The House met at 2 p.m.

Prayers.

Hon. Mr. Handleman: Mr. Speaker, I would like to invite all members of the Legislature to join with me in welcoming a distinguished visitor from the province of British Columbia, the Hon. K. Rafe Mair, Minister of Consumer Services, who is in the gallery.

POINT OF PRIVILEGE

Hon. Mrs. Birch: Mr. Speaker, I rise on a point of personal privilege. Last Friday, when the death of a 14-year-old girl was raised in the Legislature, I was very emotional and, indeed, I still am. I do not apologize for the intensity of my reaction. Ministers, after all, are human beings and are touched by tragic loss of life as any other thoughtful person may be.

The Minister of Correctional Services (Mr. J. R. Smith) and I have requested a four-ministry internal investigation as to the events preceding the tragic death raised on Friday. A report on that investigation will be made to the House tomorrow, and it will reflect the findings of officials from the ministries of Health, the social policy field, Correctional Services and the Solicitor General.

Mr. Lewis: I’m sorry, I missed one of the things the provincial secretary said. Did she say an investigation into the events that preceded the death or followed it? I didn’t hear that part.

Hon. Mrs. Birch: I said preceding the tragic death.

Mr. Speaker: Statements by the ministry.

LIQUID WASTE DISPOSAL

Hon. Mr. Kerr: Mr. Speaker, I would like to correct some information I gave to the leader of the Liberal Party in reply to a question asked of me last Friday regarding the proposed liquid industrial waste disposal site in Canborough township.

The hon. member asked if I would agree to having the hearing held under The Environmental Assessment Act rather than under The Environmental Protection Act. I incorrectly replied that the hearings were to be held under The Environmental Assessment Act. The Canborough hearing which is now under way is being held under The Environmental Protection Act, by, as I said, the Environmental Assessment Board. I regret having incorrectly informed the hon. member.

Section 33 of The Environmental Protection Act has been used since 1971 for such hearings and applies directly to waste disposal of all kinds.

The Environmental Assessment Act, as the hon. members know, is new legislation and we have not yet proclaimed the section which would bring specific private sector projects under the Act.

Mr. Godfrey: Why not?

Hon. Mr. Kerr: I wish to assure hon. members that the review of the environmental factors of this project will be as extensive and thorough under this procedure as it would be under the assessment legislation.

The major difference between the two proceedings as they apply to this case is that the hearings under the EPA will consider the project as it is advanced by the proponent and the board will recommend a course of action to my ministry, rather than making a decision on the proposal as it would under The Environmental Assessment Act.

There may be some confusion at this time as to the responsibility of the Environmental Assessment Board. The board is now empowered to hold hearings under three major Ontario Acts: The Ontario Water Resources Act, The Environmental Protection Act and The Environmental Assessment Act. I don’t intend to go into the details of the three hearing procedures other than to say that the hearing by the board in Canborough is a public forum, will be thorough and will cover much more than the economic and technical aspects of the proposal.

Mr. Speaker: Oral questions.

Mr. Lewis: Perhaps picking up on what was said by the Provincial Secretary for Social Development, may I place the question to her: Can we then assume that in the statement before the Legislature tomorrow the various events, at least in factual form, prior to the occurrence of the death will be dealt with, including the role of Thistletown hospital, the actual judge’s recommendation for the young girl and the role of Correctional Services at the point in which wardship was assumed? Will there be a factual setting out of that kind of information?

Hon. Mrs. Birch: Mr. Speaker, I anticipate that that kind of information will be available for the statement tomorrow.

Mr. Lewis: By way of supplementary, given what I believe to be the extraordinary relevance of it, would it be possible for the minister to release those aspects of the transcript of the referral of the judgement, not that relate to any matters of confidentiality which she would want to provide at the inquest, but of the actual judicial determination?

Hon. Mrs. Birch: Mr. Speaker, I would have to take that under consideration. I am sure the hon. member appreciates the desire on behalf of this government to protect the privacy of this girl’s family.

Mr. Lewis: Of course. That’s why I say only the release of the judicial determination.

Mr. Nixon: Mr. Speaker, perhaps there might be a further question there. As the minister indicated that she felt betrayed when she answered a question similar to this a few days ago, has she inquired as to why she was not informed of the circumstances of this tragic event until it appeared in the newspapers in Toronto two months after the suicide?

Hon. Mrs. Birch: Yes, Mr. Speaker, I have been assured and that also will be answered in our statement tomorrow.

PUBLIC HEALTH NURSES’ NEGOTIATIONS

Mr. Lewis: A question, if I may, for the Premier, Mr. Speaker: Since the dispute in the public sector involving the public health nurses appears to be going on forever, would it be possible for the Premier to call into his office or a place of his choosing, along with the Minister of Labour (B. Stephenson) all the heads of the public health boards across Ontario which have not settled -- 28 or 29 I believe -- in an effort to see whether or not the logjam encompassing all of them might be broken and bargaining be restored?

Hon. Mr. Davis: Mr. Speaker, I must confess that as a local member I became somewhat involved in the discussions in the region of Peel, which apparently have been resolved. Whether the idea of having in the other 26 or whatever number would serve any useful purpose or not, I’m not sure, but it’s certainly a suggestion that I shall consider.

Mr. Deans: Supplementary: Have you any suggestion to make, then, other than the ones that have been made from this side of the House, with regard to ways of resolving the dispute, given that it appears the boards of health have together decided they have no interest in reaching a satisfactory solution to what is a very difficult problem?

Hon. Mr. Davis: Mr. Speaker, I’m not going to defend one side or the other. I think it’s perhaps a little unfair for the hon. member to suggest the boards of health have no interest in coming to a conclusion. I think they have an interest.

Mr. Sargent: Give them the money then.

Mr. Nixon: Might I ask the Premier if one of the alternatives that has been proposed from this side of the House and from the community at large, for compulsory arbitration or arbitration, is one of the alternatives that the Premier might give further consideration to, since the House, being in session, could deal with it without further delay?

Hon. Mr. Davis: Mr. Speaker, this was a suggestion coming from some groups. I think the Minister of Labour answered this question last Tuesday or Thursday, I forget which date. She pointed out the concerns that we have. I recall the views of the Leader of the Opposition and his concern about compulsory arbitration. Quite obviously his party wouldn’t support such an approach.

Mr. Nixon: We would. Presumably you would. So let’s do it.

Hon. Mr. Davis: Well, I would say to the member from Brant, one of his problems is that he presumes too much. I wouldn’t presume that necessarily at this moment.

Mr. Ruston: Now you are saying you won’t then.

Mr. Nixon: What the Premier is saying is, arbitration if necessary, but not necessarily arbitration.

Hon. Mr. Davis: No, Mr. Speaker. That too is one of the difficulties of the hon. member. I didn’t say that.

Mr. Nixon: No, you didn’t say anything.

Mr. Lewis: It bothers us that you should be more progressive on labour matters than they are. That’s unfair.

Mr. S. Smith: You are two of a kind. Big business and big labour.

PRESERVATION OF NIAGARA AGRICULTURAL LAND

Mr. Lewis: May I ask the Premier another question relating to matters discussed in this session? Can you give the House an undertaking that you will make a public determination of the Niagara fruit and grape belt land controversy, the proposal put to you by the Niagara regional government, in a time sufficiently short that this Legislature can debate it before the House rises?

Hon. Mr. Davis: Mr. Speaker, I would like to give the hon. Leader of the Opposition that undertaking. However, being quite realistic and knowing how complicated it is and the need for this to be considered very carefully by government, I can’t give that undertaking. I would like to have some sort of decision -- and I’m just expressing this now without thinking it through very carefully -- whether the decision itself would require or really necessitate any sort of debate here.

Mr. Lewis: Yes, it would. It depends on the decision, doesn’t it?

Hon. Mr. Davis: See, you’re presuming too much too.

Mr. Lewis: No, I am not. I just want to know what it is.

Hon. Mr. Davis: Yes, you are. You’re saying it’s going to necessitate a debate without even knowing what the decision is.

Mr. Lewis: Let me ask the Premier by way of supplementary, what is this incomparable stalling about the agricultural land of the Niagara Peninsula, when last year at this time his Minister of Agriculture and Food (Mr. W. Newman) repudiated exactly the same decision? Why is the Premier taking so long to indicate to Ontario and to Niagara what the determination of government is?

Hon. Mr. Davis: Mr. Speaker, I don’t want, you know --

Mr. Lewis: Be provocative.

Hon. Mr. Davis: -- to be picayune on this, but when the hon. Leader of the Opposition says it’s incomparable, which means that no decision has taken any longer than this --

Mr. Lewis: Incomparable stalling.

Hon. Mr. Davis: -- I have to say that I know other government decisions that have taken longer than this.

Mr. Lewis: Well, you are pushing it.

[2:15]

Mr. Swart: Supplementary to the Premier: Could I ask him if he recognizes that the boundaries issue in Niagara revolves around an official plan, and that as in other official plans it can be changed very readily subject to following a decision. Is he therefore prepared to have some new regulations or legislation developed to give some greater permanency to any decision that is made that is now given by an official plan?

Hon. Mr. Davis: Mr. Speaker, I try to listen very carefully to the hon. member who represents a particular point of view and interest in that area which is not necessarily consistent with that of a lot of his colleagues who surround him.

Mr. Samis: He got elected.

Hon. Mr. Davis: I am referring to his former colleagues on the regional council where the hon. member’s point of view was not necessarily always in the majority.

Mr. Lewis: Are you backing down on Niagara?

Hon. Mr. Davis: I’m not backing down, I am just saying --

Mr. Speaker: Order please. This is a supplementary question.

Hon. Mr. Davis: -- we are not yet ready to tell him -- and I know he wants to know -- what it is the government’s position is going to be. This may come as a great surprise and a great shock to him but the fact remains we are not.

Now, what was the member’s question?

Interjection.

Hon. Mr. Davis: The member wants me to alter those boundaries so that Welland gets larger and the other gets smaller. That’s really what he is saying to me. We really haven’t considered that possibility.

Interjections.

Mr. Swart: Mr. Speaker, I don’t think I got a reply to my question. My question was, is the Premier prepared to change legislation or regulations so that a decision on an official plan for Niagara has some greater degree of permanency than exists under present official plan legislation?

Hon. Mr. Davis: One thing I will say for the hon. member for Welland-Thorold, he has always been a great supporter of regional government until very recently and now he wants us to interfere with the regional government structure.

Mr. Swart: We find it doesn’t work. We want to change it, yes.

Hon. Mr. Davis: Oh no. I’ve known the member so well for so long. He tries to have it both ways whenever it suits.

Interjection.

Hon. Mr. Davis: I would say to the hon. member we really haven’t considered that possibility.

RACIAL DISCRIMINATION ALLEGATIONS

Mr. Lewis: A question of the Minister of Labour, if I may, Mr. Speaker: In this very unhappy situation at Milrod Metal Products Limited -- the charges of race discrimination now coming before the Human Rights Commission -- has the ministry attempted to persuade the company to have them do the time study analysis of that plant by the special firm, Sheldon and Kellogg, to which they had once agreed, rather than by people from within their own corporation which seems to be at the core of the constant upheavals in that work place?

Hon. B. Stephenson: Mr. Speaker, I am not sure at this point that that is at the core of the upheaval at this time. However, both the Labour Relations Board and the Human Rights Commission are presently, at my request, investigating the situation. I anticipate we shall have a report from both of those bodies within the next few days and hopefully will be able to make some recommendations to that company to resolve this difficulty.

Mr. Lewis: A supplementary, if I may: Since this company is now a subsidiary of ITT and -- Well, smile and shake if you will, I want to remind the minister, lest she has forgotten, that since January, 1976, that little plant, Ontario Malleable Iron in Oshawa has been locked out by ITT, and does she think she might deal with this conglomerate in terms of its labour relations and the way it behaves in the province of Ontario in a fairly vigorous fashion?

Hon. B. Stephenson: Mr. Speaker, ITT has obviously some other subsidiaries in the province of Ontario and those subsidiaries have in fact dealt with their labour relations problems quite rationally.

Mr. Lewis: Where are they?

Hon. B. Stephenson: There is a problem, there is no doubt about that, at Ontario Malleable and obviously there is a problem here. We are attempting to find out the root cause of the problems and hopefully we will be able to help the employers and the employees to resolve it.

Mr. Breaugh: While the minister is sorting that out, does she have any advice for those 200 families at Ontario Malleable as to how they feed one another, since they have been locked out without a salary for 11 months now?

Mr. Lewis: It’s not Chile you know, this is Ontario.

Hon. B. Stephenson: Mr. Speaker, there is no doubt about the fact that the senior officials of the Ministry of Labour have been actively involved in attempting to resolve the problem at Ontario Malleable for a prolonged period of time. They are still working very hard at this. There is a degree of intransigence on both sides of this situation which I find unacceptable. I would hope that because of the active pursuit of the problem by officials of the ministry and by myself, because I have made some pretty disturbing remarks which neither side really appreciates apparently, I believe we will be able to resolve that one eventually. The difficulty is that I hear from a number of employees that they have been bruiting about the statement that they don’t really care whether it’s resolved or not, and I find that extremely disturbing.

Mr. Breaugh: Could the minister clarify that last part of her answer?

Mr. Lewis: Which employees?

Hon. B. Stephenson: The company has said that if it is not resolved within a reasonable period of time it will close the plant, and some of the leaders of the employees’ groups have said, “Fine. Go ahead and close the plant.”

Mr. Moffatt: Which leaders?

POLLUTION OF LAKES

Mr. S. Smith: I have a question of the Minister of Natural Resources. Now that it’s been reported that the state of New York has decided to switch its coho salmon planting to Lake Erie from Lake Ontario because of the Myrex in Lake Ontario, is the minister still continuing to plant coho and chinook, which I believe is the programme at the moment in Lake Ontario, despite the high levels of Myrex?

Hon. Mr. Bernier: I believe the state of New York is not totally moving its plantings from Lake Ontario to Lake Erie. I believe there will be a certain quantity planted in that particular lake. I would say that the question of our planting is being reviewed right at the present time. I hope to have something more positive to say in the next few weeks.

Mr. S. Smith: By way of a slightly related supplementary if I might, now that we hear also that Lake Simcoe is polluted, in this instance with mercury, can the minister assure us that we are now in possession of a complete list of all the lakes in which unacceptable levels of various industrial pollutants have been found, and if not, would he undertake to table such a list?

Hon. Mr. Bernier: I’d be glad to table a list of the lakes that we have in our possession. I would say that our studies are ongoing; reviews of lakes are an ongoing matter within the province of Ontario. We think we have something like well over 100,000 lakes in this particular province. I’m sure the member will agree that it will take some time to assess them all. But what we have, we’ll be glad to table.

Mr. Godfrey: Supplementary to the question: Will the minister also include the streams that empty into Lake Ontario, Lake Huron and Lake Erie -- for example, Duffin Creek and other areas like that which we already know are contaminated?

Hon. Mr. Bernier: Yes, we’ll be pleased to give members all the information we have available on those streams.

FRENCH-LANGUAGE EDUCATION

Mr. S. Smith: A question for the Minister of Education: in view of his statement on October 6 that he would have further statements on French education for anglophones and statements on testing in our schools in the not-too-distant future, can the minister tell us when he intends to come forward with those promised statements?

Hon. Mr. Wells: I will have some statements very shortly.

Hon. Mr. Davis: Do you want us to check the date?

Mr. S. Smith: In view of the emergent situation in Waterloo where, due to the cutback in grants, the board has now cut out its pilot bilingual programme, which means that students who have taken that course during the first, second and third grades will now have no more French until grade 6, which means they’ll pretty well lose what investment they’ve already put in of an educational nature, could he tell us what plans he has to assist Waterloo to keep its bilingual programme going?

Hon. Mr. Wells: I would be very pleased to hear more detailed information about the situation in Waterloo. I have not been made aware of the fact that they have cancelled any programme. Indeed it was at one point that the Waterloo county board, if that’s the board the member is talking about, had in fact cancelled the buses for French-language students who were going to another area. But I’m happy that those buses were reinstated by that board just a few weeks ago.

HURONIA REGIONAL CENTRE

Mr. S. Smith: A question for the Minister of Community and Social Services: Can he tell us whether the report which he had commissioned on the Huronia mental retardation facilities is prepared now -- it was presumably only going to take a short time -- and will he be making it public?

Hon. Mr. Taylor: No, the report has not as yet been completed. It is being written. It did take a longer period of time than we anticipated. That was because Dr. Willard was anxious to ensure that everyone who wished to be heard from was heard from. I think he took something in excess of 175 interviews from people who were concerned about that particular operation. He also was sick for a while and that delayed the report as well, but I do expect it soon and I can assure the member that it will certainly be given the consideration of my ministry and government. Frankly, my general view is that matters such as this should not be kept under wraps, if that’s the suggestion the member may be implying.

Mr. S. Smith: By way of supplementary, although I appreciate the minister’s general view about the distinction between information and intelligence -- I think I have heard it at one or two points -- can we be given some guarantee that this report will be made public?

Hon. Mr. Taylor: I am not in a position to guarantee anything --

Interjections.

Hon. Mr. Taylor: You smile at that. All I can guarantee the member is that it will be acted upon in the best interests of the people of the province.

Mr. Lewis: Does the minister realize that almost single-handedly, as a minister, he is a walking testament to the need for a freedom of information Act in this Legislature?

Mr. Speaker: Order, please. That is not supplementary to the question.

Hon. Mr. Taylor: May I reply that I have heard other accusations with equally little foundation in fact or truth.

COMMENTS OF OSC CHAIRMAN

Mr. S. Smith: A brief question for the Minister of Consumer and Commercial Relations, Mr. Speaker: Is he aware of the comments made last month by Arthur Pattillo, the chairman of the Ontario Securities Commission, in which Mr. Pattillo expressed disappointment and said, “I think it is unfortunate that [basically, the essence is] Bill 98 was not proceeded with past first reading”? He feels, as the minister may know, that this is hurting the investment community in this province. Could the minister comment on that speech?

Hon. Mr. Handleman: Yes, I am familiar with the speech. I don’t agree with the conclusions drawn by the hon. member. Mr. Pattillo did express disappointment that it was not re-introduced at this session. He knew that when it was introduced it was for first reading and for submissions and discussions which we have had with members of the investment community.

There is a tremendous amount of amending to be done and my position is that there would be no point in introducing it again unless we were sure the time constraints would permit us to pass it. Since they will not permit us to pass it, in view of the heavy workload of the standing committee on justice, it will probably not be reintroduced until next spring at the earliest.

Mr. S. Smith: By way of brief supplementary, is the minister aware of the consternation it is causing in the business community, which put considerable time into making submissions in order to improve this bill? Does he know, for instance, of the editorial in the Financial Times which says Ontario’s delay in introducing some of these worthwhile amendments is a disservice to investors in all provinces since Ontario takes the lead? Surely something as important as this could be proceeded with?

Hon. Mr. Handleman: Mr. Speaker, I am fully familiar with the editorial comment which has been made. I have been in touch with some of the ministers in other provinces. My understanding is that some of the other provinces are quite prepared to take our Act -- and they are welcome to it -- and introduce it and have it debated. We think there’s no time in this session to introduce it and unless I have the assurance of the hon. members opposite that there would be no debate and no amendments there isn’t time to take that kind of legislation through in a short session.

Mr. Eakins: This is not the closing of hospitals.

REALLOCATION OF JUVENILE INSTITUTION RESOURCES

Ms. Sandeman: A question for the Minister of Correctional Services: Could the minister please explain to us what the plans of his ministry are with relation to children now in training schools under section 9 of The Training Schools Act, particularly in the light of the increasing evidence that many children are inappropriately placed in training schools under that section? Does he still intend to follow his policy, stated on April 13 of this year, of maintaining 1,100 beds in the training schools for the foreseeable future?

Hon. J. R. Smith: Mr. Speaker, the whole matter of our capacity and the fact that the schools we are operating at present are under capacity -- even since we closed Grandview, they are still under capacity except Cecil Facer -- is constantly under review.

Ms. Sandeman: A supplementary: The minister didn’t address himself to my question. Grandview had already been closed when he made that statement in April. What plans does he have for reviewing the situation of children in the training schools under section 9 if they are inappropriately placed in that setting?

Hon. J. R. Smith: We have no further plans for section 9 children.

[2:30]

Mr. Lewis: Supplementary: Even in the light of what has happened, does the minister have no further plans since he sees how inappropriate that placement was?

Hon. J. R. Smith: As a result of what has happened at the Kawartha Lakes School, this is one of the things I intend to turn my attention to -- to make a complete review of section 9 and whether or not it is being used --

Mr. Reid: I thought that was being done already.

Hon. J. R. Smith: Section 8 children are being brought into the training school system under section 9.

Mr. S. Smith: He doesn’t mean to betray you; he just doesn’t know any better.

HIGHWAY 400 EXTENSION

Mrs. Campbell: Mr. Speaker, my question is to the Minister of Transportation and Communications. Considering our discovery in January of this year of some 24 acres of borough and private land in the path of the proposed Highway 400 extension north of Eglinton Avenue, will the minister tell us what the present status of this property is and how much money will be required to purchase it?

Hon. Mr. Snow: Mr. Speaker, I am not completely sure I heard all of the member’s question. I think I heard the general content of it. There is, as I believe has been stated before in this House, one parcel of private ownership land on the Highway 400 right of way north of Eglinton Avenue. All the other land is either owned by the ministry or by the municipalities. At the present time preliminary planning is under way for that section of the road from Jane Street down to Eglinton, and I believe the alignment of the private lands that are required has just been finalized. The property request has gone out to our property people to purchase that land, and I don’t believe any price has been established on it as of yet.

Mrs. Campbell: Supplementary: Is the minister aware that an official in his ministry has advised us that the land required for the Highway 400 extension had been set aside by the borough of North York specifically for roads, while the borough tells us that it is presently designated green belt? Just what is the status of this land?

Hon. Mr. Snow: I can’t explain that particular discrepancy in the information that the hon. member has received, but I shall look into it.

UTDC-ONTC TRAIN DEAL

Mr. Wildman: Mr. Speaker, I have a question for the Minister of Transportation and Communications. Can the minister confirm whether or not UTDC will make a profit of about a quarter of a million dollars per year from the Ontario Northland Railway on the leasing arrangements for the 15-year-old diesel trains purchased in Switzerland? Does he anticipate, if this is the case, ONR having to raise their fares in order to pay the $1-million-a-year bill?

Hon. Mr. Snow: Mr. Speaker, I know where this question was derived from, and I am sure if the hon. member had taken his pencil and paper to figure out the matter a little bit he would have soon come to the conclusion that the UTDC will not be making a profit of a quarter of a million dollars, as I believe he stated, on the leasing of the four trains.

The four trains were purchased by UTDC for, I believe, something in the neighbourhood of $3.7 million to $3.8 million. They are to be leased to the ONTC for a five-year period at a rate of approximately $1 million per year. Obviously there is a difference of about $1.2 million between what the UTDC will receive for the five years and what they paid for the trains. Of course, taken into this calculation is the cost of financing the trains, the amortization of the trains over the five-year period, as the trains are to be sold -- or at least the ONTC is to have an option to purchase the four trains at the end of the five-year period at $100,000 per train. In effect, the ONTC is not only leasing the trains, it is also amortizing the purchase price of the trains over the five-year period, which must be taken into consideration. Any profit that might be derived by UTDC is very minimal indeed.

Mr. Reid: Supplementary: Can the minister explain why he’s going through all this accounting shuffle? In fact, would the minister not agree that all he’s doing is causing higher expenses and trying to improve the balance sheet of UTDC, and that if such a programme should have gone ahead it should have been done by the ONR and that he is trying to confuse the taxpayers by trying to plump up the balance sheet of UTDC?

Hon. Mr. Snow: No, I wouldn’t agree with that statement at all, Mr. Speaker.

Mr. Wildman: Supplementary: Can the minister explain why the ONR couldn’t purchase these trains directly itself, instead of going through UTDC?

Hon. Mr. Snow: Mr. Speaker, the trains are being purchased from the Swiss National Railroad in Switzerland. Certain modifications are being made to the four trains in Switzerland before they will be delivered to UTDC. The reason for UTDC handling the arrangement is because of its contacts in Switzerland, the fact that it is presently dealing with the Swiss railroad company and the Sig Corporation in the development of the prototypes for the TTC streetcars. They have a staff available to supervise the modifications of the trains in Switzerland, and it was a much better and cheaper arrangement to have UTDC carry out these negotiations and the upgrading of the trains because of their people already located over there.

Mr. Reid: Would the minister not agree that there are serious accounting difficulties involved in this? Is he aware of the auditors’ report on UTDC, in which they say they are very concerned about the accounting practices of UTDC, that in their opinion this practice is not in accordance with generally accepted accounting principles, and that, again, the UTDC is trying to confuse and mislead the public and that its accounting practices are already suspect by the accounting firm? What is the minister doing about those things?

Mr. Cunningham: What’s going on over there?

Hon. Mr. Snow: I don’t know how to answer all those questions at once. No, I wouldn’t agree that UTDC is trying to mislead anyone and I wouldn’t agree that there are any accounting complications --

Mr. Reid: What about the auditors?

Mr. S. Smith: Read the auditor’s statement.

Hon. Mr. Snow: If you’ll just hold your britches for a moment. There is no confusion whatever in the accounting arrangements for the purchase of the four trains by UTDC and the leasing of the four trains with the option to purchase to the Ontario Northland.

Mr. Reid: You are just juggling figures.

Hon. Mr. Snow: I don’t think anything could be a simpler business arrangement than that. Mr. Speaker, with regard to the auditor’s notes in the UTDC financial statement, I’m well aware of those. I don’t believe the hon. member is right in saying the accounting practices of UTDC are suspect. I don’t think the auditor gives that impression at all. The auditor draws to our attention the fact that certain costs involved in the development of certain engineering projects are being carried on the books of the company as costs relating to that project which will be recovered from the sale or the development of those particular products. UTDC is strictly a research and development organization. We realize that perhaps if General Motors was developing a new automobile --

Mr. Reid: Why are they funding the ONR?

Hon. Mr. Snow: -- it would not be using that same type of accounting procedure.

Mr. Reid: That’s pretty slim.

PAYMENTS TO MILK SHIPPERS

Mr. McKessock: Mr. Speaker, I have a question for the Minister of Agriculture and Food: In view of the recent announcement by the Quebec Minister of Agriculture that he is guaranteeing now and forever the revenues of his farmers in paying industrial milk shippers this year 40½ cents per hundredweight on in-quota milk, plus paying all penalties in any in-sleeve production, would the minister consider doing the same for Ontario industrial milk shippers?

Interjections.

Hon. W. Newman: Mr. Speaker, in order to answer the member properly, first I’d like to point out that the province of Ontario led the way in putting up a guaranteed bond for the in-sleeve production to be released --

Interjections.

Hon. W. Newman: -- from the Ontario Milk Marketing Board to the milk shippers of the province of Ontario. That guarantee could amount to $10.4 million. That was done by us first. The same offer was made to all the other provinces. They did not do it.

Second, I was the one, with the co-operation of the Ontario Milk Marketing Board, who asked Ottawa to release --

Mr. Nixon: The farmer’s friend.

Hon. W. Newman: -- the four million hundredweight of milk on a pro rata basis to the industrial shippers across this country --

Mr. Sargent: Good for you.

Hon. W. Newman: -- which means 127 million pounds to the producers of the province of Ontario. The Ontario Milk Marketing Board is meeting, I believe, tomorrow and Wednesday to try to work out a formula for the best way to distribute this 127 million pounds of milk --

Mr. Good: Last week you told us it was Thursday and Friday.

Hon. W. Newman: -- to the producers of this province.

Mr. Riddell: Maybe he read the letters I sent.

Mr. Speaker: Order, please.

Hon. W. Newman: I have also met with the board to discuss with them how I feel they could best distribute this quota.

Mr. McKessock: Supplementary: In view of the fact that the minister indicated that Quebec has followed him on the in-sleeve coverage, would he consider following them now on the 40½ cents per hundredweight?

Interjections.

An hon. member: There’s an election on now.

Hon. W. Newman: You know, I won’t even comment about the election. I’ll just comment on the national supply management committee. There is an agreement between Ottawa and all provinces and my understanding about this 40 cents, if it is paid out and as the Quebec Minister of Agriculture is no longer going to be seeking office, I’m not exactly sure what’s going to happen with that --

Mr. Sargent: Answer the question; answer the question.

Interjections.

Mr. Speaker: Order, please. Order.

Hon. W. Newman: The national supply arrangement committee, under the Canadian Dairy Commission, says if they allow payments to be made by a province directly to producers it is breaking the national agreement. If they’re breaking the national agreement, then I will ask Ottawa to step in in this particular case, which I will be doing this week. We have no indication at this point in time that the amount of money has been paid out.

Mr. McKessock: Supplementary: If the federal government does allow the Quebec government to pay this, will the minister follow suit and pay the same?

Hon. W. Newman: Listen, I don’t want to destroy the national programme on milk in this country --

Mr. Nixon: You can’t do less.

Hon. W. Newman: Oh, listen, you fellows really don’t understand it, do you? You really don’t understand it. You would destroy for political expediency the milk policies of this country. Two years down the road, we’d be in chaos, and you know it.

Hon. Mr. Welch: Shame, shame.

Mr. Nixon: Why doesn’t the minister resign?

Mr. Speaker: Order, please. Order.

RADIOACTIVITY AT PORT HOPE

Mr. Yakabuski: Mr. Speaker, I have a question for the Minister of Health: Because it is common knowledge that the Port Hope cleanup has begun and that already thousands of tons of material have been removed from sites in that locality and dumped in the --

Mr. Singer: In Renfrew.

Mr. Yakabuski: -- in property in the Chalk River area belonging to Atomic Energy of Canada, I’m just wondering and I want his assurance, that we are not just transferring --

Mr. Warner: Question, question

Mr. Yakabuski: -- the Port Hope problem to Renfrew county.

Mr. Nixon: Never.

Mr. Moffatt: No. They’ve already got a problem.

Hon. F. S. Miller: Mr. Speaker, the responsibility is federal. I think that should be kept clearly in mind when the hon. member is discussing the issue in his riding.

Interjections.

Mr. Singer: Good answer, that.

FAMILY BENEFITS RATES

Mr. McClellan: I have a question for the Minister of Community and Social Services. It has been 17 months since the family benefits rates in Ontario were raised in May, 1975, and during that period the consumer price index has gone up 10.7 per cent. I want to ask the minister why there has been such a delay in raising the social assistance rates in the province and whether he will assure us that he will raise those rates this month to alleviate very real hardships that are being experienced by social assistance recipients.

Mr. S. Smith: He can’t assure you of anything.

Mr. Wildman: Can’t guarantee it.

Mr. Speaker: Order, please.

Hon. Mr. Taylor: I sure wouldn’t guarantee the member for Hamilton West anything.

Interjections.

Mr. Sargent: That wasn’t very nice.

Hon. Mr. Taylor: Well, you don’t blame me, do you?

Mr. Speaker: Order, please. The question’s been asked.

Mr. S. Smith: That’s as good as the Premier’s remark about chickening out.

[2:45]

Hon. Mr. Taylor: As members know the family benefit rates are not automatically indexed so there are no automatic increases depending on fluctuations in the cost of living. However, they are periodically reviewed as members very well know.

Mr. McClellan: Seventeen months.

Mr. R. S. Smith: Seventeen months is a little more than periodical.

Hon. Mr. Taylor: I can assure the House that that policy has not changed.

Mr. S. Smith: He can’t assure you of anything.

Mr. McClellan: Mr. Speaker, to that non-answer, I wonder if the minister, when he gets around to reviewing the rates, would take into account the publication by the Ministry of Housing released today, Rental Market Survey? I want to ask the minister whether he’s seen that and whether he realizes that the rental rates which he pays under his family benefits legislation are about half the average rent levels in the metropolitan area and whether he will assure us that he will take that into consideration when he revises the rates, I hope again this month.

Hon. Mr. Taylor: May I say in response, that no person should know better than the member for Bellwoods, having worked as a social worker, that the amount of money or the breakdown for rent and other items is considered. However, he should also know that if one is going to earmark a specific lump sum for rent across the board, there may very well be a tendency for landlords to meet that target even though they may be charging less. Really what counts in the final analysis is the overall lump sum payment that is given to people.

Mr. Lewis: You are a great social services minister.

ZUCCHINI RECIPE

Mr. Good: Mr. Speaker, a question for the Minister of Agriculture and Food: This has to do with an August 9 release from his ministry. Is the minister aware that the rather exotic and unusual recipe for zucchini squash as published and which is purported to have been developed by the ministry is the same as a recipe which appears on page 59 of The Cooking of Vienna’s Empire, published by Time-Life Books, New York city, copyrighted in 1968?

Hon. Mr. Handleman: Plagiarism.

Mr. Speaker: Order, please. We can’t hear the man.

Mr. Good: I’d like to ask the minister the same question that was asked me: Does the minister not feel that there’s no reason or excuse for his ministry to be indulging in the rather dishonest practice of plagiarizing recipes?

Hon. W. Newman: Mr. Speaker, I consider this of the most urgent public importance and I’ll be glad to answer the question. Yes, there was a recipe put out by the ministry called --

Mr. Nixon: You can’t blame this on Gene Whelan.

Hon. W. Newman: Aren’t you glad you separated parties? Anyway, the recipe is called zucchini with dill sauce. This is the one the member handed to me the other day. We’re looking into it. I understand there might be some interest by another group but I’ll suggest my wife has a better recipe than this one.

Mr. Good: Has the minister received a letter yet from the legal department of Time-Life book publishers?

Mr. Singer: A writ.

Hon. W. Newman: No, we have not.

Mr. Good: Well, you’re about to, I believe.

Mr. Nixon: They are going to take it to the Supreme Court.

Mr. Speaker: Order.

WESTINGHOUSE ANTI-TRUST SUIT

Mr. Burr: A question for the Minister of Energy regarding Westinghouse Electric Corporation’s anti-trust suit filed recently, accusing 29 major uranium-producing companies, including some in Canada, of forming a cartel to fix prices. The question is: Does the minister know which Canadian companies are being sued?

Hon. Mr. Timbrell: No, Mr. Speaker, I don’t. This is a matter strictly and purely within the prerogative of the federal government.

Mr. Burr: A supplementary: If it turns out that Canadian companies have been indeed charging exorbitantly high prices, not only to the American power companies but also to Ontario Hydro, will the minister seek to recover the over-payments which have been charged against Hydro?

Hon. Mr. Timbrell: I think the hon. member is, first of all, prejudging the net effects of the action in the United States. I think perhaps he would be well advised to look at some of the background of that action and why Westinghouse has launched it at all, to look at some of their sales and some of the agreements -- perhaps questionable agreements -- they made five and 10 years ago for the provision of fuel. I think it’s very premature and very hypothetical at this point.

INDIAN LAND AND RESOURCE CLAIMS

Mr. Sargent: I have a question of the Minister of Natural Resources. On June 3 I asked the minister if there was any reason why the cash payment can’t be made to the Indians now concerning the lands acquired from the Indian reserves by the ministry over the years in the Bruce Peninsula. He very adeptly stick-handled around the goal a bit and finally said: “These are being resolved by agreement with the three parties” -- that’s the feds, this government and the Indians. “Once that is resolved and clarified, then we will be able to make payments to those Indian bands whose funds are being held in trust on their behalf.”

I am continually having to phone down to get cheques from Indian Affairs to have them balance their books. Why in hell can’t you pay them the money you owe them?

Hon. Mr. Bernier: I have to tell the hon. member that these discussions are very complex, as he well knows. They are still going on and we are as anxious to clear up the matter as he is. I can assure him that we will do everything we can to expedite the situation.

Mr. Sargent: That isn’t good enough. If they pay out money they have to have it coming in.

Mr. Speaker: The oral question period has expired.

Petitions.

Presenting reports.

REPORTS

Hon. Mr. McMurtry tabled the report of the Public Trustee for the year ended March 31, 1976.

Hon. Mr. Parrott tabled the financial report for the University of Waterloo and the University of Western Ontario for the year ended April 30, 1976.

Mr. Speaker: Motions.

Introduction of bills.

Orders of the day.

ONTARIO ENERGY BOARD REPORT

Consideration of the report of the Ontario Energy Board respecting Ontario Hydro bulk power rates for 1977.

Mr. MacDonald: Let me remind the House of two basic points to begin with, and then I want to zero in on what I think is the real focus of this debate. Members of the House will be aware of the fact that Ontario Hydro requested a rate increase for the year 1977 of 32 per cent. This was submitted to the now-required review by the Ontario Energy Board which reduced it to 30 per cent. Secondly, Ontario Hydro is in something of a financial difficulty at the present time. I think this must be frankly acknowledged at the outset so that one can put any comments and any proposals with regard to easing this rate increase within the context so that they can be presented responsibly and can be judged to be responsible.

As we learned in the select committee, particularly in the second half of our sessions in the first six months of this year in testimony from many different officials of the corporation, Ontario Hydro is experiencing financial difficulties because of the fact that its revenues are dropping and its costs are continuing to rise. Their revenues are dropping because Canada and Ontario are tending to experience now somewhat in lag behind that of the United States a rather significant drop in the industrial use of power because of the whole economic slackness of the last year or so.

Secondly, to some degree, at this point rather inestimable and I suspect rather small, there is some impact on the whole ethic of conservation. So Hydro’s sales are dropping and therefore their revenues are dropping. And that, combined with a continued rise in costs, in keeping with rising costs generally across the board, means that Hydro’s net position is a difficult one.

Now, having said that --

Mr. Deputy Speaker: Could we have some order in the chamber, please? There are far too many private conversations going on.

Mr. MacDonald: In other words, viewed strictly from a traditional budgeting and accounting procedure, the 32 per cent increase which Hydro asked for is defensible. But the point I want to make to the House with great vigour this afternoon is that that doesn’t alter the fact that what Hydro may have asked for represents an intolerable burden upon consumers in this period of AIB restraint. If anything is to be done by Hydro and/or the government, it should be done to ease that burden. The New Democratic Party submits that something can and should be done.

In fact, let me put it in what I think are defensible and yet rather tough phrases. I think this government would be irresponsible if it didn’t move to reduce the proposed Hydro rate increase. It would be irresponsible, because this government is committed to an implementation of the Trudeau-Davis wage and price guidelines. And I insist that they are Trudeau and Davis guidelines. They were laid down by Ottawa; they were accepted unquestionably by this government --

Hon. Mr. Timbrell: By Blakeney and Schreyer too.

Mr. MacDonald: That’s irrelevant at the moment. There were some points that Blakeney and Schreyer disagreed with and they had the intestinal fortitude to speak up. The trouble with this government is it accepted holus-bolus what Ottawa suggested even though there were some things that they muttered some concern about, and now they are committed to an implementation of those guidelines. As long as the people of the province of Ontario are going to have to live with rather strongly implemented wage controls, then there is an obligation on this government to operate within its jurisdiction to do something about correcting the rather soft implementation of price controls which we have experienced in the first year of AIB.

I don’t want to stray unduly, because I understand there will be an appropriate time later in this month to discuss the whole report, but I just draw your attention, Mr. Speaker, and the attention of the minister to a recommendation IV-10 on page I-27, in the earlier portion of the final report of the select committee, which is entitled “Easing the Burden on the Consumer.” I think I’d just like to read those paragraphs into the record.

“The bulk power rate is applied only to the relatively few direct industrial customers and to the municipal utilities. Most consumers of electric power buy from municipal utilities at prices that are set by, and unique to, each utility. Under the memorandum of agreement signed by Ontario and Canada, jurisdiction for the direct application of the Anti-Inflation Act and regulations to the municipal utilities was assigned to Ontario Hydro.

“The committee has, from its beginning, been deeply concerned about the impact of Hydro’s bulk power rate increases on the consumer. In its interim report, the committee specifically hoped that the 1976 rate increase could be kept to a level that could be related to the increase in incomes allowable under the guidelines.’ The committee therefore carefully considered the impact an increase in the bulk power rate would have on the typical residential customer. The committee expects that Hydro will use its regulatory powers to contain municipal rate increases in much the same way as the committee has approached Hydro’s bulk power rate increase: applying the general intent of the guidelines; examining each component of cost; and looking at the rates in a longer-term perspective.”

The implication of that -- namely that Hydro should see that any saving is passed on to the customer so that the impact in price increases will be as close to the guidelines as possible, if not within the guidelines -- is that there is an obligation on the government to make certain the bulk power rate increase is such that, when passed on, it will be close to or within the guidelines.

That, of course, raises a key question: Is it possible to do so? I want to suggest to you, Mr. Speaker, that it is possible to do so by rather a simple procedure. It’s not a new procedure. It’s one we talked about ad nauseam in the select committee. It is the procedure of smoothing the rates over a two- to three-year period, specifically over a three-year period.

[3:00]

Let me remind the House that in the testimony before the select committee last spring, Hydro forecast then and has confirmed since that its rate increase for 1977 would have to be in the range of 32 per cent. It pointed out, however, and it has confirmed since that it anticipates its rate increase requirements for 1978 would be in the range of 15 per cent; in 1979, in the range of 11 per cent and in the years beyond that in the range from five to 10 per cent. In short, there is in prospect a rather significant drop in the increase required each year in order to meet Hydro’s needs.

If we are living in a period of restraint and if this government is committed to see that that restraint is imposed and lived up to as much as possible, then I submit that there’s an obligation on the government to do this year what has been talked about -- I won’t go into the difficulties and the failure of implementing it in the past -- and implement a smoothing of the 32 per cent required for 1977, the 15 per cent forecast for 1978 and the 11 per cent increase forecast for 1979 which would be a rate increase in our view, in the range of 20 per cent over the next three-year period; at least 20 per cent for the first of the three years.

Let me go one step further. I remind the House of what happened last year. Last year, Hydro’s first indication of its rate increase requirements was 38 per cent. The minister may shake his head all he wants but it is correct -- 38 per cent. They smoothed it out to 29 point something or in the range of 30 per cent.

There was a hue and cry as a result of that proposed 30 per cent rate increase which was initiated in the first instance within this House, primarily by the leader of the New Democratic Party (Mr. Lewis), but it was obviously voicing a widespread concern across the province --

Mr. Peterson: Yes, from the Treasurer (Mr. McKeough).

Mr. MacDonald: -- that the government tended to ignore to begin with but significantly, within a matter of weeks, certainly within a matter of a month or so, the two responsible ministers, particularly the provincial Treasurer, had joined the hue and cry. To borrow his phraseology, he said the prospect of a 30 per cent rate increase was appalling. Because of that word from on high, Hydro reviewed the situation and revised its rate increase requirements to 25 per cent.

I always assumed that the government thought that even that might be reviewed still further, otherwise I don’t know why it set up the select committee to engage in that exercise. In any case, the select committee did review the situation and recommended a further reduction in the increase to 22 per cent. The government accepted it. Hydro implemented it.

Let me review what happened last year. Hydro’s initial forecast was for 38 per cent. It smoothed it to 30. It voluntarily cut it to 25 per cent when the provincial Treasurer and a lot of other people found it to be appalling. The select committee took it down to 22 per cent.

What we are going to have this year is Hydro asking for 32 per cent. The Energy Board has reduced it to 30 and if there is no further reduction in terms of the budgetary and accounting needs of Hydro, then I submit the government has this remaining option -- to say to Hydro that the rates should be smoothed over the next three-year period and that for the year 1977 it should be no more than a 20 per cent increase.

I predict that in the second, third and fourth year of the smoothing -- because it’s an ongoing process in which each year one takes a new year into the smoothing process -- and as we reach into the 1980s when the forecast increase requirements are in the range of five to 10 per cent -- at least that is the forecast now -- we can avoid the intolerable impact of this 30 per cent increase.

I say to the provincial Treasurer, through you, Mr. Speaker, that if he thought a 30 per cent increase was appalling last year by what tortured logic does he come to the conclusion that it isn’t appalling this year?

The echoing silence is significant. There is obviously no rhyme or reason as to why it shouldn’t be just as appalling this year. We are still engaged, certainly at the federal level, in as vigorous an implementation of the wage controls, and presumably this government is going along. We are still engaged in a soft implementation of price control, and a refusal on the part of this government to do what it can to reduce that 30 per cent is just to play the game of a soft implementation of price control, which erodes the whole credibility of the AIB programme.

The government can’t have it both ways. If it wants to have a programme then it has to exercise its powers within its jurisdiction to make certain that that programme is going to be effective. I remind you, Mr. Speaker, what could flow from this, if we were to smooth the 30-15-11 over the next three years to a rate that in 1977 would start with 20 per cent. Twenty per cent in bulk power rates would on the basis of past experience translate itself into a rate for most utilities, across the board in most utilities, in the range of 15 per cent. Last year it was 16 per cent, when our bulk power increase was 22 per cent it was 16 per cent.

Hon. Mr. Timbrell: Seventeen per cent.

Mr. MacDonald: Well 16 to 17 per cent, and then the rate for the mythical average residential consumer was 13.9 per cent. All I am saying is that if you take your 20 per cent smooth rate for 1977 it could escalate down to that mythical average residential consumer at the rate of perhaps 13 per cent -- admittedly not wholly within the guidelines. What is the minister looking so puzzled about? If a bulk rate increase last year of 22 per cent, ended up with 13.9 per cent for the mythical average residential consumer, is it not a likely prospect that a bulk rate increase of 20 per cent would result in an increase for the residential consumer in the range of 13 per cent? Sure it would. He can shake his head all he wants. I would be interested to see any counter argument to that.

I think I have made the case, and I don’t want to take an undue amount of time, Mr. Speaker. I just want to deal with one final point. Admittedly if Hydro’s requirements for next year, now fixed by the Ontario Energy Board at a 30 per cent increase, are smoothed out at 20 per cent for 1977, that is going to leave Hydro with a cash flow problem. They will get 10 per cent less revenue than they were expecting. In short, instead of having an increase of 30 per cent on their $1.5 billion revenue, which would be roughly $450 million, they would not get in 1977 about $150 million. I suggest there is an answer in which the government can do something about that and it is right back in the court of the provincial Treasurer.

I know that Hydro is trying desperately to live within its current debt-equity ratio. I know that this government is painfully sensitive about Hydro’s borrowings. When we listened to the investment dealers before the committee last year the record will indicate that they were very frank. They weren’t worried so much with regard to Hydro’s borrowings. They were looking through Hydro at the situation within the provincial government -- a government that was running a debt of $1.9 billion at that time -- and while they wouldn’t choose to describe it as fiscal mismanagement, those on this side of the House have deemed that to be rather an appropriate description of the situation. In other words, the problem rests with the government.

Okay. Just because the government is uptight and brought in a budget last spring to try to deal with this problem and fix the ceiling for Hydro of $1.5 billion capital availability for the next three years, I don’t think it should be an inflexible straitjacket that doesn’t permit at least a minor relaxation to cope with this situation so that you could ease the burden on the consumer from this unnecessary 30 per cent rate increase. Perhaps $150 million might have to be borrowed at the end of the first year to compensate for the drop in cash flow that Hydro would have. In the second year, if you were picking up 19 per cent or 20 per cent instead of the 15 per cent that was forecast, you would be getting more money than you needed so you could start repayment immediately on this short-term borrowing of $150 million.

It doesn’t need to be added into the long-term borrowings for Hydro. It doesn’t need to alter the debt-equity ratio. Indeed, one of my colleagues, the hon. member for Wentworth (Mr. Deans), our House leader, has done some interesting calculations, and later in the debate he will give them to you, Mr. Speaker, to show you that a smooth rate in the range 20, 19 and 18 over the next three years would leave Hydro with more money rather than less. Admittedly, in the process you would have certain interest charges that are difficult to calculate because it depends at what point in the year you make your borrowing in 1977 to compensate for the drop in cash flow, and at what point in the next year you start to repay it, but it’s a sensible kind of proposition.

I submit, in summary, it would be a reflection of this government’s willingness to accept its obligation to play its part to control prices that fall within its jurisdiction, otherwise they are acting irresponsibly, they are paying lip service to the AIB, the Trudeau-Davis wage and price controls, but they’re not doing anything to implement it, certainly on the price side.

Mr. Reed: Mr. Speaker, if we consider that the first real inquiry into the affairs of Ontario Hydro occurred only this year -- the 1975-76 select committee on Ontario Hydro -- it’s small wonder that Hydro has been found wanting in both its policy directions and its management practices. Seen in the light of the general financial situation, the 30 per cent asked-for increase can hardly be surprising. And the possibility that we’ll be facing further rate increases in subsequent years is certainly not out of the question.

On the issue of the nuclear component, one must recall that it has been well over 20 years since the Ontario government made the decision that projected increases in demand could be met by thermal production of electricity. So complete has been the government’s commitment to its nuclear policy that in some cases hydraulic plants have been simply closed rather than conscientiously repaired or refitted. Moreover, any arguments that questioned cost, reliability or long-term conservation either went unrecognized or were ignored.

Hydro’s own figures for 1975 show the cost per kilowatt for thermo-nuclear electricity is some eight times that for hydraulically produced electricity. The ministry has made a serious error in judgement in operating Hydro under the assumption that the more you use the cheaper it will be, and thus, use as much as possible. We know that that sort of rationale, economically at least, has some reason connected with it with the old hydraulic component, but with the thermal component it simply doesn’t add up.

As Hydro’s rationale is to produce electric power at cost to the people of Ontario, it would appear obvious that their approach to marketing does not correspond to their approach to production. Ontario Hydro to this point has not changed its method of pricing, a method which discriminates against the smaller consumer. We have no doubt that better methods of pricing could influence the levels of consumption of electricity in the province, and that the average household could be given a preferred rate on initial purchases.

Hydro currently capitalizes to meet a peak demand, which usually comes some time in February and lasts for a few hours. This peak could be reduced, not only by incentive pricing but through effective technical adjustments as well as a more fundamental commitment to conservation. Hydro’s failure with regard to the management of demand during this peak period is endemic of a more general attitude. Indeed, the entire Hydro financial situation and the policy of meeting demand come what may begs the question why Hydro was allowed to operate for so long without any legislative scrutiny.

[3:15]

Using thermal generation as we do at the present time, almost two-thirds of the energy input is lost. As can be so readily shown, this need not be the case. Moreover, as thermal generation allows for effective decentralization -- for example, certain important industries can benefit because equipment can be relocated virtually anywhere -- the need for further costly expansions of the provincial grid might be substantially reduced.

There is no question that the responsibility for this and future price increases falls directly on the government’s shoulders. Energy is the key to our economic hopes, our standard of living, and we can no longer accept at face value the statements of a government that has shown itself so lacking.

At the same time, I am still of the opinion regarding the 30 per cent increase that if that proportion of Hydro’s income -- which it denies as profit but which is undeniably a profit -- were ordered into the general revenue, the increase still might be reduced at least a few percentage points. I would urge the government to so order, as I understand that it has done on occasion in the past.

Hydro’s mandate is to produce power at cost to the people of Ontario, and while Ontario Hydro would argue that it does not make a profit there are certain cushions which, through this critical year, could be eliminated. I believe the approach to be reasonable and responsible and still capable of maintaining the financial integrity of this system.

Mr. Nixon: Mr. Speaker, is it the minister’s intention of concluding the debate at this time?

Hon. Mr. Timbrell: Well, if I can, I thought I’d speak now.

Mr. Nixon: There are other people to speak.

Hon. Mr. Timbrell: I haven’t seen the full list. How many others do you have?

Mr. Deputy Speaker: It’s the understanding of the Chair that the debate will conclude at 5 o’clock, and it’s my understanding that the time allocation has been split up evenly among the three parties; 40 minutes each.

Hon. Mr. Timbrell: Mr. Speaker, I understand by indication from the member for York South (Mr. MacDonald) that there’s one other speaker for the official opposition party.

Mr. Moffatt: Two more over here.

Mr. Peterson: There are several here.

Hon. Mr. Timbrell: Well, I understood that there was an agreement that we would rotate.

Mr. Nixon: I don’t want to delay it, Mr. Speaker, but it is often the procedure that the minister in charge will wind up, so that the arguments can be answered or further information supplied.

Hon. Mr. Timbrell: Mr. Speaker, I am at the disposal of the House, as far as that goes. If you’d rather --

Mr. Nixon: No, that’s fine.

Hon. Mr. Timbrell: -- that I wait until later, I will. If you want to proceed with your next speaker, then go ahead.

Mr. Drea: Mr. Speaker, one of the difficulties in assessing the recommended rate increase for Ontario Hydro by the Ontario Energy Board is that at first hand it seems to defy a great many aspects of the anti-inflation programme in this country. Certainly a sizable increase in a very essential commodity has to be looked at, particularly at this time, in the light of whether there is an alternative to it that will do three things:

1. Protect the financial integrity of the corporation, which happens to be a very significant borrower in foreign markets;

2. Provide the utility with the financial revenue to carry on its operations within the limits that have been imposed upon its borrowing;

3. -- and I regard No. 3 as the most significant -- Provide the greatest benefit to the residential consumer, both in the light of the rates that will be paid, the service that will be provided, not only now but in the future, and the consequence of deviating from the recommended increase which has been reviewed by the Ontario Energy Board.

First of all, let’s discuss the implications upon the utility in the markets where it must borrow and there is no argument in this House today that Hydro must borrow. It would be foolhardy to suggest that it could pay as it goes. It is less than a year ago since the smoothing process, which has been suggested as the alternative, went down the drain so rapidly that it isn’t even mentioned in the report which came to this Legislature from the select committee recommending the 22 per cent increase which was finally adopted.

I say it went down the drain so quickly that it wasn’t mentioned. It did not go down the drain without the considered discussion and thought of the select committee. There is not a member on that committee who didn’t know exactly what was happening and they wanted the rates for 1976 to be as low as possible to cushion the impact of that raise.

I do not find it a reasonable alternative to propose to a corporation now that it revert to a financial position which was abruptly and decisively turned aside by this Legislature less than a year ago.

In short, I do not believe that smoothing -- I agree with the member for York South that smoothing is an accepted practice. It has been accepted practice in this province for a great number of years. I agree that it makes admirable good sense. I agree that it probably helped put Hydro into the financial position it is in today. But not at this time. It was put out a year ago and everybody knew what was happening.

One doesn’t play with the financial operations of a utility of the size of Ontario Hydro, saying that in 1975 on this rate increase it goes one way financially and in 1976 it goes another way. The obvious question is what happens a year from now in 1977? One can only play with financial figures and financial acumen for so long. Sooner or later we come to the day of reckoning, the bottom line, and this is the year when the bottom line is there.

Secondly, in terms of the revenues which must be raised, how can we go to a utility and say, less than a year ago, “Restrain yourself. Do not borrow. If you are going to have to build, build within the limitations of your borrowing, the obvious point being that if you are going beyond the limitations which have been imposed upon you in your public borrowing, you are going to have to raise more revenue from your rates.” Those are the only two ways that Hydro can raise funds.

Then we come back a year later and say, “Notwithstanding all that, go out and borrow a little bit more because perhaps next year the revenues will be higher; the recession may be over; a great number of things may happen. The New York bond market may be this, that or the other thing but by 1978 you will be back in a financial position where your revenues are keeping pace with what has been reviewed and found desirable by the Ontario Energy Board for the rate year of 1977.”

Finally, we come to the consumer. The consumer is being asked to pay a bill --

Mr. MacDonald: They burn while we fiddle.

Mr. Drea: The consumer is being asked to pay a bill. The consumer was asked last year to pay a bill. In the light of the Ontario Hydro bulk rate increases until last year, as reflected in the rates charged by the local utilities, the raise last year was, quite frankly, to many consumers, appalling. Incidentally, the word used by the provincial Treasurer (Mr. McKeough) was obscene, not appalling.

Mr. Peterson: You are obscene; he is appalling.

Mr. MacDonald: I didn’t see any big correction.

Mr. Drea: This year it is not so appalling. On the one hand, the federal government by its own action has raised most significantly, most substantially and most appallingly the two competitive sources of fuel and of energy for the consumer far more than even this increase.

Secondly, members opposite are asking the consumer to buy this kind of a flim-flam: “Yes, we will lower your rates this year; and while we can’t guarantee what is going to happen next year or the year after in terms of fixed costs with Hydro, such as the cost of fuel, we’re going to take it easy on you this year because we can spread it out, but don’t really worry too much about it because by 1978 or 1979 it will all balance out.” The time has come in this province where people expect to pay their full costs for energy. From government they want the commitment that their electrical energy, which they own and which they control, will be produced at cost and that it will be supplied at cost or as near to cost as is possible.

I don’t think it does any good when we’re asking people to meet the challenge of not only the high cost of energy, but indeed the changing times in energy supply, production and availability, when we’re asking them to tighten their belts one way, to accept energy conservation as a way of life, then to say, notwithstanding that, we are going to play a few little games with you on what the rate is and somehow we are going to try to postpone the day of reckoning into 1978, 1979, 1980 and so on.

If I thought smoothing would do a scintilla of good towards Ontario Hydro’s financial position in terms of its borrowing, towards Ontario Hydro’s financial position in terms of the revenue it must generate for the system, if it would really do anything for the consumer, then I assure you I would be a very strong advocate of smoothing. But the question of smoothing and all the things that went with it were given most deliberate, most detailed and most substantive discussion by the select committee in 1975. At that time, as I said before, smoothing and the other alternatives to meeting the day of reckoning were discarded. The work of the select committee was to make Hydro adapt itself financially as well as in an operational way to changing times, to quote the cliché, to take the fat out of Hydro. In the ensuing months by and large that has been done.

Surely now is not the time to say that after a few short months let’s go back to the game of let’s give this, let’s give that and let’s see what happens next year. I suggest to you, Mr. Speaker, the Ontario Energy Board has very carefully considered the application by Hydro. It has very carefully listened to the witnesses. It has issued a very detailed report. I think it would be foolhardy to try to fool the consumers of this province that there is an easy way out. The truth of the matter is there isn’t.

As a matter of fact, hard as the increase may be this year, at least we have reached the end of the tunnel. To postpone it and put it down the road, quite frankly, is asking to go back to the gropings of late 1974 and early 1975; and to me that is a very grave disservice, not only to the consumers of this province but to the utility that must supply them.

[3:30]

Ms. Gigantes: Mr. Speaker, I can’t resist picking up on a few of the points made by the hon. member for Scarborough Centre. He makes smoothing, this very sensible suggestion that’s been put forward by my colleague, sound like some kind of sin that is carried out in dark corners. Smoothing is a perfectly reasonable kind of adjustment which Hydro has itself carried on its rates for many years; and the reason it was not adopted in 1976, I should point out, was that you would have been smoothing up to the projection that we now have in front of us for 1977, and I would expect that even a Conservative member would understand that.

He talked about three elements that he wished to see satisfied before he would accept smoothing as a possibility for 1977. He said the financial integrity of Ontario Hydro had to be protected in foreign money markets. Of course it has to be protected, and every member who sat on that select committee is very well aware of the nature of the concern expressed by the money lenders in New York about not Ontario Hydro but the Ontario government. The fact remains that the Treasurer’s limitations on borrowing for Ontario Hydro were made, in his own words, “to allow the government of Ontario room in the money market.” He then later announced that he intended not to borrow in New York during this year and there is, therefore, no good reason for the kind of limitation which he has placed on Hydro. I’m quite convinced, from the kinds of testimony that we had before the select committee, that the amount of borrowing that would be involved or smoothing for 1977 would not be a danger to Ontario Hydro’s financial integrity.

He talked about meeting the borrowing guidelines and the whole theme of his speech seemed to be summed up in the attitude he displayed on this question. Because what he’s saying is, “What is, is; because it is, it shall be.” That simply is not a very good explanation for anything, let alone our Hydro rates for 1977.

He talked of benefit to the consumer and I think he rather dismissed what happened to the consumer in the last few years facing hydro increases. Last year, as you’ll recall, Mr. Speaker, with great reservations the select committee recommended that the rate for 1976 should be a 22 per cent increase over 1975. We are now contemplating a recommendation for a 30 per cent increase. Surely the member for Scarborough Centre and the Minister of Energy (Mr. Timbrell) and Ontario Hydro cannot believe, nor can the Treasurer, that the consumer of Ontario is not aware that the crunch is on. He’s been crunched; he knows it, she knows it. There is no need to drive home what seems to be almost a moral lesson this government is trying to make. I think the consumers in Ontario have felt that lesson, and if they didn’t get it sooner I suggest that the fault lies partly with the government of Ontario.

What we’re talking about now is the projection over the next three years. It says: “In 1977 Hydro rates shall go up by 30 per cent. In 1978 they shall go up by 15 per cent in addition. In 1979 they shall go up by another 11 per cent” -- the Minister of Energy shakes his head; good, good; I hope it’s better -- “and we are going to have a decreasing rate of increase after 1979 and into the 1980s.”

Let’s look backwards at how we got into this situation. There is a kind of broad outline, as I see it, of the reasons for suggesting smoothing at this stage. It’s several years ago -- it must be several years ago; it must be between five and 10 years ago -- that Ontario Hydro became aware that, based on its historic growth pattern of seven per cent, which it followed, the growth and demand has gone up seven per cent every year, smoothed over the last 50 to 70 years, that we would be getting to a crunch in our hydro costs just about now.

What’s been happening is we have been running out of sites for cheap hydro-electric development -- and that was clear to Hydro for years back. Then it had to make a judgement about what the alternatives were. It had to make a judgement about what to do, now that cheap hydro was a thing of the past. It had to make a choice: It could go nuclear versus other fossil fuels, it could go a centralized system versus a decentralized system and it could go for a growth system or a conservation system.

Let’s review what kind of choices it has made. Hydro chose the nuclear system; that system now stands in question in my eyes and I think in the eyes of many who were on the select committee. Hydro chose the centralized system, the system with large installations where you have to have massive reserves in case one of your units goes out. Hydro chose a growth system; Hydro assumed that the seven per cent increase in demand for electric power in Ontario would keep on, that every 10 years our demand for electric energy would double. Those were the choices Hydro made.

Hydro is a publicly owned company, and the public has been content over the last several decades to allow Hydro to make its own planning; it has been content with the way Hydro has operated. We have been going through a period when Ontario Hydro could supply us with electricity at a decreasing price in terms of our take-home pay. Hydro knew that was going to change, it knew many years back that was going to change, and it still made those choices, which I consider to be questionable choices when you look back.

Hydro is one of the biggest businesses in the world, and the public has been content to let it operate with a dynamic of its own because it produced for us what we needed: energy at a good low cost. Hydro has been used to creating its own demand for its own produce. It has been selling electric energy. It has created, in a sense, the crisis that we now face. It is used to considering costs as something that get passed through, and it is used to planning and operating, like other huge corporations, without any kind of concern about what public reaction will be.

Now things are changing. We began to see, through the months that we sat in the select committee on Hydro, a change coming too in the attitude of Ontario Hydro. It is a very slow change. It is, I suggest, a very reluctant change. This organization has rolled on for years with its own dynamic, its own inward looking view of how to produce energy for Ontario at what price and for the benefit of whom. This corporation doesn’t take kindly to the kind of investigation that we put it through during the select committee procedure, but it is nevertheless beginning to respond.

I suggest to you, Mr. Speaker, that when Ontario Hydro, and indeed the Minister of Energy, came before the select committee last fall, they were not very enthusiastic about conservation. This day marks day two of conservation week in Ontario, and the attitude has obviously changed: conservation is now in. In a limited way it is beginning to get going for Ontario Hydro and for the Ministry of Energy. But last year, just a year ago, the Minister of Energy, ministry officials and Ontario Hydro were definitely downplaying to us in testimony the positive benefits that conservation could bring to Ontario. But times change; even Hydro changes.

I think that Hydro has not changed enough yet and I don’t think the Minister of Energy has changed enough in his attitudes yet. I heard him, in interviews this summer in the Ottawa area, dismissing the benefits that could be achieved with a revised rate structure for Ontario Hydro.

Hon. Mr. Timbrell: Mr. Speaker, on a point of order. The member purports to credit certain comments to me. I am afraid, from what she said, that she’s dead wrong -- as usual.

Mr. Deputy Speaker: That’s not a point of order.

Mr. Breithaupt: It’s not even a point of view.

Mr. Cunningham: It’s not even a point.

Ms. Gigantes: Mr. Speaker, I can only report what my ears heard. There is an attitude on the part of the Minister of Energy, the Treasurer of Ontario, and Ontario Hydro, which I can only describe as a “brownmail” attitude. They go around talking about brown-outs; it is “brownmail.” They are trying to frighten us into saying that whatever they decided seven years ago, 10 years ago, is going to hold true today; and whatever costs they decided seven years ago we could take today, we are going to take and it is good for our souls while we do it.

I think our souls have had enough and I would like to see the pinch come back on Hydro. I think the select committee rattled Hydro. I like to see Hydro rattled and I think the people of Ontario like to see Hydro rattled. They have lost confidence in what is happening with Ontario Hydro. I think we should keep rattling Ontario Hydro and I think one of the ways we should rattle it for 1977 is to insist that it smooth its rates. I think this is a very reasonable proposition.

I suggest that when the AIB controls are off it would be much more appropriate for us to take the kind of burden which is being suggested for this year of controls. I think it very unfair of this government to have signed an agreement with the federal government which allows industry to pass through costs, and which is going to put the same kind of burden on residential consumers who cannot pass through costs.

I know that industries are going to have to pay increased costs for hydro-electricity, for electricity, in the coming year. They are going to have to pay the 30 per cent bulk rate increase, too, but they can pass on their costs. Residential consumers can’t and their wages are limited these days.

I would like to make one further point. The longer we can delay the brutality of a 30 per cent increase -- in other words, the more we can smooth that kind of increase -- the more time the residential consumer has to prepare for the future of conservation, the conservation future we need in Ontario. We still need some time to get all that insulation into our houses. This is a cold winter in Ottawa. It has started already and it snows every two days. God help the consumer in eastern Ontario if he is going to have a winter that lasts for eight months. That is the way it looks.

Mr. Peterson: I want to address a few remarks to the minister which I think would be helpful.

At the outset I want to say I am surprised that we are in this kind of debate today, this House never having had an opportunity in any detail or in any substance to address its mind to this very major report, the public policy and the direction for Hydro. We had, as I recall, a very brief debate last spring when this thing was introduced. To this point in time I have seen absolutely no results from that investigation or any meaningful results through the ministry.

I think it is fair to say that observers of this scene have looked at that report and said it is really a very fine document and a fine piece of work on Hydro. There were a great number of recommendations in there which should be addressed by the Ministry of Energy particularly.

I think what is very revealing to me -- I would like to point out that the terms of reference of that committee were to investigate a price increase last year. As members recall, at that time Hydro was talking about a 30 per cent increase. I think my friend from York South was quite right, Hydro did really want a 37 per cent increase last year although it asked for only 30 per cent. It went down to 25 per cent, then to 27 per cent and eventually, some time very late in December --

Interjection.

Mr. Peterson: Would you be quiet please? You can have something to say afterwards.

Hydro came back finally with a 22 per cent increase. It was a long, cumbersome, unfair procedure in the sense it was very unfair to Ontario Hydro because no company of that size, that magnitude, can be expected to plan on the basis on which the ministry has really forced it to plan. That is just one of the things which I think has to be pointed out in fairness.

What bothers me about this is that this very substantial document to the best of my knowledge -- the minister may know more about this than I do; however, I doubt it. It may have been reviewed by the ministry and something may have come of it but I think we should address the minds of this House, and the ministry should address its mind to acting on these very significant proposals.

Let’s not forget that out of 41 proposals, as I recall, 20 are addressed to the Ministry of Energy, not to Hydro; not to Hydro but to the Ministry of Energy. I want to read to you, Mr. Speaker, and put on the record of this House what the first recommendation of that committee was. I have great respect for all the people who were on that committee for the final report because I think it was very well done.

Mr. Deputy Speaker: With respect, to the hon. member, we are dealing with item 31, consideration of the report of the Ontario Energy Board as opposed to item 29 which will be discussed at a later time.

[3:45]

Mr. Peterson: I might have lost you in this, Mr. Speaker, but I see them as very relevant and I see that this should antecede the debate we’re having today. I think the whole structure of this thing has been a very serious mistake. I think you’ll find they’re related and I beg your indulgence. Thank you.

I just want to read the first recommendation and put it on the record: “That the Ontario government develop and clearly articulate government policy towards Ontario Hydro.” This was done last spring, and now here we are, in the absence of this, debating energy rates, starting in 1977. I see it frankly as a very superficial approach to this very serious problem we’re all in. I think the ministry should have some very clear answers for the reason and the way this situation was handled at this time.

My friends have had some interesting points of view, and I frankly don’t disagree with them very much. I don’t think my friend the member for Carleton East (Ms. Gigantes) has the idea that we just want to go on rattling people or rattling Hydro, I don’t think that’s the point. We have to dramatically change its direction, its focus and its management. There are so many things --

Mr. MacDonald: That’s another definition of rattle.

Mr. Peterson: Rattle? That’s certainly not the street definition of rattle. You may have your own.

Ms. Gigantes: I don’t hang around streets.

Mr. Breithaupt: You never know with the NDP.

Mr. Moffatt: A group of old smoothies over there.

Mr. Peterson: Let me say this needs far more attention and direction. There are many things that we have talked about in this party and my friends have talked about from the NDP, and they’re not wrong. They are conscientiously trying to develop and contribute something to lessen the impact on the average consumer. What I don’t think enough attention has been paid to in this debate today is the impact on the average consumer. I understand the things that my friend from Scarborough West -- or whoever was talking about --

An hon. member: Scarborough Centre.

Mr. Drea: I am not your friend either.

Mr. Peterson: It’s all right; I used that word loosely.

Mr. Good: With licence.

Mr. Mancini: Anybody who sits next to the member for London North (Mr. Shore) is in trouble.

Mr. Peterson: This is going to have very serious repercussions and very serious effects for a lot of people who are on fixed incomes or on lower incomes. There are ways to handle that situation and my friends have pointed out several. I think they’re making a meaningful contribution to this debate. But what happens is that all of us in government, in my view, are creating a tremendous credibility gap with the people of this province and the consumers because at least you did and we did participate in a debate and agreed to opt into an anti-inflation programme that controlled wages and controlled prices, and I don’t want an argument about that. The point is that on one hand when we do that and on the other hand go back and say we are in a government-controlled institution but put the prices up 30 per cent, I’m telling you we’re all losing credibility, and you’re losing more than anybody.

I see that as probably the single most important reason at this particular time to bring into account all of the dramatic things we can do to lessen the impact on that average consumer today. That’s why I believe we are furthering the rift between people and government and people on the streets and the average consumer of this province by bringing in this kind of legislation. Believe me, it’s a mistake and believe me, you have an awful lot of apologizing to do. You will never be able to convince the people you’re doing the right thing in this particular issue. I see it as a very serious issue.

There are lots of small things we could have done, and we are very late in terms of years in addressing some of the very serious problems in Hydro today, in my mind. Certainly you have many excellent suggestions. With regard to the rate structure, it’s coincidental or fortuitous or incredibly good judgement on your part -- and you people are so good at sliding out things at the very last minute; you glance over the tops of subjects but you really don’t get to the guts of the subject -- to come up two days ago with a change in the rate structure. It’s not the kind of rate structure in my mind that’s going to really solve the problem, and by your own words we’re into 1979 before implementing that. With all of the planning staff you have, with all of the bureaucrats you hire, surely you should have seen these problems coming, surely you should have been planning a lot further back than just this last year. We should have been in rate structures that discourage consumption, not encourage consumption. I am glad to see some small step for mankind in that particular area. It’s late coming and it’s not very satisfactory, but it’s better than nothing, I’ll grant you that.

There are massive programmes in load management and education that could be brought in -- that could have been brought in two, three, four, five years ago. Instead, as my friend has pointed out, the government has really run an organization that’s helped to create the demand, it has created a mess, it is to a large extent the author of its own misfortune and the misfortune of the people of this province at this time. I see it as regrettable that it’s so late coming about. I see it as regrettable that the government has not addressed its mind to this issue far sooner than we have today.

Later on today my friend, the member for Grey-Bruce (Mr. Sargent) is going to be talking about a private member’s bill on his method of pricing for Hydro. I support that. I think it’s a valid one. It’s worked in certain jurisdictions in the United States and it’s one that the futurists and people are looking at for an intelligent way to make people pay the fair cost of what they are consuming, but on the other hand not to penalize that person who’s on a low or a fixed income where that person is sensitive to and careful with our finite resources, and we’re finding that hydro is one of those.

What we haven’t done is we haven’t changed the mandate of Hydro, and it has to change. It is no longer going to be acceptable just to say, “Well, they reasonably well fulfil their obligation to provide power at cost.” We are working under totally different constraints today. It’s how much we can afford. We are going to have to build within those confines today and every one of us is going to have to adjust his behaviour and consumption patterns into that particular framework rather than just go on trying to cater to everyone’s demand as they perceive it.

Frankly, the ministry’s been very slow to realize this and very slow to do anything about it. For the sake of this province and for the sake of everybody’s children, it’s got to start doing that faster and tougher, and with more authority, and it has to put its stamp on this thing. This takes a hard minister and it takes a tough minister; and frankly we haven’t seen it so far.

Thank you, Mr. Speaker.

Mr. Deputy Speaker: The hon. member for St. Andrew-St. Patrick.

Mr. Mancini: Are you supporting the increase?

Mr. Grossman: Getting back to the item on the order paper, Mr. Speaker, I anticipated the debate would, of course, get off into a discussion of things that were covered in the presence or absence of some of the members of the select committee on Hydro last fall and spring, and some of the other matters which, as the member for London Centre (Mr. Peterson) has suggested, would be more appropriately dealt with at the time at which this assembly deals with the report of that committee.

But I did want to address myself to what really is going on today. We all knew at the select committee what lay ahead for Hydro on the rate hearings in 1977. In fact, last December when the select committee came before this assembly to ask for a new, refreshed, expanded mandate to sit into the spring, the reason for that, as well outlined then by all members of the committee who spoke on that day, was a general recognition of two things: First, that it wasn’t quite as easy as a lot of members had anticipated to slap around Hydro rates for the sake of political convenience without seriously impairing Hydro’s financial stability and the health of the provincial economy generally. After a few weeks, when most of the members of the committee came to understand that it wouldn’t be such a politically attractive committee, that it wouldn’t be a situation in which we could go in there at 25 per cent and come out at 12 per cent and go back to the folks at home and say, “We’ve saved you a heck of a lot of money,” after that settled in and those persons who wanted to be on that committee in order to accomplish that disappeared, then we got down to the real gut issues.

We realized and reported to this House that very careful, lengthy deliberation was necessary before we began to juggle with even one or two percentage points when it came to the recommendations of the OEB last year.

We went through that exercise -- and I might add all members of the committee, sitting through the winter and spring months, worked very, very hard and diligently at understanding as much as we could about the processes of Hydro, what was involved in the New York bond market, what was meant by financial integrity, and one thing that the committee has included, and it’s reflected well in the debates in this assembly subsequently, was that it’s really the systems expansion programme of Hydro that affects the rates directly and that causes the generally greatly increasing rates over the last few years.

I think it’s relevant to understand the great emphasis that all members of the committee last fall and last spring put upon the financial integrity of Hydro. Remember at that point we were dealing with the difference between 25 per cent and 22 per cent. We went from 25 to 22 and there was some discussion at the committee of how attractive it may be to get it down another two points from 22 per cent to 20 per cent, but at what cost?

In the midst of that discussion -- I think it’s important to reflect back on what we were thinking of then and how careful we were when it came to even going from 25 per cent to 22 per cent, and when we had brought Hydro to that narrow margin, how we decided not to go from 22 per cent down to 20 per cent for whatever reasons, under whatever systems, be it smoothing or anything else.

I’d like to read an excerpt from the transcript of the key night of the committee -- indeed, I see it occurred at 10:55 p.m., which was a lengthy night session during which we dealt with the guts of the report, December 4, 1975.

“Mr. Renwick: ... The increased deficit and the cutback in the shared cost programmes with the federal government, those were matters. So it seems to me [I can’t understand the language, I might say] that so long as we maintain in difficult times, which everybody recognizes, a slight improvement in the Hydro position, then the basic problem which the New York bond market faces to the extent that what Ontario does can change their attitude anyway, relates to the province’s decision with respect to the budget.”

We then came into the House on December 17, 1975, and without taking the time of the House to read a lot of the excerpts, I think for an example we can read at page 1842 the remarks of the member for Carleton East (Ms. Gigantes), and I quote from page 1842:

“I don’t think there is any question in the minds of anybody who sat on that committee that in the long run we must examine not only the points which have been raised but whether or not Ontario Hydro should be limited in its operations by what is called its credibility on the bond market; or what is called its financial integrity. After five weeks’ work and leaving Ontario Hydro out alone in the bond market, with none of us there promising to buy the bonds, we all felt, I think, that we had to allow Ontario Hydro a few months in which it could get the needed capital flow and in which we could take serious steps to examine the total direction of Ontario Hydro.”

Later on the member continues: “We have to be able to provide that supportive action for Ontario Hydro before we can send it out sailing into the rough waters of the international financial market in times such as these.”

And I think, in listening today, the member for Carleton East accurately reflects the very proper and careful concern of herself and her party for those financial integrity matters as they relate to Ontario Hydro. But those were the things which caused us in December to recommend in an interim fashion that we go only to 22 per cent.

[4:00]

But subsequently the NDP made a proposal to smooth the bulk power rates so that the increase this year would be 20 per cent, next year 20 per cent and the following year 20 per cent. The net effect of that would be to trace the debt-equity ratio, one of the important indicators of the New York bond market, so that the flow would have been 83 per cent in 1975, worsening to 85 per cent in 1976 -- those are facts -- and under the proposed smoothing scheme of 20 per cent it would worsen it once again to 86.1 per cent. Again, a steadily worsening financial position.

I think one must keep in mind the remarks made so carefully in that very important evening session of the select committee on Thursday, December 4, where Mr. Renwick and others commented at quite some length upon the importance of continually improving the picture so far as the financial integrity of Hydro was concerned; even if one could not substantially improve it to the satisfaction of Hydro, among others, the important thing was to show that the situation was improving. Yet the smoothing proposal as presented by the official opposition would continue the decline in the financial position of Hydro.

I want to be fair to the member for Carleton East. I was listening outside, and I thought I heard her suggest that it’s an academic argument this year because Hydro is not going to the New York bond market. Is that unfair?

Mr. MacDonald: No. The government is not.

Mr. Grossman: Government is not, but Hydro is. Exactly. Hydro is still going to the New York bond market for some $650 million in any event, so the argument has to retain some very important validity.

I also want to say that the select committee, regardless of our mandate, did deliberate at length on just about any matter that we really felt was relevant to Hydro rates in the next ensuing years; and for that very specific reason we asked that our mandate be extended into the spring.

May I draw your attention to Exhibit IV-12, the source being Ontario Hydro Exhibit B-95 as filed before the committee. There, it was clearly set out that 1977 was going to be the very bad year in terms of Hydro rate increases and subsequently it would drop, at least in the charts shown here, to something like 14 per cent in 1978, 10 per cent in 1979 and about seven and a half or eight per cent in 1980.

The point I am making, of course, is that these exhibits were before the select committee. We were willing to sit as long as necessary to cover all the points that were relevant. All of us were there, well educated in the relevant facts as they related to Hydro rates in the next few years. No one at the committee suggested that we get into a long or detailed discussion of smoothing over the next few years. I must say that my memory may not be as good as that of the chairman of the committee. He certainly was very diligent and was there for every minute of the deliberations; I must applaud him for that. He may remember a little better than I do, but I think it would be a gross exaggeration to suggest that we debated the issue of smoothing ad nauseam. I just don’t think we did; at least I wasn’t in the room when we did, and I wasn’t gone for very long.

In looking over the minutes of the select committee, which I did over the weekend, I could find one or two places at which we discussed smoothing. I think the most substantial instance was at 10:40 am, on December 4 in response to some very good points raised by the member for Erie (Mr. Haggerty). But I wouldn’t say the discussion was ad nauseam, particularly compared to some of the other evidence we heard on some rather more obscure points. I really did want to make the point that I think the committee could well have dealt with this as a proper matter if members of the committee thought that smoothing would be a problem. We knew what the projected picture was for Hydro rates. It was right in front of us; here it is in the report. I objected strenuously when the committee instructed our very excellent and able Mr. Fisher to come out with a model projection which confirmed Hydro’s projection. The chairman of our committee dealt with this when he brought our final report into the House on June 18, 1976. I’d like to read from page 3578 of Hansard, Friday, June 18, 1976.

“Last week there was quite a flurry when it was noted in the committee’s discussion of the final draft of the report, that Hydro’s rates next year might likely result in a 34 per cent rate increase. May I emphasize that this is not the committee’s recommendation; that this is not the committee’s view.

“Hydro’s balance sheet is not favourable and the last estimate the committee was able to make was that on the basis of those costs Ontario Hydro’s rate increase next year might well be in the range of 34 per cent; the year after that in the range of 14 per cent; and beyond that it would drop down to under 10 and even to under five -- when we get on to 1983, 1984 and 1985, an under five per cent increase each year.

“Whatever is going to be the fact rather than the speculation for this coming year we will know rather shortly because the statutory obligation on Hydro is to announce what rate they feel they will need for next year.”

That is the excerpt. Of course, that’s precisely the point -- all of us knew and were aware of the ensuing problems. The committee should have dealt with the smoothing problem; it should have called all the witnesses appropriate at that stage. The chairman of the committee and everyone else understood what the reason for the anticipated 1977 rate increase requested, in any event, was going to be. The chairman of the committee, as he spoke in the House, although the inflections in his voice may have been as clever and glib as they usually are when he said this -- I haven’t perhaps said them as well as he might have -- seems to have been fairly straightforward and unequivocal in predicting what was going to happen in 1977. It was hardly a secret.

Mr. MacDonald: What I’d like to predict is what the government will do to cope with it.

Mr. Acting Speaker: Order, please.

Mr. Grossman: Today’s debate really focuses on the smoothing aspect of it. I suggest that one must keep in mind in determining this problem all the reasoning, all of the work, that went into deciding that 22 per cent, not 21 per cent, was the appropriate level for the 1976 rates. I recall last December all members of the committee save and except for two -- the member for Sarnia and the member for London Centre -- rising in the House to be very critical of the suggestion made by the member for London Centre in particular. I don’t want to be unfair to the member for Sarnia but the member for London Centre in particular had tended to suggest that the determination was an arbitrary one by the committee. It just wasn’t; everyone agreed that we thought very long and carefully about arriving at 22 per cent.

Mr. Mancini: He didn’t agree with you.

Mr. Grossman: My point is that when we went through that long exercise to get the 22 per cent, not 21 or 23, if we were going to smooth out what we knew was to be a large rate increase for 1977, no one on the committee would have objected to a long series of witnesses dealing with that very important matter of smoothing -- in a report emanating from that committee we certainly weren’t shy in going far afield to deal with any recommendations we felt were appropriate in the energy field because we knew we were dealing with energy rates, with Hydro rates, in 1977 and 1978 and so on. If it was appropriate we should have done it then.

I might say that it could be that smoothing is appropriate at this point in time. Not having heard all that evidence, not having had the witnesses, not having had the opportunity to update the financial situation of Hydro, I don’t hold myself out as some other members do as having all the knowledge there is to have in the field of energy as of today’s date, nor as of any date I might add.

The point I want to make is that we went through careful deliberations. I think it’s careless at this stage to say arbitrarily, “Let’s go for 20 per cent across the board for the next three years. It’s pretty safe because by next year who is going to remember that otherwise the rate would have been 11 instead of 20?”

Finally, I want to say that there’s a whole other broad issue and that is, when we get into deferrals, which we did get into, cancellations, which we did get into, then we begin to really upset the desirability of making those people who are using the system pay for the system in the proper year. That’s a very complicated theoretical argument, but every time we get into one of these things, let’s save for today and shove it on to tomorrow, then we are tending to distort any attempt to properly allocate any of the costs that are attributable to Hydro to the proper consumers. We could, of course, debate for days and days as to who should be paying for nuclear plants, if we continue to have them, or whatever, which consumer should be paying how much in which year. My point is that when we get into a select committee that sits for months and months and comes out with a determination, a difficult one, and then come along later and say, “Let’s move it out and knock it off for two years,” then we are arbitrarily in that sense setting up a different balance, a different apportionment of bearing the costs of electrical energy among the proper consumers. Thank you, Mr. Speaker.

Mr. Deans: The comments made by the previous speaker are interesting, but they don’t really address themselves to the problem that we currently face. The committee did, in fact, deal with the matter referred to it, but the matter of this year’s hydro increase wasn’t referred to the committee and so, therefore, it could hardly deal with it.

Mr. Nixon: That is precisely the point he made when he started, when he was criticizing the speaker immediately before him, so there is nothing new.

Mr. Deans: Okay, so what we are going to talk about now is the impact of the increase that is being proposed now and the only opportunity to do that, Mr. Speaker, is today here in the Legislature. The part I think we have got to understand is that when we consider the 30 per cent plus increase that is being proposed, we recognize that this increase is being imposed at a time when wages are under severe pressure, when the AIB is continuously rolling back wage increases to a level that makes it very difficult for the average individual to keep pace with the cost of living. So when we take a look at what’s being proposed and we try to extrapolate what will likely come in the years ahead, we come to the conclusion that while it would be nice if the people of the province of Ontario in the year 1976 could afford to carry the full burden of Hydro’s needs in the year 1976, it isn’t practical in the year 1976, and so we have to look at alternative ways of providing Hydro with their financial needs while at the same time ensuring that the public of Ontario won’t be overburdened, and that’s exactly what we proposed from this party.

We said that for major expenditures it’s not uncommon for people to look at evening out or smoothing out the impact of those expenditures or purchases over a number of years. This happens in everyone’s day-to-day life, where they look ahead and they say, “I would like to pay for it all today but I really don’t have the income that would allow me to do that. I anticipate that next year I may have a little more income, and the year after I may have a little more even then than I have now.” Therefore, if we could even it out over two or three or four years and bring the increased costs down to something more manageable, then that would be in the best interests of the people of the province of Ontario. That’s the position that we put forward and that’s the position that we stand by.

There is nothing wrong with smoothing, provided smoothing means that the reduced costs that will hopefully flow from the recommendations that were made last week that the minister tabled in the House, and from the other projections that have been made with regard to the overall needs of Hydro to meet future commitments --

Hon. Mr. Timbrell: Rates?

Mr. Deans: I am talking about rates and everything, the fact that in years to come the increases that will be necessary will be considerably smaller, presumably, than the increase that is being levied this year to meet the Hydro commitments.

[4:15]

So our suggestion is quite simple, that we understand that these may well be Hydro’s needs, and we understand that the province of Ontario doesn’t have the intention at the moment of going into the marketplace and borrowing money, and that the province of Ontario, because it doesn’t, is in a position to borrow short-term money at a reasonable interest rate by today’s standards, and that therefore we could make the impact less this year, and next year, and even the year after, if we were to smooth it over three years.

If you were to follow the process out to its logical conclusion it could be smoothed over a longer period than that if necessary in order to ensure that people on fixed incomes -- the people whose plight was raised this afternoon with the Minister of Community and Social Services (Mr. Taylor) won’t have to bear this additional burden, and that the people on pension won’t have to bear this additional burden, and that people who are the working class people of the province of Ontario, whose incomes are being severely restricted by the Anti-Inflation Board, also won’t have to find the additional moneys necessary.

The minister may say, as he has said, that in dollar terms the amounts of money that they are talking about on average across the province, the difference between 30 per cent and 20 per cent, is $1 or $2 a month. This argument was put forward some time ago. The problem there is that if we were to adopt that theory and say that it doesn’t make any difference because it is a little amount, and if we were to apply that theory against every other cost increase, we would find that people would be unable to meet their commitments.

Therefore, I think we have to be more careful in the way we approach it. We are not suggesting for a moment that Hydro needn’t get the amount it requires. We don’t think they need it all in January. We think it is possible that 30 per cent or 33 per cent of the total increase projected for this year could be smoothed out over the two remaining years. We think that would serve the public of Ontario better than the proposal put forward at the moment. We know the money that would have to be borrowed would have to be borrowed on short-term notes by the province of Ontario, but we also know that would not appreciably upset the fiscal integrity of the province or of Ontario Hydro.

Then, if we look at it more carefully we find that in this year if we went to a smoothing operation, and we had 20 per cent increase this year, 20 per cent increase next year, rather than the 30 per cent proposed and the projected 15 per cent that I understand is in the offing for next year, the actual over the two years that remain of the Anti-Inflation Board, the total amount of the increase to the consumer would be six per cent to eight per cent less. That would mean the consumers in Ontario, while they were under the Anti-Inflation Board would pay considerably less for Hydro service than they would under the proposal that the minister appears to be following and appears to be going to accept as reasonable.

Then, when we get to the year 1979, the Anti-Inflation Board no longer exercises the jurisdiction that it presently exercises, when it is no longer in effect, as the government of Canada, if we are to believe anything it says, indicates it won’t be in effect, by that time we would assume that wages would then rise, again reasonably, but somehow in keeping with the increased cost, and in that year, though the increase may be a little higher than it would have been under the minister’s proposal or under Hydro’s proposal, it would be easier for the people of Ontario to cope with it because their incomes would be higher.

We suggest it is wrong, it is simply wrong in this province at this time to propose a 30 per cent increase. It is wrong, not because it isn’t needed. We understand that. No one is arguing whether Hydro may need that much money. I don’t know, but I suspect that probably they do need the money. That is what the Energy Board tells me. But what I am saying is the public of Ontario cannot carry that burden this year. It can’t carry that burden this year. But if the minister will allow the smoothing operation to be put into effect, they can carry the total three-year burden smoothed over three years. They can carry it more readily than what he is proposing to do or what Hydro is proposing to do and what I suspect the minister and his government intend to adopt.

I don’t know how we tell people on a fixed income that they are to find the additional 30 per cent to pay their Hydro bill. I don’t know how they will find it. I don’t know how I’d go into apartment buildings and tell many of the elderly that I deal with every day that they have to find another 30 per cent in addition to what they paid last year for their Hydro rates. Therefore, I’m suggesting whatever we can do that is any way reasonable to reduce that particular burden to something more manageable is an obligation we have to undertake in this Legislature.

While you may tell me that in the long run over the whole three-year period it will cost more to smooth than it will to pay as you go, I suggest that very same principle attaches itself to almost everything in life; that it would cost less to buy your car outright in 1976 than it would to pay for it over the period of three years. The fact is that people can’t afford it and so, therefore, they do it over a period of time they can manage within their capacity to pay. If this were the only increase that people were to be faced with during this current year, then of course you may say that since this is all that they’re going to have to pay and there will be no other increases in any other commodity area it is a reasonable increase. But this isn’t the only increase; it’s only one of a large number of increases that they’ll be forced to pay.

Mr. Acting Speaker: Perhaps I could draw to the hon. member’s attention that his time has just about expired.

Mr. Deans: I won’t take more than 30 seconds to wind up. What I’m suggesting is that while the minister may, in a statistical way be able to show that the money that’s being asked for is necessary, and while he may argue that it would be better to pay as you go, my counter-argument is that what is better isn’t always possible. In the province at this time with the Anti-Inflation Board already in place and restricting wages and incomes, and given that there are other price increases imminent and already occurring, we have to take every step to ensure that the impact isn’t too great. I suggest to the minister that a 30 per cent impact at this time is more than the average consumer can afford, and we should make every effort to reduce it to something more manageable by a smoothing operation.

Mr. Acting Speaker: Perhaps I might draw to the hon. members’ attention that it is my understanding there was 40 minutes allocated to each party. The NDP has used its 40 minutes, the Liberals have used 17 minutes and the Conservatives 30 minutes.

Mr. Nixon: Just 17?

Ms. Gigantes: You had nothing to say.

Mr. Sargent: Mr. Speaker, I will confine my comments to about two and a half minutes because we have some very good talent in the wings here in our party. Whether it’s a 30 per cent increase or a 50 per cent increase, we’re so close to the forest we can’t see the trees. About 40 per cent of the total revenue of Hydro goes to pay interest. The mess we’re in today, talking about a 30 per cent increase, is totally because of nuclear power. As for the $35-billion programme we’re embarked on, we’re shooting craps with destiny, believe me. Isn’t it strange that here we have the largest programme of its kind in the whole world, the biggest project we’ve ever had, $35 billion, in the hands of a neophyte minister, in the hands of a man who has had no knowledge in the area of government or business, a minister who’s completely under the control of Hydro.

Mr. Good: Right.

Mr. Reed: It’s true.

Mr. Sargent: Even if this programme ever comes into being, in our lifetime it’ll only handle about 10 per cent or 15 per cent of the total load. Our position today in the bond markets of the world is so bad that shortly they’re going to be closing the doors on us. The credit of the great province of Ontario is zilch right now. Down the street about 400 yards from us, fellows, is a statue of Sir Adam Beck. He created Hydro for the people. We own Hydro, but who sets the rates for Hydro? We’re in bed with a great massive programme, a billion-dollar programme of nuclear power, with the contracts being let on the no-low-tender basis, on the proposal system. Here we have Robert Macaulay now being paid as of last year about $3,000 a week to give this minister advice. Mr. Macaulay himself says that Hydro is irresponsible. The Ontario Energy Board hearings confirmed that this government uses Hydro for political purposes and that Hydro budgeting was completely out of control. Here we have this government giving $100 million of our money out of this department to the Syncrude programme as a gesture of good faith.

Interjection.

Mr. Sargent: At the Energy Board hearings, Hydro admitted it had lost about $43 million last year in Pickering and the next three years are going to be just as bad, it says.

I say to you, Mr. Speaker, in sitting down, more will come on later about this but the public opposition to nuclear power is growing in every state to the south of us. In Denmark, Norway, The Netherlands, West Germany, Switzerland and Sweden, they’re all putting it in limbo.

Mr. B. Newman: The government was defeated in Sweden.

Mr. Sargent: In Arizona, Colorado, Oregon, Washington, Montana, Ohio, all these nuclear plants are going into limbo because of the costs and the hazards involved. But here we are embarked on this fantastic $35 billion programme, the largest in the world. We can’t borrow the money in the USA. Maybe we’re going to talk to the Arabs shortly but we’re going to collect it from the people who own Hydro.

An hon. member: Send Marv over there to get the money.

Mr. Nixon: He’d be a good man to send over there.

An hon. member: We’ll send Larry over.

Mr. Sargent: I say very briefly that we have nothing to say about it because this minister --

An hon. member: I think Marv would be better.

Mr. Sargent: -- is under the thumb of Hydro and it’s time the tail stopped wagging the dog and we stopped the billion-dollar giveaway to the friends of the Tory party.

Hon. Mr. Timbrell: On a point of order, I suppose, do I understand that the agreement of the House leaders has been abrogated yet again by the Liberal Party? That they’re changing it?

Mr. Acting Speaker: No.

Hon. Mr. Timbrell: Were there not numbers of speakers as well?

Mr. Nixon: Such a sensitive and reasonable person.

Mr. Deans: No, on the point of order, the agreement was that each party would have 40 minutes.

Hon. Mr. Timbrell: Mr. Speaker, it’s just that I understood there was a list of speakers.

Mr. Deans: No, the list was only for the purpose of letting the Speaker know who was likely to speak but the agreement was for 40 minutes each.

Mr. Acting Speaker: For the benefit of the hon. minister, there’s still 10 minutes’ time left for the Conservative caucus and I would assume the hon. minister might wish to use that time.

Mr. Mancini: Mr. Speaker, first of all, I think the minister should apologize for that statement he made about our party. I think it was totally uncalled for.

Interjections.

Mr. Mancini: You won’t? Well, that’s typical.

Hon. Mr. Timbrell: I consulted with the member for Wentworth, and he agrees with me, I think.

Mr. Deans: Don’t apologize. You were wrong.

Mr. Nixon: You guys have been together for quite a while. However, the member for Wentworth, having dropped his pearls of wisdom, is preparing to depart.

Mr. Acting Speaker: Order, please.

Mr. Deans: I am going to listen to my colleague and so should you. You might learn something.

Mr. Acting Speaker: Order please. Perhaps the hon. member might be allowed to return to his contribution to the debate.

Hon. Mr. Henderson: There was lots of Hydro service in evidence on Friday evening.

Mr. Acting Speaker: Order, please.

Mr. Mancini: Mr. Speaker, I’d like to address myself to the 30.3 per cent increase that this Tory government wants to put on to the people of Ontario for the year of 1977. You can address yourself to that in Lambton, Lorne.

I’d like to say that for the people living in my riding, for myself and probably for the people of Ontario in general, it probably seems almost impossible for them to comprehend why a public utility such as Ontario Hydro would ask the consumer to pay this type of rate. I think this government has abrogated its responsibility knowing full well at this period in time that the AIB in Ottawa has rolled back many hundreds of working people’s pay cheques. I think it’s very irresponsible for this government to even try to comprehend this type of increase at this particular point in time.

[4:30]

I find it almost impossible to believe that the Minister of Energy who is supposed to be looking after the well-being of the consumers of Ontario Hydro would so readily accept -- and he sent out a letter to myself and probably to all members of the Legislature, saying how he accepts this proposal and how he accepts this increase; and I assume, by his signature, it’s endorsed by him.

I find it almost impossible to believe how this type of increase can be accepted by the minister without him even bringing Ontario Hydro on the carpet in front of the people of the province so they can once again have faith and confidence in their government. I don’t think we’re going to get that kind of action from this government, and I doubt very much that the people of this province will once again have the faith and confidence that they had in governments previous to this.

The only logical thing for this government to do is to postpone this terrible increase that they want to put on to the people of Ontario and spread it out over a period of four or five years, because they know as well as we do that the people of this province just cannot afford this type of increase. And the people who use hydro and are wasteful are the ones who should pay -- not the ordinary working people who are on restricted incomes at this present time.

Mr. Speaker, I’d like to give my other colleagues a chance to speak and I will sit down now.

Mr. B. Newman: Mr. Speaker, many of the arguments I could have made have been already made by the previous speakers. However, I do want to have it on the record that I strongly object to a proposed increase of such substantial size. It’s nice that this week happens to be Energy Conservation Week and perhaps it’s fitting that the debate is taking place at this time. I could bring to the attention of the minister many of the conservation methods that are being adopted and practised in the United States in an attempt to conserve energy, and maybe I’ll do that if I have a little bit of time after I get into my comments.

A 30 per cent jump in one fell swoop is much too great for the period 1977. In my estimation it is completely unacceptable; the burden itself would fall much too heavily on those who can least afford it. I would strongly suggest to the minister, if Hydro and the minister do intend to go through with substantial increases, that these increases be phased over a period of time. In addition, there be some type of a supplement or subsidy for those who are on fixed incomes, those who may be in receipt of benefits from the Ministry of Community and Social Services. Likewise, it should be made to those who may have low incomes, but not necessarily fixed incomes, because not everyone in our society today is making maximum wages or the kind of wages you find in some of the more affluent auto industries. I would include individuals who are in receipt of GAINS as well as those who receive some portion of the guaranteed income supplement. Those individuals have to be taken into consideration. We do now provide rent supplements for some people in our society, and I think there should be something similar to that as an energy cost supplement to individuals.

The 30 per cent increase in wholesale rates will actually mean in my own community a jump of approximately 27 per cent, and that is extremely substantial when wage increases to some of the people were no higher than eight, nine and 10 per cent. Naturally, some may have received more earlier, but the average was approximately that.

A 35 per cent maximum increase would hit residential consumers in my own community. It’s such that if they used over 3,000 kilowatt-hours per month, their monthly bill would increase from $51.75 to $69.70. That is an extremely high increase, and perhaps a little too much for one to absorb. Even for the individual using the average amount of electricity during the course of a month, 600 kilowatt-hours, his monthly bill would go from $13.35 to $16.90. With today’s high cost of living that is almost too much to bear.

I would like to bring to the minister’s attention a question that was asked of readers in the Detroit Free Press just within the last two days. The question reads:

“In an effort to encourage customers to use electricity when demand is lowest, Detroit Edison is experimenting with customers, charging less for electricity they use between the hours of 9 p.m. and 9 a.m. Would you be willing to do household chores at odd hours to save on your electric bill?”

Sixty-five per cent of the people replying said they would. So you can see even by using that scheme for energy conservation it is acceptable to a substantial majority. Only 35 per cent refused to accept that type of suggestion.

I would also suggest to the minister that he look into, or have his officials look into, the use of a new electric light bulb that has been in development in the United States and is now out, and that is the Hollister bulb which uses one-third less energy. Think of the hundreds of thousands of kilowatt-hours that could be saved simply by implementing the use of that type of electric light bulb.

It is being marketed; it is used on an experimental basis in the United States. I would suggest to the minister that his officials also follow up on an experiment with that type of a light bulb. It is expensive but if it’s going to save energy during a period of our time when energy is in such short supply that suggestion is certainly worthwhile.

Because of the restraints on time I will have to complete my remarks so that the member for Brant-Oxford-Norfolk can follow up with other comments.

Mr. Nixon: I know we are in a time constraint with the private member’s hour beginning in just 22 minutes and I do want to hear from the minister. Just briefly I will indicate my views in this connection because it certainly is an important matter, indeed, that the Ontario Energy Board is recommending an increase in our bulk rates of 30.3 per cent.

They have heard submissions from Hydro and a number of interested and involved organizations, as well as individuals. It is not entirely clear what the responsibility of the minister is in this connection but we must presume that the minister, after this debate and after consulting with his colleagues in the cabinet, will either give an approval for that rate increase to be effective as of January 1 or perhaps will do something else. We must presume that at least this debate is predicated upon the possibility, if not the probability, of the government giving instructions to Ontario Hydro to change their methods of financing even in the short term so that we will not have to pay an additional 30.3 per cent average on the bulk rate.

The proposal for smoothing the rate over a period of three years is an extremely interesting one; in my view a valuable one. It appears, however, to have been dismissed by the member for Scarborough Centre (Mr. Drea) who usually, more or less, follows the government line. He normally figures out what the government wants said ahead of time and then says it in as strong a way as possible. So I have a feeling that the minister when he does speak is going to be saying about smoothing very much what the member for Scarborough Centre said. In other words, “It is a good idea but it won’t work now” without any good and sufficient reason for why it won’t work now.

The reason that is given is that it may put our credit rating in New York, the credit rating of the province of Ontario in a somewhat more parlous state than it is now. Of course, we don’t want that to happen. There are tremendous pressures on the credit rating of the province and while it has been maintained at a surprisingly high level we are all aware of the tremendous pressures on interest payments and for the debt requirements of the province at a number of levels.

But I do feel that a matter of policy that has been accepted by the government, and strenuously and enthusiastically accepted, has been support for the concepts of the anti-inflation legislation federally. Now, it has been pointed out by the member for York South (Mr. MacDonald) -- and it is true; we all know it -- that the government has without reservation accepted the recommendations and the principle of the Anti-Inflation Board and that legislation.

Certainly this was one of the reasons why the Treasurer (Mr. McKeough), in his comments on the increases a year ago more or less just indicated that the government policy was such that Ontario Hydro would draw in its horns on the proposed rate increase then and finance it in any way it saw fit. It is amazing when pressure is brought upon Hydro how they do respond, particularly to the statements of government policy.

These debates, boring perhaps as they may be to some people, are in a sense historic, in that Hydro has become, as the hon. member for Carleton East (Ms. Gigantes) said, one of the largest corporations in the world and certainly the largest in Canada with tremendous powers independent of government. The first occasion when I recall the government influencing Hydro’s decision was when the former Premier, John Robarts, indicated that he thought the new headquarters building was premature, back about 1960. He didn’t pass a resolution of the House or an enactment of any kind but the Premier’s opinion was sufficient that the then chairman, George Gathercole, certainly withdrew the plan and we didn’t hear of it again, until the premiership changed.

Now you say, “There’s Nixon going on his old hobby horse again,” yet I draw to your attention, Mr. Speaker, that while we are now in the new Hydro headquarters, the old headquarters is still sitting there right beside it, empty as a Hallowe’en haunted house, not in use, not rented, while we can look at the glittering magic of the new building as the epitome of the philosophy of Ontario Hydro over so many years.

We are here now to change that philosophy dramatically. Hydro is no longer in the hands of the engineers. It is very much in the hands of those people representing the needs of the province of Ontario -- certainly the need is to keep the lights on and the wheels turning, but also to put a new meaning on that phrase “power at cost.” I think the understanding by Hydro boards in the past on what hydro at cost gave them as their responsibility has been seriously in error. I believe that Hydro has evolved in a state of mind which has been wasteful, uneconomic and in fact, because of the engineers’ control of the main policy decisions, completely divorced from the broader needs of this province.

I would simply say that the proposition put originally by the member for York South and reflected in comments on all sides, including the member for St. Andrew-St. Patrick (Mr. Grossman), is that the real justification for government action in reducing the proposed increase on January 1, must be based on the Anti-Inflation Board and the concepts of anti-inflation to which this province has given its support for so long.

One of the best briefs presented to the Ontario Energy Board hearings was that put forward on behalf of the Ontario Municipal Electrical Association, which I perused with great care. Mr. Speaker, you are aware I’m sure, being interested in these matters, that OMEA has itself felt it owned Hydro, and it has a strong case to put forward that that is so.

The hon. member for Grey (Mr. McKessock) indicated that it was Adam Beck who brought the OMEA together in this new and, for the time, a very progressive if not socialistic concept of Ontario Hydro. But the ownership of Hydro, and it can be argued anywhere, is really in the hands of OMEA. Their approach, and it’s a very effective one, is the government should not approve of a 30.3 increase, but the increase allowable should be predicated on the Anti-Inflation Board guidelines.

This does not mean a 12 per cent increase. I believe the hon. member for St. Andrew-St. Patrick was saying somebody was talking about a 12 per cent increase. I believe that would be unrealistic. But the careful computation of the recommendations from OMEA, that is based on the federal anti-inflation directions, would mean that an increase of about 28 per cent -- and, my God, that is a huge increase -- would be in line with the pass-through of costs associated with the basic principles of the Anti-Inflation Board.

The minister, in his recommendations to cabinet, might very well mitigate the tremendous impact of an increase of over 30 per cent to some small degree at least by approving, or at least recommending an increase somewhat less but which could be justified on the basis of the pass-through of the costs.

[4:45]

The member for Scarborough Centre was talking about the federal government permitting huge increases in the cost of other energy materials which relate to hydro. Fortunately we make most of our electrical energy from hydro sources, from coal, from gas and from uranium. Oil as yet is not a major part of our pass-through costs and, if it were included in the calculations, it would not have a major impact. As a matter of fact, the famous oil burning facility in eastern Ontario is a considerable distance as yet from going on stream. We are associating the need for bunker oil, I am told --

Hon. Mr. Timbrell: It went on stream a year ago.

Mr. Nixon: No, but it is not producing much energy. It is the same with Nanticoke, for heaven’s sake. I was down there this summer. Nanticoke is one of the largest generating plants in the world. We were there on a day when there were no problems with shutdowns having to do with the machinery itself, but we were told by the manager that only one unit was operating. We are still paying the interest on that huge edifice there. Really it is based on Hydro’s decision, taken by its engineers over these many years, that for some reason we have to have a 40 per cent gap over our peak load. Surely in the past this has been basically an erroneous decision that we have committed the resources of this province and the credit of this province to building some of the best hydro-generating plants in the world which for many hours of many days in the year sit completely motionless and not in use.

I believe that very serious mistakes, based on an erroneous approach to what this province needs, have been made by Ontario Hydro. I personally am not satisfied with the leadership that Hydro is giving in this connection even yet. This is in no way directed at the chairman or any member of the board or anybody else. You can take that from me, Mr. Speaker, but I will tell you that the problems that Ontario Hydro faces now are just as important as they were 20 years ago when the problem was to harness the hydro facilities of the province and move into coal generation.

You talk about Adam Beck at one end of University Avenue. Bob Saunders has a monument at this end and in his own way, I suppose, he did as much for the development of Ontario Hydro as Adam Beck, but things have changed dramatically. The real push now has got to be not along engineering lines but on the lines of managing one of the world’s largest corporations with a new mental attitude toward the use of public resources. We have got to get away from the grandiose approach to expenditure that has been so much a part of Ontario Hydro. I have been told by the hon. member for Huron-Bruce (Mr. Gaunt), whose riding encompasses that huge atomic facility up in the Bruce Peninsula, that as a farmer and as a conservationist himself, he is appalled when the bulldozers go into these cedar forests and push all the logs together and burn them. To hell with any kind of conservation, we are building an atomic hydro plant and certainly no procedure is going to stand in the way of that. No time lag for the saving of the logs and that sort of thing is going to be countenanced.

We have seen the approach that has allowed Hydro to move into the building across the street, which I think is just a ridiculous waste of public funds. The justification is, well, what’s $40 million when we are spending billions every year? The attitude has got to be changed, even in conservation.

It was pointed out by one of the speakers a few moments ago that a year ago the minister was saying conservation doesn’t mean anything in this province, that we don’t need it, and that we will leave the lights on because we have got lots of electricity. Believe me, that’s so. We have got lots of electricity. We are overproducing and can overproduce a tremendous percentage beyond what we require even at peak load, but now we are getting into conservation as just another glittering piece of the harness of the white horse that the Minister for Energy is riding in his great political career.

I don’t think it’s meaningful. I don’t believe politicians ought to be in the conservation business. It should surely be supported by politicians but be on a more professional base than that which we are getting from the public relations officer of the minister and his little green pin saying, “I support Erg, do you?” Erg is a very small unit of work, not energy, and I submit that that’s just another instance of money down the drain. The minister and his executive assistant are the only ones supporting the programme that says he’s a little Erg. Everybody else has forgotten it. That was last week. It is typical of the wasted money and the wasted approach.

We believe permission should not be granted by the council of this province, the Lieutenant Governor in Council, for an increase of the magnitude that has been approved by the Ontario Energy Board. It should be reduced along the lines of the Anti-Inflation Board guidelines which have been accepted by this province, and surely that kind of a reasonable approach would be acceptable, even to the hard-pressed consumers.

Hon. Mr. Timbrell: I have no intention of getting into some of the verbal personal abuse that some members feel that they have to get into in this House from time to time. It is usually a cover-up for the lack of policy, the lack of innovation, the lack of any ideas at all coming from that far northwest corner of the House.

Mr. Cunningham: Why don’t you get off your horse? You certainly do it well when you are outside the House.

Mr. Acting Speaker: Order, please.

Hon. Mr. Timbrell: I want to just say this. I listened to you; I would appreciate it if you wouldn’t interrupt for the last few minutes of this debate.

There were a number of points made during today’s discussion that really relate to the report of the select committee dealing with the 1976 Hydro rates, and that deal as well with the report under preparation really by the royal commission on electric power planning. I won’t presume to touch on them today, but there were some statements made, particularly by the member for -- Grey-Bruce? Owen Sound? Whatever the name is -- that really boggle the imagination.

First of all he accuses me, as the minister, of having an adviser on staff for $3,000 a week. That, Mr. Speaker, is sheer and absolute fabrication.

Mr. Sargent: They paid him $176,000 last year, which works out to about $3,000 a week. Check with the auditor.

Hon. Mr. Timbrell: If the hon. member will go back and re-read the Hansard for the estimates committee last November -- I think it was the 18th or the 19th. I don’t know what kind of condition he was in, but he asked me a question about that.

Mr. Sargent: On a point of order, Mr. Speaker, will the minister please qualify what he means by that last remark? Please qualify that, sir.

Hon. Mr. Timbrell: My point is that I don’t know whether the member remembers, but at that point he asked me a question about that, and I pointed out, that, yes, that particular individual had been engaged as legal counsel. I pointed out the millions of dollars that that individual had saved this province through the successful execution of an intervention before the National Energy Board in the TransCanada PipeLines rate hearing case.

Mr. Sargent: What has that got to do with it?

Hon. Mr. Timbrell: The member went on to suggest that the minister is somehow under the thumb of Hydro. I want to tell you, Mr. Speaker, that I take very seriously my responsibility for The Power Corporation Act -- very seriously. And the fact that there are over 24 --

Mr. Sargent: You are making one hell of a mess, that is all I can say.

Hon. Mr. Timbrell: There are over 24 categories of activity that Ontario Hydro engages in, for which they must --

Mr. MacDonald: Point of order, Mr. Speaker. The minister criticized the discussion of topics that were relative to what we have before us this afternoon. I would like to ask whether he is going to deal in the remaining six minutes with what we do have before us this afternoon?

Hon. Mr. Timbrell: Mr. Speaker, I fully intend to do that. I hope the hon. member for York South will understand, but perhaps because of my own background as a history teacher, and as one who has a strong belief in Parliament, I get a little more than upset when I see the rights and privileges of Parliament abused --

Mr. Cunningham: You know nothing about energy.

Hon. Mr. Timbrell: -- particularly when they are directed to myself with absolutely unsubstantiable assertions.

If I can just briefly, in the remaining five or six minutes, go over some of the history leading up to today’s discussion. Back in 1973 when the Power Corporation Act and The Ontario Energy Board Act were amended there was a very conscious decision of the government that the rate-making process of Ontario Hydro had to be more public than it had ever been in its history since 1906. Prior to that, of course, the rates were set by the Ontario Hydro board. From time to time the Premier of the province and whichever minister of the day was responsible to the House for Hydro was consulted, and the rates went ahead.

It was a decision of this government that that had to be more open and more amenable to suggestions by interested citizens and groups within the province for their involvement. Now last year that process started out with Hydro asking for a 29.7 per cent rate increase, not 38 per cent. In July the government ordered Hydro to cut their capital budget by at least $1 billion, and to cut their operating, maintenance and administration budget by at least 10 per cent.

This they did. In fact, they even went further on their capital budget; they cut $1.2 billion and as a result changed their rate request to 25 per cent.

Notwithstanding, when the Energy Board -- and this was the part that was missing from the chronology as outlined by the member for York South. When the Energy Board submitted their report in early October, they found that on the basis of their judgement of the estimates of cost and of revenues, Hydro would need 26.7 per cent. The rest of your chronology was correct; Hydro said they would stick with 25 per cent, and as a result of the select committee process it came to 22 per cent, which, let’s all admit, was an arbitrary figure. In fact the select committee found that the 25 per cent was well within the Anti-Inflation Board guidelines.

In 1977 in sending the rate request to the Energy Board, I specified two things in the minister’s letter of reference: number one, that Hydro live within the anti-inflation programme, and, number two, of equal if not overriding importance, that there be the question of their financial integrity. If I might just quote from a portion of the select committee report which will be -- for the benefit of the member for London Centre (Mr. Peterson) who has left the House -- discussed in this House on, I believe, November 15. I believe that’s the date that’s been arranged among the House leaders. It’s interesting, when you get into this question of financial integrity, to read this excerpt from the select committee report. I quote:

“Financial integrity in turn will affect the amount of money the financial communities are prepared to lend to a borrower, and the interest rate associated therewith. The lower the financial integrity, generally speaking, the less capital will be available to a borrower and the higher the cost of funds. While market reaction to eroding financial integrity may be gradual in the form of slowly rising relative cost of money and so on, it may also be more dramatic in the form of a D rating. In this latter case, capital availability and cost of funds may be substantially altered overnight.”

I’m not going to take issue with the official opposition in the sense that they are putting forward an alternative. We understand that rate smoothing is an alternative -- in fact I would have to argue it’s one that’s been used for a number of years, and perhaps has contributed to the position we’re at now. As the minister responsible for Ontario Hydro and for advising the government on the policy direction we should give, I have to be concerned as much about the kind of costs we’re going to saddle the people of Ontario with in 1979 as I am about 1977.

The member for Brant-Oxford-Norfolk (Mr. Nixon) suggested that we should go strictly with the Anti-Inflation Board guidelines. If he would read the material which I tabled last Thursday, including the letters from the president and chairman of Hydro, he would find that if we went that route the increase would be 30.3 per cent. That is in fact within the Anti-Inflation --

Mr. Nixon: Has the hon. minister read the submission by the Municipal Electric Association?

Hon. Mr. Timbrell: I have, Mr. Speaker, and I want to read to that hon. member from a newsletter which went out under the date of October 8, 1976, to all members of the Ontario Municipal Electric Association. I quote: “Nonetheless we support the Ontario Energy Board’s opinion and conclusion with regard to the 1977 bulk power rate increase.”

Mr. Nixon: Maybe Darcy is right.

Hon. Mr. Timbrell: Mr. Speaker, this is not an easy decision. It is impossible for the government, in evaluating the situation, to confine itself entirely to 1977. I want to say that I do take issue with some of the figures used by the official opposition. In the calculations it put out last Tuesday, it used a base year figure of $1.5 billion as revenue. If the members would look at the Ontario Hydro submission to the Energy Board they’ll find that in fact -- and this is on table 5(c)6 of the submission -- the base year figure should have been $1.305 billion, not $1.5 billion.

Then the official opposition went on to calculate it on the basis of 20 per cent a year, cumulative, without any allowance for growth in demand for electricity. One of the members made the statement that in fact the revenues are down and sales are down. They’re not, they’re not.

I suggest that the members go back and look at some of the basic figures. I’m not challenging the position they’re taking. It’s a reasonable alternative, but one which the government, in evaluating, has to very carefully weigh against the long-term disbenefit, if there is such a word, to the consumers in terms of the much higher cost with which we will be saddled.

Mr. Acting Speaker: This order of business is now discharged from the order paper.

[5:00]

POWER CORPORATION AMENDMENT ACT

Mr. Sargent: Mr. Speaker, we are talking in a --

Mr. Acting Speaker: Order, please. Will the hon. member first move second reading of the bill?

Mr. Sargent: I’m sorry. This is an unusual experience for me. I don’t know how to go about this because there’s not much chance of it being passed anyway.

Interjections.

Mr. Sargent: This is Bill 91, An Act to amend the Power Corporation Act, first reading.

Mr. Acting Speaker: Will the hon. member move second reading?

Mr. Sargent: Will I move second reading?

Mr. Sargent moved second reading of Bill 91, An Act to amend the Power Corporation Act.

Mr. Sargent: As I said before, this whole debate reminds me of the story of a bear going into a bar. He sat down and ordered a beer. The waiter brought him the drink and went back and saw the boss. He said: “Funny thing, I’ve got a bear here in the bar and he gave me a five dollar bill for a beer. What’ll I charge him?”

The owner said: “Oh, give him five cents change. He won’t know the difference.”

A minute later the waiter went around and sat down beside the bear and said: “It isn’t very often we get a bear in here to have a beer.”

The bear said: “No damn wonder at $4.95 a bottle.”

It’s no damn wonder the people of Ontario are fed up with this rate increase which is going to cost in the neighbourhood of $500 million this year. I think back when the member for Brant-Oxford-Norfolk (Mr. Nixon) mentioned Sir Adam Beck and Bob Saunders. I was the mayor of Owen Sound at the time when we were engaged in the conversion from 25 to 60 cycle. Going around the province was Bob Saunders, the great Conservative that he was, and the slogan became, “Hydro is yours. Don’t use it,” because of conservation. Today I think the whole summation of this is, “Hydro is yours but you can’t afford to use it.”

Across the province of Ontario, an area so big that we could put five states the size of Texas within our borders, we have eight million people with about two million families and at least one million of these families are having a tough time today. Hundreds of thousands of people are senior citizens on fixed incomes. All of these people are subsidizing -- hear this -- commerce and industry by paying higher rates for electricity. They’ve been doing it since Adam Beck gave Hydro this beginning of Hydro belonging to the people.

The man who made Ontario Hydro into Canada’s most successful experiment in socialism, Adam Beck, promised cheap electric power. He said in 1910: “We must deliver power to such an extent that the poorest working man will have electric lights in his home.” Hydro met that challenge magnificently. Its low rates and efficiency have been the envy of the whole world. But shortly before he died in 1925, Adam Beck took aside one of his employees and said confidentially: “Now remember what I’m telling you. They have no cause to raise Hydro rates. Watch what they do after I’m gone.”

Everyone’s been watching with varying degrees of horror and dismay. In recent weeks, Hydro, now with a budget of one-third the size of this whole province, the largest of its kind in the whole world, rolls ahead with plans for a seven per cent annual growth in power supply and a 38 per cent increase in reserve capacity next year. In this great power system owned by the people of Ontario, no one has the right to say that the rich and powerful should control the rates, which they do. Whether or not they do this, the fact remains that up until this day the residential home owner, the apartment dweller and farm home owners have been subsidizing industry and business. This bill, called “lifeline,” proposes to do something about it. The bill is an Act to amend the public service law in relation to the minimum public basic user charges for residential electrical consumers.

This bill amends The Power Corporation Act by adding thereto a new section. The new section requires that the commission promulgate a list of essential energy-consuming activities, indicating the minimum energy needs for a family of four. This list would then be circulated to every municipality, and they will then determine the minimum usage sufficient to fulfil the electrical energy needs. Every municipality shall redesign its residential rates in structuring to create a residential block rate at a rate equal to no more than the rate in effect on January 1, 1975, and the costs are to be recovered by recovering the lost revenues in succeeding residential blocks and in commercial industrial classes of consumers. Electrical space-heating customers, municipal customers, commercial apartment buildings, and non-profit institutions are exempt from the provisions of this Act.

In a letter dated October 19, we are told by Mr. Taylor, the head of Hydro, that Hydro rates will be up by 30.3 per cent, which will cost a residential customer using 750 kilowatt-hours in a month an increase of $3.43 or about $50 per year. The price of electricity is rising so dramatically that it now threatens to price itself beyond the ability of many people to afford it.

The present pricing policies in Ontario still encourage people to waste power. Here’s an example: Sportscaster Johnny Esaw has a large Thornhill home containing four television sets (three in colour), a dishwasher, two stereos, a heated pool, a washer, a dryer, power tools, total air-conditioning and about a dozen outside lights switched on automatically at dusk.

Mr. Grossman: What have you got? Have you got more or less?

Mr. Sargent: Hear this; this is interesting. When he checked his Hydro bill this week, he was amazed that it was only $32. The reason is that Hydro rates are geared to give the big users a better deal. In the city of Toronto the first 50 kilowatt-hours used monthly are 5.3 cents each, the next 200 are billed at 2.3 cents and above that is 1.6 cents. So the old age pensioner, who does little but boil a kettle and make a little toast, is actually subsidizing people in air-conditioned mansions.

Mr. Eaton: Turn off all those lights and sound systems in your night club.

Mr. Sargent: Fellows, this is like motherhood; you can’t be against it. If you go into your riding and say you’re against this, you’re dead in the next election.

Mr. Kerrio: They’re dead anyway.

Mr. Sargent: It’s in Hansard that the member for St. Andrew-St. Patrick and the member for Middlesex are against this.

Mr. Speaker: Order, please. Will the hon. member keep to the bill?

Mr. Sargent: Thank you.

Mr. Kerrio: It’s three to one, Mr. Speaker. Look at them all in a row.

Mr. Sargent: You know, Mr. Speaker, I’d like to ask you a question, if I may, while you’re in the chair. I have this bit of a brochure. I spent all weekend having it made up to get it done in time for the House opening.

Mr. Drea: Who paid for it?

Mr. Grossman: You copied that from a magazine.

Mr. Sargent: I took it into the Speaker to have it distributed to the desks. The Speaker checked with someone on the phone and said, “No, you can’t do that.” I would like to know, who did you speak to who told you that I couldn’t do this? Who was it? Who is the man that presses the button that says I can’t do this?

Mr. Ferris: Bill Davis.

Mr. Sargent: Well, you tell Bill Davis that they’re going to get it anyway.

Mr. Grossman: You copied that; it’s like a recipe.

Mr. Sargent: This “lifeline” proposal --

Mr. Grossman: You could use one.

Mr. Sargent: -- of rate reform will provide relief to low users of electricity.

Mr. Drea: You’re kidding.

Mr. Sargent: That’s right.

Mr. Drea: Then you haven’t read your bill.

Mr. Sargent: In the low users of electricity category are the poor. Their electrical usage is significantly lower than the use of higher-income groups --

Mr. Grossman: It’s going to cost you money.

Mr. Sargent: -- but studies reveal that 5.2 per cent of their income goes for electricity as against one per cent of the income of well-off users.

Mr. Hodgson: How do you classify well-off users?

Mr. Sargent: Well, I’d say you do pretty well there, Bill, I don’t know. Another group that has low energy use --

Interjections.

Mr. Sargent: There is not a member on that side of the House who hasn’t got another job on top of his salary.

Interjections.

Mr. Sargent: I mean, don’t you talk to us about being well off. We work for our living here.

Interjections.

Mr. Sargent: The point I am trying to make to you affluent people --

Mr. Kerrio: That’s fair odds, three to one. You are doing well.

Mr. Sargent: Another group that has low energy use and would benefit from this is the elderly people and people on mother’s allowance -- they are a part of the larger group that is generally a low user of electricity -- and the apartment dwellers. Due to their small living quarters and generally small family size, this group would benefit from “lifeline.”

So, in effect, the rate structures would actually reward, not penalize low users. We are reversing the process. Do you understand?

Mr. Grossman: We understand, yes.

Mr. Sargent: The current system is now the more you use, the less it costs you. We are going to reverse that. And we are going to reverse it, whether the government likes it or not.

Mr. Grossman: Do you use an electric razor?

Mr. Sargent: The result is now the large users who impose the greatest cost on the system. However, Hydro is selling these expensive kilowatts at low declining block rates, thus commerce and industry have been receiving a subsidy at the expense of the low residential customer.

Mr. Drea: Have you thought of distributing back yours with free drinks?

Mr. Sargent: There is an urgent need to reconsider our patterns of growth and consumption. it is no longer reasonable to expect a utility rate structure to charge a small, low income group four cents per kilowatt-hour and a large, affluent user three cents per kilowatt and an industrial user two cents per kilowatt. A “lifeline” rate will restructure this and redress this situation.

The necessity is that electricity is an essential component part of all modern life today. We rely on electricity to run countless appliances, machines and instruments. There are no substitutes for electricity and therefore it is absolutely essential for a healthy and minimally decent standard of living.

This rate relief we are going to come up with, “lifeline,” will provide a rate relief to all low and moderate users of electricity, as well as the poor and the elderly. And “lifeline” rates would provide relief to middle as well as low income people. In this inequity the poor spend proportionately more of their income on electricity than any other income group. However, the rates now are set up so that the average cost per kilowatt hour is higher for low use than for high use and “lifeline” ends this inequity by causing large users to bear their fair share of the cost of generating and distributing electricity.

In the conservation area what we are all concerned about by increasing the incremental and absolute charges for high and increasing use, “lifeline” acts to discourage wasteful use and encourage energy conservation. “Lifeline” rewards low use and penalizes high, luxury use.

So in closing I want to say this. As elected representatives of the people of Ontario, of eight million people, it is the duty of all of us in this Legislature -- it shouldn’t be in a private member’s bill, it should be a bill that everyone supports.

In the democratic process a private member might have a good idea once in a while. They do have it in the States but anytime it happens here it never gets to a vote.

Mr. Kerrio: They’ll support this.

Mr. Sargent: So it’s the duty of this Legislature to establish policy for these regulatory agencies. “Lifeline” is a broad pricing issue on which the Legislature is empowered to provide proper guidelines in order to achieve more responsive and responsible rate-making policies.

[5:15]

Today those of us are petty-fogging alarmists who are against the $30-billion or $35-billion programme of this nuclear adventure of the Premier --

Mr. Drea: You are against nuclear power.

Mr. Sargent: -- when in our ignorance we tell you there is no hurry about providing power for the next generation --

Mr. Drea: You are not against Bruce.

Mr. Sargent: -- when hundreds of thousands of our new citizens can never hope to have a home, when we have closing of hospitals, when our graduates can’t get jobs, when the government of Ontario seizes Indian lands and doesn’t pay for them, when thousands are hunting for work, when thousands every day are waiting for hospital beds, when our courts are clogged and people wait two and three years for justice, how tiresome these contentions are, how small-minded, selfish and sentimental, how lacking in vision and idealism.

To those of us who grumble about voyages to the moon and annual expenditures of billions of dollars more on weapons and rockets, I invoke the inspiring words of an ancient Egyptian who reproached a fellow slave for complaining about the chains and beatings and the huge stones that had to be dragged across the desert to build Pharaoh’s pyramid. He said: “How tiresome you are to whine and complain. It’s an honour to be associated with an enterprise of such magnitude.”

Mr. Drea: You are against it?

Mr. Sargent: Yes, I am opposed to nuclear power. I certainly am.

Mr. Drea: Boy, they will love that down in Bruce.

Mr. Sargent: You are shooting craps with destiny when you go into nuclear power programmes which will never in our lifetime handle any more than 10 or 15 per cent of our total power load.

Mr. Drea: Boy, they are going to love you for the unemployment.

Mr. Speaker: Order, please.

Mr. Sargent: This bill is timely. It’s legislation for the times.

Mr. Eaton: What is your rate structure?

Mr. Drea: It is the truth.

Mr. Speaker: Order, please.

Mr. Eakins: Listen to a good speaker.

Mr. Sargent: I’d like to see once in a while in this forum, which is the greatest province in the whole world, that we could have the democratic process work and good legislation from this side of the House should get the assessment of the whole House and not be playing politics with the lives of Ontario people.

Mr. Hodgson: Ontario from our side of the House.

Mr. Drea: First of all I’d like to compliment the previous speaker. Never before probably has anybody brought in a bill of which they have never understood the implications, like the one today. Just let me give you a few little examples about the populist reform from Owen Sound.

Mr. Eakins: With some authority.

Mr. Drea: It is probably the greatest piece of humanitarianism since Marie Antoinette went to the guillotine talking about cake.

Under this bill the member wants to give relief to the poor. Well what happens to the poor who happen to have more than four kids? What happens to the low-income family where there are six or seven children and they want to give them a bath?

Mr. Sargent: It is on kilowatt-hours.

Mr. Drea: Then he is going to impose a rather Draconian test in the first place. If Hydro can’t figure it out, the municipality will. Then there are the little clauses in there that spell out means tests. We’re going to talk about the woman who is on family benefits who lives, if I can recall the quotations correctly, in rather small quarters and tends to have a rather small family and who will benefit. She won’t benefit as much as the fellow who has five cottages, because under this system those five cottages would pay so little in terms of electrical cost because the usage would he extremely low. This has to be the first bill that would ever take food, money indeed the Hydro bill out of the hands of the destitute widow and hand it to somebody who can have two, three or four cottages. Perhaps that is a bit of an oversimplification.

Mr. Riddell: It is.

Mr. Ferris: You said it before.

Mr. Drea: Let’s just put it into perspective.

Mr. Kerrio: You are pushing electric heat in Sudbury.

Mr. Drea: You know, that’s the first speech you have ever made in the House.

Mr. Kerrio: That is one more than yours.

Mr. Drea: This bill, however well-intentioned -- and I rather suspect, knowing the member for Grey-Bruce, that he commissioned someone to do it -- I rather suspect that he should have commissioned somebody who knew a little more about electrical power --

Mr. Sargent: Mr. Speaker, on a point of order.

Mr. Speaker: On a point of order.

Mr. Sargent: The member is away off track. This legislation is now in force in California and Vermont and I have been in touch with legislators in those areas and they provided me with the information they had. Our research people restructured it for me, Frank; I am not any smart guy. But I see a need for this and that’s why -- I will level with you, I don’t know all the engineering facts but I know the guts of it, Frank, and that’s why I think it’s a good bill.

Mr. Speaker: Will the hon. member please refer to members by their riding rather than the names, please? Thank you very much.

The hon. member for Scarborough Centre.

Mr. Cunningham: Scarborough Frank.

Mr. Drea: For instance, let’s take a look at the impact upon -- let’s just take someone in a vicinity that we all know. Let’s take the Plaza 500, just a couple of blocks away.

Mr. Cunningham: Let’s take Marvin.

Mr. Drea: They can all avoid and take advantage of virtually every provision of this bill very simply. They all live in rather modest quarters in the Plaza 500, one bedroom or two.

Mr. Cunningham: Almost as big as your office.

Mr. Drea: They tend not to do their own laundry. You send your laundry out; obviously that’s not a usage of electricity. You are a real conservationist.

They tend not to eat in their own dwellings. They tend to eat in commercial establishments. I think that you could take anyone in a building like that and show that this, at least for purposes of this bill, is what the average Ontario family should try to emulate.

There is no argument that the time has come when the pricing policy in regard not only to electricity but particularly other forms of energy, natural gas, that the more you use the less you pay -- there is a frequency discount; they are trying to handle things in bulk -- those days are over. This government has addressed itself in a very long and a very thorough examination of just what would happen and how it would happen, because the “how” when you change over a rate system like this does have some impact.

It is all very well, you know, to say, “Well, industry can bear the cost.” Well, it concerns me a little bit that you can really be that flippant about it particularly when you come from an area of the province that doesn’t exactly have the highest employment rates on record. If you are going to change over such an essential item and such a continuing cost item --

Mr. Sargent: Are you for this or against it? Are you for it or against it?

Mr. Drea: -- as electricity, then you have to be aware of the ramifications toward employment, you have to be aware of the ramifications toward pricing and you have to be aware of the impact upon the community.

Mr. Kerrio: We have already felt that.

Mr. Eakins: With a 50 per cent increase.

Mr. Drea: A bill like this, which tries to establish in a rather simplistic manner some answers to a very complicated problem does not provide relief for those for whom it is intended to provide relief. As a matter of fact, it does just the opposite. It provides much more of a relief for those it is trying to punish than for those it is trying to reward in trying to find some equity in the present circumstances surrounding the very high costs of energy.

I may say that it is really not quite the desperate problem as outlined by the mover of this bill. As a matter of fact electric bills in this province are substantially less than those in other jurisdictions, particularly in the United States --

Mr. di Santo: Wait until next year -- 30 per cent increase next year.

Mr. Drea: -- including the increase. I would be very glad. I can read you off including the increase, but I don’t want to take up any more of the time. There is no question that this is done in two states in the United States --

Mr. Riddell: Pretty good cartoon, eh, Marvin?

Mr. Drea: What is your problem? Are you auctioneering again or what do you do? You just chew your cud there, or what do you do? If you have something to say, say it.

Mr. Riddell: Carry on.

Mr. Drea: One of the difficulties in this is that the two situations in the United States -- one in California and one in New England --

Mr. Sargent: Vermont.

Mr. Drea: I have it Maine, but I am prepared to accept Vermont.

Mr. Sargent: Maine is going to.

Mr. Drea: Maine too? All right, then you have three. The circumstances in those states are somewhat different. As a matter of fact the one in California is not a permanent piece of legislation. It is a temporary piece of legislation, where there are certain rates held down on this basis until the overall rates have achieved a certain percentage.

Mr. Speaker, the energy situation in this province is now so challenging and so complex the solution is not just in terms of electrical consumption, but in the consumption of natural gas and other fuels. In terms of our standard of living, in terms of our employment, in terms of our position in world trade, in terms of our future, whatever changes are made to meet these things have to be done with delicacy, with foresight, with enormous plans, and with a great deal of flexibility. In every one of these criteria, this bill is not only wanting, it has totally ignored those situations. I don’t want to seem to be too hard upon the particular mover of this bill because I know that he has moved this from very sincere and very honourable motives.

Mr. Speaker: The member has 30 seconds.

Mr. Drea: I am sure he wants to do something for these people. But I would suggest, Mr. Speaker. in closing that he might better direct himself to some more practical and more reasonable and more equitable solutions rather than this type of simplistic scatter-gun approach.

Ms. Gigantes: Mr. Speaker, I think that I probably reflect some ambivalence in my caucus toward this bill. While we appreciate very much the intent of the bill I think there are a number of questions that I for one would like to raise about it. It is interesting to note that when the member for Grey-Bruce talks about how large Ontario is, and how he can put five states the size of Texas into Ontario, he is suggesting a plan which was taken, obviously directly, from an American plan.

For example he has provided us with a brochure which still has not received your permission to be distributed I understand. But the brochure, which is no more clear to me than the bill, in one question says: “Would ‘lifeline’ force industry to leave the state and consequently mean a loss of jobs?”

Obviously this idea -- in fact the whole leaflet -- is a direct transfer from an American leaflet. I think that one of the things he should bear in mind, therefore, is that Ontario is precisely the size of five American states. To lay a plan like this on a province the size of Ontario with the different kinds of needs for electrical energy that we find in different areas of Ontario, may not be at all what he would like once he thinks about it.

There is no doubt in our minds that the rate structure of Ontario Hydro needs reform; it needs drastic reform. It has been working backwards in terms of getting conservation benefits for us. It has been encouraging use, and it comes from the period of time when Ontario Hydro looked to create added demands for electrical energy in this province. It is also the intent of this bill, obviously, to provide some protection for low and middle income people faced with soaring energy costs, particularly electrical energy costs, in the province of Ontario. These two elements of the bill are elements that we very strongly support.

[5:30]

I would suggest to the member for Grey-Bruce, though, that he take a look at the document which we’ve just recently received from Ontario Hydro called the Electricity Costing and Pricing Study, Volume One. On page 24 of that document he will find a summary of various patterns of restructuring rates for Hydro which would attempt to achieve somewhat the same objectives as his bill.

There is a critique given of each of these patterns: No. 1 is called “lifeline” and there is an examination of the benefits and the costs of that structure. No. 2 is the energy stamps or voucher system of providing a basic amount of electricity at a reasonable cost for low and middle income people. And No. 3 is an energy tax credit. It gives a very brief description of how an energy tax credit system would run, and then points out that this system, of all the systems suggested, is the one which would most efficiently meet the very objectives that he seems to be after in this bill.

In other words, it would most effectively protect the low- and middle-income people in this province who need basic amounts of electrical energy at a minimum cost. It would provide an income transfer as an income transfer, and instead of providing the same amount of energy for everybody it would reimburse people according to need. It seems to me a very much more flexible and sophisticated method of getting at that element in the bill which he has stressed and which we believe to be very important, the protection of low- and middle-income earners facing rising energy costs.

I would hope that when all the volumes of the Electricity Costing and Pricing Study are available to us -- I don’t believe they’re all available quite yet, but I understand we’re to have access to them early this month -- we will have a better chance to take a look in detail at these various proposals.

I hope that the member for Grey-Bruce won’t be discouraged if we do question right now the methods he has proposed in his bill. I think there is great support here in this caucus for the principles that he would like to promote, and that we would be interested in developing the kinds of possibilities that are outlined in the Electricity Costing and Pricing Study over the next few months.

Mr. Reed: I am very encouraged by the remarks of the member for Carleton East in her interest in the spirit of the bill and the intention in which it’s presented, because that is precisely what this bill is intended to do. I would like to advise her as well that we often borrow things from others, and in this case if there was borrowing from our friends south of the border I personally don’t feel demeaned in any way for undertaking --

Ms. Gigantes: But this is a proposal by Eddie Sargent.

Mr. Cunningham: Where did your philosophy come from?

Mr. Reed: The fact is, though, that I’m sure the member for Carleton East will concede that one of our members has had the good sense to take this approach and study it and feel that it was important enough to present to this House. I would commend my colleague very much for taking that point of view, because we wouldn’t have had it otherwise.

The conservation of energy is one of the most important concepts the government of this province can engage in at the present time, particularly when we realize that 50 per cent or more of all the energy we consume is wasted and, even more particularly, when we consider that Ontario’s economic future will be largely determined by energy and its availability and how we apply it. If we in this province are to maintain and expand and continue to make vital an economic base which is largely industrial, then all reasonable approaches to conservation must be considered. In so doing, we must be careful not to turn energy into an item of such luxury that it loses its prime function which is to maintain and improve our standard of living.

There’s no doubt in my mind that raising the price of all energy sources promotes conservation. It certainly does. But there is a point where a negative impact sets in, when the price begins to preclude its use by people of modest means. If this were to happen, many of the benefits of energy would be lost or overbalanced by other negative influences.

I’ll give a simple example. If an elderly couple on a fixed income were not able to keep their house warm because of the high cost of heating fuel, then the attendant complications of ill health might prove to be far more costly than the availability of a moderate amount of energy.

Mr. Cunningham: John White would have to put on a sweater.

Mr. Reed: I think it’s obvious there’s a role for common sense to prevail, and I see the common sense prevailing in the presentation of this bill. What the bill does is confirm a position I and my colleague from London Centre (Mr. Peterson) have taken on rate structures that are progressive. As outlined in this bill, they would enhance the conservation effect but at the same time guarantee to all those who use electric power modestly a rate they can afford.

Recent cost increases in electric power are a direct reflection of recent generating expansion by Ontario Hydro and of course those plants which are under way for future expansion. They reflect the change from a predominantly hydraulic generating system to a predominantly thermal generating system and the cost of thermal production is much higher. Since a share of the increase is paying for the capital expansion commitment, it would seem only reasonable to reduce that expansion as much as possible. I am deeply concerned that the ministers of the day who were responsible for Ontario Hydro were not able to understand the true value of this superior form of energy. If a progressive rate structure had been implemented in conjunction with the implementation of thermal generation, I am convinced that massive expansion under way today would not be necessary in the first place.

A regressive system, that is, a system where one pays a higher price for the initial purchase and a lower price for volumes purchased thereafter, is reasonable and justifiable economically at least in the purely hydraulic system simply on the premise that the water runs down the river anyway whether it’s used or not. However, there are even weaknesses in that argument since using those terms of reference means no consideration is being given to holding anything in reserve for the future, and that is one of the reasons why we’re in the situation we’re in today.

The encouragement of waste in this manner cannot be justified with any argument. Waste does not improve our standard of living. Waste does not enhance our industrial potential. Waste makes us less competitive through higher than necessary costs per unit of production. This bill will go one step further in eliminating waste. This can prove to be a good vehicle for giving us a true understanding of the real value of electricity. It will not only not harm our standard of living but will improve it, especially for those who are determined to be modest users.

I would appeal to the government to give the pensioner, the newly married couple, the person on fixed income and anyone else who truly desires to use this precious high-grade resource wisely the kind of encouragement we all need. I urge the government to adopt this bill.

Mr. Grossman: Mr. Speaker --

Mr. Reed: Support it.

Mr. Grossman: Not quite. I want to rise to address myself to --

Mr. Reed: You will never make it.

Mr. Grossman: I want to address myself to this bill presented by the member for Grey-Bruce. I won’t use his first name. We’ve been forbidden from doing that. But I can see a compromise. I’ll call him Grey and he can call my colleague Scarborough, if he’ll call me Saint. That would be a perfect resolution to it.

Mr. Cunningham: Did you write that?

Mr. Grossman: You may be right. I might say that I got the brochure, and if you have any copyright problems having stolen it from wherever it came, Eddie -- Grey -- give me a call and we’ll sort it out for you. But I would have put my picture on the front -- that’s the difference -- not a spare tire.

Mr. Eakins: Not that!

Mr. Grossman: You bet. I applaud the member. He’s obviously putting aside his own very personal interests as the bill by his own description would penalize him personally in view of where he sits in the economic ladder. So I compliment him on his courage and his unselfishness in that regard. He’s personally willing to bear the burden for a good portion of the public. I’m the other portion. I would benefit from it.

Mr. Kerrio: Are you?

Mr. Cunningham: I see those lawyer’s bills.

Mr. Good: Certainly you are in the dark most of the time.

Mr. Cunningham: We will have a tag day for you.

Mr. Grossman: The sentiments of the member for Grey-Bruce have of course already been met and dealt with by the already referred to report tabled last Friday. The whole matter of the cost of energy of all forms has recently shown some dramatic increases. All members of the Legislature are concerned, as is the member for Grey-Bruce, that the citizens of this province will be able to pay for this most essential commodity. I suppose it was with this in mind that we got into our select committee on Hydro and that the cost and pricing study emanated out of Ontario Hydro. That study is of course a complete re-examination of the pricing system for electrical energy. It was tabled last Friday.

Mr. Sargent: The bill is dated June 3.

Mr. Grossman: I don’t think this is like the education situation -- they weren’t anticipating your bill. But we know now that this study is one of those that has made some extensive and important proposals regarding the future pricing of electrical energy.

But the important part of the study is that it advocates the pricing of electrical energy on a basis of the cost to produce the energy --

Mr. Sargent: On a point of order, Mr. Speaker.

Mr. Speaker: Point of order.

Mr. Sargent: I suggest to the hon. member that the bill was dated June 3 and he had a chance to study it and that’s why they came up with their report on Friday. The same as what happened in their education bill when Wells --

Mr. Speaker: Thank you. The hon. member.

Mr. Grossman: I don’t know how many cabinet meetings were spent worrying about your private member’s bill --

Mr. Cunningham: Not enough.

Mr. Grossman: -- but the report that came down on Friday emanated of course from Task Force Hydro in 1974 and is a result of two years of study. I don’t think it was slapped together on Friday in preparation for Bill 91.

Mr. Cunningham: Are you in the cabinet?

Mr. Grossman: In any event if the proposals of the costing and pricing study are accepted there would be a reduction in cost up to 30 per cent for those who are users only of small amounts of electrical energy. Thirty per cent. And such groups as senior citizens who are using approximately 250 to 500 kilowatt-hours per month would be the ones directly affected and benefited from the recommendations of this study.

Mr. Cunningham: Would you be offended if we said we didn’t believe you?

Mr. Grossman: Mr. Speaker, it is important to note that the proposals, if accepted, would accomplish this reduction without introducing the complications and inconsistencies which I believe to be inherent in Bill 91. The bill proposes that there be regulations establishing classes of residential premises, as well as regulations defining minimum essential energy needs. These two requirements would bring upon us the usual and expected bureaucratic operations, accompanied by an army of people needed to interpret the various types of residential premises, and the amount defined as “minimum essential energy needs for each premise.”

Mr. Sargent: Just got to change the rate, Larry.

Mr. Grossman: That’s what the study’s going to do in a more reasoned fashion. There are no easy answers to the question.

Mr. Sargent: When -- in 1979?

[5:45]

Mr. Grossman: Obviously a person with electrical energy in their residence has a higher minimum energy need than one with oil heating. A family of six has a higher minimum energy need than a family with one child or no children. In some areas of the province temperatures are colder than others, and the minimum energy need is higher in northern Ontario than in Toronto, so I hear. Of course, the minimum energy need changes depending on the time of year and the circumstances of an individual family. Families with young children have a much higher minimum energy need than families with older children who may be away in school.

Mr. Sargent: If you introduce an amendment, I will support it.

Mr. Grossman: I believe that there may be a fundamental error in the premise of the bill, which appears to be that small homes need or use less energy and that low-income groups always live in smaller homes and always use less energy. It’s not that simple.

I agree with the intent of the bill, as I said earlier, but I cannot accept the measures recommended to bring about this objective. I point out to the member for Grey-Bruce that, as proposed, the bill could be providing a bonus for those persons who live in apartments and, as my friend, the member for Scarborough Centre, has said, those persons who send their laundry out and do most of their eating in restaurants. They indeed have a minimum energy need, but I wonder if it is really the intention of the member for Grey-Bruce to give those persons a bargain in their electrical energy rates.

In conclusion, I would suggest to the House that the solution to the problem outlined in this bill is contained in the Ontario Hydro costing and pricing study introduced last Friday, which we will all have a chance to review and comment on in the early months of 1977, I trust. That study reviews the complete pricing of electrical energy, not only for residential use but for commercial and industrial applications. And when the proposals resulting from the hearings are implemented, we will have a complete new costing and pricing system for electrical energy in Ontario. It may take a little longer than the member for Grey-Bruce wishes. It may take a little longer than I would wish. But ultimately the solution will be a more satisfactory one -- not a piecemeal one -- and one that meets all of the needs and problems addressed by the select committee on Hydro and the results of the Task Force Hydro study starting in 1974. For those reasons I will not be supporting this piecemeal American bill.

Mr. di Santo: Cheap, cheap, cheap.

Ms. Bryden: Mr. Speaker, I think we are all aware of the way in which the huge increases occurring in energy costs have hit householders in Ontario. For that reason we are interested in considering any means of cushioning the impact on them.

This year’s Hydro increase was 22 per cent, and the Ontario Energy Board has already approved an increase of 30.3 per cent in wholesale rates for next year. This could mean an increase in the average bill for the ordinary consumer of $40 to $50 a year. The cabinet can still stop that 30.3 per cent increase, and we are urging them to act by at least considering smoothing of the proposed Hydro rate increases for the next three years. But so far we haven’t heard of any “stop Hydro” movement by the Premier (Mr. Davis).

The proposed Hydro increase, as all members have recognized, will hit pensioners and other people on fixed incomes particularly hard. Those on welfare, who have not had an increase for 17 months, will still have to find the extra money. The only way most of these people can meet increases of this magnitude is by reducing their food expenditures and their pitifully small allowance for car fare and recreation.

For average wage earners it will also mean a reduction in the standard of living because under the AIB controls they are limited to increases of eight to 12 per cent this year and six to 10 per cent next year. Many with low bargaining power have not even got increases of that level and they inevitably will have to cut back to meet the Hydro increases. We believe that the government has a responsibility to see that low-income people do not suffer hardship from these increases, which are beyond their control.

We do not think the present bill really offers the kind of relief that will look after their problems. For instance, it does not cover anything other than hydro costs, but natural gas costs have gone up tremendously. In the last few years there have been eight increases. A ninth is proposed for this coming winter of 18 per cent in the Metro Toronto area. Fuel oil costs have also gone up. We think if there is going to be any bill providing relief, it should cover all forms of energy.

We also have considerable reservations about the present proposal, mainly because we find it somewhat unclear. I share the views of the member for Scarborough Centre (Mr. Drea), which I don’t very often do, on some of the unclear elements of the bill. It does not say anything about the additional charge on large users who use more than the minimum essential which the bill proposes will be set. It does not tell us how the minimum essential needs will be determined.

As the member for St. Andrew-St. Patrick (Mr. Grossman) mentioned, it does not tell us how there will be any variation for different family sizes. In fact, if it simply contemplates a flat charge for every residential premise, there is no incentive to conserve and it becomes a very regressive tax. There is no relationship between such a charge and ability to pay. Nor does the bill indicate what class of customers would pay more to pick up any revenue loss from this proposal. It appears there would definitely be a loss because the basic charge as set forth in the bill cannot exceed the charge in effect on January 1, 1975, plus 50 per cent of any 1975 increase, with nothing for any 1976 increase.

For these reasons I would have preferred to see a bill brought in which covers all energy sources. I think the tax credit route is probably the best one to consider for such a measure of relief. A tax credit can be tailored to ability to pay. It can cover all energy costs. It can be paid without administrative trouble by adding it to the present tax credits now available. Under the Ontario income tax system, they are paid even to people who do not have any taxable income, provided they fill out a form, and most people are already filling out forms in order to get the property tax credit.

The tax credit could be set at a basic sum for energy costs for the average householder or a percentage of energy costs on a declining scale so as not to encourage increased consumption, less two per cent of taxable income, as is done in all other tax credit in order to have a cut-off point so that the well-to-do would not get credit. That seems to me like an eminently worthwhile alternative to consider to this bill, and I would hope that the government would consider that rather than this bill.

Mr. Cunningham: All members of the Legislature are very concerned at the proposal currently before us to increase Hydro rates by 30.3 per cent in these times of inflation and restraint and certainly difficulty among those who are on fixed incomes, our senior citizens, and those who are not quite as fortunate I’m sure as all the members here in the Legislature.

I’d like to commend the member for Grey-Bruce for his continuing, very sincere concern on the part of these aforementioned people. All too often we don’t tend to think about those people, and I commend him for this concern.

Mr. Grossman: We do over here.

Mr. Cunningham: The principle of this bill I think is very important. If we licensed our cars in the same way that we pay for our hydro, a person who drives a Datsun would have no financial incentive whatsoever by way of our licensing fees to drive that four-cylinder car. At the same time it would be absolutely absurd to afford some sort of reduction in licensing fees for that person who drives a Cadillac or Lincoln or in fact a Rolls-Royce, as I saw the appointments secretary to the Premier (Mr. Davis) driving the other day.

I am sorry the Minister of Energy (Mr. Timbrell) is not here at this time. I am sure he is trying to explain this 30.3 per cent increase, which I must admit I have difficulty in explaining too.

But to get back to the principle of the bill, I am attracted to any idea that would, through fiscal incentives, encourage less use of hydro and at the same time give people a break who deserve it.

It wasn’t that long ago and I am sure, Mr. Speaker, I don’t know if you were in the chair at the time -- I rather doubt it; you were possibly a private member at the time -- but Ontario Hydro was encouraging us to live better electrically. Now today we have started this great conservation programme that I am sure all of us would like to adhere to and would subscribe to personally. But I am sure every one of us, given that recent tabling of philosophy, must be drawn to the conclusion that there is some very poor planning going on over there, if any.

I suppose every one of us is also drawn to the inefficiency that tends to go on over there and for that very reason we see a bill of this sort in some small way assisting those on fixed income to obtain some relief from these large increases in hydro. The ramifications of these increases I think are very, very far-reaching and very serious, not only as they affect those on fixed incomes but also those people who require a small amount of hydro to operate their business and who operate their business in a very marginal fashion. I am referring now to our small business people.

It wasn’t that long ago we heard the Minister of Energy talk about fiscal integrity, but if there is anything I think that would have a great deal of integrity it is the very thesis of this incentive-oriented type of inverted pricing. To that end I think that Adam Beck, if he were alive today, would adhere to it.

It seems in those days it was very integral to his whole thinking that Ontario Hydro’s electric energy be provided to every single person in this province at the lowest possible cost. He was, I guess, very correct in his fears a long time ago when he said, “Watch what they do when I am gone.” If he could only see what they have done. Now I am not necessarily referring to the building of that building without tender across the street or the expensive equipment stories we hear that disturb us all or whether it’s Ontario Hydro buying cranes. The object of the exercise I am sure is to make that operation more efficient to us all.

In concluding, I would say that I appreciate this idea. The thesis of it appeals to me tremendously. I would only say to you, Mr. Speaker, that because it is a good idea adopted from some other venue or from an opposition party, that we not so cursorily set it aside and disregard its intent, because I think its intentions are very good. I would suggest that before long the government will be appropriately impressed, largely through public opinion I would think, to redirect itself as it relates to the pricing of energy and the requirements. They are not very effective now, I don’t think, and I think the members on this side would share that view.

Mr. Grossman: Where were you Friday?

Mr. Cunningham: I was here.

Mr. Speaker: Does the hon. member for Durham East wish to state his position? We have a minute.

Mr. Moffatt: Not at this time, Mr. Speaker, thank you.

Mr. Speaker: This order is now discharged from the order paper.

Hon. Mr. Welch: Mr. Speaker, before moving the adjournment of the House, we indicated Friday that tomorrow we would turn to legislation in the order that was mentioned then.

On motion by Hon. Mr. Welch, the House adjourned at 6 p.m.