-date figures. They have given our young people the privilege of paying in the future, because of pension fund borrowing and so forth, for the benefits which we enjoy today.

They have given our young people an expensive education system which many people consider is inadequate and does not provide the basic skills which are necessary if they are to compete in the job market with any degree of success. They have given our young people no encouragement to enter the agriculture industry and to have almost forced them to move into the large urban areas in search of employment.

They have given our young people the Opportunity to go to community colleges and universities but they have given no guidance as to the courses which should be pursued to have that maximum possible choice of employment opportunity. They have given our young people cutbacks in social services which might have helped them to cope with the difficulties of modem day living. They have given our young people an increase in OHIP premiums which will clearly not be reduced in the future.

They have given our young people in recent years the expectation and the hope that their future would be successful and secure. Now, like Indian givers, they are in the process of taking back that expectation and that hope.

Mr. Jones: It is indeed a privilege to participate in this debate today and I wish to express my full support for the approach to the economic priorities of our government as set forth in the 1976 Ontario budget.

I represent a constituency that forms part of what is considered to be one of the most important areas and sectors in the whole of the golden horseshoe area, and the region that makes up Canada’s industrial heartland. The constituents in my riding are concerned about the economic realities of our times and they are concerned about their futures. They are concerned about their futures in business, they are concerned about their farms, they are concerned about the future of their jobs.

They want to be assured that the standard of living, the quality of life that they have become accustomed to will continue and improve in the years to come. They want the security of knowing that they will be able to continue to grow in an economic climate and an atmosphere that is conducive to the development of individual initiative and individual freedom. And they want to work in an atmosphere where monetary reward, adequate profit and entrepreneurship are not dirty words but rather the fundamental right of any free person.

The people of my riding have expressed real concern over the recent pronouncements of the Prime Minister of this country. They are worried about the uncertainties of this new society he is proposing, a new society where regulations and controls seem to be the order of the day and where government continues to grow bigger and spend more. Now is not the time for government to expand and have blossoming bureaucracy. Now is the time for quiet, responsible leadership.

[9:00]

Mr. McClellan: When are we going to get it?

Mr. Jones: We are. Now is the time when we must assess where we have come from, where we are going and how we will get there.

Mr. Laughren: We will help you get there.

Mr. Jones: That’s what the Treasurer was talking about in his budget statement. All of us in this province have benefited from the well-being of the private sector. To turn around now and change the very foundations of our society is to place in serious jeopardy the advantages of all that we have achieved and worked for and now enjoy.

I strongly believe that the government’s role in our society is to create a sense of stability in our system; a stability that fosters free enterprise.

Mr. Bain: What a myth!

Ms. Gigantes: Nothing stable about it except it stinks.

Mr. Jones: We must help, rather than interfere, and not be an alternative to private business. We must encourage and assist, not regulate and control. And we must reject the idea that further government ownership is either necessary or desirable.

Mr. Wildman: Private profit at the public expense.

Mr. Laughren: Socialism for the rich, free enterprise for the poor.

Mr. Jones: Just listen and I will tell you why. I was very interested recently to receive a copy of a letter from the chap who was the candidate for the NDP in my riding during the last election. It was a letter that was sent to the independent businessmen in my riding.

Mr. Bain: Did you support him financially?

Mr. Jones: What did he say? “If independent business people want help, an NDP government would be ready, willing and anxious. We aren’t going to be pushy.”

Mr. Bain: You have never helped the small businessman.

Mr. Laughren: You are driving them to the wall.

Mr. Speaker: Order, please. I think one person speaking is enough, and it is the hon. member for Mississauga North.

Mr. Jones: Mr. Speaker, I couldn’t help but think of Saskatchewan.

Interjections.

Mr. Speaker: Order.

Mr. Jones: Maybe we should take a little wander through the west, where we have seen some NDP governments and what they have done with business. In thinking of Saskatchewan, there is $1-billion potash industry --

Mr. Wildman: That’s small business?

Mr. Jones: -- made up of a composite of businesses, together a large earner of export dollars built through years -- 20 years, in fact -- of hard work and enterprise. When the potash industry was suffering in a world-wide depression, the NDP government of Saskatchewan was unwilling to accept the risk of nationalization.

However, after the industry’s world position improved, the NDP avarice came to the fore. They demanded so much additional tax revenue that the industry was forced to go to the courts for protection.

Mr. Wildman: The hospitals here went to the courts for protection.

Mr. Jones: But before the courts could render a decision, the NDP blatantly announced the takeover of the industry through nationalization.

[Applause.]

Mr. Jones: Before the hon. members opposite thump their desks any more, let’s see what the results were for a moment.

Ms. Gigantes: Why don’t you go to Saskatchewan and run Tory?

Hon. Mr. Taylor: Your true colours are coming out now!

Interjections.

Mr. Speaker: Order, please.

Hon. Mr. Taylor: Nationalize everything; that is their policy.

Mr. Jones: Private industry’s confidence was replaced with the greed of the NDP government. Not going to be pushy? Hardly.

Let’s talk about auto insurance. That’s a favourite subject over there. Our friends in the opposition party have promised that if elected, they will introduce compulsory auto insurance.

Mr. Haggerty: Right on.

Mr. Laughren: A free-enterprise rip-off.

Mr. Jones: In fact, on June 15, in Woodstock, the hon. Leader of the Opposition (Mr. Lewis) said “An NDP government will not allow private insurance companies to issue auto insurance. There is no justice in auto insurance. Automobile insurance agencies are one of the biggest rip-offs.” Yes, he said it; that was his word.

Rip-offs indeed! What about the motorist in British Columbia who was ripped off by paying an extra $1 or $2 an hour or more out of his own pocket to get his car fixed?

Mr. Laughren: What about the motorists in Saskatchewan and Manitoba?

Mr. Speaker: Order please. If the hon. member wishes to remain in the House, he will remain silent. Thank you.

Mr. Jones: Because body repair shops claim that the BC government rates were not enough.

Mr. Wildman: Quit talking --

Mr. Jones: And what about the motorist who was ripped off for another 10 cents per gallon gasoline tax to pump money into the Autoplan, when in fact, because of its natural gas revenues, BC could actually have cut the gasoline prices by 10 cents a gallon?

And what about the taxpayer who was ripped off because the British Columbia Autoplan lost $34 million in its first year? And what about the driver in British Columbia who had to pay $10 for a driver’s licence? A province-wide strike by Autoplan employees created a hardship for thousands of motorists. Since Autoplan was a monopoly service, a single strike could wipe out insurance service throughout the province.

That’s what happened. Motorists were compelled to have their cars repaired at their own expense for the duration of the strike. Indeed, it was a kind of a programme which must be expected from a monopoly government business. It costs as much for a government to repair cars as it costs for anyone else.

Hon. Mr. Taylor: More.

Mr. Jones: Low insurance rates mean only that the taxpayer is footing the bill in some other way and the personal service that people need and expect is replaced by an administrative nightmare. I think we must concede, as the voters of BC conceded --

Mr. B. Newman: That’s the truth.

Mr. Jones: -- that the Autoplan was scarcely one of the Barrett NDP government’s finest moments.

Moving on to Manitoba, a Winnipeg Tribune survey of its readers indicated that 70 per cent were hostile to the NDP government’s Autopac plan. And with good reason. In 1975, the Autopac conceded that it lost $25 million in its first two years.

Despite the NDP promise not to raise the rates until 1975, rates increased by as much as 75 per cent for the mandatory basic $50,000 bodily injury, property liability and $200 deductible collision. As in British Columbia, the motorist is forced to pay a two cents per gallon gasoline tax to subsidize the scheme. And one last dismal note before we leave Manitoba, Mr. Speaker. The insurance bill for the 1974 model car of Manitoba Premier Schreyer increased by 35 per cent in 1975.

If government auto insurance is so great, why don’t British Columbia, Manitoba or Saskatchewan let private insurance companies sell in competition? The claim of the hon. Leader of the Opposition that automobile insurance agencies are one of the best rip-offs is simply false. In Ontario, insurance rate increases are just keeping pace with the cost of living.

Our province has initiated a seven-point programme to improve insurance coverage. The government has prompted a fair claims settlement new approach, better communication by companies with claimants who want to discuss their claims, prompt acceptance by companies of reasonable claims and a ban on trying to force claimants to sue by offering low settlements. Our efforts are directed towards these objectives rather than to taking over the day-to-day operation of the automobile insurance industry.

But the auto insurance industry is just one area in which British Columbia’s NDP government saw fit to intervene. What about the BC railway, which was losing about $87,000 a day under NDP control?

Mr. Bain: What about the ONR?

Mr. Speaker: Order, please.

Mr. Jones: Lest we forget, what about the BC ferries, under the mantle of the government, which dropped about $58,000 a day?

Mr. Bain: The BC government or the Ontario government?

Mr. Jones: The BC government -- NDP government.

Figures were foremost in the minds of the voters, in British Columbia, incidentally, on Dec. 11 of last year.

Many here may recall that about a decade ago the Province of British Columbia experienced a truly memorable upsurge in mineral discoveries. One substantial ore body after another was uncovered and the unlucky ones came into production before the Barrett government came along. The creativity and the determination of the NDP taxman would have impressed even the Sheriff of Nottingham. Most people have, in their naivety, always assumed that taxes had to be related in some way to profit. The genius of the Barrett approach -- similar to the genius of the Blakeney approach -- was to disregard the existence of profit.

Mr. Bain: What does this have to do with the Treasurer and his budget?

Mr. Jones: No longer would those companies which were losing money escape their tax obligations. How’s that for confiscation? It gives the word a whole new meaning.

Mr. Bain: Are you running on Barrett’s record?

Mr. Speaker: Order please.

Mr. Jones: The result of the British Columbia resource tax policy is perfectly understandable to anybody except a socialist.

Exploration activity ceased altogether in a big part of that province. Five of 30 producing mines shut down entirely. Others introduced layoffs of up to 60 per cent of their working force. There was disastrous unemployment, rapidly declining production and, wonders of wonders, reduced tax revenues proving, among other things, that one can’t get blood from a stone.

They created a stone and then couldn’t understand why they couldn’t get any blood from it. The sad thing is that even when the people, in their collective agony, turf these perpetrators of such nonsense out of office, it doesn’t solve things all that quickly. Business, once badly burned, isn’t likely to assume readily that this fiscal wrecking crew is truly dead and buried. It’s what people these days call a crisis in confidence.

Mr. Bain: Tell us about United Asbestos.

Mr. Jones: Another interesting comment made in this letter that I received from the former NDP candidate in my area is this: “Independent business matters to the NDP.”

These rumblings from the left are, to say the least, disquieting. The NDP of all people are holding themselves out as friends of small and medium business; not only friends but the only friends. Talk about the capacity of --

Mr. Laughren: Always have been.

Mr. Jones: -- leopards to change their spots. I think an examination of the facts and the background would reveal that instead of a leopard we’re probably getting a pink panther.

At any rate, the NDP should have no objection to those sceptics among us taking a look at what their counterparts in some of the western provinces have managed to accomplish on behalf of small businessmen. It turns out that a lot of people have struck it rich in NDP provinces as their advertising suggests. Most of them, however, are members of a blossoming civil service or ever-increasing numbers of welfare recipients thrown out of work by the application of socialist economic policies.

Mr. Wildman: Yes, they get rich on welfare.

Mr. Jones: Unfortunately, though -- it wasn’t in the writings to my businessmen constituents or they didn’t mention it -- not too many were businessmen. Their crosses are strewn over three provinces. I’m reminded of a large billboard which used to stand beside a highway that leads from Vancouver to Calgary.

Mr. McClellan: You should run in Vancouver.

Mr. Jones: It said it all very simply “Will the last businessman leaving British Columbia please turn out the lights?” That sign has gone now and recent reports indicate that the patient is improving every day but it was a close call. Our friends in the official opposition are always talking about what they would do with the resource industries in this province.

We’ve lost count; some of the veterans of the House have told me we’ve been No. 17 or No. 18, we did hear a sort of slant that way from the member for Sudbury East (Mr. Martel) as he gave his tear-stained, hysterical diatribe against mining companies.

Mr. Wildman: Come off it.

Mr. Jones: The other day he was talking about labour and the need for some increased protection there.

Mr. Wildman: Sure, let them die in the mines.

Mr. Jones: He wasn’t so hard this time, I noticed, on the mining companies. One has to wonder if those late-blooming friends of business from Etobicoke or High Park managed to stick a sock in his mouth before he put a foot in theirs, given this new approach of the friend of the businessman which the NDP are now proposing.

Mr. Laughren: Did the John Birch Society write your speech?

Mr. Jones: Before anyone considers letting these economic blackguards get their rapacious hands on the resources industry in Ontario --

Mr. Wildman: Jack Horner is leftist beside you.

Mr. Jones: -- look at their track record out west. I hope we keep reminding the voters of this province.

Mr. Laughren: We approved of it.

[9:15]

Mr. Jones: Another interesting comment made in this letter to small businessmen from the NDP candidate in my area is this: “Independent business matters to the NDP,” and as he went on in this vein I checked to see if that was just his thought or perhaps the policy across the province. Sure enough, it is cranking up in many ridings across the province, and yet not too many people are going to forget the lessons of BC and Saskatchewan and the others we referred to.

It looks like our friends in the opposition are championing yet a new cause, yet a new sector of our society, and it’s a sad commentary of our politics today that there are those who would seek to build their careers, build their own political future, by pointing to some as the friends of the corporate elite -- we just heard it again from the member for Cambridge (Mr. Davidson) -- and presenting themselves as friends of the little man and the working man. I said it before and I’ll say it again, that as one of six children from a working class family I resent the suggestion advanced by the NDP members that they are the only ones who want to help the wage earner in Ontario.

I dislike the cosy platitudes we hear in this House every day of socialism and their claim to have a monopoly on concern for the average man.

Mr. Wildman: Just ask the guys who work in Matachewan.

Mr. Jones: This government has worked hard to foster an economic atmosphere in which small business may flourish and succeed. Take the small business operations division of the Ministry of Industry and Tourism.

Mr. Laughren: What a joke.

Mr. Jones: They don’t talk much about that and what this government does through it.

Mr. Bain: It is not worth talking about.

Mr. Jones: You’d better believe it is. We have six regional offices, 22 field offices in Ontario and 15 foreign offices abroad. It provides industrial and tourism advisory services, as well as development programmes right in the areas where they are required.

Mr. Bain: They do nothing.

Mr. Laughren: Private labs -- yes, we know.

Mr. Jones: They encourage manufacturing arrangements --

Mr. Wildman: Don’t call it free enterprise though.

Mr. Jones: -- provide business counselling and generally give assistance to the service industry and to small businesses, since these field offices are on the scene and they provide a grass roots level between Queen’s Park and business.

Ms. Gigantes: How about small business in eastern Ontario?

Mr. Jones: What do you know about small business?

Ms. Gigantes: That’s where I live.

Mr. Jones: Also included in the small business operations division is a selective placement group which advises industrial clients where potential employees with skills they are seeking can be found. One of the recurring difficulties faced by small businessmen throughout this province is that of obtaining adequate skilled labour. Though highly skilled workers are vital in many areas, we must also recognize the strengths and the abilities of the young people coming into the work force.

The previous speaker, the member for Kent-Elgin (Mr. Spence), referred to some of the heritage that we’re giving to our young people.

Mr. Wildman: A rip-off.

Mr. Jones: One of the things we have is the Ontario Youth Secretariat, which I have the privilege to be responsible for at present.

Ms. Gigantes: Rah-rah-rah, that’s what you teach them.

Mr. Jones: I can tell you some of the heritage that we’re anxious to pass along to them. I can also tell you that we are worried about the widening gap that seems to be developing between what business is seeking from young workers and what the educational process is providing them, and that’s not a criticism of the educational system. It’s merely to say that we’re aware of a growing concern within the private sector that formal education alone may not provide a young person with the necessary knowledge or skills for successful entry into today’s work force. The responsibility for improving this situation lies as much with the educators as it does with the consumers of the educational product, the community at large.

Within the Ontario Youth Secretariat, our government recognizes the need for increased communication among unions, business, government, industry, educators --

Ms. Gigantes: Don’t you want them to be trained!

Mr. Jones: I was in your riding last week, as a matter of fact, talking to people and they’re interested in this.

Ms. Gigantes: Whose riding?

Mr. Bain: They must have just loved to have you.

Mr. Jones: Our career development programme is working to foster a greater awareness and understanding of the various needs of each sector.

This programme is being developed in close co-operation with the Ontario Chamber of Commerce. Local chambers and businessmen across the province are working to ensure that young people acquire the basic information on the realities of the working world. In this way, local business plays a major role in preparing students through the transition between school and work.

We’re helping to strengthen the total education process so the students will be provided with the necessary background to formulate and evaluate their educational and occupational plans. All sectors have a real responsibility in the career development process of Ontario’s young people. Today’s youth are tomorrow’s future and we all have a stake in this and so we are all making an investment in the future.

One of the other major difficulties faced by the small businessmen in Ontario has to do with manpower, rising wages and rapid turnover of staff.

Mr. Wildman: You don’t want to pay them too much.

Mr. Jones: I’m not attempting, in any way, to downgrade the hardships being faced by the genuinely unemployed, but let’s not ignore the percentage of unemployed that are in a position to be very selective about returning to work, and let’s not ignore the economic turmoil that this creates.

I strongly support the initiatives set forth in the 1976 budget to provide stronger incentives to Ontario’s small businesses. As the hon. Treasurer stated, in this province of opportunity, the small businessman has a large role to play, as an employer, as a supplier of goods and services, and as an innovator.

Ms. Gigantes: Any more money for the small businessman? No.

Mr. Jones: The reduction of the general corporation tax rate from the 12 per cent to the nine per cent for all companies eligible for the federal small business deduction will be a great assistance to some 50,000 Ontario companies. In addition, 25,000 small corporations will be exempted from the onerous requirement of paying taxes in instalments and the proposed legislation to create venture investment corporations designed to increase the supply of risk capital will be welcomed by small business in all parts of the province.

Our government is committed to protecting the viability and the vitality of the private sector. We’ve never been leaders when it comes to effectively creating entrepreneurship and I’m happy to admit it. What we have done is develop programmes which will foster the type of economic development best able to create the atmosphere of results that will benefit the whole community. What we can do, and what we are doing and will continue to do, is to create incentives and an economic environment in which enterprise and skill can be encouraged and developed. There can be no place in this society for the assumption that profits are some kind of immoral reward for a few greedy robbers.

Mr. Wildman: Just excess profit.

Mr. Jones: Profits are a legitimate and honest return on investment. Excessive and unreasonable taxes place an unfair burden on the savings of those who have taken risks to provide capital for our economy, and outright regulation or control threaten to destroy the very foundations of our quality of life.

Mr. Bain: Are you the resident Conservative platitudinous espouser?

Mr. Jones: So, if a party is to be friends of the businessmen, they best understand something about it.

Mr. Wildman: I’m going to speak in this budget debate about Ontario, not about the western provinces, and I’m going to talk about an area that was not mentioned once in the budget speech by the Treasurer (Mr. McKeough), and that is northern Ontario. There wasn’t one word about northern Ontario in the budget, or in the presentation of the budget.

I’m particularly dismayed and dissatisfied with the lack of economic planning and foresight in the preparation of the budget introduced by the Treasurer, in that the north, as I said, was not even mentioned.

The so-called planning documents tabled in this House are not much more than a compilation of platitudes masquerading as policy planning. I am especially disappointed in the lack of policy initiatives for the economic and social development in the northeastern region of this province from which I come, and the apparent failure to recognize that transportation is a central determining factor in the diversification of the economy of the area and the improvement of the quality of life in the northern communities.

In the northeastern Ontario regional strategy paper which was tabled in this House there was only one recommendation, and that’s a very weak one, that deals with transportation. This is a paper that purports to set out a planning strategy for the northeast but all it proposes for transportation is further study, in co-operation with the federal government, of truck and rail freight rates and the arrangements affecting the region and northern Ontario generally.

I don’t deny that study is necessary to nationalize freight rate structures, especially since the recently tabled two-year study by the Ministry of Transportation and Communications was so inconclusive and inadequate. But there are many economic problems in northeastern Ontario that relate to transportation problems that require immediate action -- the kind of measures that a government that remains wedded to free enterprise, if only in philosophy, appears loath to take. Rather, it is easier to study planning than to implement it while the government continues to react to problems, after they develop with ad hoc measures. Unfortunately for northern Ontario, this approach often means missed opportunities and lack of development.

With few exceptions, northeastern Ontario suffers from stagnant population growth, a lack of growth in employment, a high rate of emigration and low levels of per capita income relative to Ontario, as a whole. This results from the fundamental laws of economic development in a so-called free market economy -- the free enterprise system that is so often belaboured in the government’s planning papers.

In this system, profit maximization seeks economies where it can find them. Economies exist in locating manufacturing close to markets and in areas where technical and managerial services, as well as social and economic infrastructure, have been developed by private and public investment.

The golden horseshoe of southern Ontario, which was mentioned by the previous speaker, has, accordingly, developed as a metropolitan centre dependent upon the exploitation of the resources from the hinterland regions such as northeastern Ontario. Economic surplus is extracted from the north and a poorly diversified, non-integrated economic base has developed in the north, as a result. Economic decisions are continually made by Toronto-based business and local executives and businessmen in the northeast have co-operated with these decisions, in their own interests. This is the great free enterprise system that was just now extolled by the previous member.

As a result of this economic relationship between north and south, the transportation network grew up designed to export raw materials to the south for processing. Freight rate structures which discriminate against the north have developed, making it cheaper to export raw materials than finished product and thus perpetuating the region’s hinterland position. Freight rates, both rail and truck, tend to encourage the haulage of commodities in a relatively unprocessed state.

As a matter of interest, I suppose, in 1973 the provincial government lowered Ontario Northland’s rail and truck rates by 18 per cent in an attempt to prompt other carriers to follow suit. This helped, somewhat, to alleviate the costs to northeastern Ontario. The overall problem of freight rate inequities has not been resolved, however, since neither CN or CP has reduced rates by a similar amount. The transportation of raw material, southward, remains cheaper than the transportation of processed goods.

This problem of discriminatory freight rates is compounded and rates further inflated because of the limited number of transportation routes and modes and the lower level of freight volume in the north. The thinking behind the statement that “for the most part, the transportation requirements of business and industry in the northeast are adequately met by the existing infrastructure and their levels of service” in the northeastern regional strategy paper apparently indicates that this government accepts the present dependence of the north upon resource extraction industries. Even if this were acceptable, the statement is questionable when you consider the types of roads and so on that we have in the north.

[9:30]

The Ministry of Transportation and Communications, even in its recently tabled investigation of freight rates and related problems, has not come up with satisfactory programmes to deal with discriminatory transportation policies which might help the north. The study points out that truckload class rates in the north are higher, while the rates in the Highway 11 corridor are higher even than the rates in the Highway 17 corridor. This is because of lower competition among the carriers. Also, since there was a preponderance of small shippers dealing in the north, many of the loads are limited in volume and costs are higher on routes to many centres in the north. Pool car and truck services, which are available in other parts of this country, are now only available to Sudbury and to some shippers in North Bay and Thunder Bay.

The study commissioned by the ministry suggests further study by the Highway Transport Board to analyse the changes in the class A authority to allow for through service to Thunder Bay on Highway 11 and to remove restrictions on full load licences north of North Bay. It also suggests that pool car and truck rates and services should be encouraged in northern Ontario by having the ministry conduct a market survey and publish the findings.

These recommendations seem to me to be very weak, especially after two years of study. Here the ministry is suggesting further study of a problem that is obvious to anyone who looks at the figures.

Perhaps the reason for this is the emphasis that this government continues to put on the development of the north by the private sector, rejecting real economic planning and control to bring about economic equality for the north. We should not delay any further the necessary amendments to the regulations. The government should move now to set maximum freight charges to and from centres that are captives of truck transport, and it should become actively involved in setting up pool truck services.

The government should also control express transport rates now that the ministry itself recognizes that express rates place northern Ontario at a competitive disadvantage. Instead, the study suggests that express rates should reflect equality with other areas of Canada and leave it to the private sector to bring that about. It’s my position, Mr. Speaker, that since the private sector, based on past experience, is not likely to comply with this policy, the government should impose controls now.

This study also suggests that the trucking industry should institute tapering freight rates, as the railways now do in some areas, since freight costs display a tapering effect the longer the haul. This would certainly benefit the north. But, again, the government is only requesting change. Why doesn’t this government ensure that terminal costs are spread over mileage haul by enforcing a tapering system for freight charges?

The study pointed out that another factor inflating freight charges for northern Ontario is that most goods travelling across the international border to and from the north travel via circuitous routes to southern Ontario gateways such as Windsor, Fort Erie, and Ivy Lea, rather than Sault Ste. Marie. The study suggested that an amendment be introduced to ensure that truck freight rates reflect direct route mileage between origin and destination so that the added costs resulting from such circuitous routing are not borne by the shippers and the consumers.

Mr. Speaker, I hope that we will see legislative action in this matter soon. But, again, the government is reacting to a problem rather than tying transportation into an overall plan for the economic development of the north. The economic impact of freight rates is significant when the need for economic diversification in the north is considered. The high rates on industrial goods inhibit diversification and economic growth. As long as the northeast remains essentially a hinterland economy, the region faces a danger that once its resource base is exhausted or even diminished, relative to other areas, a period of sharp decline will ensue. If an expanded economic base is not established there is little hope for economic survival in the north.

The relative decrease in the importance of the Sudbury basin as a nickel-producing area poses such a threat, as one example, and perhaps the most serious. The necessity of developing a diversified economic base for northeastern Ontario, incorporating more processing activities, is therefore of pressing importance.

If freight rates are controlled or reduced to stimulate growth, however, and I don’t really expect the government to do this, but if they were, the government would still have to ensure that the savings were not simply passed on in higher profits to parent companies by branch plants in northern Ontario. Measures must be taken to ensure that the multi-national corporations, if they are to continue to extract Ontario’s resources, must help to diversify the economy of the north by establishing manufacturing and processing industries in the region.

Also, the government should act upon the recommendations of its own 1970 study entitled “Prospects for an Expanded Non-ferrous Metal Industrial Complex for Northern Ontario” for the establishment of industries where transportation is not a high cost factor. This study dealt with transportation as a cost factor, among others, in determining the viability of certain types of processing industries. It concluded that northern Ontario faced no disadvantage for constructing certain types of industries -- for instance, cement plants, wire and cable works, copper and brass mills and sand-casting and die-casting non-ferrous foundries -- since in these cases labour cost advantages would balance transportation problems. Government action is needed now to create such a complex for northern Ontario, but, again, it can’t be done without overall planning for the economic development of the north, which requires that transportation and freight rates questions be integrated into economic planning.

Transportation planning must precede development, not simply react to it. Measures to deal with freight rates should be seen as planning tools. The government should be acting now to lessen northeastern Ontario’s dependence on resource extraction as the sole basis of economic development. Control over the freight haulage industry must be exercised to eliminate discrimination against the north and inflated cost factors, wherever possible. The government should also initiate programmes to encourage the establishment of industries that do not depend heavily on transportation as the way to create diversification and more jobs in the economy of northern Ontario.

As the previous speaker probably realizes, I’m talking about planning and control, something that apparently is anathema to this government. But I should make clear that without that kind of planning the north cannot develop and will remain a hinterland economy dependent upon resource extraction which benefits the south and exports jobs to southern Ontario. Since there is no planning at all for the north in this budget that was recently introduced by the Treasurer, I cannot support it and will have to vote against it when the time comes.

I realize that I haven’t dealt with the arguments presented by the previous speaker about western Canada, I’ve just dealt with northern Ontario, something that this government doesn’t know very much about. They know more about BC, perhaps, than they do northern Ontario.

Interjections.

Mr. Wildman: I am afraid that because of that, this government will continue to have only four members in the north, and will not really understand the problems of the northeast or the northwest.

Mr. Bain: They don’t have any more members in BC than they do in the north.

Hon. Mr. Bennett: It is still the government.

Mr. Bain: In BC?

Hon. Mr. Bennett: It is still the government here.

Mr. Bain: Very tenuous.

Hon. Mr. Bennett: Doesn’t matter; it is still the government.

Mr. Wildman: It is very unfortunate for northern Ontario, of course --

Mr. Bain: That is what Marie Antoinette said, too.

Hon. Mr. Bennett: That is not what she said.

Mr. Wildman: -- but it is possible for this government to remain the government without having very many members in the north. I suppose this is the reason they take the attitude they do: “Who cares about the north? We can still be the government.”

But I want to warn the government that unless they change their attitude they won’t have four members next time in the north. They won’t even have one.

Mr. Eakins: They will all be Liberals.

Mr. Wildman: The suggestion was made recently by the member for Algoma-Manitoulin (Mr. Lane) that we should establish a northern Ontario ministry. It was a very interesting suggestion and I believe he is going to bring it up at the Progressive Conservative Party convention this weekend. It seems to have more to do with the fact that the member for Algoma-Manitoulin is the only PC member from the north who does not have a cabinet post than with anything that is going to benefit northern Ontario.

The problem, as he sees it, is that this government is not receptive to the needs of the north, and I must agree with him. He gave a very interesting speech last Friday at a meeting at which I was present. He detailed in quite eloquent terms how this government ignores the north, doesn’t pay any attention to the north, and how northerners have such a difficult time getting this government to hear anything they want. And the interesting thing, Mr. Speaker, is after he is finished detailing all of these problems, then he turned around and blamed it on the bureaucrats, not on the government. It was the fault of all those bureaucrats from Toronto, who don’t really understand the north.

The thing that he ignores, of course, is that those bureaucrats do what they are told to do by the government. This government tells them what to do; this government supposedly sets policy -- I would hope they set policy. The government determines the policy; the bureaucrats implement it.

So the solution is not to impose a new bureaucracy, a new ministry -- that would add more red tape to northerners who are trying to get things done -- but rather to change the government.

Mr. Jones: Is that in the budget?

Mr. Wildman: Hopefully, if the members opposite support us in our approach to the budget, then we will be on the way to changing the government.

Mr. Bain: Was BC in the budget?

Mr. Wildman: The previous speaker, Mr. Speaker, spoke at great length about other provinces. I have tried to deal completely with Ontario, and specifically with the economic problems of northern Ontario.

Hon. J. R. Smith: The best place; the best place in Canada.

Mr. Wildman: And I think that it is very important for all of us to realize that unless this government sees transportation as a central tool in development planning for northern Ontario, that northern Ontario will continue to stagnate. We will continue to export jobs to the south, along with our raw materials, because it is cheaper to export raw materials southward than it is finished products. Young northerners will have to continue to move to that great golden horseshoe which, as the previous speaker said, was the centre of industrial growth in Ontario. We will have to continue coming south in order to get jobs, and the north will continue to lose in the whole equation.

The fact that this government has not yet learned this, the fact that the Treasurer could give a speech introducing a budget and not mention one word about the north -- not one word -- indicates what this government knows about that region of the province, and indicates how much they care about that region of the province. And imposing a new ministry for the north in order to give the member for Algoma-Manitoulin a seat in the cabinet, is hardly a solution.

[9:45]

The solution is to oppose this budget and to oppose the government that has introduced it, to develop economic planning with transportation as a central factor in it, to make it possible for economic diversification in the north, and to have manufacturing industries to produce jobs for northerners, so that this province will prosper and all of us in all regions of the province will benefit.

Mr. Reed: Mr. Speaker, it is a great pleasure for me to rise and reply to the budget speech which was delivered by the Treasurer (Mr. McKeough) on April 6.

I would like to begin by saying I don’t want to take issue with my own colleagues and the member for London North (Mr. Shore) who did such a wonderful job in replying to this budget. I believe he stated his case clearly and eloquently. My other colleague in the back row, the member for Renfrew North (Mr. Conway), also possesses a degree of eloquence that I will never hope to match. However, both of those colleagues of mine alluded to the Treasurer’s performance. I would like to go on record as saying that of all of the members of this House, I probably am in a better position to judge a theatrical performance than my two colleagues --

Mr. Haggerty: We will see he gets an Academy Award for that.

Mr. Reed: -- and what a performance it was. It was worthy of the best, including I must say the enthusiastic applause of his claque, which was there to support him. The setting would have made P. T. Barnum, the man who coined the phrase “there’s a sucker born every minute,” green with envy. When you stop and think of it, here he was on a stage with a paying audience of 7.5 million, most of them captive. And how they pay!

Mr. Haggerty: In bondage too.

Mr. Reed: The price of admission this year jumped to $708 a seat.

Mr. Gaunt: That’s right. They pay out of the pocket book --

Mr. Reed: Can you imagine a theatrical setting more appropriate? I know the scalpers in Toronto have been getting as high as $75 for a hockey ticket at Maple Leaf Gardens, and I also realize the performance we witnessed was as excellent a performance as it could be. But the price of admission is getting a little out of hand. The one redeeming factor is that this had one peculiarity that must be pointed out. The author was required to render his own performance, a requirement of no mean talent. By way of critique, might one suggest that the minister continues to actively postulate and develop his performance career and encourage others to become students of the pen?

I should also take a moment to commend the director of this performance in choosing the minister to have the lead in this production and seeing in him the talent necessary to stage the performance. The one thing I found regrettable about the whole thing was -- as the late George Drew would have put it -- the cast of trained seals. I found them to be far too numerous, and one would hope that after another election, their numbers would be much reduced.

It is a privilege to speak to this budget because it rests with the position taken by both the Liberal Party and myself as a campaigner in the last election. I don’t think enough time has elapsed yet for all of us to forget that it was our party, the one that the Treasurer refers to with such disdain as the third party, that spoke of the need for restraint and financial responsibility. It was our party that stood alone in its criticism of continuous deficits that have plagued this province ever since the member for Brampton (Mr. Davis) became Premier.

I cannot forget my worthy Conservative opponent, during that election campaign, who would march up and down the stage and tell audiences that deficit budgeting was the modern way for governments to operate and that the economy of the province would benefit from sustained deficit. I cannot forget criticizing the cost of regional government, at that time, and being told it was only temporary and that the cost of government, under the regional system, would soon come down.

Hon. J. R. Smith: Join Hamilton!

Mr. Reed: I cannot forget the rash of irresponsible giveaways prior to the election, which have cost the taxpayers of this province so much money.

Of course, I cannot forget it was two months later -- two months only -- when the Treasurer of Ontario decided, at last, to do an about-face and turn and go the other way. You see, he realized, without admitting it -- and it was pretty difficult to get him to do that -- the Liberal position really wasn’t all that bad. It must have been a bitter pill for him to swallow to think that the third party contained some element of responsibility.

I support the concept of restraint and moderation and I commend the Treasurer’s courage in being able to realize his error and change his mind and begin the long arduous path of repentance. I use the words, “long arduous path,” because to this point nothing has been resolved and, in truth, the only thing we have gained to this date is posture. We will not see the realities of this restraint budget until the end of the year -- until we find out if the province will need a supplementary in order to carry out its business. You see, Mr. Speaker, that would be the acid test and one wonders, now, if some of the revenue predictions contained in this budget would reflect expectations beyond the province’s capacity.

I am concerned, too, with the priorities that the government gives to spending and the way it attempts to justify the expenses it incurs and the moves it makes. For the record, I would like to relate a hopefully short chronology of events, which tends to continue my doubts about the sincerity of this restraint programme, and whether it is not indeed nothing more than a posture.

Away back on May 19, 1974, the cabinet made a decision, at that time, to proceed with the construction, or to allow the proceeding of the construction, of a hydro corridor from the proposed Bruce nuclear plant to the environs, if you like, of Metropolitan Toronto. Because of objections of property owners along the way, and so on, the government attempted to placate these people by holding public hearings, environmental hearings and what have you, and led everyone to believe the final decision had not been made.

This last winter, knowing things were about to come to a head, the people called the Interested Citizens Group, who represent 4,500 citizens along the proposed path of the corridor, approached the Ontario Ombudsman, and asked him if he could look at the case. Three weeks later a Lieutenant Governor’s order in council was handed down authorizing the construction of the corridor -- that is the second authorization the hon. members have to remember, just to keep things straight -- and hopefully precluding the Ombudsman from participating on behalf of the Interested Citizens Group. The rationale given was that time was fleeting, and if this corridor was not constructed there would be a backlog of generation at the Bruce nuclear plant which would cost the taxpayers of Ontario untold millions of dollars.

The Ombudsman, on the other hand, wasn’t to be hoodwinked by this order in council so he proceeded to consider the legality of his position, disregarding the decision. It was not until April 5, 1976, that the contents of that cabinet decision were revealed to the Ombudsman, at which time he was effectively restrained from acting on behalf of the Interested Citizens Group. At the time, the Minister of Energy (Mr. Timbrell) issued a statement saying the delay had already cost the people of this province between $45 million and $48 million.

Can you imagine, Mr. Speaker, that back in 1974, on May 19, the government had the options open to it at the time either to proceed with the corridor or grant an independent study of that corridor and the feasibility of the whole plan, as was requested by the Interested Citizens Group.

Mr. Good: The decision was made then.

Mr. Reed: If the delays have cost a nickel, that responsibility must be borne by this government. I am sorry even to have to bring this subject up again, as a matter of fact. This deliberate delaying of revealing the facts to the public and to the Ombudsman, the deliberate holding of environmental hearings and going through all the charade of public participation and the cost, lead me to wonder about the priorities of this government.

Mr. Gaunt: It’s very cynical.

Mr. Reed: Cynical isn’t the word, if it indeed had cost $25 million to $48 million. What about the further delay? We now have a situation where the Interested Citizens Group is still asking for an independent study and where the operation of expropriation and so on, the beginnings of this Hydro corridor, are being undertaken. We know the delays in court, the legal delays that can be imposed, can take another two years. We know one little independent study will take approximately three months. I ask you, Mr. Speaker, and I ask my friends in the House, where are the priorities? If we want to talk about costs, let’s talk about that cost.

I want to tell you, Mr. Speaker, I am continuing to press for an independent study of this corridor through the select committee of Ontario Hydro. The premise that my case will be based upon is simply the comparative cost between further legal delays of two years and the granting of an immediate study.

[10:00]

Finally, I would like to say something about municipal taxation. The Treasurer’s main method of applying restraints has been to shift the burden of fiscal responsibility on to the municipal taxpayer. He must have seen this coming for some time since he began last winter to try to soften the people of my riding by accusing them of being something akin to freeloaders.

At the same time, he has gone on to defend the system of government of his creation, of course, which has proven to be one of the most costly blunders of the 1970s. I am referring to regional government. He admits publicly now that there is duplication of service. He admits publicly that regional government is more costly. But he says now that any recommendation for a change must come from the municipalities.

The financial condition of this province, which has prompted the closing of hospitals in small communities and placed constraints upon people trying to administer such things as Children’s Aid Societies, must somehow be taken as evidence that the validity of the regional system must be questioned and that those functions which can be more efficiently and more cheaply performed at the municipal level should be turned over to the municipality. I grant that, upon doing that, there may be very few functions left for the regional system to perform. However, I would recommend that the Treasurer might serve better to lose a little face at this particular point in history and save a whole lot of money.

The Treasurer has defended the higher cost of regional government by saying the quality of services before imposition was in some cases very low. I wonder if he will ever be able to tell the people of Ontario by whose standards the quality of services in municipalities was low. In many cases I could mention, the quality of service was of a standard acceptable to the people in the municipalities; what is more important, those standards were affordable by the people in those municipalities.

Who, outside of a municipality, has the right to tell the people that their standards of service are too low? Does the government of this province have the right to tell us what is good for us? The plain fact is that there is room in a number of areas for real financial restraint. I have mentioned one. The year 1976 will tell us whether or not the Treasurer’s budget may start the Province of Ontario back on the road toward financial health.

Mr. Good: No way.

Mr. Reed: The taxpayers of Ontario will all be chipping in to help the Treasurer out of his jam --

Ms. Gigantes: Exactly.

Mr. Reed: -- and I am sure he is aware there is a limit to their generosity.

Mr. Speaker: Does any other hon. member wish to take part in the debate at this time?

Mr. Kennedy: If not, I will move the adjournment of the debate. Did you want to speak, Murray?

Mr. Gaunt: No, it is not my turn.

Mr. Kennedy moved the adjournment of the debate.

Motion agreed to.

Hon. Mr. Parrott moved the adjournment of the House.

Motion agreed to.

The House adjourned at 10:03 p.m.