Hansard Transcripts 1978-May-02 | Legislative Assembly of Ontario

Mr. Haggerty: Mr. Speaker, I rise to support Bill 60, An Act to amend the Retail Sales Tax Act. It’s interesting to note that this is the second sales tax bill introduced in the Legislature and debated on second reading within the last five weeks. Speaking on Bill 27, An Act to amend the Retail Sales Tax Act, I suggested then that if we were to see some improvement in our economy and new jobs created, the Treasurer (Mr. McKeough) had to introduce amendments to reduce the sales tax to a level that would encourage public spending and reduce large inventories of consumer goods.

As usual, the Treasurer has taken a negative approach. He is more interested in the dream of a balanced budget in 1981 than in putting people back to work in a non-inflationary way, while this time the federal government has provided the stimulus to provide the economic growth, for a short period of six months perhaps.

These proposals are not intended to create further inflation. The six-month reduction of the provincial sales tax from seven per cent to four per cent will mean a loss of revenue of some $433 million. Ottawa’s share of this provincial sales tax reduction is apparently $289 million, and it will be in effect from April 11, 1978, to October 7 1978.

My colleague the Liberal critic, the hon. member for London Centre (Mr. Peterson), commenting on the federal budget and the Treasurer’s response to it, accused him of being the most indecisive Treasurer of all times. He pointed out that only a month ago the Treasurer rejected any form of stimulus, and instead extracted another $271 million in tax increases in the form of increased OHIP premiums, as well implementing other tax measures. Now the Treasurer claims to have played an important role in the design and implementation of a major new federal-provincial initiative to stimulate the Canadian economy. He is prepared to throw in $144 million to support the initiative which he admits probably won’t affect unemployment, will not change growth figures and will worsen the deficit position.

While we support the reduction in provincial sales tax which we hope will help to stimulate the economy, we want to see a full study of the impact of this reduction. We need to know who’s going to benefit. Will it lead to increased purchasing of imported goods? Will it provide a much-needed stimulus to the Canadian manufacturing sector? What will be the impact for Canadian industry? Perhaps those are some of the questions the minister can answer.

This is not the first proposal by the federal government to add some stimulus to the economy in Canada, and perhaps the benefit will come to Ontario. In January and February of this year, as a direct benefit of the reduction of personal income tax, some workers were provided with more take-home pay. Essentially, this program gives up to $100 in tax cuts for low- and middle-income families. The federal government took less money from the 7.5 million Canadians who will receive the benefit of this reduction. In addition, a year ago the federal government, in its budget, provided an overall income tax cut of approximately $300 million. These two initiatives gave consumers $1 billion in disposable income to circulate through the economy. All the federal government measures or tax measures are intended to provide a stimulus to the lagging Canadian economy and high unemployment. The main goal is to create employment.

I might say that in 1971 there was a reverse position taken. That’s when the provincial government applied stimulus to the economy to create new jobs, to get the economy rolling and to add in the long run to the coffers of the province of Ontario through other tax revenue resources.

It’s interesting to note that in a tax study entitled Reassessing the Scope for a Fiscal Policy in Canada, on page 13, there is outlined an alternative measure to a full employment budget. It goes on to say, for example, that if 68,000 more jobs had existed in Ontario in 1977, extra revenues to the province would have amounted to $380 million. Of course, I suppose the biggest saving there would be in unemployment insurance.

This is the main concern of my party, that government give top priority to the unemployment situation in the province of Ontario. It is at an all-time high of almost eight per cent, in some cases nine per cent. That’s the average, but in my area, in the riding of Erie and I suppose you can take in the Niagara Peninsula -- it runs at about 12 to 14 per cent; and that’s supposed to be a rather healthy community.

I say to the minister that I hope these cuts in retail sales tax will be the stimulus to create jobs. If not, I think that the Treasurer’s wishful dreaming of a balanced budget by 1981 will not come true.

I suggest to him, based upon the comments of that study, Reassessing the Scope for a Fiscal Policy in Canada, if he can find 68,000 jobs it’s going to bring in some $300 million in extra revenue. That’s the area the government should be approaching, to get out and find jobs. Get a healthy climate here for the business sector to create the jobs.

I don’t have to tell the minister. He can read the articles in the newspapers about industry heading to the United States, particularly from Ontario and Quebec, because there is a healthier climate there. Maybe one of the reasons is that they are not taxed as high as they are in the province of Ontario and throughout Canada. Hopefully, the minister will convey our thoughts in this particular area so that top priority is given to job enrichment programs for the province of Ontario. I think it is mentioned there, as I said before, that there is revenue there when people are working. If we reduce the sales tax, if only for a short period of time -- six months -- hopefully this is going to add some fuel to create jobs in the province of Ontario.

I thought perhaps the Treasurer would have brought in some more key legislation to create that stimulus that is required in our economy today. I notice that the province of Quebec is not happy with the deal from the federal fellows in this particular area of a joint program on tax reductions, but Quebec’s leaders have their own personal reasons. They have included additional tax forgiveness in such areas as textiles, clothing, shoes and so forth to boost their economy, and to protect jobs in that particular area. Rightly so, that is the choice they have made, but I am pleased to see that at least this government is working with the federal government in this particular area. It is regrettable that the province has not provided the leadership in this particular area. We do support the bill in principle.

Mr. Charlton: Mr. Speaker, I too rise to speak to Bill 60. I should say at the outset that we are going to support this bill. I say that with some mixed emotions. We are in a position of more or less having to support this bill, because it is the only even remotely serious measure that government has taken to attempt to stimulate the economy, to stimulate consumer spending, and hopefully to provide some stimulus for job creation.

I have mixed emotions because this government saw fit to provide no economic stimulus on its own. Yet the government somehow managed to rearrange things sufficiently to find the money to pay for Ontario’s share when the federal government made this proposal. I have mixed emotions because of the short duration of this three per cent tax reduction, the six-month period. This measure is supposedly designed to stimulate consumer spending with the eventual hope that jobs will be created, but the proposal runs for only six months so whatever stimulating effect this tax reduction will have on the Ontario economy ends in October, just as we head into the winter months and into that period of the year when the economy traditionally slows down and unemployment increases.

We are concerned that this, the only serious economic measure in terms of economic stimulation on the books, was proposed by the federal government and not by this government. It concerns us very deeply that the government of this province didn’t find the time and the money that it has now found to provide an economic stimulus in its own budget. We are also very concerned that this action that the federal government has now taken has unfortunately intruded in a constitutional way on the jurisdiction of the provinces in terms of taxes.

[8:15]

It concerns us that this, the only economic effort at any level to deal with the economy and stimulation this year, has brought upon us another confrontation between Ottawa and the province of Quebec. It seems to us that the whole question of governments playing a role and providing some stimulus to deal with some of the economic problems that we have has been very badly handled. This program is a perfect example of that.

There are a number of ways in which this proposal is very offensive. As I said at the outset, there will be some stimulation from this measure but it’s questionable to what degree. It’s questionable whether any permanent effect will be felt at all. It’s questionable whether it’s really going to serve the people of Ontario as it’s going to end before we get into the serious period of next winter. This caucus is left in the position where we can’t reasonably pass up this opportunity to provide whatever limited economic assistance that Bill 60 will provide. I would like it on the record that, although we are going to support the bill, we don’t feel the way this whole thing has been handled and the lack of initiative on the part of this government on its own are satisfactory for the people of Ontario.

Mr. Nixon: I want to say a word or two about the bill. Frankly, I have felt for a long time that the federal and provincial budgets should be much more closely related than they ever have been in the past. The fact that the federal Minister of Finance, after consultation with the provincial Treasurers, was able to bring in a budget which reduced the sales tax across Canada, with the exceptions that have already been noted in the case of Quebec and the one we are aware of out in Alberta, means that in my opinion we’ve come into quite a new phase in public finance.

It has always been a surprise to me that the Treasurers and the Minister of Finance could not reach agreement as to how the economy needed stimulating in this case, or we hope in the future perhaps even dampening down so that the results would be coordinated and the effect would benefit all parts of the country.

I have been concerned, however, about certain inconsistencies in the policies before the enunciation of the federal budget. When the original Ontario budget came down, there certainly was no attempt to stimulate the economy of this province by any kind of tax reduction. As a matter of fact, to the contrary, there was an extremely onerous, and in my opinion ill-advised, increase in the OHIP premiums that we have been discussing in the last few weeks.

At the same time that the Conservative government here was raising its revenues, the Conservative Party nationally was calling for a $2-billion tax reduction. They didn’t undertake to describe to the taxpayers or anyone else where this money would come from, but they indicated it would be used for stimulation of the economy in general. I never heard of opposition doing that sort of thing any place else. It surprises me that the federal opposition, the Progressive Conservative Party, would take that alternative, particularly when we are approaching a very sensitive time associated with a possible federal election. The Liberal Party, federally, did choose this time in its judgement to coordinate a tax reduction across Canada, which is surely going to have the effect of stimulating the economy.

Mr. McClellan: Surely, surely, surely.

Mr. Nixon: I was somewhat surprised at the same time that, although the western Premiers accepted these federal contributions toward provincial tax reduction, they got together a few days after to criticize the initiative of the government of Canada in this regard. I thought that smacked of a political response when I read it because they had grabbed the money with some alacrity at the time while a few days later they issued press releases criticizing the government of Canada for this important initiative.

The nice part of the system actually was that since the government of Alberta has these ancillary revenues, let’s say derived in large part from the consumers of the province of Ontario, it doesn’t have a sales tax to reduce. So there was a little bit of ironic justice there to satisfy some of the more unsophisticated taxpayers of the province of Ontario, like myself. But to give the Premier of Alberta credit, he didn’t carp about that unduly. He’s sitting on close to a $4 billion nest egg that be can’t bring himself to invest in anything other than fairly short-term bonds. I think he likes to run his fingers through the money every three months just to be sure it’s there.

Mr. Martel: The Heritage fund, he goes down there and counts it.

Mr. Nixon: Yes. But to give the Treasurer of Ontario credit, he did not carp about it at all. He uniformly said it was an excellent idea; and in his own inimitable style he said, “I thought of it first.” And you know, actually it’s true, Mr. Speaker.

Mr. McClellan: Poor old Sinclair Stevens.

Mr. Nixon: I can remember the Treasurer, in either a report to the Legislature or in one of his many speeches -- and there’s about three a week; he prints them on both sides of the paper so it’s a real chore to read them -- he said -- this must have been almost a year ago -- that in order for the government of Canada to fulfil its responsibilities it should pay us, the provinces, to reduce our sales tax. At the time, I thought, “Darcy, you are losing your grip, because that’s just not going happen.”

The more one thought about it the more obvious it became, but the part I liked was that the program which resulted in this reduction was a two per cent decrease financed by the government of Canada, predicated on an additional per cent decrease financed out of our own Treasury. That really appealed to me, because the last time we had one of these short-term tax reductions was in 1975.

Mr. T. P. Reid: Just before the election.

Mr. Nixon: The hon. member might remember that that happened, and the judgement of the Treasurer at the time was that the economy ought to be stimulated on a short-term basis, actually by -- was it removal of the sales tax on automobiles?

An hon. member: Yes.

Mr. Nixon: Surely it wasn’t that generous? Was it all taken off? Oh now I remember, because I rushed out and bought a car, along with a number of other people, because the savings were tremendous.

Mr. T. P. Reid: A Volkswagen?

Mr. Nixon: There was a spontaneous outpouring of gratitude right across this country that saw the Conservatives return in a minority situation. As I recall -- and it is already ancient history -- the sensitive, fine-tuned stimulation at the time amounted to $600 million in the reduction of our revenue by the decision of the Treasurer at that time. There was a package of programs that weren’t all associated with the sales tax but the sales tax was one of them. It was a very imaginative package involving a cheque to everybody who had bought a new home in the last century and almost everything one could think of that would justify sending out a share of this $600 million upside down cake to the taxpayer.

Mr. T. P. Reid: It’s amazing how an election can stimulate.

Mr. Nixon: That, of course, is not directly on the principle of this bill; and yet in a way it is, because I would be one of the last to suggest that the federal Minister of Finance, Mr. Chretien, is one of the most effective politicians I have ever seen in action -- he really is something -- that he would associate this rather fine-tuned adjustment of the Canadian economy in the reduction of the sales tax with an election that might be looming. As a matter of fact, having read the headline in the Star today, it is not looming quite as largely as it did earlier in the morning.

Mr. McClellan: Why is that?

Mr. Nixon: I don’t know. I hope that they go ahead because --

Mr. Warner: It must be the sales tax; maybe it’s the sales tax.

Mr. Speaker: That isn’t on the principle of this bill either.

Mr. Nixon: Right. We can’t blame the Minister of Finance for Canada for not trying to at least use all of the facilities at his command to convince the grateful Canadian taxpayers of the efficacy of this initiative. As a matter of fact, he used more than the facilities at his command, because he actually got our Treasurer to dig into the Treasury of the province of Ontario and hock out money to pay for another per cent reduction, which is also in some respects designed to assist the people of Ontario to make up their minds in the only logical way to support the incumbent administration in Ottawa. I was particularly delighted that the federal initiative, tailored after the Ontario Treasurer’s own earlier initiative and following his suggestion almost exactly, left our Treasurer in glowing support of the federal budget and digging into our Treasury for -- what would be the revenue for one per cent for half a year, $180 million? Imagine, finding $180 million of our hard-pressed funds in a budget that had already been pared to the bone with absolutely no fat nor leeway of any kind available for any programs under any circumstances. The Ontario Treasurer found the dough because of the initiative of the government of Canada which he thought he should follow.

Certainly, it would be a strange thing for us on this side to criticize that initiative in any way. I think it’s just grand, and I hope that the people of the province appreciate the leadership of the federal government in trying to stimulate the economy in this way.

Mr. Wildman: Herbert Hoover would be proud.

Mr. Nixon: It really concerns me that the Conservative budget of Ontario a month ago had nothing but tax increases. The Conservatives in Ottawa called for a $2 billion hand-out, and the Liberal government in Ottawa took this initiative. I would use the word “conned,” but let’s say they persuaded the government of Ontario to reduce the sales tax in this imaginative, and let’s say, efficacious way. All of us want to stimulate the economy. We want to make jobs, and we certainly want to re-elect the Liberals in Ottawa.

Mr. Eakins: An excellent address.

Hon. Mr. Maeck: Are you for or against the bill?

Mr. Nixon: I’m for the bill.

Hon. Mr. Maeck: Mr. Speaker, there is very little I can say in reply. It’s all been said, obviously.

Mr. Eakins: And said well.

Hon. Mr. Maeck: I did want to talk a minute about one question that the member for Erie (Mr. Haggerty) had posed, and that is whether or not we had done a study as to what impact there would be on Canadian industry. Again, that’s almost an impossible thing to do simply because --

Mr. Haggerty: Going from past experience.

Mr. Wildman: Parizeau doesn’t think so.

Hon. Mr. Maeck: -- we, in this government, didn’t have very much notice as to what was going to happen. The decision was made very quickly so there certainly wasn’t time for a study.

The only thing I can refer to is the fact when we did remove the sales tax on automobiles in 1975, as mentioned by the member for Brant-Oxford-Norfolk, it certainly did stimulate the auto industry to a great extent.

Mr. Haggerty: You called an election campaign too.

Hon. Mr. Maeck: It really didn’t have the effect on the election that the member for Brant-Oxford-Norfolk indicated.

Mr. Eakins: Not as much as you would have liked.

Hon. Mr. Maeck: We only came in with a minority. We really didn’t win by very much.

Mr. Eakins: It was a poor gamble.

Hon. Mr. Maeck: I would also confirm that this idea was the brainchild of the Treasurer of the province of Ontario and not the federal government. This proposal was made some nine months ago.

Mr. Nixon: A suitable time.

Mr. McClellan: It was a brainchild of Sinclair Stevens.

Mr. Wildman: Strange bedfellows make strange brainchildren.

Hon. Mr. Maeck: The opportunity arose at the proper time for the Liberals in Ottawa to take advantage of that excellent suggestion made by the Treasurer.

Mr. Martel: Are you biased?

Hon. Mr. Maeck: With an election on the horizon --

Mr. McClellan: The distant horizon.

Hon. Mr. Maeck: -- it was an opportune time for the Liberals in Ottawa to bring forth the plan proposed by the Treasurer some nine months ago.

Mr. Wildman: When another election was on the horizon.

Hon. Mr. Maeck: There is no reason why we, as a government, shouldn’t take advantage of the funding that was offered to the taxpayers of the province of Ontario, which we did.

As members know, one per cent is being absorbed by the Treasury here in the province, which amounts to about $144 million; and the other two-thirds is supplied by the federal government. I do want to reiterate that it was not a federal plan originally. It was proposed by our illustrious Treasurer.

Mr. Nixon: Is that it?

Hon. Mr. Maeck: That’s it.

Mr. Sargent: It will never pass.

Motion agreed to.

THIRD READING

Hon. Mr. Maeck moved third reading of Bill 60, An Act to amend the Retail Sales Tax Act.

[8:30]

Mr. Makarchuk: Mr. Speaker, on the motion for third reading, I just wonder if the minister made any contingency provision in view of the fact that if the election isn’t called, the sales tax may be lost or the reduction prolonged beyond the October expiry date and may run into next spring. Would the minister indicate to the House at this time what the reaction would be from the province of Ontario; because if the election is next spring, then the sales tax exemption may be on for a whole year or it may be on into the fall of the following year? Could the minister indicate at this time what he is doing about this possibility?

Hon. Mr. Maeck: We will cross that bridge if we come to it.

Mr. Warner: You have no plans.

Motion agreed to.

INCOME TAX AMENDMENT ACT

Hon. Mr. Maeck moved second reading of Bill 61, An Act to amend the Income Tax Act.

Mr. Nixon: Mr. Speaker, this is another part of the federal-provincial economic stimulation program for which we have nothing but commendation on the approach taken by the government of Ontario and the government of Canada.

Mr. Warner: Trudeau doesn’t need to be in Toronto tonight.

Mr. Nixon: If we are in the midst of a situation that has been prompted by any kind of electoral pressure that has caused this kind of co-operation, I hope and pray that such co-operation will continue. In the unlikely event that the administration in Ottawa were to change and in the likely event that it will change here, I can assure you, Mr. Speaker, who will still be in the chair -- there’s no doubt about that -- that we would look forward to working in a close and orderly way with the administration of Canada.

Mr. Deans: I’ll bet you would.

Mr. Nixon: We confidently expect that it will still have the Liberal initiatives which have resulted in these bills that are before us today.

Mr. McClellan: And the highest unemployment we’ve had in years.

Mr. Nixon: In almost every instance they have been a tremendous boon and boost to the taxpayers of Ontario. The suggestion has been made that if an election is not held until perhaps the fall or next spring, or maybe even longer than that --

Mr. McClellan: Under the new Liberal leader.

Mr. Nixon: -- we would hope that these adjustments would continue to assist the hard- pressed taxpayers of this province --

Mr. Wildman: It’s all part of the new Liberal deal.

Mr. Nixon: -- because if they have got to wait for a Tory initiative to reduce the taxes or adjust the load for the benefit of the consumers and taxpayers here, they will wait a long time. We are only hoping that a change in government here will put Liberal principles in control of taxation policy, which is the only way the people of this province are going to get the long-term benefits they deserve.

Mr. McClellan: Nobody deserves that.

Mr. Martel: You should go back to the farm.

Mr. Charlton: Mr. Speaker, I noted with some humour some of the comments of the member for Brant-Oxford-Norfolk on this bill and the last bill, Bill 60. This bill is the companion bill to the retail sales tax bill; it’s the bill by which the Ontario government will gain the money and by which it will pay money back if it happens to get too much.

I thought it was rather strange that the member felt quite strongly that this was a program, initiated by the federal government, that was going to be of real benefit to the people of Canada. I find that a rather strange observation on his part. It obviously has been commented in this Legislature by people from all parties that the effect of this six-month tax reduction is going to be very limited; and it’s going to end in October.

Mr Nixon: The member for Brantford wants to extend it long after. I think it’s a great idea.

Mr. Makarchuk: What’s Pierre going to do?

Mr. Charlton: If it extends a little longer, that will be fine; but it doesn’t seem to us to be appropriate to be electioneering with the economy of Ontario.

The other thing that I find rather strange in his comments is that it seems very unsatisfactory to us in this caucus that the federal government, which initiated this program in its mad search to find a way to impress somebody in a budget within which it had no mobility, overlooked what is ultimately going to be a bigger problem, this new confrontation with the province of Quebec over the position the feds have taken in moving into provincial jurisdiction. In their mad search to find a way to impress somebody, they actually offended somebody they already have very serious problems with. In the long run, it is going to be a bigger problem than that what they have accomplished or solved with this particular measure.

We’re going to support the bill, but it is not a bill that is going to accomplish any great economic resolution to the problems in the province of Ontario. In fact it is questionable whether there will be any effect at all. As a matter of fact, the revenue critic for the Liberal caucus pointed out in his original speech on the Retail Sales Tax Act that nobody knows whether the consumer spending, which is or should be generated by this, will even be spent on Canadian products.

It is, therefore, a little presumptuous to tout this bill and its companion bill as any kind of an economic panacea.

Mr. Laughren: I was very happy that I came in to hear the member for Brant-Oxford-Norfolk speak about the whole idea of progressive taxes. You’re not going to believe this, Mr. Speaker -- well, maybe you would, but there are those in the House who wouldn’t -- but for bedtime reading the other night I was reading Ken Carter, who did a little bit of work on taxation policy.

Mr. Nixon: Do you mean Commissioner Carter? A buck is a buck?

Mr. Laughren: Yes, I call him Ken Carter, deceased.

Mr. Nixon: You have too many researchers.

Mr. Laughren: This is what the late great Ken Carter had to say about the kind of taxation we’ve got in this country and in this province. I will quote him directly. He was talking about the package of taxation we have. He was quite right in saying that one can’t look at one piece of taxation and say that makes the whole taxation system regressive or progressive or whatever.

Mr. Nixon: You’re the single tax party, corporation tax.

Mr. Peterson: Financially sophisticated.

Mr. Sterling: What about personal income tax?

Mr. Laughren: Yes, I have always said that personal income tax is the only progressive taxation we have in our society. Let me get back to the matter at hand. Ken Carter said: “In the light of these criteria, we believe that the present tax system is inequitable in many important respects. The combined effect of sales taxes, corporate income taxes, property taxes and the present personal income tax rate and base, is such that low-income individuals and families pay higher taxes than is equitable when compared to middle and upper-income individuals and families.”

That may not be news to many people here. But perhaps we should reflect for a moment on what it is about a Minister of Revenue who does the beckoning of the Treasurer of the province of Ontario, who reduces regressive taxes rather than uses progressive taxes in order to come up with the proper mix.

I know the Minister of Revenue normally takes it second-hand from the Treasurer. This time he is taking it third-hand--from the Minister of Finance and the Treasurer through to the Minister of Revenue for the province of Ontario. That must get a little bit demeaning for someone like the member for Parry Sound (Mr. Maeck), who really is king of the realm in the Parry Sound area, to be suddenly now someone who gets things third-hand.

Mr. Makarchuk: He’s getting it from the back of the third hand.

Mr. Laughren: Yes. He is getting things third-hand from a political party in Ottawa, namely the Liberals. That must really grate on the Minister of Revenue. I really wonder about the whole wisdom of reducing a regressive tax rather than increasing a progressive tax. I know the minister can say “You tell that to the people out there who suddenly are going to pay less taxes on the goods they buy.” I suppose we should stop and think for a moment about why we have any kind of tax in our society besides income tax. Some day the Minister of Revenue, who is responsible for collecting taxes, will have to explain to me, in one of the sessions in which I advise his senior people on how they should be taxing the people of the province of Ontario --

Mr. Nixon: Tell us about that again.

Mr. McClellan: You like that, eh?

Mr. Laughren: It’s true. Perhaps I’m being simplistic, but it’s always seemed to me that anything other than income tax is a way of camouflaging the fact that the tax system is regressive. If one really wanted to have a tax system that was fair, we would rely on income tax. We’ve got this myriad of taxation policies that are primarily designed to disguise the fact we have a regressive tax system. When we get right down to it and strip away all the rhetoric, that’s what it boils down to. The Minister of Revenue can come up with other arguments if he likes, but that’s what it’s all about.

Mr. Sterling: Should we take away corporate taxes?

Mr. Laughren: As a matter of fact, if we had a truly progressive tax system, we would only need one -- income tax. We only need one. We would have to have controls on the flow of capital from one jurisdiction to another and so forth, but that’s right; the member’s absolutely right. I’m really amazed he is so perceptive, I really am.

Mr. Sterling: Thank you.

Mr. Laughren: Following in the footsteps of Don Irvine, I’m astounded. Do members remember how Don Irvine was described? What was the description of Don Irvine -- the pre-Cambrian shield in human form? The present member is an improvement.

Mr. Sterling: I am really just a chip off the old block.

Mr. McClellan: Off the old rock.

Mr. Laughren: We really do get a strange combination of federal and provincial tax policies when we get the federal Liberals combining with the provincial Tories --

Hon. Mr. Maeck: Supported by the provincial NDP.

Mr. Laughren: -- to ease the tax burden to stimulate the economy in this country. It is truly something to behold.

Mr. Nixon: The reduction in sales tax. Just wait until Elmer Sopha gets hold of you people up there. He will make it come to life.

Mr. Laughren: Elmer Sopha peaked early in life. He peaked long before he sought the nomination in 1978. You should write off Elmer Sopha right now. He’s a has-been -- and I’m generous, he really is.

Mr. Warner: He’s probably a never-was.

Mr. Laughren: We see the federal Liberals saying, “We think the provinces should reduce their sales tax by three points. We’ll pick up two of those points and the provinces will pick up one.” It’s like an offer you can’t refuse that they put to the provinces.

The provinces, almost at the same time, are saying, “We understand the problem of stimulating the economy, we understand the problem of unemployment, but we’re really going to crunch the good burghers of Ontario by increasing OHIP premiums by a very substantial amount.” Thank goodness, thank goodness we have minority government in the province of Ontario at this time, and thank goodness the Liberal Party of Ontario and the New Democratic Party of Ontario were able to get together and say, “That’s too much. That’s too much for us in opposition to swallow in Ontario at this time.” It was time we got together, wasn’t it?

Hon. Mr. Maeck: Oh, yes.

Mr. Laughren: Yes. I would only hope. and I would make this plea to the Liberal Party, that we would get together in the same way on the occupational health bill that’s going to be coming before us.

Mr. Nixon: Our position is clear on that bill. Read Jonathan Manthorpe.

Mr. Laughren: I haven’t read Jonathan Manthorpe lately.

Mr. Nixon: He’s a well-informed, objective observer.

Mr. Laughren: Jonathan Manthorpe is a --

Mr. Nixon: A great fellow.

Mr. Laughren: Jonathan Manthorpe is not read in Shining Tree. They don’t read him in Shining Tree and I don’t read him in Sudbury.

Let us be clear that we cannot trade off tax policies with the health and safety of workers in the province of Ontario. I would hope that the Liberal Party would understand that very clearly and would stand with us in resisting that kind of trade-off that the government is trying to make.

[8:45]

What I really started to say was that we see in this country the kind of contradictions between the federal jurisdiction and the provincial jurisdiction in interpreting how the economy needs to be stimulated. I cannot help but think of what happened in the province of Quebec. There we had the Minister of Finance, Mr. Parizeau, saying to the federal Liberals, “We’re not going to buy your package.”

Strange isn’t it, that it was the Treasurer of the province of Ontario who suggested the package to the federal minister, Mr. Chretien? He was the one who said, “You pick up the costs of the sales tax reduction for the provinces.” But Parizeau, on the other hand, said, “Just a minute. We’re not going to buy that holus-bolus. We’re going to do something we think will stimulate the economy of the province of Quebec in a much better way than what the federal Liberals are suggesting.”

Perhaps -- just perhaps -- the Treasurer of Ontario should have said to the Minister of Finance in Ottawa, “Look, we’ve got a better idea, too.” Maybe the minister of finance in Ontario should have worked together with the Minister of Finance in the province of Quebec and said, “Look, we think there’s a way of stimulating the economy of this country, not just --

Mr. Nixon: This is the Income Tax Act, Mr. Speaker.

Mr. Laughren: -- reducing all goods from seven per cent to four per cent. But oh, no! Not the Treasurer of the province of Ontario.

I want to tell the Minister of Revenue --

Mr. Nixon: That’s the last bill.

Mr. McClellan: It is a package.

Mr. Laughren: -- that in the province of Ontario we could have eliminated the sales tax on textiles; we could have eliminated the sales tax on building supplies --

Mr. Nixon: This is Bill 61, The Income Tax Act, Mr. Speaker.

Mr. Laughren: -- we could have eliminated the sales tax on household furniture; we could have eliminated the sales tax on major appliances.

An hon. member: Would the member return to the subject of the bill, please?

Mr. Laughren: I don’t pretend to the Minister of Revenue that we have all the documentation on all the consumer goods on which the sales tax should have been reduced. We don’t have access to all those kinds of details, but I think that the Treasurer and the Minister of Revenue do. The Minister of Revenue and the Minister of Treasury, Economics and Intergovernmental Affairs should have sat down with their counterpart in Quebec and said, “You know, perhaps it’s time we got together and eliminated the sales tax on all the consumer goods in these two provinces.”

Mr. Peterson: On a point of order, Mr. Speaker. In fairness, the hon. member is not addressing his mind to this bill.

An hon. member: That’s not fair.

Interjections.

Mr. Peterson: We’re talking about the Income Tax Act, the mechanism whereby there is equalization of adjustments in the collection of the money. We’re not talking about the Sales Tax Act at this time, and I would ask you, Mr. Speaker, to draw the hon. member to order, apart from the fact that he’s being quite boring.

Mr. Warner: Only because you didn’t think of it first.

Mr. Laughren: I await your ruling.

Mr. Acting Speaker: Have you concluded your remarks?

Mr. Laughren: No.

Mr. Acting Speaker: Would you please then continue; and try to confine yourself to Bill 61.

Mr. Laughren: I shall certainly do that. May I remind the Speaker that what we’re talking about is a bill --

Mr. Sterling: Don’t talk about it.

Mr. Laughren: -- that causes income tax revenues which would normally go to the federal government to be redirected to the provincial government to make up for the reduction in the sales tax? That’s what we’re talking about.

Mr. Breaugh: Right, absolutely.

Mr. Laughren: If the Liberal Party doesn’t understand, or if they’re so embarrassed by the fact that they’re being part and party to a taxation policy --

Mr. Nixon: Your face is still red from last week, Floyd.

Mr. Laughren: -- in the province of Ontario that is regressive and does nothing to stimulate the domestic industry in this province, then let them stand up and say so.

Mr. Breaugh: We all understand that.

Mr. Warner: They may stand up and leave.

Mr. Nixon: He used to say that to Inco?

Mr. Laughren: Well, the member for Brant --

Mr. Nixon: Here comes the champion, the member for Sudbury East (Mr. Martel). You can all sit down and relax.

Interjections.

Mr. Laughren: I’ll tell you, Mr. Speaker, that this bill is inseparable from the sales tax bill and --

Mr. Nixon: That’s why you are talking about the sales tax, right.

Mr. Laughren: It certainly is; and certainly that --

Mr. McClellan: Part of the same flim-flam.

Mr. Laughren: I think that the Treasurer and the Minister of Revenue -- and I think we’ve been very gentle with the Minister of Revenue because I think it’s time we insisted that he take a stronger position when dealing with the Treasurer on matters of taxation. There is no question that in the province of Ontario the interests of the citizens of this province are not being regarded as passionately as are the interests of the citizens of Quebec by the Minister of Finance and Revenue in that province.

Mr. Breaugh: Right.

Mr. Warner: Right on.

Mr. Laughren: The Quebec government’s primarily concerned with stimulating the economy of the province of Quebec and the Treasurer of Ontario doesn’t seem to understand that that’s important in the province of Ontario, too.

By the last count we had 345,000 people unemployed in the province of Ontario.

Mr. Warner: Shameful.

Mr. Laughren: That is serious. That represents probably a million people if one takes into consideration families and so forth. That is a very serious number for the Treasurer not to have sat with the Minister of Finance and Revenue of the province of Quebec and said: “Between these two provinces, we probably have at least 80 per cent of the manufacturing activity in all of Canada”; and not to have said to themselves “Let us go to the Minister of Finance in Ottawa and say to him: ‘If you are interested in stimulating economic activity and employment in this country, you simply have to understand where the economic activity is centred, namely in Quebec and Ontario. You don’t have to worry about Alberta as they’re looking after themselves very well. Rather than these blanket sales tax reductions which affect imports as well as domestically produced products, let us reduce the sales tax on certain individual products. We know that a province can reduce sales tax only on items produced within its borders because elsewhere is the purview of the federal government. We cannot mess around with that, but what we can do is to reduce the sales tax on a broad range of products, for example, all appliances and all textiles. We can’t say only on textiles in the province of Ontario because that would mean in effect that we would be setting up a tariff against products produced elsewhere’.”

We have the figures that show us in broad terms what products are primarily produced in the province of Ontario. Statistics Canada brings out figures using terms like value added; which is a very valuable term to understand because it says that there is a certain economic activity within the borders of Ontario dealing with the following products. It is of little value to us if we import a great deal of our products, such as automobile parts, and then just screw them together here and sell them. That is not a great deal of economic activity within the jurisdiction of Ontario but --

Hon. Mr. Maeck: It’s a lot of jobs.

Mr. Laughren: Of course. I am just saying that if we produce them right from square one, then that is more economic activity, more value added as the economists and the statisticians term it. That is what we should be looking at, not just for Ontario, but for Ontario, Quebec and Canada as a whole. Other people would call it import substitution.

This is the kind of mindless stimulation policy that the federal government has entered into and which the Treasurer of the province of Ontario is endorsing holus-bolus.

Mr. Nixon: The NDP is against tax reduction.

Mr. Laughren: For how long do you think that the people of Ontario are going to sit back and say: “We understand what the Minister of Finance in Quebec is doing but, that is Quebec?” They are not going to say that. They are going to say, “Just a minute, this isn’t just an act of separatism. This is the act of a Minister of Finance who is acting in the best interest of the people of his jurisdiction.” That is what we are missing in this province.

For just once I would like to see the Treasurer of Ontario stand up and say, “Just a minute, Mr. Minister of Finance in Ottawa, we have problems in Ontario as well. It is fine for us to be the wealthiest province and the most industrialized province, but we have problems too. If we don’t stimulate the economy in the province of Ontario, that is not good for the whole country because we share our wealth with other provinces, If we don’t have that wealth to share, the other provinces will hurt as well.”

Mr. Haggerty: With tax increases.

Mr. Laughren: It is not a selfish attitude to say that we simply must improve the economy of the province of Ontario. That is not selfish at all. What we are saying is that as we benefit, the rest of Canada benefits as well because this is the industrial heartland in Canada. We are not going to have a strong Canada and a strong federation unless we have a strong economy in the province of Ontario. Perhaps it is time that we realized that.

I think that the Treasurer of the province of Ontario is being out-stickhandled all the way both by the other provinces and by the federal Minister of Finance. It is very difficult for me to stand here and support this bill, which I will because it reduces sales taxes in the province of Ontario. It is a blatant political move by the federal Liberals but nevertheless it is there. We simply have to support it. I will tell members that it has raised my level of cynicism and that of a lot of other people in the province of Ontario.

Mr. Acting Speaker: Are there any other members who wish to speak to this bill? The hon. Minister of Revenue.

Hon. Mr. Maeck: Mr. Speaker, again very, very quickly, the member for Brant-Oxford-Norfolk only reiterated what he had said about the previous bill, so I don’t think I have to remark on that again.

Mr. Swart: He’s only got two speeches.

Hon. Mr. Maeck: The member for Nickel Belt, of course, has talked about his party’s philosophy as far as taxes are concerned and he is quite aware that their philosophy is just a little different from ours and I see no point in getting too deeply into that debate.

Mr. Warner: Ours is sensible.

Mr. Martel: Ours is progressive.

Mr. Laughren: The Tories don’t have any.

Hon. Mr. Maeck: However, I would remind the member that while he may think the program which has been instituted by the province of Quebec is superior to ours, I would just say there are quite a few items in the province of Quebec that are manufactured right in the province of Quebec that have been left out and I don’t see that as being very fair. I think our program is fairer to the consumer and to the person who is selling the product than the Quebec one. I would also remind the member that all of the other provinces, of course, with the exception of Alberta, which doesn’t enjoy that little thing called sales tax at all, have adopted basically the same plan that we have in the province of Ontario, so, if as he indicated, the Treasurer of Ontario has been hoodwinked by the federal people, I guess all of the other provinces have been too. I don’t really see it in that light. I believe that the program is a good one and I personally endorse it and welcome the passing of this legislation, because this economy in the province of Ontario --

Mr. Laughren: You don’t have any choice, Lorne. You have no choice.

Hon. Mr. Maeck: -- does need some stimulation. This is probably not going to do the complete job by any means, but it’s going to help and I think we have to move in that direction.

Mr. Martel: It’s a Band-Aid, whereas you need a tourniquet.

Mr. Acting Speaker: The motion is for second reading of Bill 61.

All those in favour, please say “aye.”

All those opposed, please say “nay.”

In my opinion the “ayes” have it.

Motion agreed to.

THIRD READING

Hon. Mr. Maeck moved third reading of Bill 61, An Act to amend the Income Tax Act.

Mr. Acting Speaker: All those in favour, please say “aye.”

All those opposed, please say “nay.”

In my opinion the “ayes” have it.

Motion agreed to.

An hon. member: You will note, Mr. Speaker, that the NDP voted against it.

CORPORATIONS TAX AMENDMENT ACT

Hon. Mr. Maeck moved second reading of Bill 68, An Act to amend the Corporations Tax Act, 1972.

Mr. Peterson: Mr. Speaker, I am happy to rise to make a contribution to this particular bill. I think it is a testament to the flexibility of the Treasurer. I regret very much that he’s not here tonight to hear all the nice things that I have to say about this man.

Hon. Mr. McMurtry: We will give him the message.

Mr. Peterson: Please convey the message. I’ll send him a gold-embossed copy of my little diatribe, because he’s truly a remarkable man, Mr. Speaker. He’s without question the most flexible-principled man that I have ever had the privilege to sort of sit opposite and to observe quite intimately.

This is another very major change in policy, Mr. Speaker. If you observe the things the Treasurer was saying even up until a couple of weeks or a week or so before he made this shift, then you will see that indeed he has a tremendous instinct for survival and can change his mind without batting an eye. We have seen an important series of major changes in policy that the Treasurer has brought about unilaterally, without flinching and without even feeling obliged to explain himself.

[9:00]

I’m not one that has called for the Treasurer’s resignation. Some people thought he should have resigned over the little brouhaha we had a week or so ago; I wouldn’t expect that of him, because his principles wouldn’t run along those particular lines. Look at the kinds of major changes in financial policy that he has brought about in this province; for example, the reneging on the Edmonton commitment, unilaterally bringing tremendous disruption to a large sector of this province. Look at how he has changed in his budget papers from using the OHIP premiums to finance about 28 per cent of this system, then moving that up to more than 30 per cent of the system. Again, this is an abandonment of a fundamental policy.

Mr. Laughren: I’m glad you are speaking to the bill.

Mr. Peterson: I am building a case.

Mr. Warner: That may take a little while.

Mr. Laughren: I agree; it does take time.

Mr. Peterson: It’s a subtle case, Mr. Speaker. And I would advise the NDP members to be quiet and listen; they’ll learn something, and then they will probably want to quote me.

Mr. Hall: Listen and learn.

Mr. Laughren: We’ve tried that. It didn’t work.

Mr. Warner: Build a case out of cement and then crawl into it.

Mr. Wildman: It’s a casket you are building.

Mr. Peterson: Mr. Speaker, we also see that the Treasurer has abrogated the guidelines set by the Smith committee for the percentage of debt in this province. It was nine per cent; now it’s up to more than 11 per cent of the gross provincial product.

We have seen these major changes that sort of slip through without even the acknowledgement that the principles existed in the first place. If anybody is going to say there isn’t certainly in this province, if anybody is questioning the lack of economic stability, then clearly a large percentage of the responsibility has to rest on the shoulders of this Treasurer.

The Treasurer has got a commitment to balancing the budget in 1981; it’s a commitment that I personally and my party support. But, to me, balancing a budget means matching current revenues with current expenditures. What he is doing, and we have pointed it out before, is he is selling off assets, he’s selling off capital items and taking them into current accounts, and he’s fudging below-the-line transactions into above-the-line transactions. Essentially, he is changing the budgeting policy of this province. There are major changes, and he tries to sneak them through.

Mr. McClellan: Give us the Liberal version. Tell us how you would do it.

Mr. Peterson: Now we have a major change in terms of an increase in corporation tax, Mr. Speaker, and I want to quote to you from the Treasurer’s own remarks to the select committee on April 19, 1978. He was hauled before that committee, as you recall, and asked to explain alternatives to the OHIP premium increase.

An hon. member: Kicking and screaming.

Mr. Peterson: In his written comment then, talking about the corporation tax increase, he said the increase will give Ontario the highest corporation tax rate in Canada; the more successful the firm, the higher the tax increase, which will penalize investment and endanger our competitive position.

He went on to explain, in the same conversation on April 19 -- and I want to quote from Hansard, because I think it’s an important contribution in showing the massive change in the Treasurer’s mind over a very short period of time, and it should be read into the record to give some perspective to this whole discussion. Talking about corporation tax, he said: “I can think of few things that would be more unwise at the moment. Profitable firms would face a very large increase -- you are looking at about three points [assuming all of this was picked up by income tax rather than any percentage by the premium increase]; it’s probably a little more than that, closer to four points. It’s really increasing the rates from nine and 12 per cent to 12 and 15. This would be a 25 per cent increase, I guess, in the rates, if you were going to finance it by corporation income tax.

“The corporation tax route has a more selective impact. It would give us the highest corporation tax rate in Canada, and the more successful the firm, big or small, the higher the tax increase. In my view, that would penalize investment and endanger our competitive position.”

Did you get that, Mr. Speaker? He said it would “penalize investment and endanger our competitive position.” He continued: “Let me add to that. I think in some things Ontario is still the leader. There is no question in my mind that if we moved on the corporate tax side by a point or two points or three points or half a point, or whatever, other provinces would follow along. I think frankly, in terms of the competitive position of Canada, that’s the kind of leadership that I don’t particularly propose to give at this point in time.”

Mr. Speaker, that is a quote from Hansard of April 19, 1978. About a week later, he dramatically changed his mind and he’s increasing our corporation tax by one per cent.

Mr. Bradley: Friendly persuasion it’s called.

Mr. Peterson: Interestingly enough, Mr. Speaker, as you recall, the Liberal Party at the time of that great debate came out with what we thought were constructive, meaningful proposals to finance this additional $271 million worth of revenue. Some of those were spending cuts, I stand here unabashedly and tell you, because we are a party of restraint. We have encouraged that. We have argued for that continually.

Mr. Wildman: You’re a party of unemployment. You’re a party of the jobless.

Mr. Peterson: The Treasurer’s response is: “You know, we’ve cut it to the bone. There’s no place that we can move. There is no more fat to cut out of the budget,” in spite of the fact that he reordered his spending priorities and cut out some --

Mr. Wildman: You cut it to the quick.

Mr. Peterson: -- $300 million or $400 million last year saying that he’d budgeted to the bone. This year, having said that he had budgeted to the bone, that there was no fat in the budget, when he came off his original position on April 25 he did manage to cut another $73 million worth of spending out of the government. That is the kind of program we have encouraged. That is what we have argued for. We said at that time that we would have liked to have seen restraint in the order of $140 million, but the Treasurer came up with $73 million.

Mr. McClellan: And only 6,000 jobs.

Mr. Peterson: It proves to us consistently the sloppy budgeting, the inaccurate budgeting, and it proves to us --

Mr. Laughren: Tell us about your budget stimulation program.

Mr. Peterson: -- that there is a great deal built into this budget. It’s going to need a new kind of discipline, a new kind of management technique to budget properly for the future of this province --

Mr. McClellan: How many jobs did that cost, David?

Mr. Wildman: Management technique? With people walking the streets.

Mr. Peterson: -- and we think we have some very specific ideas on how to do that. We have more faith that the private sector can create jobs than we have in the public sector by sloppily wasting money, pushing it through government bureaucrats and just wasting more and seeing the concomitant growth of the public sector.

Mr. Wildman: They can always sell apples on the street corner.

Mr. Peterson: So, Mr. Speaker, we argued for more restraint. The Treasurer came up with some of that. We suggested, as you know, a half a point increase in corporate income tax -- I must say, with regrets.

Mr. Wildman: A half a point is better than none.

Mr. Peterson: We weren’t happy about suggesting an increase in corporation tax because we always have to be very sensitive about a complete tax climate in this province. As you know, we’re experiencing the deindustrialization of this province; we’re seeing the lack of investment; we’re exporting jobs on an almost daily basis, and one has to be very sensitive about how much one is extracting out of the hide of the private sector, because we could quickly drive everyone out of the province if we were not very careful. That concerns us a great deal.

Mr. Laughren: It certainly does.

Mr. Peterson: So we argued, Mr. Speaker, that by an increase of about half a point in the corporation tax we would generate about $41 million from the private sector for the remainder of this year.

Mr. Wildman: As I said, half a point is better than none.

Mr. Laughren: Are you sure that wasn’t too savage?

Mr. Peterson: We thought it was more fair; we thought it was a more equitable and progressive way to finance some of this increase in health costs for this year.

Mr. Laughren: You think you would drive them right out of the province at a half a point.

Mr. Bradley: You’d naturalize them.

Mr. Peterson: As you know, the Treasurer originally projected in his budget that the bite for the corporate sector would be $122 million. Now, he’s put it up, with his last statement, to some $133 million. So he has dramatically increased the load on the corporate sector and it just shows again, if one analyses the tremendous changes from April 19 to April 25, some six days -- the tremendous change in philosophy, the tremendous change in policy by this government -- one has to really question what they really stand for. Is there any real consistency of principle or of taxing philosophy --

An hon. member: You would rather have had an election, wouldn’t you?

Mr. Wildman: Why did you vote for it? You were just as flexible.

Hon. Mr. Maeck: That’s not what you were saying before.

Mr. Peterson: -- because I have yet to see it? As you recall, the devolution of this situation almost resulted in an election in this province and I can say to you very frankly, we in the Liberal Party were prepared to go to the people on this issue. There is no question about that. And we know that our slippery friends to the left would probably --

Mr. Laughren: Oh, yes, yes.

Mr. Peterson: -- have weaseled out as usual, but we were prepared to take this issue to the people we felt so strongly about it

Mr. Bradley: They would have been annihilated.

Mr. Peterson: We are not particularly happy with the compromise that came out of the initiatives made by the government -- and I credit the Premier with this, because it seems to me that his fine hand was clearly in the solution that evolved out of the situation -- we decided as a party to not create an election, to compromise, even though we are not particularly happy with the result. As a result, when my leader went behind your chair, as I understand, Mr. Speaker, and shook hands with the Premier, they agreed between them, with the full support of the caucus, that the Liberal Party would support this action as well as the other action suggested by the Treasurer on that day, to avoid an election, to get on with the business of running this province.

But I say to you again, it is not the ideal solution in our minds. We’re not very happy about it. We are sensitive about the tax climate in this province. We think that we are sensitive about losing jobs on a daily basis. We need constructive policies that are going to bring investment and jobs here to this province, and this isn’t a constructive one. And I look forward, frankly, in the months ahead --

An hon. member: To even higher unemployment.

Mr. McClellan: There’s been twice as many jobs lost.

Mr. Peterson: -- to a complete evaluation of this entire financing of the medical system -- an examination that we have never had in this province, as I understand. We have seen this massive system grow mostly by regulation and by management of the Ministry of Health. It needs a complete legislative overhaul and review. I am looking for alternative methods of financing it at the time. I desperately hope that this income tax increase at this time is a temporary one and we will get back some day, a year or so from now, and bring in legislation to reduce it half a point. But failing that, and in the interim, we in the Liberal Party will support this bill. Thank you.

Mr. Charlton: The member for London Centre started out his remarks by complimenting the Treasurer on being one of the most flexible people that he had ever seen. He wasn’t quite so complimentary at the end of his remarks. I thought I should point out to the member for London Centre -- I will give him a quick lesson in physics -- when you apply heat to a substance, it becomes very much more flexible than its normal state.

Mr. Peterson: You don’t have any substance.

Mr. Warner: Malleable. That’s a description of the Liberal party.

Mr. Charlton: We, in this caucus, are going to support the bill to increase --

Mr. Peterson: Rail against it for a while and then support it.

Mr. Charlton: -- the corporation tax by one per cent.

Mr. Sterling: Is the member for Nickel Belt (Mr. Laughren) not going to support it?

Mr. Charlton: As a matter of fact --

Interjection.

Mr. Sterling: He said it wasn’t progressive.

Mr. Acting Speaker: Order.

Mr. Charlton: As a matter of fact, we consider the corporation tax a much more progressive place to go looking for revenue than OHIP, or to any of the other things the government has been hitting in the last couple of years. The corporation tax -- this one per cent increase -- we don’t even consider it’s high enough. We mentioned a two per cent in- crease in our response to the budget away back in March.

I suppose that’s where I should start out in discussing this bill. This one point increase in our opinion isn’t enough. It is a progressive tax. This is a tax that is very much less regressive --

Mr. Sterling: You guys should get together over there.

Mr. Laughren: We are together.

Mr. Charlton: -- than the freeze and the cutbacks which the government has proposed to cover the rest of the OHIP rollback.

Mr Sterling: Of course he’s from the south and you are from the north.

Mr. Charlton: Part of the problem is the Treasurer. In our view, income taxes and corporate taxes are the most progressive forms of taxation and should be treated as such whenever the government is considering where to get additional revenues. Unfortunately, that hasn’t been happening in this province. The Treasurer, due to a very vain pride in having the lowest income tax rate in Canada and trying to hold the line on corporation tax and protect his particular comrades, has in almost every instance over the past few years used the most regressive forms of tax increases that he possibly could instead of going to the progressive forms of taxation as we have.

We just don’t find this acceptable. It’s easy for the Treasurer to say that we have the lowest income tax rate in Canada but we also have the highest OHIP, or we would have had -- and I guess we still do -- and licence fees that just went up astronomically, and the highest gasoline tax in the country. This bragging about having the lowest income tax in Canada is not assisting the people of Ontario, especially those on low and middle incomes. It’s not to the benefit of the people of this province.

This vain pride on the part of the Treasurer is not in the long run helping the economy of this province either. That’s why I think we fought so hard and the Liberals fought so hard against the OHIP increase, because it would have affected individuals at the bottom end of the scale and it would also have affected the corporate sector anyway.

[9:15]

In our view, it would have been much more progressive if this bill that we are discussing tonight had said two per cent instead of one per cent. Then we wouldn’t be faced with additional restraints and job freezes in the public service sector. We are looking at several thousand jobs in the civil service. We are looking at some additional jobs that will be lost because the poor Minister of Government Services (Mr. Henderson) doesn’t know where he is going now, doesn’t know which projects he can go ahead with and which projects he is going to have to shelve in terms of capital construction. Those are all jobs. The unemployment situation in Ontario is growing fast enough on its own without the government helping it up the ladder a little more quickly and a little higher.

I am just going to say this to the new Minister of Revenue. We understand that we can’t expect miracles from him as a new minister overnight, but we want and we expect to see him get a handle on his new ministry. He and his ministry officials must play a much more active role in future in trying to influence the Treasurer when he is trying to find additional revenue; in laying the facts in front of him --

Mr. Laughren: Cigar tax.

Mr. Charlton: -- about which are the progressive taxes and which are the regressive taxes and about the impact of the things he is proposing. The Ministry of Revenue administers all of these taxes; officials there see the impact; they can analyse the impact. We want to see the minister in the future laying that on the Treasurer and letting him know that that’s not the progressive way to go; this is the progressive way to go.

Mr. Haggerty: I rise to support Bill 68, An Act to amend the Corporation Tax Act, 1972, with some reluctance. An increase in the tax base from 12 to 13 per cent, even though that increase is one percentage point which may mean little to some individuals, is hard for industry and business alike to accept during a period of uncertainty in a complex Canadian environment, and during the policy of restraint that this government is deeply entrenched in.

The proposals put forward by the Treasurer in his budget of April regarding increasing OHIP premiums to the extent of 37.5 per cent -- which was found unacceptable to the official opposition and even the general public -- resulted in the strong position put forward by the Liberal caucus which brought the government to heel to avoid facing a provincial election. I am sure that we recall the Treasurer making some sidesteps, backing up and going forward with some new proposals, some of which were not accepted. But he certainly did back off from his original proposals.

On April 25, 1978, the new proposals, with the supplementary action to reduce the 37.5 per cent OHIP increase, resulted in a compromise by the government to search for other alternatives to reduce the $271 million required from the subscribers of OHIP. One of the alternatives was for the Treasurer to increase corporation tax by one percentage point, thereby raising the necessary revenue. He increased the revenues from the $122 million suggested in the March 7 budget plan to the April 25 proposal of $133 million by way of a tax increase to corporations in Ontario.

We, on this side of the House, greatly understand the position the Treasurer faced, searching for other means and other sources of revenue. The leader of the official opposition faced a similar situation in trying to find alternative measures to raise additional revenues to reduce the impact of the OHIP premium increase of 37.5 per cent. We said on March 9 that we would find alternatives to the Treasurer’s excessive OHIP rate increases. We also said that if the Treasurer persisted with his arrogant attitude toward the people of this province, we would bring in a vote of no-confidence.

Some of our proposals were, first, to limit the increase in OHIP premiums to six per cent. This approximately reflects the real higher cost in the health insurance system and is within the AIB guidelines, as it should be. This would raise some $51 million. The six per cent increase would have meant a monthly premium rate of $17 instead of $16 for a single subscriber and $84 instead of $32 for family subscribers. The Treasurer’s budget proposal would have provided a monthly premium of $22 and $44 respectively.

In the Treasurer’s report on April 25 to the Legislature he said: “I’ve asked my colleague, the Minister of Health (Mr. Timbrell) to again alter the regulations reducing the budget increase from $6 to $12 per month for a single family and family subscribers respectively to $3 and $6 effective May 1, 1978.” We accept that compromise.

We had other proposals to force the Treasurer to implement his own dollar control and manpower guidelines, which limit the budget for government salary and wage settlements to an increase of four per cent. This year’s estimates show spending beyond this guideline of $67 million. I think the Treasurer has moved into that area. Perhaps jobs will be lost in the government services by attrition. We accept that proposal.

One of our other proposals was to cut government spending on services by five per cent. These are services such as public relations, consultants, printing and so on. We’ve indicated that the budget for these services was increased 7.5 per cent and could be cut back to a 2.5 per cent increase for a saving of $24 million.

We have also provided alternative measures for the Treasurer to pick up some $271 million. We’ve suggested an increase in corporate tax by half a percentage point to 12.5 per cent for most businesses. This would generate an additional $41 million. For most businesses, this would cost far less than their share of the 37.5 per cent OHIP increase. In fact, the government’s OHIP hike would cost businesses $122 million. The combined cost to business of our proposal for a half percentage point corporate tax increase and the six per cent increase would be $61 million, exactly half the cost of the Treasurer’s proposal.

We also proposed the use of some lottery funds for general revenue. There is far more money being generated than originally envisaged. We believed our proposals were responsible and reasonable and we urged the government to consider them seriously. The government did consider our proposals and they came up with their own proposals.

In the Treasurer’s statement to the Legislature regarding OHIP premiums and supplementary actions on April 25, 1978, on page 6, he said: “I rejected raising personal income taxes because it would undermine the positive effect of Ontario’s retail sales tax, jointly financed with the government of Canada, of which our share of this boost to consumer spending is $144 million. This leaves only our other major tax, the corporations income tax, which I now propose to raise. Effective March 8, 1978, Ontario’s rate will be increased to 13 per cent for large corporations and 10 per cent for small businesses, generating the required $72 million in this fiscal year.”

We can see that the Treasurer and the government have compromised. But the effect of amendments in section 33 to the corporate tax rate of tax payable by the corporation from 12 per cent, with the amount taxable to 13 per cent and the present special deduction available for small business, effectively reduces the regular tax rate by three percentage points from 12 per cent to nine per cent. As a consequence of the increase in regular tax rate from 12 per cent to 13 per cent, the effective rate for small business will increase nine to 10 per cent. As my colleague who spoke previously said, this certainly will have an impact on the business sector in the province when a number of them are facing difficulties. In my opinion, the increases in the corporation tax of $133 million will eventually be passed on to the consumers in Ontario and other provinces.

We in the party support the bill, but would have preferred the government to accept our alternative measures to raise the necessary $271 million to cover the cost of OHIP. It provided a more reasonable approach to the problem than we now face today.

Mr. Laughren: The Liberal Party has indicated their wish that the corporate tax would not have been raised the full one per cent, but raised only one half of one per cent. I would like to indicate to the members in the chamber just what the comparable corporate tax rates are in Canada, to indicate that we would not be, and are not, pricing ourselves out of the market in terms of corporate tax rates.

In Newfoundland -- and surely, if there’s any province that needs industrial development it’s Newfoundland -- the rate is 14 per cent. If there have been any recent changes, I’m sure some of the members will correct me --

Mr. Haggerty: Look at the industries closing down too.

Mr. Laughren: -- but these are the latest figures that I have. It’s 14 per cent in Newfoundland.

Mr. Bradley: That is a booming place.

Mr. Laughren: -- Prince Edward Island, 10 per cent. If you think that a high rate kills industry, why is PEI not the industrial heartland of Canada? Nova Scotia 12 per cent; New Brunswick 12 per cent; Quebec 12 per cent; Ontario 12 per cent, and now up to 13 per cent; Manitoba 15 per cent. You might check the unemployment rate in Manitoba versus Ontario.

Mr. Peterson: The socialists did that.

Mr. Laughren: Saskatchewan 14 per cent; and you might check the unemployment rate in Saskatchewan, my friend. Alberta 11 per cent -- well, Alberta doesn’t need any help from anybody.

Mr. McClellan: It’s a Liberal policy.

Mr. Laughren: British Columbia 15 per cent. I want to assure my friends from the Liberal Party --

Mr. Peterson: The socialists leave a brown, slimy trail wherever they have been.

Mr. Laughren: I want to tell them that a corporate tax change of one per cent doesn’t mean that you’re driving out any kind of hope for industrial development. That’s a lot of nonsense. You’ve bought a bill of goods. Let me tell you something: we’ve been told in northern Ontario that the problem in the north is that there are not enough tax concessions. So what do we do? We give all sorts of tax concessions. And what happens? They greet us with layoffs, that is the kind of response we’ve had in northern Ontario. Falconbridge Nickel Mines has been saying for 45 years, “we have to have a processing allowance to ship our ores to Norway.”

Mr. Bradley: The enemy is over there.

Mr. Laughren: What does the Treasurer do? He gives it to them for 45 years. What happens?

Mr. Peterson: He’s only 44 years old.

Mr. Laughren: They say thank you and they lay off another 1,000 people. I want to tell you something, you can’t buy it.

Mr. Samis: The mine says the same, David.

Mr. Laughren: You can’t make those kinds of tradeoffs. My colleague the member for Hamilton Mountain (Mr. Charlton) was right on when he said that if you apply heat something becomes more flexible. We saw that the other day. The Premier (Mr. Davis) applied a little heat to the Liberal Party of Ontario and said, “We expect a trade-off for the reduction in OHIP, and the trade-off will be the -- “

Mr. Bradley: Even you don’t believe that.

Mr. Laughren: “ -- health and safety of workers in the province of Ontario.”

Mr. Haggerty: Broadbent said we are paying too much tax.

Mr. Laughren: That was an indication of what happens when you apply heat to the Liberal Party of Ontario.

Mr. Bradley: You’re losing your grip.

Mr. Laughren: You become infinitely flexible. That’s what happens to the Liberal Party in Ontario.

Mr. Bradley: A big sigh of relief over there, a big sigh of relief that they didn’t get annihilated.

Mr. Peterson: What do you expect for telling that?

Mr. Laughren: Shout me down, if you want. I know you’re embarrassed about your position. You’re going to have difficulty --

Mr. Peterson: It is embarrassing to sit here and listen to this nonsense.

An hon. member: Not as embarrassed as your leader was today.

Mr. Laughren: -- going to the Ontario Federation of Labour convention next year and justifying to them how it was that you backed off on the health and safety legislation in the province of Ontario. How are you going to explain that to the labour people?

Mr. McClellan: You might even say they flip-flopped.

Mr. Deputy Speaker: Order. Would the hon. member return to this bill?

Mr. Laughren: Yes, Mr. Speaker, I’d be very happy to.

What I was wondering is how it is that in the province we can increase the corporation tax one per cent -- which this bill does and that’s why we’re here tonight -- and at the same time we get people in this chamber saying that, “You really shouldn’t increase the tax rate so much, because you’ll drive out industry and you’ll hurt the employment picture in the province.”

[9:30]

That’s what they say: “We need jobs in Ontario. In order to have those jobs you’ve got to stimulate the private sector and create jobs.” The next minute they are pounding their desks for a policy that cuts out 6,000 jobs in the public sector and the private sector in the province of Ontario.

That’s what the Liberal Party is telling the province of Ontario by buying the Treasurer’s package that replaced the OHIP increase. It is exactly what they did. They stand here and talk about this corporate tax increase and say, “You shouldn’t include that one per cent because if you do, then you will cost jobs.” The minute before that they had been pounding the desk and saying, “Hurray for a policy that costs us 6,000 jobs.” I guess that is what is known as flexibility. I am going to tell you, Mr. Speaker, that that is not what we would do.

Mr. Haggerty: More layoffs all over the country.

Mr. Bradley: You should write fiction.

Mr. Laughren: To get off the problem of the Liberal Party of Ontario, because they are really more irrelevant than I am giving them credit for, the Minister of Revenue, when he brings in this bill which raises the corporate tax one per cent, what he is really saying, “That’s how we are going to help pay for OHIP premiums in the province of Ontario.”

We said it ourselves when we were proposing alternatives to the OHIP increase. We said, “There’s the corporate tax; that is one way that you could do it.” There is no question about it, we agreed with that. But we also said, “There is a progressive taxation called the personal income tax, and you can do it that way as well.”

If there was one overriding weakness in the provincial budget aside from the OHIP increase, it was the lack of job stimulation. That was the overriding weakness on top of the OHIP increase. What does the Treasurer do? He doesn’t say, “Well, all right. We recognize the problem of 345,000 people unemployed in the province of Ontario. We must do something about it and one way of doing that is to have a job stimulation program”. Oh no.

He says, “We are not going to listen to those New Democrats who came up with this job stimulation program proposal in their reply to the budget” -- which was put forth by the member for Ottawa Centre (Mr. Cassidy), our leader. “We are not going to buy the package the New Democrats have put forth for use. We are going to raise the corporate tax,” which they did. “We can’t let them have their entire way, you see. We can’t buy their whole New Democrat package”; which was a corporate tax increase plus a personal income tax increase.

The Minister of Revenue knows that is not a politically popular thing to do, but we think it is a fair and equitable thing to do. The Treasurer says on the other hand, “No, we can’t do it that way because that would be buying what the New Democrats suggested.”

Mr. Peterson: We thought you were in favour of tax cuts.

Mr. Laughren: “What we will do is to cut out more jobs in the province of Ontario.” You tell me how cutting out 6,000 more jobs -- not only in the public sector but in the private sector as well, because when you eliminate those jobs for regional priorities in northern Ontario, when you eliminate those jobs for municipal projects in the province of Ontario, it is the private sector that will be doing a lot of that construction, not just the public sector. So not only is he crunching the public sector, he is crunching the private sector as well. You tell me, Mr. Speaker, how that is stimulating the economy in the province of Ontario. It is making the whole prospect of unemployment even more dismal.

Hon. Mr. Maeck: It was to reduce the premiums. It was to reduce the premiums which you wanted. Accept some responsibility now for the problems.

Mr. Laughren: Is the member for Parry Sound not listening to me? I am saying to him that we had a set of alternatives that included the corporate tax increase, which is the bill before us now, but also had an increase in the personal income tax level too.

That is not a politically popular stance to take. It is not posturing on our part. It is not politically expedient. Nobody likes an increase in personal income tax.

What we are saying is that that is a more equitable way of doing it than cutting out jobs. That doesn’t make any sense at all with 345,000 people unemployed. We believe you could do it through the personal income tax and the corporate tax and you wouldn’t have to cut out 6,000 jobs. We have already got 345,000 people unemployed. That simply doesn’t make any sense. That is not radical economics or radical politics. It is not even socialism.

Does the minister know that? The good people in Parry Sound would accept that.

Hon. Mr. Maeck: I don’t think so.

Mr. Laughren: Well, don’t mumble in your beer over there. That is true.

Mr. Deputy Speaker: I wonder if the member is speaking from his seat or is he moving to the right?

Mr. Laughren: I will move to the left from now on. I am standing, Mr. Speaker. You are looking at 65 inches of coiled lethargy which could be unleashed at any time.

I did want to conclude my remarks by saying that we are in support of this bill, because we think it is appropriate to increase the corporate tax at this time; and it is appropriate that the corporate sector should pay part of the cost of the increased OHIP health cost in the province. We are very sorry that this corporate tax increase is part of a regressive package. Just as the sales tax is a regressive package, so is eliminating jobs a regressive fiscal policy for Ontario.

We are dismayed at the lack of imagination that is shown by the government. We think they have become tired in their fiscal thinking and it is time that they started to look to us over here for some advice. I know that the Minister of Revenue doesn’t hesitate to come to me for advice for tax legislation and so forth. But the Treasurer hesitates, and that’s where the weakness is in that government.

Mr. McClellan: Temporary state of affairs.

Mr. Laughren: Our alternatives are positive. They would stimulate the economy in the province. We are not interested in dampening down the economy, we want to help the economy. We know -- and the Minister of Revenue would be the first to recognize this point -- we have often said that we need more services for people in the province, whether it is health care, education, services for people in the north like sewer and water services, and so forth. The minister would agree with me. We’ve often said that, many times.

But this is why I think the government, certainly the Treasurer, is unfair to us. He indicates that we would just increase deficits, we would just tax people out of their minds; always more and more services and never give an example of how we would pay for those things.

That’s simply not fair. What we understand very clearly is that because we have a private sector economy, unless that private sector is healthy we cannot have a strong and growing public sector which provides services to people. We understand that very clearly. We would be very foolish, given the fact that we live in a private sector economy, not to say that without growth in the private sector we cannot have a healthy public sector which delivers the kind of services in which we believe so strongly.

We are not about to get out there and destroy the private sector. There are parts of the private sector that we think should be dealt with differently, like the resource sector. We’re unabashed about it. We think the resources of this province should be in the public sector; then it would be a wealth-creating public sector, not a wealth-absorbing public sector. We feel very strongly about that. We feel that would help us deliver the services to people much better than the private sector has been able to fund the public sector in the past.

We are as concerned as the government about building a healthy economy in Ontario. We simply say to the government that creating more unemployment with these kinds of tax policies is not going to help any of us. It’s not going to help us, on this side, ensure that the public sector is healthy and can deliver services to the people of Ontario that we demand; and it is not going to help the government philosophy of a healthy private sector when it cuts out 6,000 jobs, many of which would be in the private sector in construction and so forth.

We think that the government is simply wrong -- that its thinking is 19th century liberalism in swift retreat. It doesn’t make any sense at all, and we would urge the minister to reconsider. It is too late with this piece of legislation, but we would urge him to reconsider; and the member for Parry Sound would be always welcome on this side.

Mr. Deputy Speaker: Is there any other hon. member who wishes to participate in the debate? If not, the hon. minister.

Hon. Mr. Maeck: Mr. Speaker, very briefly, I don’t think there’s too much I can add to this particular debate, other than to say --

Mr. Samis: All those telling arguments.

Mr. Laughren: We poured out our hearts to the minister.

Hon. Mr. Maeck: -- that it has been very interesting to sit over here and watch the two opposition parties try to shift the blame onto each other as to what is going to happen regarding unemployment in the province because of the cutbacks and the restraints.

Mr. Laughren: It is your fault.

Mr. Bradley: We all know the blame goes over there. No doubt about it.

Hon. Mr. Maeck: I would remind all members that there was not going to be any unemployment if the OHIP premiums had remained as they were.

Mr. Samis: Want to make a bet on that; $300 million lost in purchasing costs.

Hon. Mr. Maeck: I would ask members opposite to accept some of the responsibility for the actions that have been taken by this government --

Mr. Nixon: That applies to the Treasurer’s retraction.

Hon. Mr. Maeck: -- in co-operation with all three parties.

Mr. Stong: We know where the responsibility lies.

Hon. Mr. Maeck: There is no way they can sit over on that side and suggest that this party must accept all the responsibility.

Mr. Laughren: Just all the blame.

Hon. Mr. Maeck: They are all part of it.

Mr. Nixon: You are the government. If you don’t want to be responsible, why don’t you resign?

Hon. Mr. Maeck: They have insisted that minority government must work, that they must have their say. Now they’ve had their say, but they must also accept the responsibility that goes with it.

Mr. McKessock: There are not many over there to accept it tonight. There are only four members over there to accept it.

An hon. member: Lorne Maeck for whip.

Mr. Speaker: The motion is for second reading of Bill 68. Shall the motion carry?

Some members: No.

Mr. Speaker: Those in favour of second reading of Bill 68 will please say “aye”.

Those opposed will please say “nay”.

In my opinion, the “ayes” have it.

Motion agreed to.

Third reading was also agreed to on motion.

JUDICATURE AMENDMENT ACT

Hon. Mr. McMurtry moved second reading of Bill 71, An Act to amend the Judicature Act.

Mr. Breithaupt: Mr. Speaker, it is interesting to see that these two bills, Bill 71 and Bill 72, are before the House tonight. As you are aware, sir, the justice committee was meeting, dealing with securities legislation; however we have adjourned in order to proceed with these two particular bills so that the House would have work to do this evening.

With respect to the principle of this bill, it is clear from the comments that have been made on this side of the House that we in the official opposition welcome the logical and positive steps that are shown by this legislation. As you are aware, sir, the amendment which is before us deals with the provision of bilingual trials in courts in certain designated counties and districts of this province. There have been comments made over these last several years that parties in this House were divided as to the provision of specific amenities to those residents of Ontario who were basically French speaking. I believe that the support this bill will receive this evening will show clearly that those attitudes ascribed to some persons in some parties were not correct.

I believe that the approach to provide these services where the population is particularly sufficient and where there is a clear demand is something that is long overdue in Ontario. We are indeed a long way from the days of regulation 17 with respect to French language within this province. This, fortunately is a change which I hope members will all be able to positively and seriously support.

As you know, sir, the courts are now going to be able to receive evidence and conduct certain proceedings in the French language in certain appropriate cases. These proceedings will be useful. We recognize, of course, that there may be some difficulty with respect to the actual pleadings and the documentation in these cases. My colleagues will be speaking particularly to those concerns. We understand that the Attorney General (Mr. McMurtry) is, of course, mindful of the difficulties that apparently have yet to be fully resolved with respect to that documentation.

[9:45]

I would say I am certainly pleased to speak in favour of this bill and I hope that it attracts the attention and support of all members in the House.

Mr. Lawlor: The ideal situation in a province such as this, with the profound yearnings we all have in the veins for national unity, would be to be bilingual of course.

The Attorney General is, no doubt, aspiring towards that. By 1985, he would anticipate that all the courts would operate genially in both languages; and so would the judges and so would the lawyers, et cetera. But that is not the present condition of affairs. Therefore, we are somewhat constrained by mere facts, by practicality. The practicalities, to the extent that they can be met at this time in history, are being picked up in this legislation by and large.

It’s by no means perfect -- and I don’t think the Attorney General would claim it -- or by no means as far as we will eventually go in this particular regard. There are other mixes in the population between French and English which will gradually come under the heading of this legislation. On the maps that have been supplied us and in the background material, for which I thank the ministry, it shows very considerable swaths of the province in a blacker colour, showing areas, going up from Algoma and right across the north, as being what will be the designated areas, with Essex down on one corner and the various counties close to the French border around Cornwall on the other corner. There will be, certain pockets in between. In the great metropolitan centre, particularly in Toronto, certain bendings or certain greater flexibility, as bilingual judges come more on stream, would, no doubt, take place. But, as things stand, this is the best we can get.

It should be pointed out what are the constraints under which this legislation is operating. First of all, in order to have the trial in French, it would be necessary to make a motion before the county or Supreme Court; and in the case of the appeal a special, separate, distinct motion before a judge in chambers in order to achieve that objective; and very early on in the course of the filing of the pleadings in the case. That is an added step. It will not be accepted that necessarily the trial will go on in the language being designated and some people will resent that.

I’ll just mention it now, that as far as the small claims court is concerned, that being somewhat more of an off-the-cuff operation, where the plea is that it’s more easily conducted in the French language, that may be raised at the initiation of the trial and the necessity for motions is obviated. Having to make an application to the court, I think the Attorney General will agree, is necessary because of the tenor or because of what we’re up against in trying to bring in this legislation, but it is a little regrettable at the same time.

The Act itself has some wording that says that even “where an application is made under subsection 3 the court may further direct that the hearing or any part of the hearing be in the French language if, in the opinion of the court, the hearing or part can be conducted effectually.” That’s admittedly somewhat vague. In committee we should explore what effectually really means in this situation and what the Attorney General has in mind in the use of that vague terminology. There could be any number of circumstances, I suppose, in which it would be in discretion decided not to be so conducted effectually and it would be excluded. So there’s a second obstacle, so to speak, or crimp written into the legislation with respect to the utilization of the two languages.

I have just one other thing on the general principle of the bill. The wording is very careful with respect to in whole or in part, and that is well understandable because of what might happen in many instances within designated areas or anywhere else. Suppose the defendant in a motor vehicle action case is English-speaking only, whereas the plaintiff is French-speaking only. Obviously, in order to achieve some kind of communication both with the court and with the judge himself and with the jury, should there be a jury on the case, bilingual features will be necessary. Part of the trial could be in one language and part of the trial in the other. I think that the Attorney General in trying to take that possibility into account, and in our jurisdiction it is very likely to be a major consideration as to how the trial is conducted.

The other thing that is of interest and which is not embodied in the statute, and which again in committee would have to be perused, is the business of venue. An action may be initiated in a designated area and applications may be tried in French, but the defendant again might wish to have that trial moved out of that particular area because he wants it tried in English. There is a distinction between a criminal trial of a particular case on one side and a civil action on the other. The new federal legislation, which is companion legislation to this and is going through the House of Commons at the present time, I believe would give the option to the accused in that particular, should he want the trial in the language of his choice; whereas in the civil law it would be a matter of convenience, just as under the present rules of practice touching venue, as to where the preponderance or the weight lay as to where this trial would be conducted, including the capabilities of the judge and his access to a jury fluent in both languages.

While the Attorney General is covering, I believe about 66 per cent of the French-speaking population of the province, there is a fairly substantial number not presently envisaged as falling within the legislation. On the subject of venue, my problem here is we perhaps should embody a clause or something touching that very matter of venue and spelling it out in the very legislation. I know it’s set forth elsewhere, but I am a firm believer in bringing into the ambit of legislation that which is pertinent to it so that it’s at people’s fingertips and they know where they stand.

Apart from the fact that we will be asking that this go to committee to ask some very penetrating questions, we accede to this legislation.

Mr. Deputy Speaker: The hon. member for St. George.

Mrs. Campbell: My colleague asked to speak.

Mr. Roy: My colleague has graciously agreed to let me go forward, and I think she does so willingly. So if you want me to keep you informed of some of the activities going on outside of this Legislature you had best let me speak, Mr. Speaker.

I just want to make a few comments briefly. I consider this an extremely important step in the processes of the province. I said publicly, and I say it to the Attorney General now, that it has taken a certain amount of initiative and leadership to proceed in this fashion. As one who has been advocating this since 1969, even prior to my entry into politics, I recall in 1969 having tried to get a trial in French and not being able to and witnessing, on a weekly basis, the ridiculous situation in Prescott-Russell, an area where people couldn’t even speak English, having to speak for the record, which simply did not make sense.

It is rather sad that it has taken that amount of time, but I do want to say to the Attorney General that he has shown some initiative; he has taken initiative in other fields and he should be congratulated for it. I agree, and I think my colleagues here agree too, that this bill should go to committee, inasmuch as we would like to get it passed as soon as possible and we have some questions on the legislation; hopefully that’s where it will proceed.

If I may be permitted to utter a few words in French. I think it is an important event in the process of the recognition that there is a minority, a substantial minority in this province, who are committed Canadians, committed Ontarians and committed fighters for Canadian unity. But there were times when life was awfully difficult. My colleague for Kitchener-Wilmot (Mr. Sweeney) spoke about some of the more infamous days.

Je voudrais dire, Monsieur l’Orateur, que c’est un pas important. D’après mois, les franco-ontariens ont lutté trop longtemps et ils voulaient tout simplement avoir des garanties. Ils n’étaient pas satisfaits, Monsieur l’Orateur, d’avoir tout simplement une situation où leurs droits, ce n’étaient même pas des droits mais on leur permettait de faire certaines choses, c’était plutôt des libertés qu’on leur donnait et ils demandaient d’avoir des droits, certaines législations qui protégeraient ces droits-là. Et aucune législation n’était aussi offensive aux franco-ontariens que l’article 127 de ce statut, le Judicature Act.

Parce que, Monsieur l’Orateur, là on voit clairement une législation qui non seulement ne donnait pas de droits aux franco-ontariens mais qui empêchait, qui clairement disait que toute procédure dans les cours de justice ici en Ontario était strictement en anglais et alors on avait certaines situations pas tout simplement tristes mais des situations absolument ridicules dans certains tristes mais des situations absolument ridicules dans certains comtés de la province, et je voudrais dire que les franco-ontariens se réjouissent.

Ils ont lutté longtemps pour obtenir ce genre de droit et il va sans dire que la situation au Canada et surtout au Québec a été un facteur important dans l’acheminement de ce droit-ci. Mais le fait demeure que le Procureur général devrait être félicité pour son initiative et nous du Parti Libéral qui avons lutté, plusieurs d’entre nous qui avons lutté depuis longtemps pour ce genre de législation, nous allons l’appuyer, nous allons faire peut-être un effort pour essayer d’améliorer la législation et certainement c’est une preuve et pour les franco-ontariens c’est peut-être une des preuves les plus importantes qu’enfin on veut garantir leurs droits par législation. Alors certainement nous allons l’appuyer.

Mr. Speaker, my comments can be relatively brief. I would like to put these questions to the Attorney General, and hopefully in the discussion of the legislation we can see whether we can, working in a spirit of cooperation as we have on many pieces of legislation that have come to the House, improve this bill, which is a bill along the lines I suggested back in 1971.

I fully realized at that time that it was just not possible to say, holus-bolus across the province, “Everything is bilingual”; or, “Everyone can have a trial in French”; because you get into situations of practical problems. I think we all understand that.

[10:00]

My first concern is the fact that the designation of counties or districts or courts which can operate in French or bilingually is left up to the Lieutenant Governor in Council. Frankly, and maybe this is something we can discuss, in view of the fact that we have successful experiments going on in the province now, it might be a good idea to list some of these counties in the legislation now, knowing that it can operate, that we do have the facilities and that this is a practical situation that we can announce and put into the legislation.

There is some concern on the part of the Franco-Ontarian community that if we simply leave it up to designation by the Lieutenant Governor in Council, it’s difficult, by pressure or otherwise, to bring some of these things forward, because it’s not up to the initiative of the Legislature at that point. It may be a good idea to designate them now.

The areas I have in mind are the counties of Stormont, Glengarry, and Prescott and Russell, the regional municipality of Ottawa-Carleton, the districts of Nipissing, Timiskaming, Cochrane, Sudbury and possibly Algoma. Then, of course, there are certain areas where it’s going to be more difficult, where there is a sizeable number of Franco-Ontarians, and we may have to look at this.

I can see some difficulties in some areas. For instance, I name the city and area of Welland, Penetanguishene, parts of Essex county, part of Renfrew county and areas of this nature. Those are the areas where we must proceed with caution and where it may be difficult on a count basis -- and I suppose this is why this legislation is framed in such a way that the Lieutenant Governor in Council may not only designate counties but courts as well for the purposes of this section.

These are some of the things that certainly the Franco-Ontarian association and the Franco-Ontarians of this province are looking at, and it may not be a bad idea to designate, to put right into the legislation now, the areas where this legislation will be in force.

The second area of concern is in relation to the areas where there is not a designation of counties. I throw this out to the Attorney General in the sense that it may be possible to have some flexibility in the legislation by way of change of venue or by way of having, for instance, a situation where in a particular case you may have a judge from Ottawa who is bilingual who can go into Renfrew, for instance, to hear some cases. Judges travel to some degree anyway. There are exchanges even among the provincial court and the county court judges. Of course, there’s no problem with the Supreme Court judges; they travel anyway.

This may be an alternative in some of the areas which are not designated, but in some circumstances it may be, if we have that flexibility in the legislation, that we in this House give some evidence that the only reason we cannot proceed on a province-wide basis is for practical ones, but in those certain circumstances there may be this approach. What I’m trying basically to say to the Attorney General is that I think it’s in the best interests of all of us, of our country and of this province. The Attorney General knows how it is on an image point of view: Sometimes we like to play up more where we have failed to do something, where we run into disputes, rather than to play up the situations where we have proceeded, where we’ve been successful.

I name the Filion case as an example. I realize that’s not that good an example, because that had some practical problems -- the conspiracy case and things of this nature. But we may well be able to avoid that sort of -- some people call it posturing, or whatever -- by having a situation where we have more flexibility in the legislation, allowing a situation where either a bilingual judge can come in and hear the case or we can have a change of venue.

I realize that from a practical point of view this may be more difficult when it involves a jury, because of the amendments to the Juries Act and the fact that there’s going to be some designation in the Juries Act in those counties.

The other matter I would like to raise relates to the statement in the legislation, in subsection 5, where an application is made under subsection 3, that the court may further direct a hearing. I’m just wondering why it’s not “shall” at that point in the legislation. If in the opinion of the court, the hearing or part of the hearing can be conducted effectively in either or both languages, why is the discretion still left up to the court? The discretion should be exercised at a point where he can effectively determine in the court whether he can proceed in that fashion.

Once he’s determined that is the case, surely if we are enshrining a right here, he should be up to the court to say, “Okay, at that point, you shall proceed in that fashion.”

What I’m saying basically to the Attorney General, is he seems to have two discretions in subsection 5. In other words, he may do certain things if he finds certain other things. I just point that out to the Attorney General as something that we shall be looking at. Whether there is any objection, I raise these points with the Attorney General because in committee these are some of the things that we’ll be considering for amendment. If there are serious objections, certainly we want to hear them.

The other point is something I raised on the first day this legislation was announced. Of course, section 127 talks about writs, pleadings and proceedings in English only, and here we’re going to be allowing proceedings bilingually in French, but not the writs and pleadings.

I’ve not finished my inquiry on this. I’ve talked to certain members of the Quebec bar to find out how things operate down there. In the original assessment that I’ve been able to make, they seem to agree with the approach that’s taken by the Attorney General now, but I have not finished talking to various people. As I understand it, the committee of lawyers, the panel which made certain suggestions to the Attorney General, suggested to him that the proceedings were the important part and that the pleadings and the writs should continue to be in English only for practical reasons; I can see a situation where you get a French-speaking litigant and he drafts his statement of claim, for instance in French, and the other defendant speaks English only and he’s got an English counsel, it may be a problem to communicate, for him to respond and defend himself against that claim.

On the other hand there’s another problem, which arises when you’re going to be examining someone on his statement of claim or on his pleading, if it’s in English and you’re examining him in French that causes an additional problem. So you could see that there are practical situations.

I put that to the Attorney General as a practical situation. Maybe he can respond to this.

I go one step further. As I read the legislation, this will only apply to trials; it will not apply to pre-trials and will not apply to discoveries and will not apply to motions. What I’m talking about are certain pre-trial procedures. As I read the legislation -- I may be wrong and the Attorney General may correct me on this; but again that can be a problem and I say that maybe we should have more flexibility in the legislation.

If you have a situation where both counsel, for instance understand French, both parties speak in French, I really can’t see, if there is going to be a French trial, why the proceedings, why the discoveries for instance, shouldn’t take place in that language. It would make it easier, because if they don’t you get into a situation where, for instance in cross-examination or otherwise at the trial, you’re faced with a transcript that’s in English and you’re cross-examining someone in French and trying to get him back on his evidence that’s in English.

My colleague from Kitchener mentions the question of appeal. The appeal is taken care of in this matter, as I understand the legislation. For purposes of the appeal, the transcripts will be taken in French and they’ll be going up to the Court of Appeal in French, as I understand this legislation.

So, Mr. Speaker, just very briefly these are some of the concerns I have about the legislation, and these are some of the matters on which we would like to improve the legislation. Hopefully in committee we’ll be able to ask certain questions on this, and working in a spirit of co-operation, which has been evident in many of the pieces of legislation that have been before this House, we can have a bill and an Act that we in this province can be proud of, and which we, many Franco-Ontarians, can go and brag about in the province of Quebec. I’d like to do that for a change, rather than going there apologizing I’d like to go there and brag and say: “Look, they’re shaping up there in Ontario; so out here in the province of Quebec, let’s not get hot and heavy, les Péquistes, about the province’s anglophone minority.”

I think we’ve got something here. It’s an important step. I’m extremely proud to be participating in this because I’ve fought for it for a while, and hopefully we’ll get a very good piece of legislation which will serve the purpose for which it was intended.

Mr. Cassidy: Monsieur l’Orateur, je vais accueillir l’invitation qui est devant nous ce soir, c’est un Bill qui était attendu depuis longtemps dans la Province de l’Ontario. Ça me fait plaisir que le présent Procureur général a été capable de convaincre ses collègues du cabinet conservateur que le Bill est nécessaire. Mais c’est dommage à notre avis que ça a pris si longtemps et je crois que quand-même, même si on a fait ce petit pas il y a encore des choses à faire pour garantir les droits des franco-ontariens, d’avoir des procès de justice dans leur propre langue partout dans la province où ils sont situés.

La situation, Monsieur l’Orateur, c’est tout simplement que ça fait presque dix ans depuis l’engagement, l’engagement fait de la part du premier ministre de notre province, d’assurer le service en français pour la population franco-ontarienne. Comme représentant d’une communauté, d’un comté avec une grande proportion de franco-ontariens, de gens de langue française, comme le porte-parole adopté de la communauté franco-ontarienne, c’est un problème qui m’a concerné depuis mon élection en 1971.

Et depuis mon élection, j’ai pressé à plusieurs reprises, à maintes reprises le gouvernement de donner des services en français où ils sont requis. J’ai tout d’abord rencontré tant et tant encore de la résistance de la part du gouvernement.

Je me souviens par exemple au temps de l’élection partielle de Carleton-Est en 1974 quand Monsieur Pierre Benoît était le candidat du Parti Conservateur, quand j’ai posé toute une rangée de questions au gouvernement sur les services en français, sur l’administration de la justice en français, sur la traduction de certains documents en français et la réponse que j’ai eue dans ce temps-là, c’était que le gouvernement ne savait pas exactement de quoi il s’agissait et que le mouvement vers la stipulation de services en français semblait être ralenti jusqu’au point de presque aucun mouvement du tout.

Alors maintenant on a vu un changement, un peu plus de vigueur en ce moment-ci, mais quand même il y a des faiblesses assez grandes dans le Bill qui a été proposé. Je veux rappeler à la chambre qu’en 1968, à la première conférence de la Constitution, le gouvernement ontarien a accepté le principe, le principe de donner des services au public dans les deux langues officielles de notre pays.

Et puis en 1968, le gouvernement a annoncé le création de quatre groupes de travail pour examiner les services d’administration provinciale, service de justice, service municipal, et puis des services en français dans la législature et les traductions des statuts provinciaux. Alors dans ce temps-là on avait le commencement de certains engagements de la part du gouvernement. Mais qu’est-ce qu’on a vu depuis ce temps-là? On a vu des petits pas, toujours des petits pas, toujours de la résistance, toujours des problèmes en convainquant le gouvernement que c’est nécessaire et que c’est le temps de donner aux franco-ontariens des services qui sont justifiés en vue de leur statut comme le deuxième groupe officiel de notre pays, comme un des deux groupes fondateurs de notre pays.

A notre avis, dans le Nouveau Parti Démocratique nous croyons que beaucoup des problèmes que nous avons expérimentés jusqu’ici ont été dus à la résistance du gouvernement à l’adoption du français comme langue officielle en Ontario. Si cette déclaration a été faite par la Législature avec le support du gouvernement, je crois que l’adoption des services spécifiques dans les deux langues officielles serait assez facile à achever.

Mais dans notre sens, un engagement complet aux deux langues officielles dans cette province a été toujours très dur pour nous autres de convaincre le gouvernement de faire les mesures nécessaires. Notre position dans le Nouveau Parti Démocratique qui sait que nous devons avoir les deux langues officielles dans la plupart des provinces, qu’une de ces raisons pour cette mesure, c’est tout simplement notre position comme une des provinces fondatrices de note pays, notre position comme la plus grande province de langue anglaise dans le Canada qui peut par cette mesure assez simple et directe convaincre dans notre opinion, convaincre la population québécoise, la population de langue française de notre pays de notre sérieux sur les matières de l’unité nationale et de notre engagement au futur de notre pays.

Mr. Speaker, I want to speak about the bill, briefly. As I was saying in French, it was way back in 1968 that the government first decided that something should be done and established, at the first constitutional conference, a series of task forces, including a task force to deal with the question of services of justice in French.

[10:15]

The specific results from that particular task force were very limited. There was a promise of hiring some bilingual personnel. There was a promise of doing something in the future and the problem with this government in the past has been too often the promises for Franco-Ontarians have been services for the future rather than services today. There has been a level of frustration among Franco-Ontarians, which I can understand as a member representing a riding with a substantial number of Franco-Ontarians.

It is simply not good enough that we say to the people of this province, in many cases people whose ancestors go back long before many of our ancestors settled in this province, “You have to fight and fight and fight again to get a basic level of services in your mother tongue and in the other official language of our country.” And that’s one of the reasons why we in the New Democratic Party believe that French should be an official language in this province.

The recent Throne Speech made all of the steps necessary to implement that particular step, save the final one. The decision of the government, after many years of foot-dragging, that it was prepared to see the translation of the statutes of Ontario into French; the adoption a long time ago of the use of French in this Legislature itself; the movement we are now making towards the use of French in government services where there are numbers of Franco-Ontarians is a foot-dragging, halting, slow kind of movement. It would be a lot more definite and a lot more assured if the government made the fundamental commitment to Franco-Ontarians, but we believe that what the government is doing now is resisting the symbolic step for reasons that we find difficult to understand but with consequences which we believe are enormously damaging to the future of our country and of Confederation.

The headlines in Quebec about the Premier’s retrograde attitude on French as an official language were much greater than the headlines --

Mr. Speaker: That is not in this bill though.

Mr. Cassidy: I realize that, Mr. Speaker. That’s why I am about to return to the principle of the bill -- were much greater than the headlines that actually accompanied the decision of Sun Life in January that it was going to pull its head office out of La Belle Province.

If I can conclude that line of thought, Mr. Speaker, the New Democratic Party believes that this should be a province with two official languages. We have many cultures in this province and that’s to be recognized as well, but the fact of multiculturalism and of having no official culture is something that exists alongside the fact that we can and should have two official languages. That’s a means of resolving something which goes right down to the fundamental heart of our history and our tradition in this country and in this province.

Maintenant, Monsieur l’Orateur, je veux commenter un peu sur le Bill dans la forme qui a été proposée. Nous sommes conscients du fait que les associations franco-ontariennes ont eu très peu de temps pour considérer le Bill. Quand nous avons parlé avec l’Association canadienne française de l’Ontario hier matin, par exemple, ils n’avaient pas encore vu même une copie du Bill. Apparemment on n’a eu aucune consultation avec le groupe-clé des franco-ontariens et c’était seulement parce qu’un de mes assistants a envoyé quelques copies de ce Bill à l’ACFO au moyen d’un autobus vers Ottawa, qu’ils ont eu une petite considération du thème direct et spécifique de ce Bill. Je veux dire que j’espère que les procédés à la considération de ce Bill au comité doivent avoir un petit délai pour que les associations impliquées puissent commenter pour la part des franco-ontariens.

I would like to say as well, Mr. Speaker, that in addition to the need to have some delay in committee stage of this bill in order that the Franco-Ontarians, who apparently have not been adequately consulted, should have a chance to look at it and comment on it, there are some areas of the bill we are disturbed about.

In the first place, we have a strong feeling that the government should take the step of designating the areas for bilingual courts, or that French- and English-speaking courts be provided in the bill rather than leaving this up to the Lieutenant Governor in Council. I asked the minister about this on the day he made his original announcement, a week ago, at the time that I was welcoming the fact that the government was prepared to move this far. The minister said, “Well, we are not going to go back from where we are right now.” I think Franco-Ontarians have had too many setbacks and too many disappointments for them not to wish that the bill contained a specific designation of those regions and counties of the province where French-speaking courts will be available as a matter of right.

Secondly, I am very disturbed at the fact that subsection 5 of the bill does not make the use of French in the courts a right, it still leaves it as a privilege. Now what this could mean is that even where you have a French-speaking judge, French-speaking lawyers, French-speaking defendant and French-speaking accuser or if it is a civil case where you have all of the parties concerned are of the French language, the judge could decide that for reasons of getting out of the wrong side of bed that morning he would not permit the proceedings to take place in French. Now surely that is ridiculous, Mr. Speaker.

Hon. Mr. McMurtry: Nonsense.

Mr. Cassidy: It is not nonsense because the bill says specifically that where an application is made to appear before a French-speaking judge, the court may direct that the proceedings be held in French; but the court is not obliged to direct. I would point out, Mr. Speaker, that that is particularly relevant in the case of appeals, where at the appeal level as well the proceedings are optional in French and not mandatory in French.

Hon. Mr. McMurtry: You had better read the bill.

Mr. Cassidy: I have read the bill in great detail, Mr. Speaker.

Hon. Mr. McMurtry: The member destroyed his credibility all the time by just going too far and showing incredibly bad judgement.

Mr. Cassidy: I have read the bill in great detail. If the minister is concerned about the things I am saying, then it is quite open to him to propose or to promise an amendment to the bill in committee stage, which changes the option, signified by the word “may”, to something which is mandatory, signified by the word “shall.”

Mr. Breithaupt: Read subsection 3.

Hon. Mr. McMurtry: Yes; read subsection 3, that’s where the right is given.

Mr. Cassidy: In subsection 3 it says that the court --

Hon. Mr. McMurtry: And don’t talk such nonsense.

Mr. Cassidy: The court simply says that the hearings shall be conducted before a judge who speaks both of the official languages, both English and French. Now the minister can have his tantrum if he will, but the fact is that there was a weakness in the bill in subsection 5 where it does not carry through in the principle of subsection 3; and that is what I am disturbed about. I think that should be commented upon by people outside this Legislature, as well as inside; and I wish that the minister would get up and acknowledge that a mistake has been made, a loophole has been left in the bill by his officials, and this Legislature should in fact correct it.

J’aimerais bien voir un engagement de la part du ministre qu’il est prêt à faire un changement dans la subdivision no. 5 du Bill pour assurer le droit de parler le français dans un procès de loi, pas simplement pour donner l’option si le juge même dans une cour de langue française dit que le but est de faire accepter que le français soit utilisé dans la procédure.

I just want to say, Mr. Speaker, that that particular loophole does have a tendency to undermine what the minister had to say when in his statement the other day he said that French-speaking litigants may, as a consequence of this designation of courts, may elect to have the right to testify in their own language. They may elect to have the right to testify before a French-speaking judge, but it is not yet assured that they will actually be able to testify before that judge in the French language. That is an obvious area, Mr. Speaker, which we would hope could be fixed and in which in fact it has been pointed out to us already by the people at L’association Canadienne Française de l’Ontario, in their concern that now that we have finally taken this step, now that we have finally started to erase from the statute books the blot of the Judicature Act which provides for English-only trials in this province, that it should not be a half-hearted kind of job.

I just want to conclude in saying that I offer these comments in a spirit of welcoming the bill, but in the spirit of hoping that the bill will in fact carry out the intentions of the minister, which I am quite prepared to accept are genuine intentions because we have seen more progress in this particular area under this particular minister than under God knows how many of his predecessors over the past few years, in fact over the past few decades.

Mr Speaker: The hon. member for St. George.

Mrs. Campbell: May I say in opening je regrette beaucoup si je ne parle pas français avec la facilité que je voudrais à ce moment-ci.

Mr. Roy: Vous parlez très bien.

Mrs. Campbell: Ah, je vous remercie.

Mr. Samis: Secondé.

Mrs. Campbell: I too rise to express my support of this legislation. I recognize that there are problems with it and I support the position taken by my colleague from Ottawa East, in that it does seem to me that at this point in time there should be some way in which we could designate those specific areas, which I am sure the minister must have had in mind when he was drawing this legislation, having the advantage of some of the experiments which have taken place already in the province. It is a fact that quite often people who have waited a long time for something would like, of course, to see things go further and I sincerely hope that we will be able to move more quickly now that we’ve made this initial rather important step.

I don’t share with my colleague from Ottawa Centre his criticism of the bill. I feel there are points which ought to be clarified. There are points which can be made to strengthen it, but I would stand here and like to congratulate this Attorney General for moving in this direction as he has done.

It was interesting to me to sit in a court in Ottawa and to have there in that court those who were French-speaking. Everyone in that court was French-speaking except me. I would not undertake at any time to conduct a hearing or a trial in French, but I think people are going to have to get used to conducting trials in French. Even those who are bilingual are going to have to work through this system, and it seems to me that on something as important as this we should, in fact, give some kind of lead time in order to make it abundantly effective as we go.

I would like to say there is one thing that my colleague said with which I do take some exception, and that is when he mentioned the great Glengarry. Glengarry, to me, ought to be conducting trials in Gaelic, if you want to know.

Mr. Roy: You’ve got to get them to speak French

Mr. Samis: Make it trilingual for Glengarry.

Mr. Roy: Are you going to speak on this, George?

Mr. Samis: Briefly.

Mrs. Campbell: However I am not pleading for the incorporation of the third founding language of this country at this point in time.

On motion by Mrs. Campbell the debate was adjourned.

On motion by Hon. Mr. McMurtry, the House adjourned at 10:28 p.m.

May 2, 1978

MINISTRY OF GOVERNMENT SERVICES AMENDMENT ACT

THIRD READING

RETAIL SALES TAX AMENDMENT ACT

THIRD READING

INCOME TAX AMENDMENT ACT

THIRD READING

CORPORATIONS TAX AMENDMENT ACT

JUDICATURE AMENDMENT ACT