The House met at 2 p.m.

Prayers.

Hon. Mr. Welch: Mr. Speaker, I know that a couple of my colleagues have statements. They have been detained, obviously.

Mr. McClellan: Better put on the whips over there.

Hon. Mr. Welch: Actually they just wanted to make sure everything was up to date; so they are waiting until the last moment.

Mr. Breaugh: Is this an acknowledgement that you really are bankrupt over there?

Hon. Mr. Welch: Mr. Speaker, with the concurrence of the House, perhaps we could carry on with the question period and revert to statements when my colleagues with statements arrive.

Mr. S. Smith: No, we will wait. What do you have -- 26 cabinet ministers?

Mr. Hennessy: You tell him, Stuart.

Mr. S. Smith: Mickey’s here, look at that; Jim Taylor is here.

Mr. Nixon: Jim never misses prayers.

Mr. Makarchuk: Did you tell him when the big hand is on 12 and the little hand is on two that’s when the House starts?

An hon. member: It is about time, Larry.

Hon. Mr. Grossman: It has been a very busy morning.

STATEMENTS BY THE MINISTRY

WESTINGHOUSE CANADA

Hon. Mr. Grossman: Mr. Speaker, I am sorry for the delay and I thank the members of the House for their forbearance. We were working until just a moment or two ago to finish our work on the Westinghouse Canada situation in Hamilton.

To that end, I might say that I would expect the members opposite are just now receiving copies of my statement, which they will know from dealing with me in the past is not a usual situation. Usually copies are there well in advance but, because of these circumstances, we have been delayed until now. Also, I am out of breath for those reasons.

Yesterday, the Leader of the Opposition (Mr. S. Smith) raised the question concerning the possible closing of the Aberdeen Avenue plant of Westinghouse Canada in Hamilton. Yesterday, he referred to -- and I quote from Hansard -- “a study undertaken by Westinghouse Canada which may well result in putting 700 production employees out of work in Hamilton.”

Yet I understand that by 11 o’clock last night, after doing some research, he discovered that the layoffs might not in fact occur. His original, unresearched statement raised, I think, unnecessary concerns for all employees in Westinghouse and elsewhere.

This House will therefore be interested in facts concerning Westinghouse instead of unresearched speculation.

Mr. Sargent: I’m sure glad you’re around here.

Hon. Mr. Grossman: You should try it more often yourself, Eddie.

Hon. Mr. Snow: Glad to see you here too, Eddie.

Hon. Mr. Grossman: My officials met with the Westinghouse Canada executive -- the president, vice-president and their staff -- last November 15. The meeting was indeed to have been held as early as October 13 but had to be postponed.

Westinghouse told us then of their long-range plans for their Canadian operations and how they were conducting an evaluation of all their manufacturing so they could build for a profitable future in Canada. They told us frankly that unprofitable lines, not surprisingly, would probably have to be discontinued, and that their policy was to convert from a branch plant to an organization set up to service local needs. They discussed the changing pattern in their industry and how they must respond.

I am, as I stated yesterday, frankly disappointed that they did not tell us earlier of the specific study which involves the Aberdeen Avenue plant, but I must remind the House that this is still at the study stage and the conclusions will not be made until the study is complete. My staff has discussed this matter with Westinghouse officials who anticipate that the first part of the study, the first part only, will be completed by June and the rest of the study finalized by October.

If any layoffs do result, and this will not be known until the study is complete, those layoffs will indeed be phased in over a period of three years. Even so, the company feels there is a good possibility that, with increased employment in other Hamilton operations and with normal attrition, the 700 employees who might otherwise be affected could be absorbed elsewhere.

Mr. S. Smith: That’s still 700 jobs whether it’s the same people or not.

Hon. Mr. Grossman: I wish to stress that any decisions affecting Westinghouse Canada Limited will be made in Hamilton and nowhere else. In our discussions with Westinghouse it has become apparent that they feel the reaction through the press and their own elected representatives has been much greater than the situation warrants.

Westinghouse has been in Canada since 1903 and there have been tremendous changes in the entire electrical industry in Canada and in the rest of the world, quite obviously, in that time. The company at present employs more than 7,000 people in Canada, plus a further 2,300 people who were recently transferred to CAMCO at the time of that merger.

Westinghouse Canada has not been content to stay as just a branch plant. They have been successful in introducing the world product mandate concept by which the Canadian company is the exclusive manufacturing plant and conducts product research and development for certain products which are sold world-wide.

Mr. M. N. Davison: How many products?

Hon. Mr. Grossman: One of these products is gas turbines which have been sold successfully against aggressive foreign competition into many world markets. They are able to do this in part because they are a multinational, and because they can use the worldwide facilities of their company. This rationalization process is one that benefits Canada and one that we are encouraging in other companies.

Mr. M. N. Davison: How many other products?

Hon. Mr. Grossman: The product mandating buffers them against foreign-made decisions .

Mr. McClellan: Give us another product.

Hon. Mr. Grossman: That’s what these studies are all about. That’s precisely the process that’s going on now.

On the whole question of multinationals, I think all persons, including the Leader of the Opposition, must take a mature and responsible attitude.

Mr. Cassidy: What does that mean?

Mr. Warner: For the minister that means bow and scrape.

Mr. Speaker: Order.

Hon. Mr. Grossman: There are many examples of successful multinational operations in Canada providing substantial employment to our citizens.

Mr. Warner: Where?

Mr. Cassidy: Like Inco?

Hon. Mr. Grossman: I’m going to tell the members where. If I may quote a speech I delivered in the great city of Cambridge on March 1:

“A great deal of our economy is dominated by branch plants of multinational firms. There’s a lot of nonsense talked about multi nationals. On one side people say they are all bad; others talk as if they raise no problems at all. The truth is somewhere in the middle” -- I would say to the Leader of the Opposition -- “but I think it’s high time we started to work in a deliberate way to maximize the benefits we can get from the activities of multinational firms in Canada.” That was on March 1.

I suspect, I would note to the Leader of the Opposition, that notwithstanding yesterday’s performance, many people in -- just to name three communities -- Sarnia, Kitchener and St. Catharines -- are happy to have major multinationals creating very substantial employment in their communities.

I have stated over the past several weeks that we must do what we can to rationalize the branch plants that are operating in Canada. Product mandating is one way of encouraging efficiency of operations, and decision-making in Canada is part of that scheme. We must do what we can -- I say to the Leader of the Opposition -- to develop a mature and responsible attitude to the whole subject of multinationals in Ontario.

While we are on the subject of maturity and multinationals --

Interjection.

Hon. Mr. Grossman: I am going to quote from the Leader of the Opposition in a minute -- I want to discuss the comments of the Leader of the Opposition this past weekend.

Mr. Kerrio: There has to be something sensible in there.

Mr. M. N. Davison: How many more products?

Hon. Mr. Grossman: My friend will find out.

On March 12 the Leader of the Opposition was quoted in the Toronto Star as saying --

Mr. S. Smith: That was an inaccurate quotation.

Hon. Mr. Davis: Another one? Are you on the conservative or liberal side of the party?

Hon. Mr. Grossman: The Leader of the Opposition says it was inaccurate. We will find out whether he means this year’s or last year’s statement.

Mr. S. Smith: We will read the correct statement to you.

Hon. Mr. Grossman: “The Tories believe the way to do things is to provide giveaways to American companies while totally ignoring our own industrial potential. The Conservatives gave away” -- .

Mr. S. Smith: We said you had to do it that once but not to make a fetish of it. That’s what we said. Do it once but don’t go down the slippery slope.

Mr. Speaker: Order. If we are going to have orderly proceedings, only one person should be heard at a time. We are at the point in our routine proceedings where we are listening to a ministerial statement. There will be ample opportunity to respond to the statement during question period.

Mr. S. Smith: It’s an inaccurate quotation.

Hon. Mr. Grossman: I say to the Leader of the Opposition to wait until he hears all of his statements and then pick the ones he wants to disavow.

I continue to quote from the Leader of the Opposition: “The Conservatives gave away millions to the Ford Motor Company to build a plant in Ontario and the real reason was the vision of ribbon-cutting ceremonies in the minds of Tory cabinet ministers.”

Mr. Speaker, I would now call the attention of the Leader of the Opposition to his comments in the Legislature --

Mr. S. Smith: On a point of privilege, Mr. Speaker: It happens to be that the minister is reading a statement from the Toronto Star which statement itself was not a correct quotation from my speech. I would like to set the record straight by reading the exact quotation, and a tape recording is available if the minister and other members of the press would like to hear it. I now quote from the speech:

“They sort of stumbled into the Ford deal in Windsor. They were dragged into it by the feds -- most of the money was federal -- and the provincial government stumbled into it” --

Interjections.

Mr. Speaker: Order.

Mr. S. Smith: -- “and got some good publicity. Suddenly they realized that here was an opportunity for them to look as though they were doing something. Visions of ribbon-cutting danced in the heads of Tory cabinet ministers as the notion struck them that all you have to do is give away the taxpayers’ money and someone might open a plant. They will claim that the reason they are opening the plant is because you gave them the money; then you can stand back at the ribbon-cutting ceremony and talk about what a great economic strategy you have in Ontario.”

[2:15]

An hon. member: What’s the point of privilege?

Mr. Hennessy: What’s the punch line?

Mr. S. Smith: You will recall that, at the time of the Ford deal, we recognized that this was -- and I called it at the time -- “a slippery slope.” Those were the words that I used.

Mr. Nixon: Exactly right.

Mr. S. Smith: I am still quoting, Mr. Speaker, from my statement from the weekend. If the Premier would like to hear the actual statement, I said: “We were being blackmailed and had no choice but to give in, in that one particular instance.”

Hon. Mr. Davis: That is incorrect.

Mr. S. Smith: “It was like applying a tourniquet when a haemorrhage is occurring. You don’t normally use tourniquets as a regular way of maintaining people’s health, but it was a necessary thing to do at the time. We made it plain at the time that it had to be regarded as an exception, as something that we were forced to do because we were desperate for the jobs, but that we had to use the intervening time after that to develop a genuine industrial strategy. What did the government do? It repeated the experience on a smaller scale with the Hayes Dana Corporation of New Jersey.” And I went on to discuss the Hayes Dana matter.

Let’s be very clear on this matter. The minister should get his facts straight in the future.

Interjections.

Mr. Speaker: Order. The minister will please continue his statement, uninterrupted.

Hon. Mr. Grossman: Mr. Speaker, the Leader of the Opposition has risen on a point of order to explain what he said. He has asked for a retraction. May I say that I am sure he would have written a letter to the editor of the Star explaining what he did say. May I say, secondly, that he has indicated to me just now that he indicated in his speech -- and I look forward to receiving a copy -- that we were dragged into it by the federal government.

Mr. S. Smith: I said we were going to lose the deal.

Mr. Speaker: Order. As I drew to your attention before, we are in the process of listening to ministerial statements. Any editorializing, or anything in response to what is said over here is not permitted at this time. If the minister would just complete his statement, let’s get on with the business of this House.

Hon. Mr. Grossman: Mr. Speaker, to respond --

Mr. Speaker: No. Just continue with the statement.

Hon. Mr. Grossman: With respect, the Leader of the Opposition has asked that I withdraw a portion of my statement, and I ought to either withdraw a portion of that statement or respond to his point of order as to why I should not withdraw that portion of my statement.

Mr. S. Smith: I didn’t ask the minister to withdraw a thing. Let him leave it on the record. Let him leave his distortions on the record.

Hon. Mr. Grossman: Rather than taking up the time of the House, Mr. Speaker, I will distribute to any persons who are interested, including the Leader of the Opposition, a copy of the Leader of the Opposition’s letter to the Right Honourable Pierre Elliott Trudeau, dated June 21, 1978, which will show that we were not dragged into it by the federal government.

Mr. S. Smith: The minister knows I favoured it at the time.

Hon. Mr. Grossman: The Leader of the Opposition pleaded with the federal government to give us some money to go and get the deal. That’s what he did. Here it is.

Interjections.

Mr. S. Smith: What is wrong with the minister? He was in the House. Everybody knows that.

Hon. Mr. Grossman: In his letter to the editor he can draw that to his attention too.

To continue with the statement, Mr. Speaker: I want to call the attention of the Leader of the Opposition to his comment in this assembly on June 23, 1978.

Mr. S. Smith: When you guys were about to lose the deal.

Hon. Mr. Grossman: Oh, I see! “We need 2,600 jobs in the province.” Here is what he said: “Why stop at $17.5 million when, for another $17.5 million or so, we can get the $500-million plant on Ontario soil and create the 2,600 jobs?”

Mr. S. Smith: Or you would lose the deal; that’s right.

Hon. Mr. Grossman: Is the member ready for what he said next? “I’m proud to say that is the policy of the Ontario Liberal Party.”

Mr. Havrot: Talk about red faces now.

Mr. Mackenzie: Tweedledum and Tweedledee.

Hon. Mr. Grossman: Mr. Speaker, to sum up: It is always easy to beat up on multinationals, but the plain fact is that this country, like many, has always needed a certain amount of foreign capital to be able to meet the aspirations and the job demands of its people.

A mature approach is needed when speaking of both domestic and international capital, and jurisdictions which operate on cheap politics or immature sabre-rattling have no credibility and will be left behind.

Although the Leader of the Opposition may have difficulty deciding on his party’s industrial policy, we have no difficulty in developing and following our own. We intend to take every opportunity to develop Ontario industry, to work with the facts that exist and to be concerned for the potential for industrial growth and employment in this province.

PHYSICIANS OPTING OUT OF OHIP

Mr. Speaker: The honourable the Minister of Health.

Hon. Mr. Timbrell: Mr. Speaker, yesterday I was asked to table the figures for physician options on a county-by-county basis; today I will read those figures into the record.

I may say, sir, that the statement will be distributed later in the day, inasmuch as I got the draft statement as I left the CBC after talking to my friend from Oshawa and certain changes have been made by myself. Before I give the figures, Mr. Speaker, I would like to put them into context.

Almost since the inception of the plan in its present form, the province’s doctors have had the option of billing the plan directly or billing the patient directly; in the latter case the plan reimburses the patient. In fact for the first approximately seven years of the plan approximately one doctor in eight have billed patients directly.

As I have said, sir, on many occasions, we in the ministry expected an increase in physicians opting out of the plan as the Anti-Inflation Board regulations were lifted at the end of 1978; and that, Mr. Speaker, is precisely what has occurred.

Before reading the figures for the counties, regions and districts, I would like to apprise members of the following figures. First of all, the matter of the number of physicians opting out by effective date: On November 1, 1978, 36 physicians opted out; December 1, 1978, 31; January 1, 1979, 205; February 1, 1979, 116; March 1, 1979, 77; coming up on April 1, 1979, 71; and on May 1, 1979, two.

Yesterday, Mr. Speaker, I said I felt we had seen the peak of opting out and these figures confirm my view. These figures are firm and final and no more than two physicians can opt out in the month of May because of the three-month notification period.

Mr. Roy: Don’t count on it.

Hon. Mr. Timbrell: It is also noteworthy, sir, that since 1973 there has been a steady growth of the utilization of health services. In 1973-74 the average number of claims per insured resident of Ontario was 5.3, and by 1977-78 that had risen to 6.7.

What this indicates, Mr. Speaker, is that despite an increase in opting out by physicians there has been a steady growth in usage of the services; in other words, there would appear to be no threat to the acceptability of medical care.

In addition, Mr. Speaker, it should be of interest to members to see that the ratio of opted-in physicians in the province has improved significantly in the past six years. The figures, which are based on Statistics Canada population estimates, are for March of each year. I will start with 1973 when there was 907 population per opt-in physician in the province; 1974, 869; 1975, 838; 1976, 824; 1977, 803; 1978, 812, and once we have the March 1979 data I will release that as well, although I obviously expect a slight increase in that ratio but well below the figure at which we started in 1973 when the records started to be kept.

To reiterate, Mr. Speaker, I do not see any threat to the universality of the health plan in Ontario at this time. Universality is the cornerstone of the plan and we are constantly monitoring it.

Now as I promised, here are the figures for physicians billing the plan directly for the end of February, 1978. I might point out, Mr. Speaker, that these figures include the total number of physicians who have signified their intention of opting out, whether their effective date has arrived yet or not. They also represent physicians who are actually billing the plan, as opposed to the much larger number of physicians registered with the plan but who are not presently billing for one reason or another. These are by county, region, or district, and the percentage of doctors who are billing the plan directly, that is, who are opted in:

Brant county, 97.5 per cent; Bruce, 100 per cent; Dufferin, 94.7 per cent; Elgin, 96.8 per cent; Essex, 89.8 per cent; Frontenac, 94.2 per cent; Grey, 90.5 per cent; Haldimand-Norfolk, 93 per cent; Haliburton, 100 per cent; Halton, 71.1 per cent; Hastings, 99.2 per cent; Huron, 95.7 per cent; Kent, 98.9 per cent; Lambton, 78.1 per cent; Lanark, 100 per cent; Leeds and Grenville, 89.7 per cent; Lennox and Addington, 100 per cent; Metropolitan Toronto, 76.3 per cent;

Middlesex, 79.8 per cent; Muskoka, 100 per cent; Niagara, 80.3 per cent; Northumberland, 98.3 per cent; Durham, 100 per cent; Ottawa-Carleton, 82 per cent; Oxford, 89.4 per cent; Peel, 78.6 per cent; Perth, 70.7 per cent; Peterborough, 52.8 per cent; Prescott and Russell, 100 per cent; Prince Edward, 94.3 per cent; Renfrew, 97.8 per cent; Simcoe, 74.8 per cent; Stormont-Dundas-Glengarry, 98 per cent; Victoria, 100 per cent; Waterloo, 74.5 per cent; Wellington, 71.4 per cent; Hamilton-Wentworth, 88.1 per cent; York, 59.3 per cent;

Algoma, 99.2 per cent; Cochrane, 97.4 per cent; Kenora, 100 per cent; Manitoulin, 100 per cent; Nipissing, 82.9 per cent; Parry Sound, 100 per cent; Rainy River, 100 per cent; Sudbury, 91.8 per cent; Thunder Bay, 97.1 per cent; Timiskaming, 100 per cent; and out of the province -- there is a group of physicians who bill from out of the province -- 95.4 per cent.

In brief, Mr. Speaker, I see no threat to the principle of universality in this province.

Mr. Warner: You wouldn’t.

Hon. Mr. Davis: Listen, if you got grades like this you would have passed.

Hon. Mr. Timbrell: What is of great importance is the fact that we in the ministry are constantly seeking ways to improve our dealings with physicians.

Mr. Warner: You sit idly by and watch the thing being destroyed.

Hon. Mr. Timbrell: We have a lot more to discuss with the OMA and we have been setting up mechanisms to discover and to dispatch minor irritations with bureaucratic procedures, and to review the means whereby the schedule of benefits is arrived at so that the results of such negotiations not only are fair to the public and to the profession but are seen to be fair.

ORAL QUESTIONS

WESTINGHOUSE CANADA

Mr. S. Smith: I have a question for the Minister of Industry and Tourism. Given that his own officials have now spoken with Westinghouse and seem to confirm that, as said in today’s Spectator, there is little hope that the 700 jobs will stay -- even although some of the jobs lost will be lost by the process of attrition and therefore actual employee layoffs in some instances may not happen, the city will lose the 700 jobs very likely -- what is the explanation that the minister is able to accept for this?

Is he aware that the reasoning being offered by the company, which accepts that the switch gear and control plant on Aberdeen Avenue is profitable, is that they wish to replace this older plant with a number of smaller, decentralized plants all around the country? Does this make much sense to the minister, does he accept that particular reasoning; and is he not concerned with a statement made by the president of Westinghouse some time ago in which he spoke of the benefits of these small, more-automated, decentralized plants which are non-union? Does the minister feel that the reasoning may be an effort on the part of the company to avoid the union?

[2:30]

Hon. Mr. Grossman: I have to say to the Leader of the Opposition that I suspect the company wouldn’t have to conduct a study which it has well publicized, let its employees know about, and indeed let the public know about, if all it was trying to do was to get away from a union.

That study will be available to our ministry, I am sure; and with the consent of the persons doing the study and that of Westinghouse, we would be happy to make it available to the Leader of the Opposition and to the third party, and to anyone else who wishes it. Therefore, I would tend to discount at this time, on the evidence we have at hand, an attempt to avoid the union.

Secondly, the Leader of the Opposition refers once again to the Hamilton Spectator, from which apparently he concludes there is little hope of the jobs being saved. I should say that as a result of our discussions with them they have indicated to very senior officials in my ministry there is some hope for a lot of those jobs.

I would remind the Leader of the Opposition that, as he should know, there are currently some 4,300 persons employed by Westinghouse in the Hamilton area, and that many of those 700 or so workers might well be absorbed into some of the other activities of Westinghouse in Hamilton. I would reflect that Westinghouse has made a substantial contribution to the Hamilton area and is not about to take what I suspect would be an unusual step; that is to walk away from its labour force there and those parts of its operation there which seem to work well.

I would also remind the Leader of the Opposition that when Westinghouse talks of getting into diversified plants and smaller operations they are not only talking about other parts of Canada. Indeed in our conversations they have indicated -- the member for Quinte (Mr. O’Neil) will be interested -- some talk about moving some parts of their operation to eastern Ontario.

These are alternatives which Westinghouse and Canadian-owned plants, plants all over Ontario and everywhere else, do look at from time to time. I am happy to say that Westinghouse is not following a high-handed approach of simply closing the plant, giving layoff notices and moving its operation to another country or even another part of this country. Rather they are conducting a study, and the bottom line of it is as I believe the Leader of the Opposition indicated to some persons either out there or on the media last night, I think he reflected that this was free enterprise, and one of the things that is going to happen is that free enterprise operations are going to assess their operations from time to time to see if they can develop more profitable ways of carrying on business than those currently in use.

My concern is that they do not abandon a community for reasons other than good, businesslike reasons, and that they have given every opportunity to this government to assist them in relocating the work force, and given the workers and community involved every chance to adjust to that change.

Mr. S. Smith: By way of supplementary:

Given the fact that the Aberdeen plant has been quite profitable, that they intend to continue making their switch gear and control products in Canada -- it’s not something they are willing to admit they are going to take back to the United States when the tariffs go -- is the minister convinced that it makes sense to have a bunch of small plants all around the place when he is always speaking of the economies of scale and so on? Is the minister convinced that it makes more sense to do that? Isn’t he the least bit suspicious as to the reasons for that, given Mr. Tyaack’s address to the Conference Board of Canada in which he praised the small, decentralized non-union plants as the way of the future?

Hon. Ms. Grossman: Again, I think it would not be helpful to the long-range prospects for Westinghouse, which does employ 4,300 persons in the fine city of Hamilton, to invite speculation, based upon a speech made earlier and upon a study it is conducting, that Westinghouse is acting in a high-handed, unreasonable fashion. As I have indicated earlier, I just don’t think that premature speculation is a type of attitude which is conducive to attracting the type of confident investment decisions made by Westinghouse and other people.

I do acknowledge, I would say to the Leader of the Opposition, that it is politically attractive to jump on Westinghouse and accuse them of having plans and motives.

Mr. S. Smith: Do small plants make sense to you?

Hon. Mr. Grossman: I must say to the Leader of the Opposition, whether a diversification into those operations makes sense or not I would prefer to wait until I have had the opportunity of seeing the results of the study which they are carrying on. Obviously, Westinghouse feels that it hasn’t got enough information to make a decision on the Aberdeen plant without a study.

If Westinghouse feels that way, I must humbly say to the Leader of the Opposition that I obviously do not have the information either to make that assessment without at least having the opportunity of looking at that study. Perhaps the Leader of the Opposition feels he does not need the advantages of that study to make that business decision. I myself do not have that capability, nor apparently does Westinghouse.

Mr. Cassidy: Supplementary, Mr. Speaker: I have had the opportunity to talk both to the company and to the union in the last 24 hours. Can the minister explain his confidence that he will have access to the study and that he will be able to share it with members of the opposition when the company specifically informed me at 9:45 this morning that they were not prepared to open their books either to me or to the workers who are concerned about the future of their jobs? Is the government prepared to insist that Westinghouse Canada open the books on its switch gear operations so that the workers, the community and this Legislature can judge whether this is a sound, business-like decision or whether this is yet another example of a multinational corporation pushing Canadians around?

Hon. Mr. Grossman: I must say I wonder whether the leader of the third party would be taking the same attitude if it were a Canadian-owned company making the same assessment of its business as the American multinational is. I suspect he would find it a little harder to beat up on them than he does on the multinational.

Mr. McClellan: Inco perhaps.

Mr. Makarchuk: We just want to make them responsible, that’s all.

Hon. Mr. Grossman: Secondly, may I say I don’t apologize for the fact that in this country we do believe that businesses have the right to keep their records confidential and to make their own decisions as to which portions of their records --

Mr. Cassidy: So we won’t get the study, or it will be meaningless.

Hon. Mr. Grossman: -- are going to be open to the public and which are not, the same as the members opposite have that opportunity, the same as the unions have that opportunity to make that decision, the same as any ordinary worker or any union member has the opportunity to decide whether --

Mr. Cassidy: No, they don’t.

Mr. McClellan: You are not answering the question.

Hon. Ms. Grossman: -- his or her own personal affairs are matters which are going to be open to the public.

Mr. S. Smith: Not when you’re shutting a plant down,

Hon. Mr. Grossman: I think it is a very crucial thing to decide on the floor of this House as to whether this government believes that a firm, deciding it is going to close its plant, is required to open all of its records and all of its books to government with the logical conclusion that government can or should force it to maintain an unprofitable operation.

Mr. S. Smith: How do you know it’s unprofitable if you can’t look at the books?

Hon. Mr. Grossman: May I say that the record of my ministry in dealing with very many firms throughout the length and breadth of this province is that the good and responsible firms co-operate on a confidential basis with my very excellent staff to do everything they can to protect the work force that suffers from a layoff or a plant closure. I would expect, though I can’t be sure and one can never be, that Westinghouse would follow the now-established procedure of working with my staff and myself, showing us the details of their operation and permitting us to comment with them on a confidential basis with regard to the long-term prospects for that particular operation.

Mr. S. Smith: By way of supplementary, does not the minister feel, given the infrastructure which the people of an area have to put in when an industry locates there -- the houses that are built, the schools as a consequence, the streets, the water, the sewage -- that an industry has a responsibility to a community, and that before it can just walk away from a plant it at least ought to be able to show that no viable alternatives exist? Doesn’t the minister think the day of treating industries as though they were kings and could walk away or come in at will without any responsibility to the community is over in Ontario?

Hon. Mr. Grossman: I must say that I wonder whether that was part of the Leader of the Opposition’s feelings when in the Prescott Journal he was quoted as saying he would encourage industry to leave the golden horseshoe by lowering energy rates and upgrading transportation services in other places. Is that what he was thinking about when he said he would encourage industry to move out of the golden horseshoe?

Mr. Riddell: Don’t be so political, get on with the answer; it is getting a little tiresome.

Hon. Mr. Grossman: That’s precisely what it said: Prescott Journal, August 23, 1978.

Mr. S. Smith: You want to keep it all out of northern and eastern Ontario; you want it all in St. Andrew-St. Patrick, I suppose.

Hon. Mr. Grossman: But of course the member was in Prescott that day, he wasn’t in Hamilton, If he wants to encourage industries to move out of Hamilton, as he told them in Prescott, then let him stand up and say that in Hamilton, not just in Prescott.

Mr. M. N. Davison: I would like the minister to inform the House as to when his officials last met with representatives of Local 504, United Electrical Workers, in Hamilton to discuss this matter; and furthermore, I would like to know why he and the officials in his ministry are sitting so quietly on the sidelines while Westinghouse continues to try to get rid of and bust up Local 504 UEW in Hamilton?

Hon. Mr. Grossman: If the member has any evidence that that is occurring then perhaps he will send it across to us and I will work on that with my colleague the Minister of Labour and Manpower (Mr. Elgie). I am sure if the member has any evidence that that has occurred he has already referred it to the Minister of Labour and Manpower. Has he?

Mr. M. N. Davison: Open your eyes. Look at the record.

ILLEGAL DUMPING OF LIQUID WASTE

Mr. S. Smith: A question for the Minister of the Environment: Has the minister now spoken with the three staff of his ministry who were originally involved in denying that a meeting took place in December of 1976 in which his regional staff was made aware of certain illegal dumping going on at the Upper Ottawa Street site in Hamilton? Has he spoken with his staff now that a member of his Stoney Creek regional office has admitted that he and two other ministry staff met with certain haulers and were told at that time that liquid wastes were being dumped illegally?

What kind of disciplinary action is the minister going to take with his staff? Does he have results from the samples that were presented to his staff in December of 1976 when they were told of illegalities, and what exact action has he taken since the matter has finally been revealed in the newspapers, even though he himself never was able to find out about it?

Hon. Mr. Parrott: Mr. Speaker, obviously I expected this question, or one of related concern, and it would be easy for me, sir, to stand and say that since there are 139 charges laid on this particular instance, it is sub judice and I should refrain from comment. However, I think that that would not be fair to this House and I won’t do so. On the other hand --

Mr. S. Smith: That is rubbish and you know it. Just be honest.

Hon. Mr. Davis: Let him speak.

Hon. Mr. Parrott: Are you ready to listen to the answer or have you continually got your mouth in motion before you’re ready to listen?

Mr. S. Smith: Just stop congratulating yourself for something you should know anyway.

Mr. Speaker: Order.

Mr. Yakabuski: Slippery Stuart’s had a bad day. Go easy on him.

Hon. Mr. Parrott: What I was going to suggest to the leader of the Liberal Party was that we have heard a great deal on this subject, and indeed a great deal from the member himself. I think it’s time that two things happened. One, in the next day or two, perhaps Thursday or Friday morning, I will give a carefully considered response to his question, a response that will reflect not only our concern but a statement of the facts, and make sure that I do not make any utterances that would prejudice the fair trial of this case.

On the other hand, Mr. Speaker, we have heard so much from the leader of the Liberal Party on this particular item of a hearsay type of evidence -- like for instance, if I might make the case, material in a Coca-Cola bottle presented to our regional office -- which really, as he well knows, would not stand one second in a court of law. It is one thing to be suspicious, it’s another thing to have the kind of evidence that will stand up in a court of law.

As the leader knows, I have asked him in the name of the public interest on this significant issue to come forward with factual information; and I would say, since there are 139 charges pending, it would be a darn good idea for him to come forward now, not with hearsay evidence but with factual information that we could take to the courts. On Thursday or Friday I will make a much more detailed statement on the question.

[2:45]

Ms. S. Smith: Supplementary: Is the minister not aware that a member of his own office in Stoney Creek has now publicly admitted that such a meeting took place; the meeting at which the sample in the Coke bottle, whatever he wants to call it, was in fact handed over? He has admitted this publicly in the newspapers. Has he not found out about that? And will he check and find out just who was at the meeting; what the sample, if any, contained; what report was made following that meeting; and can he explain to me why it is he’s still talking of hearsay when the matter has been confirmed from within his own ministry?

Hon. Mr. Parrott: The Leader of the Opposition does us all a great disservice by confusing it so much. Is he prepared, on a matter of principle --

Mr. Roy: Try to answer the question. If you want to ask them, get out of there.

Hon. Mr. Parrott: -- that someone should be able to bring in an unidentified, unmarked, unsworn piece of evidence and say that’s enough to take a court action on any particular company?

Mr. S. Smith: Court action? What court action?

Mrs. Campbell: What court action?

Hon. Mr. Parrott: Is that his concept of justice? That’s precisely what happened, precisely what happened.

Of course I know of that meeting, and of course I followed in great detail --

Mr. S. Smith: Why did they deny it happened at first?

Hon. Mr. Parrott: -- those accusations the member has made. But he’s talking about something that concerns all of us, concerns us a great deal. I don’t think it’s very wise of the Leader of the Opposition --

Mr. S. Smith: Why didn’t they follow up?

Hon. Mr. Parrott: -- to threaten the things he has threatened in this province in the name of gaining something politically.

Mr. S. Smith: Why didn’t they follow up on it? Two years --

Interjections.

Mr. Speaker: Order, order.

Mr. S. Smith: You’ve turned a blind eye on it.

Mr. Speaker: Order.

Hon. Mr. Parrott: I rise on a point of privilege. I ask --

Mrs. Campbell: No, it isn’t.

Hon. Mr. Parrott: No, I won’t ask. I guess that’s not my privilege. Surely, when we have 139 charges --

Mr. S. Smith: Those are minor waybill matters that came out of your report, for heaven’s sake.

Hon. Mr. Parrott: -- on this issue, no one can say we have turned a blind eye.

Ms. Bryden: I have a supplementary question of the Minister of the Environment.

Interjections.

Mr. Speaker: Order.

Ms. Bryden: I would like to ask the Minister of the Environment, since he is taking court action, when is he going to bring in legislation to increase the fines for illegal dumping and such practices as are being alleged in connection with this affair?

Hon. Mr. Parrott: I answered that question some time ago in committee, Mr. Speaker. I’m not sure we’re going to do it this session of the Legislature. I did tell committee that we’re seriously considering that possibility. We’ll be bringing in spill legislation -- not related, I know, but it’s perhaps a time when we can consider the type of penalties that should be imposed for those who pollute and are found in violation of our acts.

PHYSICIANS OPTING OUT OF OHIP

Mr. Cassidy: A question of the Minister of Health, arising out of his statement today about the opting out of physicians from OHIP. Now that the minister has tabled figures that indicate that 29 per cent of the doctors in Halton county, 30 per cent of the doctors in Perth, 29 per cent of the doctors in Wellington county, 41 per cent of the doctors in the county of York, and 47 per cent of the doctors in the county of Peterborough have opted out of the OHIP plan; now that we have had information from the OHIP administrators themselves that 70 per cent of the doctors in the city of Peterborough itself, as well as in Orillia, have opted out of the plan; does the minister not believe that there are real obstacles to universal accessibility to insured medical services in many regions and cities of the province of Ontario?

Hon. Mr. Timbrell: First of all, Mr. Speaker, let me say on this question of the calculation by individual city I had a chat with the member’s friend from Oshawa at noon hour, over radio, and I will check with my staff on those figures, inasmuch as to my knowledge we have not been keeping them by city. We have been keeping them by county, region and district, inasmuch as all our planning is by county, region or district, or by hospital centre. But I’ll check that.

As I said in my statement, we have been monitoring the situation very closely and there is no indication that the universality or accessibility of the system is in fact threatened at this point. It is something we are watching very closely. The member will see from the figures I read out today that the situation varies from community to community. It seems to me that the most effective way to deal with this situation is to deal with the major problems that are of concern to the medical profession and deal with them head on.

Based on my discussions with a great many physicians around the province over the last year or so, I would have to say that they are concerned about whether or not the administrative procedures of the health insurance plan are unduly bureaucratic --

Mr. McClellan: And they are.

Hon. Mr. Timbrell: -- the expression that is used from time to time is “bureaucratic harassment” -- and there is a perception on the part of some of the profession that the schedule of benefits is not fair.

Mr. Nixon: Does the Minister of Education (Miss Stephenson) remember when she was president of the OMA? Those were the good old days. The government knew what to do then.

Hon. Mr. Timbrell: Let me deal with the latter first. There have been all kinds of studies written from various points of view on the question of physician compensation, and you can find a study to support just about any point of view you want to expound. It is pointless to try to settle that today. What I have asked the medical association to do, and it has agreed on this, is to work with ns to see if we can find a way to improve the existing structure for the negotiation of the OHIP schedule of benefits --

Mr. Nixon: Where is Richard Potter now that we need him?

Hon. Mr. Timbrell: -- so that it not only is fair, both to the taxpayers who through their premium’s and taxes are footing the bills and to the profession in compensation for its training and its skills, but also so that it is seen to be fair.

To deal with the second issue, the question of what is from time to time referred to as bureaucratic harassment, we have for the last six or eight months been working with the medical association reviewing all of the administrative procedures, because I put the challenge to them that I would like them to identify where they feel we are being unduly or unnecessarily bureaucratic. If in fact we can satisfy our mandate as described by the legislation and as overseen by the Legislature, we’re prepared to change our administrative procedures if we can make the day-to-day practice of medicine less bound by tape, forms and bureaucracy.

I think it’s better, looking at the whole province, to tackle those problems head on. I say to the member again that I feel the question of opting out has peaked inasmuch as we know that with the expiration of the Anti-Inflation Board controls there would be an increase. That has been borne out by the figures I gave members today.

Mr. Cassidy: Supplementary: Since a review of the structure of the OHIP fees was a recommendation of the select committee that met a year ago but was rejected by the Minister of Health, is the Minister of Health now prepared to stop any further opting out from OHIP until those discussions with the medical association have taken place? If not, can the minister explain what specific individuals and specific communities should do when they are faced with almost a solid wall of opted-out doctors?

Specifically, for example, what should people do in the southeastern end of Essex county where all six doctors in Amherstburg have opted out and where three of the four doctors in La Salle have also opted out, leaving only one out of 10 doctors in the region in OHIP? What should people in the Hamilton area do where 100 doctors opted out of OHIP on January 1, and where doctors in the Stoney Creek area are apparently not accepting patients who want to transfer from opted-out doctors? What should those specific individuals do in those specific situations when they find that the ministry’s averages don’t apply to them and they have not got universal access to insured medical services?

Hon. Mr. Timbrell: First of all, both Hamilton-Wentworth and Essex are well below the provincial average of opting out or well above the provincial average of opting in, depending on your point of views

Mr. McClellan: Let them eat averages.

Mr. Cassidy: Let them eat averages. Tell them that in Amherstburg. Where are their transit services to Windsor?

Mr. Bounsall: Answer the question. What about Amherstburg?

Mr. Warner: You’re distorting again.

Hon. Mr. Timbrell: The provincial average is 82.1 per cent of doctors hilling the plan directly --

Mr. Cooke: Answer the question.

Mr. Warner: Try answering the question.

Hon. Mr. Timbrell: -- and in Hamilton-Wentworth it’s 88.1 per cent, and in Essex it’s 89.8 per cent.

Mr. Cooke: What about Amherstburg?

Mr. Cassidy: What about Amherstburg? What about those people?

Hon. Mr. Timbrell: In those particular cases, and in any situation initially of course, we expect that the doctors and the patients will discuss the fees.

Mr. Warner: You don’t intend to do anything.

Hon. Mr. Timbrell: The member knows, of course, that not every opted-out doctor charges above the OHIP schedule. In fact, in many cases, they charge only what OHIP would reimburse, depending on the individual circumstances.

If the member knows -- well, obviously, the member has come across these particular cases. We will take them up with the medical association to see if something can be done.

Mr. Swart: Half a man. Cap in hand.

Hon. Mr. Timbrell: I would have to say though that inasmuch as I have not heard -- and I will check my files to verify this -- complaints from that area, people are apparently finding that it is not depriving them of medical care. They are able to work this out with the physicians in the community or they are travelling to other centres.

Mr. McClellan: Why would they write to you? You won’t do anything anyway.

Ms. Gigantes: You have told them it is no use complaining.

Mr. McClellan: So much for the principle of access.

Mr. Roy: Mr. Speaker: Accepting the minister’s premise that on a province-wide basis the universality of a plan is not threatened; and accepting the premise that in many situations in most areas of the province, if a patient is faced with a doctor who has opted out he can go elsewhere: can the minister explain the basis for saying universality is not threatened, in the case of a particular city and a particular county -- how far does universality go?

Is the minister suggesting, for instance, that if one can’t get the services of a specialist in Peterborough, the choice is to come to Toronto or Ottawa or elsewhere? Where does the minister draw the line on this famous principle of universality?

Secondly, would the minister tell us -- he has been Minister of Health for a while -- why he has not resolved the problem with the doctors on the question of bureaucratic weight, red tape and so on?

Why has the minister not resolved the problem of certain specialties within the profession? They apparently are getting more than their fair share of the fees, whereas the general practitioner is the one who is not being treated fairly.

Hon. Mr. Timbrell: If I may deal with that last point first, in fact in the last two rounds of negotiations with the medical association -- first the negotiations which resulted in the average 6.25 per cent increase last May 1, and then the negotiations which resulted in the average 6.6 per cent increase on January 1 of this year --

Mr. Cassidy: That is more than you gave the hospital workers, too.

Hon. Mr. Timbrell: -- the general practitioner was, in fact, given more than the average. In 1978 that was done by introducing what is known as the intermediate assessment and in 1979 by a further weighting of the increase.

The average increase for the GP will thus be somewhere around eight per cent plus increasing utilization, plus the increase in population; it will be well beyond the eight per cent

In the last couple of years, in fact, that direction has been very clear. We want to see more directed towards the general practitioner. This was a point, I think, raised by the member for Ottawa Centre. That was a point made by the select committee when they reported in October and a point with which we agreed.

Regarding the question of bureaucratic harassment: that committee first got going last June or July. They met on a number of occasions. They met as recently as this morning. I would anticipate resolving, in the not-too-distant future, some of the issues they have currently reviewed before they go on to some others. So we are making good progress there.

Mr. Cooke: Mr. Speaker, I would like to ask the Minister of Health how he can say in the case of a single-parent mother in Amherstburg or a senior citizen living in Amherstburg who doesn’t have transportation to Windsor, that their access to the health care system in this province is not threatened. The fact is that no doctor in Amherstburg, and only one doctor in Lasalle, is in the OHIP system in this province. How can the minister possibly say that in specific pockets of this province, like Amherstburg, accessibility is not threatened?

Hon. Mr. Timbrell: On two grounds, I guess: first, on looking at the larger picture and the growth and the use of the health care system it certainly does not indicate that people are being deterred from using it; and, secondly, on the basis of what people tell us.

Interjections.

Mr. Cassidy: How do you know we have had a 70 per cent increase in opting out?

Hon. Mr. Timbrell: We have not been hearing from many people about problems of access; in fact, very few.

WESTINGHOUSE CANADA

Mr. Cassidy: I have a question for the Minister of Industry and Tourism.

Given the fact that all evidence indicates that the Westinghouse switchgear operation in Hamilton is profitable; that the company was investing substantially in new facilities in that operation on Aberdeen Avenue up until three or four weeks ago; and that productivity is as high in Hamilton as in the counterpart United States plants: Will the minister at least undertake to ensure that the 700 Hamilton workers in that plant who are affected by the threat of layoff will be able to participate fully in the studies that the company is now undertaking; that they will have access, not just to public relations figures but to all the books on that operation so as to be able to determine how it can be kept going as a viable operation?

[3:00]

Hon. Mr. Grossman: Now, obviously, as the leader of the third party knows, I can’t ensure that any company, any union, any private individual in this country, must turn over bank accounts, private books and records to anyone else in this free democratic society. I’m not about to stand up -- and, for good political reasons, that happens to strike the fancy of the leader of the third party -- offer to change that fundamental principle, as we see it in this party, for this particular situation.

Mr. McClellan: Ask Norton about it.

Hon. Mr. Grossman: I’m not sure where the Leader of the Opposition is on this issue. I read him as saying both things during question period today. But I want to make my position perfectly clear. There’s no legislation which would require them to do that at this time, nor am I contemplating any legislation that would force them to do that.

Now, a study is going on. I think it’s only fair to point out that Westinghouse might have done what other firms, both multinational and Canadian, have done on other occasions: that is, begin by announcing a layoff rather than begin by announcing that a study is going on; announcing a layoff rather than begin by pointing out the good and bad parts of the current situation; and then pointing to the future in effect, saying, “Listen, there are some difficult times coming. We would like some co-operation from all those involved in this plant in this study and the study will be completed later this year.”

I can also add that if Westinghouse acts the way other companies have, most of that information ultimately is made available to us on a confidential basis. I might add that I’m quite proud of the record and the member’s seat mate, the member for -- where is he from? -- Sudbury, whatever, will be aware --

Mr. Speaker: Order. This is becoming a speech rather than a direct answer to a specific question. Do you have a supplementary?

Mr. Cassidy: Mr. Speaker, given that the minister is not prepared to confront the multinational corporation which is threatening to take a major part of Hamilton’s economy away; and given the fact that Ontario Hydro and many Ontario firms arc major customers of the Westinghouse operation, is the minister prepared to bring in legislation to this House in order to prevent the switchgear operation being closed, and to compel Westinghouse Canada to make it available as an ongoing operation to some other company, if Westinghouse is not prepared to keep in the business themselves?

Interjections.

Hon. Mr. Grossman: Really, I’ll presume that was a serious question and answer no. We’re not prepared to bring in legislation to stop Westinghouse from closing any particular operation. Nor am I prepared to recommend legislation which would stop any company or, indeed, any citizen of this country from changing its, his or her place of operations.

I might suggest to the leader of the third party that to be consistent he should suggest that we ought to bring in legislation prohibiting certain parts of the labour force from uprooting and moving to different communities, simply because that would cause a disruption to the labour force and the industry in that particular community. We’re not going to dictate to firms and we’re not going to indicate to labour people where they should work, either.

PROPERTY TAXATION

Mr. Epp: Mr. Speaker, I have a question for the Premier in the absence of the Minister of Revenue (Mr. Maeck).

Given that the Minister of Revenue invoked section 86 of the Assessment Act which equalizes assessments within classes, and which is his prerogative; given that 13 municipalities in Ontario have implemented section 86; and given that there are a great number of increases in property taxes and assessments within these municipalities -- in fact, in two cases, the increases have been over 1,000 per cent -- is the government giving consideration to developing a formula whereby these people, these various property owners, are going to have to increase their taxes by only a certain amount per year?

Hon. Mr. Davis: Mr. Speaker, there was a supplementary from the member for Frontenac-Addington (Mr. McEwen) which is the first supplementary I have heard from him in my whole career here.

Mr. Riddell: Just answer the question.

Mr. Wildman: Tell us about the Argonauts, Bill.

Mr. Makarchuk: You mean there is a member there?

Mr. McEwen: Point of order.

Mr. Speaker: There isn’t a point of order. There is nothing out of order.

Mr. McEwen: I was only interjecting that the procedure of the government side of the House is to increase each one by 1,000 per cent.

Hon. Mr. Davis: I will spend the rest of the afternoon trying to sort out what the honourable member really meant by that observation.

Mr. Martel: That was a former Tory. Did he belong to you fellows at one time?

Hon. Mr. Davis: I am very careful, I would say to the honourable member --

Mr. Speaker: Please don’t say it. Hon. Mr. Davis: Mr. Speaker, you do a terrific job here. You are quite right. I will try to direct my attention to the question.

As I recall the question, there is some suggestion that the minister invoke section whatever on the Assessment Act. I think if memory serves me correctly, the minister was requested to give the municipalities permissive opportunities to introduce this approach to market value assessment. I think the honourable member himself has, in terms of principle and philosophy, supported this. His party has been ambivalent in that maybe they want it and maybe they don’t, depending on where the by-election is, et cetera, et cetera.

Interjection.

Hon. Mr. Davis: Mr. Speaker, I am being interrupted by the member for Niagara Falls.

Mr. Speaker: Just ignore the interjections, please.

Hon. Mr. Davis: I can’t ignore him. I mean he’s such a delightful fellow. He’s probably in the conservative element of the Liberal Party. In fact that probably applies to about 50 per cent.

Mr. Martel: I was going to ask which ones weren’t.

Hon. Mr. Davis: I don’t know that you have any cause to suggest anything today.

Mr. Martel: Well, I don’t belong to that motley group.

Hon. Mr. Davis: I am not familiar with the exact provisions of the act but the honourable member has pointed out one of the complexities in the introduction of market value assessment. I have been in a community where we had market value assessment introduced some 10 years ago and there is the difficulty in the first six months or a year of sorting out some of the changes that take place.

I am not sure of this but I will check with the Minister of Revenue whether the municipality has the right to phase in some of these new tax situations. I think maybe they do. But I will certainly ascertain that from the minister and have him communicate directly to the member. I have read about some of the concerns in his particular community. The only encouraging thing for me is that he supports what is being done so enthusiastically. when we go to that great part of the province we say the local member is in favour of market value assessment and the municipality had followed his direction in seeing that it was introduced.

Mr. Roy: You might as well say that. You’ll never win --

Mr. Epp: Mr. Speaker, given that the municipality of which I speak is not one that I represent but is in the same general area, in order to correct the record, and given that the Premier on many many occasions in his speeches across the province makes the contention that his government is such a great --

Mr. Speaker: “Given” is not a question. where, when, why, how.

Mr. Epp: In view of the fact that he contends that his government is doing such a great job in administering the affairs of this province, how does he reconcile these preposterous, these tremendous increases in these various municipalities with that kind of contention that he’s a good manager of the affairs of the province?

Hon. Mr. Davis: I will take the first “given” as the part of the question that is most relevant -- where the honourable member does endorse the fact that we do a tremendous job in the governing of the affairs of the people of this province. I accept his congratulations and best wishes.

As it relates to the other part of his question, this is one of the problems that we raised in this Legislature. It’s one of these matters that was discussed, It’s interesting to see the leader of his own party wandering in to Scarborough West where his candidate can’t be elected, according to him, as a Liberal candidate; he has to run as an independent.

He is talking about the province imposing real property assessment when some of these members were in support of moving it ahead, Some of them were not, but I think it’s really a little bit strange to hear him come into this House now and tell us of the difficulties. we know of them and it’s up to the municipalities and ourselves to work together to see how we can assist in this rather complex issue, we have never minimized them. That’s why we didn’t move ahead on a province-wide basis, in spite of the fact that some people opposite have suggested we should in some areas of the province.

Mr. M. Davidson: Supplementary: Is the Premier aware that in the city of Kitchener alone taxes on some small businesses have increased by as much as 1,200 per cent, and municipal land held by the city of Cambridge in one instance rose by some 11,000 per cent? All of this in itself is imposing a great deal of hardship, not only on the community which must set its own tax base, but within the residential community on senior citizens who have been hit by maybe not quite as large an impact as that, but by a great percentage increase in many cases.

Rather than ask the minister as to whether or not there is a means whereby municipalities can implement the increase over a period of time, would the Premier suggest to the minister perhaps that where the situations are so serious he should be informing the municipalities that they should bring those increases in over a period of time rather than through a sudden increase?

Mr. Worton: Tell him how high is high.

Hon. Mr. Davis: I just want to make one thing very clear so that there is no misunderstanding. I’m sure the member didn’t mean to imply this in his initial question, but it wasn’t a case of the minister invoking or insisting, we were requested by the municipalities, which are presently faced with these difficulties to move into this at their initiative. It was their initiative.

I think the very distinguished member who asked me the question in the first place was perhaps part of a delegation that came to see us about it. I think I’m correct in that. Certainly he gave it his support; I can recall that.

Mr. Epp: That’s because the government froze assessments for eight years.

Hon. Mr. Davis: No one ever suggested there wouldn’t be some of these very obvious difficulties that have been related both in the press and here.

Interjections.

Hon. Mr. Davis: I’m sure the minister and his officials will be delighted to sit down with the municipalities to see what means can be developed to mitigate some of the major increases or escalations that take place. But the members opposite should understand that it’s great to talk in terms of principle and it’s great to be critical of us with respect to real property assessment or market value assessment, but it is incorrect, when the crunch comes, when we have done it on a voluntary basis, to come in here and try to tell us that we should have done it on a universal basis, or that we didn’t warn people as to the difficulties that are inherent in this.

Everybody talks about real property tax reform. A lot of people are in support of it, but it’s a very complex issue and one where I think we are wise in having certain municipalities move ahead to see what the problems are and see how we can assist them in straightening them out. I can assure the members the minister will be more than pleased to sit down with the heads of the municipalities and some of their officials to see in what ways we can be helpful. I lived through this for two years in my own area. I know some of the problems and they are not easy, although ultimately we were able, at least in that great region, to sort the vast majority of them out.

CO-PAYMENT FEES

Mr. Warner: I have a question of the Minister of Health. Since the decision regarding the placement of a patient should be based on a medical judgement, and for a chronically ill person that judgement should involve consideration of a chronic-care wing of a hospital, nursing home or a home-care program, and since this government has not provided these three basic types of care throughout the province, will the minister now withdraw his punitive $9.80 daily charge on those who are chronically ill?

Hon. Mr. Timbrell: I never cease to be amazed --

An hon. member: By trash.

Mr. Cassidy: We get amazed at the minister.

Hon. Mr. Timbrell: -- at the antics of that party opposite, a party which in October --

Mr. Pope: Page 46.

Mr. Cooke: Read the whole thing.

Hon. Mr. Timbrell: -- page 46, thank you very much -- caucused over the then draft select committee report. Finally, the member for Scarborough-Ellesmere and the member for Hamilton East on behalf of their caucus signed the report, which recommended that there be a per diem charge in chronic facilities to equalize the burdens of nursing homes.

In fact, we didn’t take their recommendation, inasmuch as it would have had the effect of charging from day one regardless of ability to pay, as in the case in some other provinces where, if one can’t pay, one goes on welfare.

Hon. Mr. Davis: That was the NDP Magna Carta.

Hon. Mr. Timbrell: Instead, we’ve come up with a system for chronic units or a chronic hospital which provides for a number of exemptions, particularly for those who are going to be rehabilitated back to the community, and is equitable and fair in comparison to a nursing home.

[3:15]

Mr. Riddell: That recommendation was made on the basis that there were other facilities.

Mr. Cooke: Or that there would be.

Mr. Warner: Continue with your distortion. Go ahead.

Hon. Mr. Timbrell: In those cases, as we have said repeatedly, we are prepared to approve additional chronic or extended care beds where the need is identified through the local planning process. That has come to being in Ottawa where recently we announced the approval for the conversion of the Ottawa General Hospital for 200 chronic beds; it has come about in Windsor where, through the agreement of the hospitals with the health council, additional chronic care facilities are being provided; and it will come about in a great many more areas as soon as the need is identified.

We are prepared, Mr. Speaker, as well, as was indicated in the speech from the throne, to expand the chronic home care programs this year in a number of areas. I will I have more to say on that later in this session.

Mr. Warner: Supplementary, Mr. Speaker: To the minister who refused to debate the report on the select committee on health care costs, does the minister realize that the committee agreed unanimously on page 37, and I quote, “that user fees by definition shift costs to those who are sick and therefore undermine one of the basic foundations of the scheme, but the committee contends to further penalize those who are sick, usually a condition beyond the control of the patient, would have a very adverse compounding effect upon what are already unfortunate circumstances”? And, further, the committee realized and agreed that there is no need for this callous penny pinching binge that the minister is on, since the committee agreed unanimously that our health costs in Ontario are not out of line, in particular when compared with the United States --

Mr. Speaker: The question has been asked.

Mr. Warner: -- they are considerably less, because we have a public health care system and they have a private one --

Mr. Speaker: The question has been asked.

Mr. Warner: -- but the minister is out to try to destroy it.

Hon. Mr. Timbrell: Mr. Speaker, this grand con job on the member’s part isn’t going to work. He knows as well as I do --

Mr. Cassidy: Don’t you speak of a con job. Hon. Mr. Timbrell: He knows as well as

I do that that section of the report was referring to the various submissions the committee had had, that it recommended a dollar per service -- a couple of dollars per service and real user fees.

Mr. Cooke: Read the whole report.

Mr. Warner: You never even read the report.

Hon. Mr. Timbrell: The member cannot escape the fact that the committee, after due consideration, and the member for Scarborough-Ellesmere in particular and his colleague, after caucusing the report, recommended that there be a per diem charge in chronic facilities.

Mr. Riddell: If other facilities were made available.

Interjections.

Mr. Speaker: Order.

Mr. Warner: The minister continues to twist and distort. Twisting and distorting isn’t going to win you anything.

Hon. Mr. Davis: Read the report.

Mr. Mackenzie: On a point of personal privilege.

Mr. Warner: You know it was done in the context --

Mr. Speaker: Order. Will the member for Scarborough-Ellesmere sit down?

Hon. Miss Stephenson: And resign.

Mr. Speaker: Order.

Does the honourable member for Hamilton East have a point of privilege?

Mr. Mackenzie: I think so, Mr. Speaker.

Mr. Eaton: Trying to get out of what he signed. now.

Mr. Mackenzie: Well, we will find out. I think it is a point of privilege, because I consider a slur on my position on that committee the comments just made by the Minister of Health.

Mr. Eaton: You signed something you didn’t really mean to sign.

Mr. Mackenzie: If the Minister of Health has discussed with his colleagues on that committee he will understand that the discussion on that $9.80 -- and there was never a figure on it -- that went on in that committee dealt very specifically with what was a loophole in the legislation that allows a family to put into an active treatment bed a person who should be in a nursing care bed when there are not enough facilities for those beds and get away with pocketing the money. That was the context of the argument and he should understand it.

Interjections.

Hon. Miss Stephenson: That’s not true.

Mr. Speaker: Order. Order.

I am sure that the honourable member and all honourable members realize that when a member rises on a point of privilege he has a responsibility to indicate which of his privileges have been abrogated. I fail to see that you have.

FARM TARIFF CUTS

Mr. Rollins: Mr. Speaker, I have a question of the Minister of Agriculture and Food. In view of the announcement of the federal government on reducing tariffs on farm commodities, what consideration will be given to the producers in the province of Ontario?

Hon. W. Newman: Mr. Speaker, yesterday the Honourable Jean Chretien released the tariff report in Ottawa. There were some reductions. It is quite interesting to note that, not because of any particular time limit, the reductions became effective as of midnight last night

It is also interesting to note that the tariff equities that we have been fighting for for three and a half years are going to be changed from a cents per pound or fixed rate to a percentage. We do commend the federal government for that.

In tariff reference 152 and the tariff hoard recommendations there were almost 300 recommendations put on the bargaining table. I have not had a chance to look at the 300 recommendations. I do know that some of them were not adopted by the government of Canada and it did not live up to the recommendations that it put on the bargaining table, but until I have had a chance to look at the total package, to analyse it and see what it will do for the horticulture industry in this province, I wouldn’t want to comment in depth on that.

On the reductions, I only have to look at today’s paper: “Tariff Cuts May Squeeze One Cent Off US Orange Juice.” May I remind members we are interested here, in Canada and in Ontario, in selling our products. When we find our products, like carrots, selling at half the price of imported carrots today, apples at almost half the price of imported apples, onions at about half the price of imported onions, that is the sort of thing they should be working on, and we should all he drinking apple juice, tomato juice, or grape juice here in this province.

Mr. Nixon: Supplementary: Can the minister inform the House if the other side of the federal announcement -- that is, increases in certain tariffs -- will be made applicable to protect some of the tender fruits and particularly the strawberry industry here? It is interesting to note that 90 days from now, unless something is done, the strawberry crop in this province will be lost unless there is some tariff protection. Is the minister using his good offices to apply this new policy to protect our own farmers?

Hon. W. Newman: Mr. Speaker, it is just unfortunate, as I said, the announcement last night said the reductions took place at midnight last night. The new increased protection or equities that we are asking for will not become effective until October 1, and will have to be done by legislation. So there will be less protection for our horticulture industry in the province of Ontario this summer than we had last summer. I think that is atrocious --

Mr. Nixon: I do, too.

Hon. W. Newman: -- when we have been fighting for this thing for thee and a half years.

JOB CREATION

Mr. Haggerty: Mr. Speaker, I would like to address a question to the Ministry of Industry and Tourism, as it relates to the mineral policy paper number 4, put out by the Ministry of Natural Resources, Towards Nickel Policy for the Province of Ontario. There are a number of proposals that were recommended by the study; seven in all. I want to know for example, if the minister has given any consideration to implementing some of them, such as to “encourage the refining in Ontario or Canada of the byproduct platinum group metals,” and to “intensify diversification of the Sudbury manufacturing base by encouraging the importation of Inco subsidiaries’ technical and nickel manufacturing expertise acquired through recent diversification, not now employed in Canada, for the purpose of creating new industry and employment in Sudbury”? Has the minister accepted any of these proposals, or when can we look to the minister to implement some of these recommendations to create jobs in the Sudbury basin?

Hon. Mr. Grossman: I will be discussing the matter further with my colleague, the Minister of Natural Resources (Mr. Auld), and I would expect he would have more to say to the House on that subject at a later time.

HOTEL DIEU HOSPITAL

Mr. Cooke: Mr. Speaker, a question of the Minister of Health: Is the minister aware of the fact that on February 21 of this year 14 patients in Windsor had to stay overnight in Hotel Dieu’s emergency room because there were no beds available in the hospital, and that in order to get rooms available the following day other patients had to be released before they were ready to be released? Further, is the minister aware that in the opinion of Dr. Frank L. Manforton, president of the Hotel Dieu medical staff, medical and legal risks are being taken in sending patients home prematurely, as well as in not admitting patients who should be admitted? Is this what the Minister of Health calls restraint of spending without a decrease in the quality of care?

Hon. Mr. Timbrell: The honourable member will know that at this particular time of the year, during the winter period, many hospitals experience their peak utilization of any point during the year.

Any decision to discharge a patient must be based on medical judgement. Of course, no physician is going to put a person in jeopardy. Likewise, the decision to detain a person in emergency overnight would be based on the best interests of that patient. But I ask the member to recognize that at this time of the year we do face these peaks in utilization that will result in some inconveniences --

Mr. Wildman: What about reserve capacity?

Hon. Mr. Timbrell: -- however, I am confident that the quality of the system is, in fact, being maintained.

MEDICAL SCHOOL ACCESS

Mr. Pope: My question is directed to the Minister of Education and Colleges and Universities. It arises from the Ontario medical school application service instruction booklet for the 1979 entering class, which is a guide for applicants to all medical schools in Ontario.

Of the five schools, three of them have geographical preferences. These preferences are set out in this pamphlet and in their own calendar material. The University of Ottawa openly gives preference to students who reside in the Ottawa-Outaouais area --

Mr. Speaker: Question?

Mr. Pope: McMaster University gives preference --

Mr. Speaker: Question?

Mr. Pope: My question is, how long has this open and co-ordinated discrimination existed against otherwise qualified students who reside in Ontario from Barrie to Moosonee and throughout most of eastern Ontario? Will the minister end it? Will the ministry compensate areas which have not had such favoured status by implementing compensatory geographical weighting factors of its own? Will the minister ascertains along with the Minister of Health, whether or not these policies have had an effect on the availability of trained medical personnel in northern Ontario, eastern Ontario and central Ontario?

Hon. Miss Stephenson: We will certainly attempt to determine whether, in fact, the policies which are enunciated now in these brochures have had any such effect.

I am aware that the University of Toronto and Queen’s University have no specific geographical policy in terms of the regions of Ontario affected.

It is my understanding that the universities, through the council of faculties of medicine, have attempted to ensure that there would be equal access to faculties of medicine for all students within the province by arranging that their catchment areas would be those designated within the document mentioned by my honourable colleague.

The University of Western Ontario specifically serves southwestern Ontario initially, then the remainder of the province. The university at Hamilton, known as McMaster, serves the Hamilton area, specifically, first and then northwestern Ontario. The University of Ottawa specifically serves the Ottawa-Outaouais region, which means, of course, that it is looking specifically as well at some students outside the province of Ontario. The faculties of medicine at the University of Toronto and Queen’s University state that they are to serve all of the students within the province of Ontario, with certain provisions made for some students from outside the province of Ontario.

If this in any way has proved to be an inhibition to the possibility of medical education for students from north-central Ontario and northeastern Ontario, we shall most certainly report this to the House. We will undertake that study.

Mr. Speaker: The time for oral questions has expired. I would just like to call members’ attention to the fact that we spent 43 minutes today on leaders’ questions and supplementaries.

Mr. T. P. Reid: How much on the answers?

Mr. Riddell: Is that the reason I can’t get a question on?

Mr. Speaker: That’s probably the main reason.

INTRODUCTION OF BILLS

FAMILY BENEFITS AMENDMENT ACT

Mr. Peterson moved first reading of Bill 11, An Act to amend the Family Benefits Act.

Motion agreed to.

[3:30]

Mr. Peterson: Mr. Speaker, I axe sure the minister is going to support this because it is something we feel very strongly about on this side of the House. It is a bill to provide equal status under the Family Benefits Act for men and for women who are parents of dependent children. We have an anachronistic law now and unfortunately, my bill does not clean up all of the irregularities in the Family Benefits Act by a long shot, Mr. Speaker, but it does go to address a specific one. There are a number of specific cases in this province at this time that need this help and I feel very confident the minister will address his mind to this and will support it because it is just and it is equitable and it is the only fair thing in the circumstances.

LANDLORD AND TENANT AMENDMENT ACT

Mr. Warner moved first reading of Bill 12, An Act to amend the Landlord and Tenant Act.

Motion agreed to.

Mr. Warner: Mr. Speaker, the purpose of the bill is one with which the committee agrees unanimously. It is to ensure that a landlord cannot prevent tenants from using a common room in order to meet with political candidates nor their representatives or those who are elected to office. It is introduced --

Mr. Eaton: We already did that in the act, what are you trying to pull?

Mr. Warner: -- because the present bill will not be through the House until after the by-elections. We ask that this bill be put on the order paper and dealt with by Friday.

ORDERS OF THE DAY

THRONE SPEECH DEBATE (CONTINUED)

Resumption of the adjourned debate on the motion for an address in reply to the speech of the Honourable the Lieutenant Governor at the opening of the session.

Mr. Eaton: Better get rid of your leader.

Mr. S. Smith: Mr. Speaker, the speech from the throne contained, as we have come to expect over the last several years, very little of direction, very little that is new, and very little to indicate to us the government has a sense of what’s wrong in Ontario and a plan for how to cope with it.

One could, of course, speak at length on a great many issues touching almost every aspect of life in the province and certainly every ministry but surely, in the amount of time that is reasonably at our disposal, the public would be better served and this House would be better served if in reply to the motion and in reply to the speech if we were to focus in greater depth on one or two matters rather than try to cover the broad waterfront of issues that affect us all.

I think the two matters which I would particularly like to share with this House, the matters on which I have some thoughts to present at this time, are fundamentally to do both with the industries upon which we all depend in Ontario; and the second matter, to do with the matter of electrical generation, the situation of Ontario Hydro.

Let us deal first of all with the question of our industrial situation in this province. We know that Ontario is the manufacturing heartland of this country and yet we know also that we have been losing manufacturing jobs in Ontario at an enormous rate. The thousands and thousands of jobs that are leaving Ontario and that are disappearing from the manufacturing sector have been well documented by the Science Council of Canada in recent studies. There seems to have been a kind of de-industrialization, about which I spoke in last year’s speech, in similar circumstances to those we find ourselves in today.

This de-industrialization finds us relying more and more, as a nation, on our raw resources and less and less able to compete in the world in the field of high technology manufacturing -- any kind of manufacturing for that matter. This is a very disturbing matter for Ontarians in particular, because we are, after all, the province that depends mostly on manufacturing.

It is interesting that as we have been sort of churning through this heavy going on industrial strategy, we have finally come to a real parting of the ways between the government of Ontario and the party which I have the honour to lead. We find two fundamental issues upon which we have very important differences of opinion and of policy. The first has to do with what I call corporate responsibility.

Let me take you back for a moment, Mr. Speaker, to the fundamental question of what is a corporation. A corporation is not a person. It should not be regarded as having the human attributes that each person has, each of us sitting here would have, each person going about his daily work would have. A corporation is a device, it is a means to an end; the end, of course, is the more efficient production of goods and services in a society and one hopes, ultimately, their faker distribution as well.

But the means to the end is, of course, the corporation by which we permit large aggregations of capital to occur with certain protections by law, certain protections with regard to tax, with regard to liability, and we allow these capital aggregations to come together with expertise, with initiative, with labour, to produce goods and services efficiently in a competitive enterprise for the good of society.

Let’s remember that. It must be for the good of society, and what we in the Liberal Party have said, for lo, these many years, is that there has to be an element of corporate responsibility, that the notion that corporations are fundamentally out to maximize profits for their shareholders is an accurate statement of how a system works and how, if you will, it is fuelled. That’s the motive source but it’s not the purpose of the system. The purpose of the system must still be the efficient production of goods and services and their rational and fair distribution in the society.

Mr. Wildman: In order to maximize profits.

Mr. S. Smith: My friends in the NDP feel profit is the end of corporations and I would suspect it is the only goal that would probably be seen by the Conservatives as well, but I don’t believe that. I believe the corporation is a device that serves society, and I believe that the seeking of profit, which is an excellent motive, is the motive force which allows corporations to, in fact, produce more and be efficient. If they did not seek profit then there would be no incentive to be efficient.

Having said that corporate responsibility is one of the things that divides the Liberal Party from the Conservative Party in Ontario, I want to expand on that a bit. We see corporate responsibility in a number of areas, but primarily four.

The first is responsibility, of course, to the planet, to the environment. It would be unthinkable that corporations should be allowed to despoil the planet, to render inhospitable the very means of existence, the very surroundings upon which we expect our children and their children to depend for life and for sustenance. So clearly corporations must have environmental responsibility as, for that matter, must all citizens.

Secondly, and this was at issue during our discussion during the question period and the ministerial statements today, there must be a community responsibility on the part of corporations. The tremendous investment which communities must make when corporations locate there are much clearer to see in small towns, in one- or two-industry towns, where, as we all know, the sewers and roads have to be put in, houses have to be built for the workers, schools and playgrounds have to be built for the workers’ children, and so on.

We can see very plainly in the one- or two-industry towns the enormous public investment that exists in a corporation. Of course, one can become a little more abstract and refer also to the educational endowment which is given to corporations, inasmuch as the people working there have been educated at the expense of the community. It is not difficult to see.

Sometimes, when you get into larger cities and when the infrastructure seems almost to exist separately from the industrial needs, it is not as easy to see that there is a community investment in each corporation. But there is indeed.

There are times in free enterprise when it is necessary to abandon a factory, when it is necessary even to abandon a whole industry. These are very unfortunate times, but they happen. If you did not have a free enterprise system which permitted this to happen, you would artificially try to keep alive enterprises which in fact were not producing well for society, and no one would be the long-term gainer in that situation.

None the less, there must be an accounting. There must be a way in which the investment of a community in a factory can be calculated and compared to the differences in profit that might accrue by closing down a plant in one place and opening it in another.

To take an extreme example, it would not be sensible to move a plant to make an extra $1 million for a corporation if it is clearly going to cost society $50 million to have that move occur. There has to be some kind of an accounting, some way that we rationalize these matters.

We see, therefore, that the time has come to recognize that communities have responsibilities to their corporations; that governments have responsibilities to treat corporations fairly, to recognize how the system works and to help them prosper; but also that corporations have responsibilities to communities. That is a very important matter. When the time comes that a corporation feels it must close a major plant, the day should be over when it can do that simply as a corporate decision, without any consideration for the community responsibilities which exist.

A third responsibility of corporations must surely be the responsibility to the labour force of the corporation. Over the years I have seen the barricade mentality by which the workers on one side and management on the other view each other with distrust and use whatever kind of protective and offensive devices they seem able to obtain by means of law or by means of persuasion. I find it very sad.

If this country is ever going to survive internationally, particularly in manufacturing -- upon which Ontario depends -- there is going to have to be a sense of partnership, a sense of mutual loyalty, between corporation management and worker. That is not going to come when corporations feel they can just shut down a plant and ignore the investment which individual working people have made throughout their lives in that corporation and in that plant.

Similarly, it is not going to come if labouring people insist on always being counted out and counted as outsiders when it comes to having to make some tough decisions to keep corporations viable. There must be a sense of mutual involvement Part of that can be sharing information with the representatives of workers. Part of that can be profit-sharing. Part of that can be share distribution. Part of that can be seats on decision-making boards and so on.

But surely the government ought to start to take some initiative to break down the barriers and to create an atmosphere of more mutual work, rather than antagonistic concern.

[3:45]

The fourth responsibility of corporations, I’m not ashamed to say, must surely be a patriotic responsibility. It must surely be a responsibility to the nation in which the corporation is attempting to prosper. It grieves me to see what has happened in that regard, but I’ll have more to say about that in a little while.

I said, at the outset, that there were two very important differences between the Conservative Party of Ontario and the Liberal Party of Ontario. The first is our sense of corporate responsibility. The second is the degree to which we are very deeply worried about, and very determined to do something about, the extent of foreign domination of our economy. I want to tell you, Mr. Speaker, that it has never been clearer that there is a very major difference between the government of Ontario and ourselves.

I have made some statements in recent days concerning the need for a code of behaviour for corporations, so that foreign-owned corporations would conduct themselves in a manner conducive to the benefit of Canada and of Ontario. These have been regarded with some derision and some fear on the part of the government, the fear being that -- and I quote the Minister of Industry and Tourism (Mr. Grossman) -- “in the international community, we will not be able to attract more branch plants to Ontario.”

I want to tell you, Mr. Speaker, that we do not need to attract more branch plants to Ontario; we need to help the Canadian companies that are struggling here now to get on their feet and become corporate enterprises that can compete in Ontario, in Canada and in the world.

Everyone knows it would make a lot of sense for this country to have a policy of lower interest rates so as to encourage more investment, so as to encourage more renewal of plants, so as to encourage more construction of housing and so on. We all know the benefits lower interest rates would bring; yet we’re locked into a situation where we have to have, over and over again, higher interest rates. What is the reason for that?

The reason given by the governor of the Bank of Canada is that our balance of payments deficit is so great that the only way we could keep from having a massive run on the dollar would be to raise our interest rates sufficiently that foreign money, mostly American, would come into the country to take advantage of these high interest rates, and, in coming into the country, would temporarily restore a balance which otherwise runs against this country in terms of our current accounts.

Yet why is money leaving this country so rapidly year by year that we require high interest rates to bring money in to balance that? What is the reason for the outflow of the money in the first place, the outflow that prevents us from having the kind of economic policy that would help us grow?

The reason is not a trade deficit because in trade at the moment we’re running a small surplus. Unfortunately we export mostly raw materials and that’s not good for the future of the country; but still, it’s a small surplus.

Hon. Mr. Davis: There’s a slight tourism deficit.

Mr. S. Smith: There’s a slight tourism deficit, indeed. There is indeed. People are fond of referring to it; it certainly is a problem, but it’s nothing like the real problem --

Mr. Nixon: All those Fort Lauderdale condominiums.

Mr. S. Smith: -- which is approximately $5 billion leaving this country in dividends, interest and service charges, management fees and other service charges, and profits, and going to those who own the bulk of industry but who are not themselves Canadians. That is the main drain on the economy of this country.

Hon. Mr. Davis: You are going to end up voting for Joe. You really are.

Mr. Nixon: You may end up voting against him, if you know what’s good for you.

Hon. Mr. Davis: I read Mel’s speech to your convention on the weekend. I said to myself: “The Liberal Party of Ontario now appears to support the Tories federally.”

Mr. Deputy Speaker: Order.

Mr. Roy: Not quite.

Hon. Mr. Davis: Did you read what he said?

Mr. Roy: The federal Tories have no economic policy.

Hon. Mr. Davis: Oh, come on. It was all directed at the government of Canada.

Mr. Young: Bill, he is just trying to separate himself from the federal Liberals; that’s all.

Mr. Deputy Speaker: Order.

Mr. S. Smith: The $5 billion which is being drained out of this country year by year will increase as each year goes by, so that added billions will be leaving our country. In order to make up for that, we will have to have massive trade surpluses or, of course, continue to increase our interest rates -- hurting our economy -- to attract more and more short-term or medium-term capital to temporarily balance the flow.

The investment we once needed in this country now has grown to the point where we are being drained daily by our foreign owners. We have come to the sad state of affairs where we must hope to raise our own interest rates high enough that the people to whom we owe all that money will be willing to lend some of it back to us temporarily so we will look okay on the balance sheet for the moment, knowing full well that means we will owe them even more a few years down the road. That is the terrible downward spiral that our country and our province are on.

Ontario, as a manufacturing centre, suffers the most from these high interest rates and from this drain on our economy. Ontario should therefore not be encouraging more branch plants in the province, but should be encouraging Canadian-owned enterprises to grow and to prosper.

These are two very vital differences between the government and the official opposition in Ontario: corporate responsibility and our attitude towards foreign domination of the economy.

Hon. Mr. Davis: Oh, come on. This is 90 per cent of the bailiwick of the government of Canada. It may be the position of the Liberal Party of Ontario, but not of Canada.

Mr. S. Smith: Yesterday I spoke of the need to have a code of corporate behaviour. I was told by the Minister of Industry and Tourism that he would like to see such a code. Such a code, said he, is just some type of silliness which would frighten away foreign investment. Heaven knows, we have enough foreign investment; but he does not want to frighten it away. He feels that kind of code would make us uncompetitive in seeking branch plants -- and he likes branch plants.

Hon. Mr. Davis: You don’t like branch plants, but I tell you there are a lot of people in Brampton who are delighted to be working at American Motors.

Mr. S. Smith: I will present to you today, Mr. Speaker, that code of behaviour for corporations.

The Premier went to Japan, and he came back terribly enthusiastic because Panasonic, if I remember correctly, was going to assemble a few pieces and possibly put them in a package in Ontario. He thought that was a wonderful thing: “Think of the jobs it would create.”

There are all kinds of Ontario industries dying to get the kind of backing and support so that they can go out and make an assault on the markets of the world, and they don’t get the support of the Premier. But Panasonic thrilled him.

Hon. Mr. Davis: We didn’t give them a nickel.

Mr. S. Smith: Unfortunately, he is not ahead of his time; he is well behind the times.

I want to set out today some of the main elements of our approach to economic policy. The first is to reiterate the industrial strategy which our finance critic, the member for London Centre (Mr. Peterson), and I have been speaking about for years now, from one end of the province to the other and in the Legislature.

There are nine major points and, at the risk of repeating some of the material that was in Hansard a year ago and two years ago, I am going to underline the nine major points of the industrial strategy which we are recommending.

First of all, we believe there must be, as I was saying earlier, support for Canadian-owned business. We must favour Canadian-owned business. If we are giving out money, it should be to Canadian enterprises. It should be for the clear purpose of making these Canadian enterprises truly competitive and making them the kinds of enterprises that will provide a future for our children. That’s the first element.

Secondly, there must be a code of behaviour. If foreign-owned companies are to be part of a general industrial strategy, then they must abide by a code of behaviour in which they act as Canadian companies should act. I’ll give an example, Honeywell has discovered and invented in Canada a certain device that has to do with lighting and lighting intensity. They can market that device throughout the world. Their parent company is apparently willing to do the research here, to let them do their own product development and market the product back into the United States and around the world.

If they’re willing to do that, then I would feel that they are acting in the Canadian interest with regard to that product. Under such circumstances, I am prepared to treat Honeywell or any other foreign-owned company on the same basis as a Canadian-owned firm. The key element for me is that the foreign-owned company would have to abide by a set of criteria which would indicate that its behaviour would be that of a Canadian-owned corporation. I’ll set out these criteria in a moment.

The third aspect of the industrial strategy concerns purchasing policies. The government of Ontario must adopt purchasing policies which are “buy Canadian.” I don’t simply mean putting up signs saying, “Shop Canadian” or “Turn Over a New Leaf.” That’s not the issue. The issue is to use the purchasing power of this government, Ontario Hydro, the municipalities, hospitals and school boards to buy Canadian.

Furthermore, we should also use the power we have over large mining corporations and large paper companies to make them buy Canadian pollution control equipment, and to make them buy Canadian in their pulp and paper equipment wherever possible. Give them whatever incentives are required to make them buy Canadian because it’s a good deal for us. In fact, the Canadian Science Council recently released a study to indicate that even if the product cost 76 per cent more, it’s more advantageous to the society as a whole to purchase the Canadian product than the foreign-made product. Their figures may be out, hut it’s obviously a good deal to buy Canadian.

Look for a moment at what we’re losing. A billion dollars is going to be spent this year on pulp and paper to renovate old plants and to buy new equipment. Yet about half of that money will go outside the country. Why should we have to import equipment for the forestry industry? Why should we have to import mining equipment, as we now do with regard to almost every large piece of mining equipment, when we used to export on a large scale? What happened to these industries in Ontario? How could the Conservatives for the last 36 years sit back and watch us lose industry after industry in the manufacturing sector in Ontario and still claim to be economic managers? We must purchase in Canada.

Fourthly, our industrial strategy must allow for specialization. We’re not going to get anywhere by simply supporting every kind of corporation in every kind of area. We must specialize in those things that we can do well in this country. To begin with, we should choose those for which there is a large domestic market. We’re a small country in terms I of population but we have a large domestic market in mining, forestry, agriculture, communications and transportation. There are large domestic markets in areas related to energy, to fisheries, to oceanography and to aeronautics. In areas such as those, we must focus I our strategy.

Fifthly, there is research and development. We must protect a certain portion of our home market for labour-intensive industry. But in terms of world competition the Third World will almost always be able to beat us in a labour-intensive sector. What we must concentrate on is technology-intensive industry. That means a vast increase in research and development. That is where we should be put ting government money. We must bring together the universities, the research establishments and the large companies with the potential suppliers to those large companies. Bring together Inco with the pollution control manufacturers. Bring together Texasgulf with the mining-machinery maker. Bring the universities in so they can do their research the way that fits our industrial strategy.

[4:00]

Sixthly, we have education and manpower planning. There is no point getting into manufacturing if we don’t have the people to do it. What an abject failure of the system of education in Ontario it is that even for the manufacturing jobs that are available today there aren’t the people available to fill those jobs, while hundreds of thousands of people are without work in Ontario. What an ironic tribute to the man who is now Premier and was Minister of Education that the education system that has cost us billions and billions of dollars has not prepared the people for the jobs that we knew perfectly well would exist. That’s what has happened.

We have spoken about apprenticeship. We’ve spoken about on-the-job training. We’ve spoken about the need for skilled trades and the need for polytechnic education where one can have a job-oriented education at the same time one is getting a good, reasonable, liberal arts type of education. What’s happened? We have one polytechnic in Ontario at a time when high-technology industries should be our salvation. We have one polytechnic at Ryerson. It is now seriously threatened in terms of its financial viability by the shortsightedness of the Davis government.

The seventh point has to do with financing. We must have a program that encourages our financial institutions to lend money to small and medium-sized Canadian enterprises. I hear so many times about the Canadian company that gets a loan to start up a business of $10,000, $15,000 or $25,000. They work really hard at it. They finally develop a business, refine a product line, start to make contacts, get the feel of where they’re going and see an opportunity for their product. Then they go back to the bank and say:

“I’ve got to get into production. I need $150,000 or $250,000.”

The bank says: “My goodness, you already owe so much, and you don’t have much in the way of assets that you can borrow against. Really, you don’t have a track record! Frankly, what have you ever done? You don’t have a great record of achievement, and that’s a pretty risky thing. I’ll tell you what my friend, why don’t you get some managerial expertise?” For which we may read, get an American buyer.

He comes back with a big American purchaser -- sometimes a Canadian purchaser, but more often an American -- who is willing to guarantee the loan. The loan is given to the American company, using Canadian money to buy out the Canadian company, so that this guy can finally get into production. At that point, if anything good comes of the product, it’s taken back home by the American company and further developed in the American home industry. That has happened time and time again. That is the story of industrial development in Ontario.

The province of Ontario has not so much as lifted one finger to do anything to get the financial institutions of this province to start to favour the new enterprises that are Canadian

Mr. Cassidy: How about the federal Liberals who revised the Bank Act?

Mr. Bounsall: That’s the Liberals’ fault.

Mr. S. Smith: -- and the small and medium-sized Canadian enterprises. They have done absolutely zero. They have not so much as spoken to the financial institutions about it, let alone introduce tax changes or other changes that might have encouraged the banks and trust companies to start to take a different attitude towards emerging Canadian businesses.

Mr. Cassidy: Why don’t you confront the Liberals up in Ottawa?

Mr. Eaton: They are the ones who control the Bank Act.

Mr. S. Smith: The eighth point has to do with an attitude --

Mr. M. N. Davison: Why leave the seventh point so quickly?

Mr. Cassidy: Yes, you were doing so well.

Mr. Kerrio: My God, they are awake.

Mr. Breithaupt: There are not many of them but they are at least awake.

Mr Watson: Seven is a lucky number.

An hon. member: Who wants to talk to Jack Homer?

Mr. Eaton: Some of your pals are falling asleep back there.

Mr. S. Smith: I take it that the members of the other two parties have detected that there’s a certain difference between the policy I’m putting forward and the policy that has been adopted by successive federal governments over the years. They’re quite right. There is, in fact, a difference. There is no doubt that the comments I’ve made about foreign domination of the economy represent a certain difference, but they most certainly also represent a very severe difference that we have with the government of Ontario.

There were the comments of the Minister of Industry and Tourism who was worried about whether or not the international investment community would take offence at a code of corporate ethics and perhaps not locate branch plants here. He expressed that worry only yesterday. There is a very severe difference between us.

If I may get to the eighth point in our industrial strategy -- and this point is a little less easy for us to deal with in government -- it has to do with the attitude of Canadians. Nothing got me angrier in the last little while than the fact that, one week after the United States recognized the People’s Republic of China, they bad Coca-Cola trucks there; they had an agreement to put in satellites and to teach them how to open up educational television channels.

What have we managed to do with China in the eight years since we recognized them? Sell them wheat. It would take a pretty inept individual to be unable to sell wheat to a hungry person.

What have we done? What has the government of Ontario done in its Ministry of Industry and Tourism? What has happened? Why could we not be opening up educational television channels in China? We have the expertise; we have trained teachers looking for things to do because of declining enrolment. We have lots of things we could have been selling to China, but we have not been doing it.

We have not been aggressive enough. It did not take the Americans a week before they were in there with all their products. They will have a McDonald’s in China pretty soon.

In Ontario, we are somehow just not in the game. A lot of that is attitude.

Maybe some of it is a reflection of a school system that has downgraded the idea of competition and produces people who think of themselves mainly as having a future working for large corporations, government, and service industries, rather than as entrepreneurs. Even our business schools hardly ever produce entrepreneurs in this province and in this country.

We could see this happening to us, and yet in our educational system we have done pitifully little in Ontario. We have not given guidance to people to lead them into entrepreneurial and aggressive, competitive kinds of occupations. We have been quite content to sit and bask in the enjoyment of this beautiful province without ever thinking about the future.

The ninth point has to do with labour-management relations. As I have said earlier, we have to change our system of labour relations. Employees have to be brought in so that they truly understand the financial position of the company they are working for. We cannot expect unions to settle for low wage increases on the basis that the company needs to be competitive, if the union members do not believe what the company is telling them and if the union members have never had the opportunity to be given reason to believe what they are being told. Unions should have a stake. Workers should be represented; they should have access to genuine information.

We should all be getting away from the barricades which, as I said earlier, have operated in the labour-management field. Neither unions nor management wish to do this. Many of the unions say they will be co-opted; they would rather be on the outside and fighting. Many management people say they do not want union people messing about with the decision-making of a company.

Today there is even an editorial in the Spectator saying that such a suggestion that working people might actually have a say in the affairs of a company is tantamount to socialism. In fact, they say I should apologize to the leader of the third party for stealing what they consider to be his ground.

Mr. Cassidy: When you come to the crunch, you never stand with the workers; everybody knows that.

Mr. S. Smith: There. You have just heard from the leader of the NDP -- did you hear that? -- if it comes to the crunch, will you stand with the workers? The old barricade mentality. Neither of the other parties and neither management nor labour seems to understand that we have to get away from the polarization; we have got to get away from the barricades. We are all in the same boat, and it is about time we started working together.

Government could give incentives to those companies that have share distribution plans, that have profit-sharing, that involve their workers in decision-making. There are things government can do in this regard.

That represents the nine points of industrial strategy which I am happy to share with the members of this House.

I promised the Minister of Industry and Tourism that I would present a code of corporate behaviour for foreign-controlled firms operating in Ontario. What I am putting before the Legislature is not intended to be a fully comprehensive code, but rather a framework in which such a code can and should be developed. The code would include at least the following components:

First of all, subsidiaries of foreign multinational corporations should at the minimum undertake research and development activities in Ontario in industries where the Canadian domestic market is large enough to justify such operations. I give as an example electrical generation, which of course we are talking about in Hamilton. Subsidiaries must be permitted to design, develop and market new products rather than only market existing products which involve no innovative research and development. That is the first sentence I would have in a code of corporate behaviour for foreign-owned corporations.

Secondly, subsidiaries should be permitted by the parent corporation to buy component parts and services under the most competitive market conditions, rather than being locked into mandatory purchasing agreements with the parent corporation. Frequently the subsidiary in Canada simply acts as a customer for the parts, components, design, services and management that are so-called expertise that it has to buy from its parent company. If the parts and components are available elsewhere, the company in Canada should not have to send large sums of money across the border unnecessarily; it should be able to buy at the most competitive price and value situation.

Thirdly, subsidiaries should be in a position to allow products developed in Ontario to be exported freely to all international markets, including the domestic market of the parent corporation. We shouldn’t just have companies interested in putting things out in a mediocre way for the domestic market. If they have the talent, if they have developed the products, they should be free to market these things on behalf of Canada, for the good of Ontario, elsewhere in the world including the home market of their parent company.

Fourthly, subsidiaries should ensure that Canadians form a majority on their boards of directors.

Fifthly, subsidiaries should be prepared to plough back profits into their Canadian operations in order to assist their growth and development.

There are two additional conditions that are part of this corporate code of behaviour which would apply to foreign-controlled and Canadian corporations alike. Firstly, corporations should acknowledge their responsibility to the communities in which they are located, and recognize that those communities have a vested interest in those factories and plants that cannot be moved or shut down with impunity. I spoke about that at the beginning of my response to the speech from the throne when I started earlier this afternoon.

Secondly, corporations should also acknowledge their responsibility to their work forces. Corporations contemplating disruptions to their work forces should be obliged to discuss any changes with their workers. They should not be allowed simply to announce layoffs or cutbacks, even in accordance with the law, and assume no responsibility for the impact of their decision.

Those seven points -- five that apply particularly to foreign-owned corporations and two that apply to both kinds of corporations, foreign-owned and Canadian -- represent for me the outline of a code of corporate behaviour, something the Minister of Industry and Tourism may scoff at but which I say is long overdue in Ontario.

All of the components I have outlined and possibly others could be worked out in consultation with labour and business leaders to ensure an environment is created that will provide the greatest benefit to the economy of this province.

Compliance with this code of corporate behaviour would be sought first through the use of moral suasion. I hope most foreign-owned corporations in Ontario have a large enough stake in this province to want to fulfil their role as good corporate citizens.

However, secondly, the government of Ontario must have a meaningful buy-Canadian policy. Non-Canadian firms would only be eligible under this policy if they demonstrated their willingness to behave like Canadian companies. In other words, if a company failed to adopt the corporate code I am recommending, then the government would not give it the favourable treatment it ought to be according to Canadian corporations, and which it would accord to such corporations under the industrial strategy I outlined a little earlier.

[4:15]

If the foreign-owned corporations are to participate in any of the benefits -- any of the investment changes, any of the tax changes, any of the purchasing policies -- then they will have to abide by the corporate code of behaviour. That is reasonable.

After so many years as a client state, surely the time has come for this country and this province to stand on their own feet and say to these people, who seem to own so much of our industry, particularly in manufacturing, “Look, we appreciate that you came in with your capital when we needed it. Now we want to work together. But we want you to act like good corporate citizens of this country and to take your responsibilities very seriously, indeed.”

Mr. Nixon: Come on, Jim, you agree with that.

Mr. S. Smith: An economic strategy for Ontario must be based, of course, on good government management --

Mr. M. N. Davison: What happens when they ignore your code?

Mr. S. Smith: -- of those economic and industrial resources under its direct control.

Mr. M. N. Davison: What happens when they ignore the code, Stuart?

Mr. S. Smith: I am being asked a question, Mr. Speaker, by one of the members of the third party. He wants to know what happens if they ignore the code. Basically, I thought I answered that question. But, for his edification and clarification, and because I appreciate his interest, I will simply say this: If they ignore the code, they carry on doing business, but they cannot get any of the benefits I am suggesting will accrue to Canadian-owned corporations as a result of a “buy-Canadian” policy. They cannot get any of the benefits in financing which will accrue as a consequence of our policies. They would not get any outright grants or any particularly favourable loans from the government of the province --

Mr. Watson: The Liberals would cut them out of the ballpark.

Mr. S. Smith: -- they would, in fact, continue to do business as it is everyone’s freedom and right to do; but they will, in fact --

Mr. M. N. Davison: Larry Grossman has nothing to worry about, then. That’s not going to scare anyone.

Mr. S. Smith: -- they will in fact not get the benefits that I have outlined.

The member says the Minister of Industry and Tourism will have nothing to worry about. He is quite right. Since there is no policy in the government of Ontario to favour Canadian businesses, there is no reason in the world why a multinational branch plant should have to worry about the government’s opinion of it. But, once you have a proper “buy Canadian,” “favour Canadian,” “support Canadian” industry policy, it becomes meaningful to be classified with those particular corporations. Then, I tell you, Mr. Speaker, the branch plants will be happy to respond to a proper code of behaviour. If they do not do so, they are on their own. They can expect nothing in the way of special treatment that the government will offer Canadian enterprise.

I think I have shown sufficient respect in taking a little time to answer the member’s question. I hope members will permit me to continue my remarks, because I want to move on to another topic.

As I say, an economic strategy for Ontario has to be based on good government management of those economic and industrial resources under its direct control. It is counter-productive, to say the least, to try to excite and influence the private sector of the economy into certain directions if, in the public sector, the government is stumbling in the opposite direction.

As I have already indicated, the most important economic resource under the government’s direct control is tax and fiscal policy. Eighteen per cent of Ontario’s gross provincial product is controlled by the Premier, Treasurer and cabinet of this province. Their record, of course, is one of gross overspending in relation to revenues, and a tremendous year-over-year building up of provincial debt. It would be absurd to expect the Ontario economy to be more efficient, to be more competitive, to be more investment-oriented, to be less inflationary, as long as the government of Ontario continues to drown it in red ink.

The practice, if not the policy, of the Davis administration has been to throw life preservers with one hand while pushing us under with the other. We have had countless protestations of reform and improvement but, every year, after the propaganda fog lifts, we see that the ocean of red ink is larger than ever.

Now we have a new Treasurer and his first major initiative is to throw a $100-million lifeline to the pulp and paper industry, an industry which, with rare exception, is enjoying good cash flow and profits, paying high dividends, and complaining that it cannot afford to modernize, to clean up its pollution and increase its productivity for the future. However, one should not, perhaps, be too harsh towards the pulp and paper industry. After all, it is only emulating the government of Ontario.

So much for the tax and fiscal policy necessary for a sound economic strategy. Let me turn now to the most important industrial resource under the government’s direct control, namely Ontario Hydro. No doubt about it, Hydro is big. One wonders sometimes if it is not bigger than the government itself. It is the second largest electrical utility in the western world. Its growth, evolution and success since 1906 have been a major reason for the economic development of this province. When the Premier and his colleagues thank divine providence and themselves, not necessarily in that order, for the miracles that have been wrought over the past 50 years, they might acknowledge the fortuitous presence of Niagara Falls.

It is precisely because Hydro’s success is essential to the further development of Ontario that we on this side of the House have been concerned to know what has gone wrong with Hydro and the government’s control over Hydro during the past 10 years. For something seriously has gone wrong and must be put right. It is no happenstance that a select committee of this Legislature has been exhaustively investigating Hydro’s affairs over the past five years -- perhaps one should say seven years, to include the Moog matter. It will no doubt be emerging from its mountain of evidence and documentation with some distilled view on what is wrong and what should be done about it. While we in the official opposition have come to some general conclusions, we await with interest the recommendations of the select committee.

Perhaps, however, I can give the House and the government some indication of how we view the problem. In that regard I can do no better than to cite some documents our research department found in our own mountain of Hydro material. These documents are rather old and I cannot say how we came by them. Presumably they arrived in one of the brown paper envelopes an opposition party receives from time to time.

The first document is apparently known somewhat notoriously within Hydro and the Ministry of Energy as “the Leighton letter.” It is dated November 9, 1970, and it was written to the then Premier John P. Robarts by A. J. G. Leighton, president of Resources Engineering of Canada Limited. Mr. Leighton was a consulting engineer whose career included work with Ontario Hydro. He had become convinced of the need for a provincially-appointed public utilities review and licensing board charged with the responsibility of studying all plans for the proposed construction of major electrical generating stations and of holding public hearings in order to receive briefs.

His letter to Premier Robarts was a suggestion that the Ontario government pursue such a policy. I might say parenthetically that one can see in Mr. Leighton’s argument the germ of new policy which eventually manifested itself in the Environmental Assessment Board. Premier Robarts thought well of the idea -- would that we had his leadership today -- and forwarded Mr. Leighton’s letter to the then Minister of Energy and Resources, the member for Burlington South (Mr. Kerr), and to the then chairman of Ontario Hydro, George Gathercole, with the suggestion that it merited “very full attention.” That’s the quotation from Mr. Robarts.

I do not know what the minister thought of it, which is hardly surprising, nor do I know except by inference what Mr. Gathercole thought of it. All we got in our brown paper envelope was a copy of a memorandum to Mr. Gathercole from Douglas Gordon, then general manager of Hydro, and a copy of a draft reply to Premier Robarts prepared by Mr. Gordon for Mr. Gathercole’s signature. The memorandum is brief and I shall read it to the House.

It is dated December 1, 1970, and reads:

“Last Friday, I suggested that we should forward our views on the Leighton letter to the Prime Minister and the honourable George Kerr. Attached is a suggested draft. I have tried to lay it on the line because we’ve had it if the government thinks like Leighton.”

The draft letter is rather long and I shall quote only the relevant portion. Mr. Gordon proposed that Premier Robarts be told -- and I quote: “There is one thing absolutely certain about Mr. Leighton’s approach. To follow it would result in brownouts and blackouts in Ontario within the next 10 to 15 years, a situation which currently exists in certain areas of the United States.”

I still quote from the letter: “Having let off steam, let me say that I am concerned, as I am sure you are concerned, with the problems of communication which continue to persist on Hydro matters; the changes which have taken place in the political, social and informational environment as to obscure the essentiality and achievements of Hydro, things which were a source of pride in the past. The pride which we once enjoyed in our achievement now seems to generate a negative response on the part of almost everyone, an attitude which apparently has its roots in increasing resentment and misunderstanding of our size and complexity and what we must do to continue to provide our vital service.

“There is an urgent need for Hydro and government to find a means of re-asserting the fact that Hydro expansion is absolutely vital to this province. Furthermore, we must communicate the fact that the driving force behind Hydro’s growth is the economy. Slow down the economy and you slow down Hydro; the converse is also true.”

Doesn’t it remind you of, “What is good for General Motors is good for the country”? I’m continuing to read from the letter. I’m continuing to quote, Mr. Speaker.

“There may be some merit in having an outside body hopefully validate the objectives, policies and practices of Ontario Hydro to the satisfaction of our detractors, but we should avoid at all cost the establishment of a body to provide, as Mr. Leighton suggests, a forum to challenge every move by Ontario Hydro.”

Well, Mr. Speaker, I do not know, as I say, if this letter was ever sent. It really doesn’t matter. My point in citing it is to show that the Hydro problem has been with us for a long time. Here, in a few paragraphs written in 1970 by the man who was and remains the chief bureaucrat of Hydro -- a paragraph intended for the Premier of the province -- are all the symptoms of Hydro paranoia which we have come to know so well: the sense of persecution; the sensitivity to criticism, real or inferred; the dedication to ever-expanding power and more power; the conviction that only Hydro knows best; the autocratic belief that what is good for Hydro is good for Ontario; and, of course, the ever-present threat that if Hydro is hamstrung in fulfilling its manifest destiny, then the lights will surely go out a few years down the road.

Well, those words, those threats of brown-outs and blackouts, were written almost 10 years ago. Certainly, Hydro has been hamstrung in fulfilling its manifest destiny in all sorts of ways in recent years, although, perhaps, not in quite the ways Mr. Leighton had in mind. If there’s one thing that’s absolutely certain today and for the next 10 years at least, it is that there is no need for the lights to go out in Ontario because of an inability to generate sufficient electrical power.

We have, Mr. Speaker, at this moment in Ontario, an installed generating capacity of 24,500 megawatts. That is 20 per cent over and above what is needed, even after allowing for a 25 per cent safety margin above peak demand. The excess capacity amounts to 4,036 megawatts which is 38 per cent of the 10,705 megawatts added to the system between the end of 1971 and the end of last year. This situation of growth over supply is not a temporary one. It will last until 1990, 12 years away. It will only disappear then if drastic stretch outs, deferrals and, no doubt, cancellations, are effected for further expansion projects now committed or planned for the next decade.

Mr. J. Reed: The biggest mistake in the history of the province of Ontario.

Mr. S. Smith: The cost of this excess generating capacity is enormous and staggering and I shall have more to say about that in a moment.

Let me first examine how the problem developed and how it was allowed to develop. The easiest and most convenient explanation, certainly from the government’s point of view, is to say that the problem exists because Hydro made an understandable mistake in its load forecast. That is to say, it overestimated what the future consumption of electricity in Ontario would be.

These load forecasts, made at the beginning of each year for 10 years I ahead, were consistently at the rate of seven per cent annual increment. The first departure from this magic figure occurred in 1977 when Hydro estimated the demand over the ensuing 10 years would increase at the rate of 6.5 per cent per year. The 1978 forecast was for 5.5 per cent; and the 1979 prediction for the next 10 years, issued a month ago, is for 4.7 per cent. It is, as I shall show, probably still too high.

[4:30]

The importance of these load forecasts is that they become the basis, the justification, and the rationale for the building of additional generating capacity, not just in the form of additional generating plants, but in the form of additional and larger transmission lines, of more transformers and switching stations, and of more administration and system infrastructure. After all, a generating station without wires hooking it into the system is a rather useless thing.

Thus, the reason we have an installed generating capacity of 24,500 megawatts today, which is 4,000 more than we need, is that Hydro estimated in 1969 that electrical demand would increase at the rate of seven per cent per year for the period 1969 to 1978, and built accordingly. In effect, it concluded that the installed capacity which existed in 1969 would have to be doubled by the end of 1978. I should, perhaps, add that the installed capacity is not quite as high as the original target because the building program has been stretched out and curtailed in recent years for a variety of reasons, one of which was that Hydro finally realized about a year or so ago that its load forecasting and expansion program are grossly over-ambitious.

How and why did this colossal mistake occur? The whole incredible story may be found if one looks hard enough for it in the mountain of evidence being piled up by the select committee on Hydro affairs. I shall attempt to cover only the salient points here.

Let me at the outset reject entirely the contention, so avidly seized on by the government, that forecasting is a seat of the pants, by guess and by God operation in which mistakes are bound to occur. Let me also reject the simpleton argument so frequently advanced by the Premier that forecasting is an esoteric, complicated business which the inexpert layman cannot he expected to understand.

There is nothing mysterious about linear regression analysis, to give forecasting its technical name. The statistical principles on which it is based have been known for a long, long time, and the mathematical formulae which it employs are well established. All one needs is a person trained in that branch of mathematics known as statistics and a computer to speed up the calculations. Indeed, for the more rudimentary calculations, all one needs is one of the more sophisticated pocket calculators available on the market.

Forecasting can be as simple or as complex as one wants it to be, depending on the assumptions made and the importance of the results obtained. One can, for example, assemble the peak consumption of electricity in Ontario each year for, let’s say the past 10 years, correlate such data in a computer or calculator and obtain a prediction for the consumption of electricity for the current year or, indeed, for any year in the future.

One can also obtain a measurement of deviation or variance from this prediction so that one can say with a remarkably high degree of probability of being correct that the consumption of electricity in any given future year will fall within a certain range. That range will be entirely accurate and confirmed by experience as long as the assumption on which it is based remains valid, namely, that the pattern of electrical energy consumption in the past will continue into the future. That would be forecasting at its most basic level.

A more sophisticated and useful approach would be to explain the consumption of electricity in the past in terms of various factors, so that a change in these variables will produce a change in predictions for the future.

Here, one definitely needs a computer to do the mathematics, but, once again, there’s nothing esoteric about it. Common sense, for example, suggests there may be a positive relationship between the consumption of electricity and the population of Ontario; between consumption and the rate of family formation; and between consumption and the number of children in classrooms. Common sense suggests there may be a negative relationship between the consumption of electricity and the price of electricity, because after all, the more expensive electricity is, the less consumers may be inclined to use it.

In fact, the list of possible variables is endless. By testing them against the recent past one can arrive at a set of variables which account for the consumption of electricity to a remarkable degree of completeness, and which permit the prediction with a very high degree of probability that a change in one or more variables will produce a certain change in the consumption of electricity.

It may be said this more complex approach to forecasting does not get ns very far because you’re still left with guessing how the variables may change. That is not how it works, Mr. Speaker. The correct technique is to arrive at variables with adequate lead time so that the time of their impact on the economy may be guessed at with reasonable precision.

Thus, we know when a change in the birth rate will show up in the number of children attending school. We know a new steel mill is not built overnight and a Toronto Dominion Centre is not built in a year. We have a very good idea as to when new commercial and industrial development will be coming on stream. All these things can be measured as to their effect on the future consumption of electricity, at least within the 10-year lead lime Hydro needs for major generating projects.

What then was the quality of the forecasting done at Ontario Hydro? Incredible as it may seem, only the most recent forecast -- the 4.74 per cent forecast for the next 10 years issued a month ago -- employed sophisticated statistical analysis. It is only in the past year or so that Hydro has had an econometric model of the economy capable of making such an analysis. All the previous forecasts were based on the crude and elementary projection of past experience, the illogic being that since the consumption of electricity increased at a certain rate in the past it will increase at the same rate in the future.

Honourable members who do not sit on the select committee on Hydro may suspect that I’m exaggerating. Let me, therefore, refer them to the testimony of L.T. Higgins, Hydro’s chief forecaster. It may be found in the transcript of the committee’s proceedings of February 28. Mr. Higgins, I have said, now uses a more sophisticated approach. He now uses seven variables in his equation to reach a prediction of future demand. Not one of them is directly related to the population factor. Instead, Mr. Higgins uses employment as a variable to capture changes in the population.

Employment, as every economist knows, is primarily a function of economic condition, not of population change, but perhaps it doesn’t matter because the load forecast predicted by Mr. Higgins’ new approach apparently doesn’t matter either. That forecast, the first one done by his econometric model, came up with a prediction of an annual increase of 2.6 per cent over the next 10 years. Mr. Higgins put it up to 4.7 per cent as an arbitrary judgement call, simply because he didn’t think 2.6 per cent would be right. He didn’t just select a high degree of variance from the forecast of 2.6 per cent; he simply decided that the demand for electricity in the 1980s will be 80 per cent higher than the figure produced by his statistical analysis because he didn’t believe what his computer was telling him.

Again, I refer honourable members to the select committee’s transcript of February 28 if they feel, as I’m sure some do, that I may not be recounting Mr. Higgins’ position correctly. On page HA-1220-2, they will find him saying: “I have some quite strong views about the presentation of models. I have some quite strong reservations as to how good or bad they are, and I make no apologies for making judgements.”

In short, it is Alice in Wonderland. For years, Hydro based its load forecasts on a method and a reasoning that offends common sense. Then, when it has finally developed techniques more or less adequate to the task, it refuses to believe the results. Why? Surely the explanation is obvious, however unpleasant. It is that Hydro is not serious about load forecasting. It has never been serious about it. It does not want to make the best and most accurate prediction it can about the future demand for electricity. It wants, rather, to make the highest prediction it can in order to expand as much as it can.

If this sounds extreme, I invite honourable members to consider the statement issued last week by the chairman of the Royal Commission on Electric Power Planning. The commission is holding hearings on the need for bulk power facilities in southwestern Ontario and, to that end, had asked Hydro for in-depth information on several factors which, in the commission’s view, would be important determinants of the electrical load growth in that part of the province. Specifically, the commission wanted Hydro’s analysis of population growth, housing starts, the electrical needs of industry and agriculture with special reference to new industries, and the additional electrical needs of the commercial sector. Honourable members will recall that all this would fall within what I have called the common-sense approach to load forecasting.

I quote from Dr. Porter’s statement: “We concluded that the information supplied by Ontario Hydro was inadequate for our purposes on several grounds, not least because it was extremely difficult to understand, even by a former professor of electrical engineering. This view was fully endorsed by several outside consultants.”

May I say parenthetically that I am sure Professor Porter has the sympathy of the members of the select committee on Hydro affairs.

The Porter commission then prepared a comprehensive set of questions for Hydro to answer. I quote from page three of Chairman Porter’s statement: “Unfortunately, although the replies to the majority of the questions assist in clarifying the original submission, the reply to what the commission regards as the central question is not satisfactory.”

The central question was whether Hydro uses population growth rates, housing starts and so on in its forecasting process, and if so, whether Hydro could provide such estimates to the commission. That is a reasonable question. On what does Hydro base these forecasts? Do they use housing starts and population growth, and if they do and other such reasonable estimates, would they put those assumptions in front of the chairman so he could understand them?

The chairman concluded as follows, and I quote what Chairman Porter said: “Estimates of such factors and their relationship to electrical growth represent the type of information? Excuse me. It seems important to understand this correctly.

The chairman felt that Hydro’s response was simply not satisfactory with regard to the central question and here is what Hydro’s response was. The question was a simple one. What do you base it on? Do you have the estimates of housing starts, population growth and so on? Could you give them to us?

Here is what Hydro said:

“Estimates of such factors and their relationship to electrical growth represent the type of information which is useful when an end-use or explanatory approach is being used in forecasting. This has not been the approach taken by Ontario Hydro, with the result that the data gathered for Ontario Hydro’s load forecasting is not of this type and has not been organized in this way.

“However, the load forecasting methodology used by Ontario Hydro does rely heavily on estimates of local load growth provided by Hydro’s wholesale customers, the municipal utilities, by direct industrial customers and by Ontario Hydro’s regional offices for retail areas services directly by Ontario Hydro. Embedded in these estimates are judgements based on first-hand knowledge of the demand for electricity and local activities, factors or trends which will change these demands.

“During its participation in the regional hearings, it is intended that Ontario Hydro’s regional personnel will be presenting for discussion with the commission the local information which appears most pertinent to load growth in certain key areas in southwestern Ontario.”

What does that mean? They are saying they don’t base their load forecasting on such reasonable factors as housing starts, population growth, family formation -- none of those things. They base it on what their customers tell them they think they might need as years go by.

When one analyses that response it means simply that Hydro estimates the future demand for electricity in Ontario by asking its own people, the municipal hydro utilities and so on, by asking itself. It means that Hydro knows best.

In short, Hydro supplies what Hydro demands. If we search for the reason, I suggest it is because there has developed within Hydro, over the years, a messianic complex to save Ontario.

The House will remember what Douglas Gordon proposed to tell Premier Robarts in 1970: “There is an urgent need for Hydro and government to find a means of reasserting the fact that Hydro expansion is absolutely vital to this province. Furthermore, we must communicate the fact that the driving force behind Hydro’s growth is the economy. Slow down the economy and you slow down Hydro. The converse is also true.”

“The converse is also true.” I invite honourable members to consider the implications of the comment. There is a certain credibility to it. No one can deny that Hydro is a colossus. It buys hundreds of millions of dollars’ worth of machinery, equipment and supplies every year. Directly and indirectly it employs thousands upon thousands of workers. It borrows billions of dollars on the credit of the province. It is not too much to say that the fate of the Canadian nuclear industry rests in its hands.

Hydro is indeed very big, very powerful. The converse is not automatically true. What is good for Hydro is not necessarily good for Ontario because we cannot afford the cost and economic waste of having a state within a state.

[4:45]

Mr. Kerrio: Created a monster.

Mr. S. Smith: I say “economic waste” advisedly. The cost of overexpanding our electrical empire, which this government accepted, condoned and is now championing, today stands at over $2 billion. In five years’ time, even with further deferrals and cutbacks, it will reach $5 billion. This money has been raised and will have to be raised by issuing Hydro bonds. The interest cost today is of the order of $200 million a year. in five years it will be $500 million a year. When the bonds mature their face value will have to be rolled over by the issuance of new debt and the payment of further interest charges. No one can say precisely when, if ever, the cost of this colossal mismanagement will be liquidated and disappear from Hydro financing and from the Ontario economy.

All one can say is that the economy and the electrical consumers of Ontario have been saddled with a bill that will total billions of dollars -- I repeat, billions -- at the end of the road. Needless to say, the Premier and his colleagues are not admitting to that kind of blunder. They have made a virtue of necessity and are contending that two much electrical power is good for us. It is even somehow a strategic answer to the ayatollah of Iran. Besides they say it is just a “temporary” surplus of generating capacity, to quote the Treasurer, which will only cost Ontario households a few cents a day.

I must confess that I am intrigued by this strategic conflict between the Premier of Ontario and the ayatollah of Iran. I shall have something more to say about it in a moment. Let me first however, deal with this temporary surplus which is only costing us a few cents a day. The Treasurer, standing in for the Minister of Energy who was understandably absent, told the Ontario Municipal Electrical Association and the Association of Municipal Electric Utilities last week of the wonderful “security” which comes from having so much excess generating capacity, which will cost a $100 million a year or about three cents a day for the typical residential customer in the province. He didn’t say how long this $100 million a year or three cents a day would have to be paid, but a close reading of his remarks reveals an admission that the temporary surplus will last until 1990. I trust the Premier will point that out to the ayatollah of Iran because I think the ayatollah should understand that we are protected from him for a very long time to come.

Mr. Breithaupt: An embarrassment of riches.

Mr. S. Smith: Meanwhile, back to the Treasurer and his $100 million a year or three cents a day. Even for a government notorious for its fun with figures, even a government whose Premier didn’t even know what the provincial debt was and had the nerve to criticize the opposition for telling him what the provincial debt was, even for that kind of a government and recognizing that a $100 million a year would be cost enough, this particular figure is so blatant in its deception and hypocrisy that I’m forced to challenge it.

I do not mean merely to show that the true cost is much higher, but primarily, because it provides an insight into the political problem which this Legislature faces. The Treasurer’s three cents a day for a typical residential customer is simply the bottom line summary of an analysis presented by Hydro to the select committee on Hydro affairs. The analysis will be found on page 9(a) of Exhibit D-89 in the committee’s record. I invite honourable members to study it carefully. The first thing they may note is that it identifies Hydro’s current excess capacity to be 3,400 megawatts and they may remember I have said it is 4,036 megawatts, a rather significant difference.

My research people arrived at 4,036 megawatts by reference to information supplied by Hydro too. They obtained the current installed capacity, they obtained the peak demand this winter, they added 25 per cent reserve margin to the peak demand and they deducted the total from the installed capacity to get an excess capacity of 4,036 megawatts.

All these terms and concepts have been standard in Hydro operations for years. But when we examine Hydro’s own analysis of its excess capacity, what do we find? We do not find a figure for peak demand this winter, we find a figure for something called “firm peak load.” It just happens to be some 500 megawatts lower than the consumption which was actually experienced. We do not find a figure for installed capacity. We find rather a figure for something called “actual capacity.” It just happens to be 1,200 megawatts less than installed capacity. Presumably there is installed capacity which is not actual -- which does not exist. Perhaps then the Treasurer will assure us that, having installed it, we don’t have to pay for it because it’s not really there.

The member for Prince Edward-Lennox (J. A. Taylor) has a great look of relief on his face that he doesn’t have to cope with Hydro when it tells him installed capacity and actual capacity are different, even though we’ve got to pay the shot for the installed capacity.

Mr. Nixon: He holds Hydro bonds. That’s why he’s so relieved.

Mrs. Campbell: In trust.

Mr. S. Smith: By introducing new nomenclature, Hydro is able to get its excess capacity down to 3,400 megawatts, which is bad enough one may say, but hear the rest of it. Hydro then proceeds in Exhibit D-89 to estimate the cost of its excess capacity by assuming that if it had estimated current demand correctly back at the turn of the decade, it would never have built the last four units of the Nanticoke generating station.

As honourable members know, Nanticoke is a coal-fired station with lower capital cost than a nuclear station. There is, I believe, a Hydro exhibit somewhere in the select committee’s record in which this cost analysis is worked out on the assumption of not having built the Bruce A nuclear station, but the end result was too costly for Hydro’s taste arid Nanticoke was substituting what we might call the authorized and cheaper version.

According to Exhibit D-89, the last four units of Nanticoke have a capacity of 2,100 megawatts and cost $391 million to install. Therefore -- and this is Hydro’s logic, not mine -- 3,400 megawatts of excess capacity have cost about $635 million. The interest, depreciation and overhead on this capital cost comes to $101 million per year which the Treasurer has reduced, no doubt for the sake of simplicity, to $100 million a year.

Hydro sold 9.9 billion kilowatt-hours of electricity last year, so this cost of $100 million a year applied to last year’s sales comes to 1.12 mills per kilowatt-hour. Since the typical residential user consumes about 9,600 kilowatt-hours a year his extra cost is about $10.80 per year, or about 90 cents per month, or about three cents per day. That’s what Hydro says. Even if one believed that the cost of Hydro’s overexpansion is $100 million a year, that three cents a day would represent only the residential share of the burden.

Residential sales accounted for only 26 per cent of all Hydro’s sales in Ontario last year. Who then is going to pay for the remaining 74 per cent, which comes to $74 million a year, if the total cost of $100 million is accepted? The Treasurer didn’t mention that in his speech last week. Somehow the Premier forgot about it too when he was so anxious to have the House and the voters understand that protecting us from the ayatollah would only cost “some cents per week.” Obviously, the industries, the businesses and the farms of Ontario will have to pay the $74 million per year. Perhaps some of them will be forced to absorb it in their costs of production, in which case the Treasurer may be able to inform us as to the expected loss of corporate income tax revenues.

We on this side of the House do not accept the government’s cost estimate of $100 million a year. The true figure is $320 million a year. I want to put on the record just how we arrived at this I cost. There is nothing mumbojumbo about it.

Ontario Hydro is required to publish a financial statement every year. It is also required to publish a prospectus when it issues new bonds. These documents report for each fiscal year the value of Hydro’s fixed assets at cost.

We’ve used these documents in estimating the costs of Hydro’s overbuilding -- with one addition. Since the financial statement of 1978 is not yet available, we’ve made use of Exhibit D-77 in the select committee’s record. Exhibit D-77 is a Hydro submission which contains the value of Hydro’s fixed assets at cost for the year ending last December.

Earlier in my remarks I made the point that excess generating capacity does not simply mean excess generators. It includes transmission and distribution capacity as well as administrative infrastructure. All these things come under the heading of what Hydro’s financial statements call “fixed assets in service.”

I also noted earlier in my remarks that between the end of 1971 and the end of last year Hydro added 10,705 megawatts of generating capacity to its system. This was a net addition. It may be easily calculated by deducting the installed capacity at the end of 1971, namely 13,795 megawatts, from the installed capacity at the end of 1978, namely 24,500 megawatts. The value at cost of Hydro’s fixed assets in service at the end of 1971 was $4,286 million. The value at cost of fixed assets in service at the end of 1978 was $9,639 million.

We may, therefore, legitimately say that the difference, namely $5,353 million, represents the cost of adding 10,705 megawatts of generating capacity to the system over that period of time.

I have already said that Hydro’s current excess capacity is 4,036 megawatts and I have explained how this figure was arrived at. This represents 37.7 per cent of the capacity added to the system since 1971. Its cost, therefore, represents 37.7 per cent of the cost of those additions, or $2,018 million.

The annual cost to Hydro customers of this overexpansion may, therefore, be calculated as follows: interest at approximately 10 per cent, $202 million; depreciation of the assets on a 30-year-life basis, $67 million; maintenance, administration and other overhead, $51 million; total per year, $320 million.

Mr. Peterson: Disgraceful. Terrible.

Mr. J. Reed: Shame.

Mr. S. Smith: I may say, Mr. Speaker, that in calculating this amount we have used exactly the same formula as employed by Hydro in its submission to the select committee. Let’s be clear on that. It’s not $100 million and $100 million is not three cents a day. There is an additional $74 million they don’t even think about when they talk about three cents a day. It’s not $100 million anyway, it’s $320 million, and that’s only the situation to this date.

What does this extra cost mean to the typical residential user of electricity in Ontario? If it were spread over all the energy sold by Hydro in the province last year it added 3.56 mills per kilowatt-hour to the bill. For the typical residential user this amounted to $34.19 in a year, or 9.4 cents a day. The average residential hydro bill last year appears to have ranged between $280 and $300 for the year. The cost of the excess capacity was, therefore, about 12 per cent of the average bill, and that’s just the excess capacity right now. There are other errors Hydro has made with regard to the heavy water plant. There are other errors in the excess capacity of tomorrow and some of the commitments already made and cancellation charges which we are already paying for today. That 12 per cent represents only the one error. There are many other errors and, frankly, if you put them all together it comes closer to 15 per cent.

Small wonder that hydro rates are going up -- and this is just the cost of the excess capacity which is installed today. By the end of 1983, as I indicated earlier in my remarks, it will be two and a half times worse.

I shall conclude this portion of my reply with a final observation on the financial cost. Hydro’s non-hydraulic generating capacity is generally capitalized and financed over a 30-year period. That means, roughly speaking, that the $320 million annual cost of Hydro’s current over-expansion will have to be borne for 25 to 30 years. We are, therefore, looking at the expenditure of $8 million to $9 million before the burden of this mistaken and misguided policy is lifted from the economy. During the latter part of this period we will, hopefully, get some electrical power for our money, but for the earlier part we will not get a kilowatt because we can’t use it. We don’t need it and we never did. Our only hope is to sell as much as we can to our American neighbours, but it is a very faint hope because all the evidence indicates they don’t need it either.

It is very amusing to think about how the government has been rushing to the defence of Hydro saying, “Isn’t it great that we’re overbuilt, because it’s necessary security against what may happen in Iran,” and then they’re turning around and trying to sell firm power to the United States. But if we needed that necessary security, which of course we don’t -- it’s a farce, the government knows we don’t, they’re clearly putting the best face they can on a bad situation -- but if, in fact, they believed that this was a wonderful extra security we had, why are they trying to sell it to the States? However, that sort of little contradiction doesn’t disturb the government of the day, of course.

[5:00]

Mr. J. Reed: Typical Tory management.

Mr. S. Smith: Anyway, our only hope is to sell as much as we can to our American neighbours, but that is a faint hope, as I say, because they don’t need it either.

The Premier and his colleagues say, “Remember the ayatollah.” I quote from the speech from the throne: “Foreign political instability makes it mandatory that we continue policies and programs which safeguard and enhance Ontario Hydro’s production facilities as a future guarantee of domestic supplies.”

What can this possibly mean, Mr. Speaker? Is there electricity coming into Ontario that might be lost because of political instability abroad? Hardly. How can the ayatollah from Iran threaten the security of Ontario’s supply of electricity? It is very strange.

When the OPEC countries created the oil crisis of 1973 Ontario Hydro thought it would be good for Hydro, and of course what is good for Hydro is good for Ontario, they say. Mr. Higgins said as much about it being good for Hydro to the select committee on Ontario Hydro affairs. He said he thought the oil crisis of 1973 would stimulate the demand for electricity in Ontario and would help the Ontario economy generally. Apparently it never occurred to him that the 1973 crisis, with its staggering impact on oil prices generally, would hurt Ontario just as it hurt all the industrialized economies in the world, and that less electricity would be needed. Now we are hearing the same nonsense from the

Premier and his colleagues: “Ontario Hydro’s production facilities must be safeguarded and enhanced,” they say, “because the ayatollah has returned to Iran.”

If there is any rationale to this ayatollah business, it appears to lie in the belief that electricity can be substituted for oil to a significant degree in the economy. The Globe and Mail, for example, has suggested, apparently quite seriously, that the railway system could he electrified, and asked me to place my trust with Hydro rather than with Tehran. I notice however, that the Premier and his colleagues imply in a vague way that there are great possibilities for substitution, but they never actually use the term.

By the way, just to put the rest of the question of the railways, if we are going to electrify the railways, it would be about a 30-year project. We would have all the time in the world to build the generating capacity we would need once it is decided to undertake something like that. It is ludicrous to say that we have to have billions of extra generating capacity sitting here like museums with nothing to do but drain the money out of the ordinary ratepayers of the province of Ontario because somebody, some day 30 years hence might decide to electrify railways and that this would be some kind of protection against the ayatollah from Iran. What nonsense! Never have I heard worse nonsense spoken in the Legislature of Ontario than that which the Premier has offered us on that subject in recent days.

Mr. Breithaupt: Or in the Globe and Mail.

Mr. S. Smith: Or in the Globe and Mail editorial for that matter, but it wasn’t spoken in the Legislature.

Mr. J. Reed: It is the Bermuda triangle again.

Mr. Martel: It is the ayatollah Lougheed.

Mr. S. Smith: You are right.

Perhaps they are aware, Mr. Speaker, of some awkward echoes from the past. On June 5, 1978, for example, the Ministry of Energy gave its views on substitution to the National Energy Board. You understand now, the Premier is telling us we need all this extra electricity to substitute it for oil we might not get. Here, on June 5 of last year, is what the Ministry of Energy said on that subject to the NEB:

“The extent to which the electrical energy can be technically or economically substituted for other energy forms in Ontario is not large, and is unlikely to substantially reduce the consumption of petroleum products.” Indeed, the ministry declared the government of Ontario’s vehement opposition to any federal attempt to promote the substitution of electricity for oil and gas in no uncertain terms.

I quote again: “Federal policies designed to increase the substitution of other energy forms for petroleum products which necessitate increased provincial investments such as for electrical generation and renewable energy must not interfere with provincial financial management.” Provincial financial management, of course, is a sacred cow of provincial autonomy. Apparently there can be no federal interference with it. The Premier, the Treasurer, and Ontario Hydro are mismanagement enough.

The Ministry of Energy gave its view on substitution to the National Energy Board less than a year ago. It apparently does not see any reason to change them just because the ayatollah is loose in Iran. Here is the conclusion in a document entitled, substitution of Electricity for Oil Products and Natural Gas, submitted by the ministry to the select committee on Hydro affairs on February 23 last. Now, please understand, Mr. Speaker. You will remember the Premier standing in his seat to tell us that because of the problems in Iran we were lucky to have all this extra generating capacity, presumably to substitute for oil. That is the only possibility I can think of, if there is anything rational in what he said.

I have already told you, Mr. Speaker, that the Ministry of Energy in June of last year said that such substitution was unlikely. Here’s what they said on February 23 of this year: “The preceding analysis deals with the potential for substituting electricity for other energy forms over the next 20 years. Despite considerable potential for such substitution in the residential, commercial and industrial sectors, there are numbers of factors that will act to constrain the degree of actual substitution: relative prices, existing infrastructure investments, including housing and conventional energy supply prospects. It can be expected” -- I’m still quoting -- “over the projection period that both the technology and the economics of renewable energy will improve. As a consequence, renewable energy will be in a position to meet an increasing, although still relatively limited, share of energy needs. The net effect will be a tendency to moderate the requirement for an increased use of electricity.”

Now, some will say the Premier is not really concerned about the ayatollah in Iran; his concern is over the sheikh in Alberta.

Interjections.

Mr. Makarchuk: The ayatollah in Alberta as well.

Mr. Warner: Ayatollah Lougheed.

Mr. Makarchuk: Ayatollah Lougheed would be more appropriate.

Mr. Hennessy: When are you going on TV?

Mr. S. Smith: If so, you will understand that I say --

Mr. Hennessy: You and Cassidy, what a team. Starsky and Hutch.

Mr. S. Smith: I thought there was a comment from the member -- for Fort William, is he? I’m afraid the member for Fort William, poor soul, has had just one too many blows to the cranium, I suspect.

Mr. Makarchuk: You should have worn your helmet, Mickey.

Mr. S. Smith: In any event, one of the advantages, of course, of having been jostled around, shall we say, in that part of the anatomy for some rime is that at least he remains alert during these presentations. That’s more than you can say for most of the people over there.

Mr. Eaton: That is pretty hard to do the way you have been droning on.

Mr. S. Smith: Most of them would rather not hear the facts, but at least he is willing to listen to them.

Mr. Hennessy: That’s right.

Mr. S. Smith: As I say, most will realize that the Premier is not really all that concerned about Iran. His concern is over the sheikh in Alberta. If so, Mr. Speaker, you will understand if I say that in a sense I share that concern. Indeed, I think the presence of Peter Lougheed in Alberta and William Davis in Ontario is something about which every Canadian should be deeply concerned.

Mr. Hennessy: Stuart Smith in Florida.

Mr. S. Smith: The federal government appears to be concerned too, because it has introduced standby legislation to allocate oil and gas supplies. What did the Davis government do in response to that prudent move? It dispatched its newly appointed parliamentary assistant to the Ministry of Energy, the member for Durham West (Mr. Ashe), to Ottawa to foam at the mouth -- something he does very well -- and to castigate the federal bill as “a camouflaged War Measures Act for which there is no present need.”

It is amazing. One day the Premier stands here and says, “We’ve got to throw $2 billion away because of the terrible crisis that may fall upon us at any moment due to what has happened in Iran.” Then he sends the parliamentary assistant to say, “There’s no need for any kind of emergency-type legislation. What’s the problem?” It’s amazing how they talk out of two sides of their face. But, then again, I suppose, they talk out of one side of each face, so it’s not so bad.

Mr. J. Reed: It’s been going on for a decade.

Mr. S. Smith: Did not this government support identical federal standby legislation during the energy crisis of 1973? Did it not enact parallel legislation in its own jurisdiction? What is one to make of the comment of the Minister of Energy to the press last week when he said, “The government objects to the present federal bill because it dealt primarily with electricity, whereas the 1974 bill dealt primarily with oil supplies”? What’s he talking about? Has he not compared the two bills?

Does he not know that they are virtually word for word, period for period, comma for comma, the same? Does he not know that the only reference to electricity is in section 15 of both bills, identical in each instance, and if those references require provincial approval before the federal government can regulate the supply of electric power within a province, what nonsense was he talking when he gave that interview to the press?

Mr. Speaker, it’s such a pity really. We had to suffer through one uninformed Energy minister after another. Finally, we have the present one who keeps a low key, who sends his assistant to Ottawa, but even he has to go to the press and make it obvious that he doesn’t know the first thing about the subject he is discussing.

The policy of Hydro is a Davis policy. The blunder of Hydro is a Davis blunder. Yet today there’s a bloated Hydro empire virtually out of control, costing the power users of Ontario millions of dollars for years to come, and it is because the Premier of the province allowed it to happen. He could have stopped it; he had the power to stop it; he was warned repeatedly to stop it, and he didn’t stop it,

Oh, the Premier will say, “You’re being wise by hindsight.” He says, “You have 20-20 vision looking backwards.” Mr. Speaker, I look back at the record. In June 1976 the select committee on Hydro issued its famous report, A New Public Policy Direction for Ontario Hydro, in which the committee expressed its conviction in numerous recommendations that Hydro’s expansion program was too ambitious, too grandiose, too unnecessary.

How did the Davis government respond at that time? I quote from the government’s response to the committee’s recommendations: “The select committee’s recommendation to reduce Hydro’s system capacity even further by deferring another generating station, either Bruce B or Darlington, would result in greatly increased risk of blackouts and brownouts. The government feels this puts the consumer at too great a risk and therefore it cannot accept this recommendation.”

The select committee recommended that Hydro develop a new generating plant to bring additions down to what the committee regarded as reasonable target levels. I quote from the government’s response again: “The select committee has recommended that Hydro develop a new generation plant and during its discussions suggested that Hydro cancel either the Bruce B or the Darlington generation station. As described in the response to recommendation 3-23, this would greatly increase the risk to the consumer. Further postponement would have a serious effect on the economy of the province and put the consumer to considerable risk without reducing appreciably the cost of electricity.”

The select committee’s report of 1976 was not the first to express concern over Hydro’s expansionism. Let me quote from the Ontario Energy Board’s report of August 1974, entitled, Ontario’s Hydro Power System Expansion Program and Financial Policies:

“The board does not consider that Hydro has made a convincing case in respect of the amount of reserve generating capacity which it requires. No evidence was adduced by Hydro which would give the board any measure of the degree of service reliability required by its customers other than an express desire to follow an arbitrary industry standard. In the opinion of the board” -- and I want you to listen to this, Mr. Speaker -- “the generation reserve margins proposed by Hydro for the program period 1977 to 1982 could be reduced substantially without significantly affecting the quality of service or the choice of economically optimal alternatives.” That is from a 1974 report.

“In view of the foregoing” -- I continue to read from that report of the Ontario Energy Board -- “the board’s suggested important modifications to the reserve capacity policy of Hydro are warranted and positive action must be taken to formulate a policy regarding generation reserve which more properly reflects customer requirements.”

On February 4, 1976, the Ontario Energy Board reported on Hydro’s bulk power rates for 1976. I quote from the report, Ontario Energy Board, 1976: “The board is alarmed to learn that even after the reduction in reliability that resulted from the directive of the provincial Treasurer, Ontario Hydro’s planned levels of reliability over the next six years are still well in excess of its stated target of one in 2,400 which the board in 1974 and most interveners in 1975 characterized as generous. However, as the board has said that the load forecast is likely to prove if anything too high, it strongly urges Ontario Hydro to consider taking immediate steps to reduce its generating margin.

[5:15]

“The board believes that if it is being asked to sanction rate increases, a large part of which is needed to assist in the financing of future plants, then it behooves Ontario to ensure as best it can that the reserve margins resulting from the expansion program are the minimum necessary to provide adequate supply reliability.

“The board urges Ontario Hydro to adopt its 1974 recommendation that planned reserve capacity requirements be reduced.”

I could quote the record ad infinitum to the same effect.

The Premier talks about hindsight. He was warned. Hydro was warned. Ontario was warned.

We in this party were concerned. Members of the NDP were concerned. The select committee was concerned. The chairman of Ontario Energy Board was concerned. All sorts of citizens were concerned very early in the game that there was and is an imperialism at work in Hydro, a determination to grow at any price which could only end, if left unchecked, in the kind of gross waste and cost we face today.

But what do we hear from the Premier? Nothing but variations of the old theme:

Leave Hydro alone or the lights will go out. It is better to have too much than not enough. What is good for Hydro is good for Ontario --

An hon. member: The lights went out for you a long time ago.

Mr. Speaker: The member for Fort William will realize that interjections are out of order; but it’s positively out of order to interject from other than your own seat.

An hon. member: Very well; thank you.

Mr. S. Smith: The member is required to rise from his seat from time to time to give his brain a rest.

Mr. Eaton: Is that why you have been standing all this time?

Mr. S. Smith: The former Treasurer knew what Hydro was doing. In January 1976, Darcy McKeough exercised his right in law to tell Hydro they could not raise the money for this expansionism. At the time he told them they did not need it anyway.

Perhaps I should spell that out a bit, Mr. Speaker, because the Minister of Energy’s deputy tried to suggest before the select committee that Darcy McKeough’s action of January 1976 was an approval of Hydro’s load forecast at that time and a denial of the necessary funds for strictly financial reasons.

I quote from the McKeough letter of January 22, 1976, to the chairman of Ontario

Hydro:

“I appreciate that the long-term electrical demand forecast by Ontario Hydro shows a trend of about seven per cent a year. After examining the province’s and Hydro’s financing capacity, you may decide that it is necessary to meet and discuss with the Minister of Energy the development of energy policies which would permit the expansion of load capacity in the range of, say, five to six per cent per annum.”

The Deputy Minister of Energy may regard that as an approval of Hydro’s load forecast if he wishes, but I think we all know what Darcy McKeough was saying. After all, he had no control over the load forecast. All he could control was the financial result of that load forecast.

But they are two sides to the same coin: load forecasting is meaningless without the money to implement it. When Darcy McKeough told Hydro it could not have the money for seven per cent, while at the same time saying Hydro should be looking at five to six per cent, he was saying that a seven per cent growth rate in electrical demand was grandiose and unnecessary.

Darcy McKeough knew what he was talking about. He had a computer. He had a ministry with a good record for tracking and predicting the impact of tax changes and other things. We now know that the Treasury had been doing some load forecasting on its own and was able to show Darcy McKeough that Hydro’s forecasts of seven per cent per year were beyond the range of reasonable probability.

Those Treasury forecasts came to light in a submission to the Porter commission in May 1976. They are fascinating reading. They consist of five different scenarios, in which the variables employed were given various weights. The lowest prediction of electrical demand to the year 1995 was at a rate of increase of 3.5 per cent. The highest was at a rate of 5.5 per cent.

The Treasury made a point of noting to the Porter commission that a growth rate of 5.5 per cent a year to 1985 could only be reached by making generous adjustments for population growth, employment and so on. Its submission contained a very pointed section on the very unlikely probability that the historical growth rate of seven per cent would continue. That could only happen, it pointed out, if there were a progressive decline in electricity prices relative to oil and gas; if there were reversal of the downtrend in birth rates; if there were increased immigration; if there were an absence of the conservation ethic, if there were a failure to develop energy-efficient technology, and so on.

We do not have to ask if Darcy McKeough pressed that evidence and that view on his cabinet colleagues, we know that he did; he was that kind of man, he was that kind of Treasurer.

I asked the Premier on Thursday last to explain why Darcy McKeough was overruled. He, of course, fobbed it off in his usual way, claiming that ultimate responsibility for load forecasting lay with Ontario Hydro. I shall deal with that point in a moment, but let me say for the record what every member in this House knows to be so, that Darcy McKeough fought Ontario Hydro and Darcy McKeough lost. He lost because the Premier overruled him, and the Premier overruled him because Hydro policy was Davis policy.

There was one man in the government of Ontario during the 1970s who knew what was wrong at Ontario Hydro and tried to stop it. I say to the Premier in words he may remember: That man is gone.

Now the Premier says it was Hydro’s responsibility. The implication of that, of course, is that it was Hydro’s mistake, although heaven forbid that the Premier should have made a mistake of any kind, because too much power is good for us and what is good for Hydro is good for Ontario, let’s remember.

It is hardly surprising that the Premier and his colleagues are trying to work both sides of the street on this issue. On the one hand they said it was a Hydro mistake; on the other hand they say there was no mistake because we need the excess generating capacity for security of supply. They have to do this because they know they cannot try to blame Hydro alone. They know that if they tried that we would produce every order in council, every cabinet approval issued since 1973 for every aspect of Hydro’s expansion program.

That, perhaps, is the nub of the matter. Under the Power Corporation Act, Hydro can operate its system and it can plan and dream as it pleases; but it cannot build, it cannot acquire, it cannot expand, without cabinet approval. Every generation project must be authorized by order in council and every project, every step in this march to gross overexpansion, was approved by this Premier and this government.

Ah, but the Premier says the Power Corporation Act gives Hydro an arm’s length independence from the government which the government must respect because the Power Corporation Act was passed by the Legislature. Well, not by this Liberal Party, Mr. Speaker, not by this Liberal Party. The leader of the Liberal Party at that time, the member for -- was it Brant-Haldimand-Norfolk at that time?

Mr. Nixon: Brant.

Mr. Peterson: A great guy.

Mr. Foulds: You don’t even know his riding, eh?

Mr. S. Smith: The member for Brant, as it was then, and now the member for Brant-Oxford-Norfolk, made it very clear how this party regarded the main provision of that legislation, which was to create an arm’s length relationship by recreating the Ontario Hydro-Electric Commission as a crown corporation.

Mr. Foulds: Why isn’t there anybody in the galleries?

Mr. S. Smith: On page 3304 of Hansard for June 18, 1973, the member for Brant-Oxford-Norfolk said: “We in the Liberal Party do not approve of that separation from government policy. We feel it should be left as a commission and the powers of the government asserted so that in fact its control over the commission will be directly responsible to this House through the appropriate minister.”

Mr. T. P. Reid: He knew what he was talking about.

Mr. Eaton: Is that right? Did you say that?

Mr. Nixon: How’s that for foresight?

Mr. S. Smith: The problem with Hydro even then, my colleague noted, was that it was “operating autonomously and surprisingly inefficiently.” On behalf of the Liberal Party he declared: “I, for one, will never vote in favour of any further separation of that monolith from the public control of this Legislature.”

Mr. Peterson: A wise man.

Mr. S. Smith: The government’s response, however, was characteristically one of saying one thing and doing another. It said that Liberal concern was groundless, because while Hydro would be at arm’s length from the government the new Power Corporation

Act contained many provisions whereby Hydro could be made to operate under public control and in compliance with government policy. That was the assurance given by the government then: Not to worry, not to worry; the new Power Corporation Act didn’t give them all that independence, they would still have to come for various approvals. But when it suits his purposes, the Premier of Ontario stands up in this House and says: “Well, I can’t take the blame for those mistakes. I didn’t make all those decisions. Hydro is independent. It acts at arm’s length from the Legislature.” Sure, when it suits their purposes they can say that.

Mr. J. Reed: And the NDP supports them.

Mr. S. Smith: In fact, the Hydro policy has been the government’s policy. That’s the final conclusion, I guess, of the submission I make to the House at this time.

There was and is enough authority in the Power Corporation Act to have stopped Hydro’s ambition. That authority was not used. Instead, the program of Hydro was approved every step of the way. This has, in fact, been a most serious and a most costly instance of government mismanagement in Ontario.

How has this affected the ordinary power consumer? How does it feel, at a time when people want to have more purchasing power in the hands of ordinary people so as to get the economy moving, so as to create jobs in the private sector; how reasonable is it that in fact 12 per cent to 15 per cent of the hydro bills of these people, these ordinary citizens today, can be regarded basically as an unnecessary tax which these people are paying into the coffers of government to pay for the huge unnecessary loans which were made mostly in the United States of America?

What kind of situation is it where the government talks about the joys of free enterprise, the need to have purchasing power in the hands of people and then, by condoning and by creating errors of this kind, increases the hydro bills of these people, the ordinary power users, in this way?

Apart from the errors made, there are other things which can be done, of course, in Hydro policy to help the ordinary user. Why did Hydro change its policy in front of the Ontario Energy Board when it came to the question of marginal cost pricing? Why did Hydro suddenly decide to cave in to the demands of the association of major power users and operate against the interests of the ordinary citizens when you consider the amount of time and study which went into that marginal cost pricing report? With even partial marginal cost pricing the ordinary user would get a break, and it is about time he did have some breaks.

Again, my colleague the member for Grey-Bruce (Mr. Sargent) has proposed a private member’s bill, which also would help the ordinary citizens --

Mr. Peterson: Great member.

Mr. Foulds: Don’t let that praise go to your head, Eddie.

Mr. Roy: You should have that kind of talent on your back benches.

Mr. Sterling: I wish he was. Come on over.

Mr. S. Smith: -- those ordinary citizens who need just a fundamental amount of electricity, just a basic amount of electricity. Instead, they are charging them more for each kilowatt hour, as now happens where the person who uses the least pays the most for each kilowatt hour; the individual just barely getting by on the bare necessities to keep body and soul together pays more per kilowatt hour than members opposite heating their swimming pools.

Mr. Foulds: What?

Mr. Sterling: I haven’t got a swimming pool.

Mr. Foulds: Which of you is guilty?

Mr. S. Smith: He has suggested, and I agree, that these people should in fact have a break. They should get the cheapest electricity and there should be an adjustment of electricity rates to help people so that the domestic user can get a basic fundamental amount of electricity at the lowest price, not at the highest price; and that is something a Liberal government will do once we achieve government in this province.

Mr. Speaker, I have gone on at some considerable length dealing with basically the need for an industrial strategy in Ontario, pointing out how the manufacturing industries, which are the lifeblood of Ontario, have been allowed to deteriorate to the point where we have become deindustrialized in this province under 36 years of rule which was interested more in the Gallup Poll than it was in doing something for the future citizens of this province.

Mr. Peterson: Our children will pay.

Mr. S. Smith: Why is it that we find ourselves with jobs now going begging for trained personnel? We have spent billions on education and yet we don’t have people ready to take those jobs. Why is it that with a need for high technology we have only one polytechnic in Ontario, and even that being squeezed to the point of ruin by the government of Ontario?

Why is it we have a government which is unable, apparently, to understand the degree of foreign domination in our economy and still is running about cap in hand hoping to attract more branch plants while being devoid of real programs to give incentives to Canadian industries to let them get a leg up in the world, to let them get out there and compete in our domestic market and in our world market the way they should be doing?

Why is it we have a government that still feels the corporation can somehow be encouraged to avoid the proper degree of corporate responsibility to the environment, to society generally, to the community, to labour, and of course to our country?

These are great differences, which we have pointed out in this afternoon’s address Mr. Speaker, great differences between the Conservative Party and the Liberal Party in Ontario.

[5:30]

We believe in corporate responsibility; we have a code of corporate behaviour and we have a feeling that corporations must serve the ends of society. We also believe that foreign domination of our corporate sector is already far too great, is a terrible drain on this economy and that we need policies to redress that dreadful situation.

We believe that Ontario Hydro has overbuilt; and we believe that the ridiculous excuses of the Premier and the various ministers suggesting that we’re lucky to have this excess capacity, are nothing but stuff and nonsense which do not bear the scrutiny of reasonable, intelligent people, nor will they stand up for any length of time.

We have demonstrated the errors of Hydro go well back into the attitude and history of that utility, and in fact are the errors of this government The fact is that they have done nothing to stop the overspending of Hydro. They have done nothing to recognize the burden which this places on the ordinary power users in the province of Ontario. And they, and they alone, must bear the responsibility for the terrible mess this has created for all Ontarians at a time when the economy of Ontario most needs stimulation and when it most needs the buildup of its private sector, they’ve allowed the colossus of Ontario Hydro to put this terrible drain on it.

To have to sit and listen to jingles about turning off light bulbs when they’ve thrown billions down the drain can only be described as grotesque. It is adding insult to injury, that’s the only way to express it. Those ludicrous jingles continue at a time when conservation seems to mean one thing; when they talk about turning off light bulbs, the only thing they’re not interested in conserving at Hydro is money, they feel they have an unlimited supply of that to throw around. It would be nice if conservation began at home. It would be nice if conservation was reflected in Hydro’s financial statement, and the financial statement of Hydro. However, Hydro has the provincial government to copy; the grandiose overbuilding of various schemes and the way in which it goes into the red and builds up the provincial debt, Hydro has a good teacher in this regard.

I have been pleased to take the opportunity to discuss some of these ideas with the House in response to the speech from the throne, and I look forward to further debate on these and related matters.

Mr. Peterson: That was a great speech.

On motion by Mr. Cassidy, the debate was adjourned.

House in committee of the whole.

PROVINCIAL OFFENCES ACT

Resumption of the adjourned consideration of Bill 74, An Act to establish a Code of Procedure for Provincial Offences.

Mr. Chairman: Order. I believe when the committee last recessed we were discussing section 52. Are there any further comments, questions or amendments?

Sections 52 and 53 agreed to.

On section 54:

Mr. Lawlor: Just one word on section 54. On subsection 2, we mentioned this in committee and I mention it again, I think that in these private cases, which are not prosecutions in the strict sense at all, where a private citizen lays a charge against another private citizen and doesn’t show up on two occasions the thing should be dismissed; not just maybe. I would ask that be taken into consideration.

Mr. Sterling: I think the problem that was discussed in the committee and the answer to your concern, related to the situation where a person who had laid a complaint was unable to appear because of circumstances totally beyond his control, such as sickness. It seemed unfair in those very particular situations to shut that prosecution down at that particular time. It was for those particular instances that this clause reads “may” rather than “shall dismiss the charge.”

Section 54 agreed to.

Sections 55 to 63, inclusive, agreed to.

Mr. Lawlor: I still find a persisting if not a contradictory dichotomy between section 64 on one side and section 59, which was added subsequently, on the other side.

Section 64(1) says “The term of an imprisonment imposed by a sentence shall, unless otherwise directed in the sentence,” -- that’s the saving part of this thing -- “commence on the day when the convicted person is taken into custody, but no time during which the convicted person is imprisoned or out on bail” -- we can understand out on bail -- “before sentence shall be reckoned as part of the term of imprisonment.”

I would like a further explanation of this particular thing. I think it’s in contradiction, to a degree, with section 59. In any event on its merits why shouldn’t the period of time in which a person has been imprisoned be taken into account? Why do you go to such great trouble to exclude it and then towards the end of the thing surreptitiously kind of bring it back in again?

Mr. Sterling: I think, basically, it was formulated in that particular way in order to allow the court to have the discretion to deal with the matter in terms of sentencing, as it should properly have. In other words, it was just formulated, with no intention of not taking into account the period of time when the accused was incarcerated prior to the trial. There was no malicious intent in drafting it in that particular way.

Mr. Lawlor: I’ll leave it alone at the present time because we’re all anxious to see this become law, but I think it’s done backwards. The whole thing is stated inversely to the way it actually should be. I suppose that was the true intent, namely, that precisely the time taken when a convicted person is placed in prison would be taken into account at the time of sentencing. That is the central fact about the section and where the justice of the thing is. But why it goes around in the opposite way, excluding rather than including, is quite puzzling to me.

Mr. Sterling: I cite a possible problem that could arise, which would be in a very unusual circumstance where the person was in fact incarcerated for a period longer than the period of time that the offence carried as punishment. That possibility could arise.

Mr. Lawlor: Yes, he should be compensated.

Mr. Sterling: I just don’t know how the court would deal with that particular circumstance, if it did arise.

On section 64:

Mr. Lawlor: I’d send you a bill.

Section 64 agreed to.

Sections 65 to 78, inclusive, agreed to.

On section 79:

Mr. Lawlor: I have just a query arising out of section 79. Is the fact that a justice may infer the age of a person from his appearance general law? Is that true about bartenders serving stimulants or beverages to minors? My feeling is that is not normally the case, that whether they are at a particular age or not is not to be determined by their mere appearance but by their actual calendar age.

Mr. Sterling: I think the problem relates to an evidentiary problem, in terms of proving the age of a person who is not called as a witness in a particular hearing. In other words, do you require in a situation where a young person is involved and he is not to be called as a witness that he have his birth certificate? How do you prove his age if you don’t have his birth certificate? Even when he’s called, it’s a question of hearsay. If he says, “I’m 16”; how do you know he’s 16 if he doesn’t have his birth certificate?

Mr. Roy: How do we do it generally?

Mr. Sterling: I guess we ask the witness. We ask the witness how old he is and we accept that, but in fact k’s hearsay. It’s a question of when the mother or father is not available to the courts how do you prove the age of a child?

Mr. Foulds: But you normally accept it.

Mr. Stong: Call his mother.

Mrs. Campbell: She should know.

Mr. Lawlor: I just think it’s a criteria that is rather easier on justices, et cetera, than it is on bartenders. Why they should he lifted and given such an elevation? The consequences that flow from it can be very serious, as to whether or not that individual is amenable to that particular court or should be in a juvenile court instead simply because he happens to be an overgrown child.

Mr. Sterling: The section is also contained in the code, and there will be cases which have held that you can’t rely on that particular subsection where other evidence is available to prove the age of the child. It was put in there for the circumstance perhaps where the parents are no longer living.

Mr. Chairman: Shall section 79 stand as part of the bill? Carried?

Mr. Roy: Well, just a second. That bothers me a little bit.

Mr. Chairman: Is this on 79?

Mr. Roy: Right; on 79, yes. I am convinced there is no provision in the code which says that a judge can infer the age of an individual. Is that provision in the code? What section of the code?

Mr. Sterling: Section 585-2 of the Criminal Code of Canada says: “In the absence of other evidence or by way of corroboration of other evidence, a jury, judge, justice or magistrate, as the case may be, may infer the age of a child or young person from his appearance.”

Mr. Roy: Is that the summary conviction provision of the criminal code now?

Mr. Sterling: It has general application.

Mr. Roy: To indictable offences?

Mr. Stong: Mr. Chairman, there is one other aspect of that. The common law has defined that to be limited to where there is no other evidence or it’s not readily available. There is a case that follows right under which says if there is other evidence available then you just can’t go on inference from appearance. So there is a greater onus than what you have alleged in this act under the Criminal Code.

[5:45]

Mr. Sterling: I think I indicated, referring to the decision in Regina and Leonard, that the subsection under the Criminal Code cannot be relied on where evidence of the age of the child is readily available. I would submit that the same law would apply to this subsection.

Section 79 agreed to.

Sections 80 to 94, inclusive, agreed to.

On section 95:

Mr. Roy: Perhaps the parliamentary assistant can assist me here. The appeal provisions and payment of the fine, et cetera, have to be changed from what the law generally was pertaining to appeal from summary conviction. As I recall, it was not necessary to pay the fine prior to filing an appeal. As I read the section now, the notice of appeal by the defendant shall not be accepted for filing if the defendant has not paid in full the fine imposed by the decision appealed from.

Possibly you could explain why you felt it necessary to change the existing law? Having in mind that most of these decisions appealed from will come from a justice of the peace, not from a provincial judge or somebody like that who has more training in the law, I would like to hear some justification for having changed the approach. As I recall, it was not necessary that the fine be paid prior to the appeal being processed or accepted for filing.

Mr. Sterling: You are correct in pointing to the situation as it is now. Basically what has happened is we have experienced an abuse of the system in terms of motor vehicle infractions where people are filing appeals in order to postpone the payment of fine and getting points on their licences. You will notice under subsection 2 that where the convicted person can enter into a recognizance as the judge directs, it still leaves the opening where the situation is such that it would be very onerous on the convicted person to come forward and show that in fact it would be onerous while the appeal is going on. Basically it has been used to abuse the point system in terms of putting that off for a further period of time.

Mr. Roy: If I might just continue this discussion, are you saying therefore that not only do you have to pay the fine when you go to appeal, but you would be losing points in the interim period pending the appeal? That doesn’t seem to make sense.

The point I am trying to make is if you felt you had proper grounds of appeal, and as an example if one was approaching the maximum number of points and in appealing he just paid his fine and lost his points -- and he would lose his licence for a month or two months -- then you would be frustrating the whole purpose of the appeal. He may be right in law that there was a mistake made at the lower level by the justice of the peace.

Hon. Mr. Davis: Are you arguing law?

Mr. Roy: Yes, I am. You wouldn’t understand that; you’ve got a chauffeur and points aren’t that important.

Hon. Mr. Davis: Of course not; I haven’t been there for 20 years.

Mr. Roy: But to the ordinary fellow out there these appeals are pretty important.

Hon. Mr. Davis: What do you mean? For the guys like you making big fees?

Mr. Roy: For the every-day person on the street --

Hon. Mr. Davis: Oh come on. You are talking about your profession.

Mr. Foulds: His income is more than yours.

Mr. Roy: I think you will agree with I me that it doesn’t make much sense to have an appeal process if the individual has to suffer the consequences of an earlier conviction. What the parliamentary assistant has said bothers me, that there have been abuses. As I understand it there was definitely an abuse of trial de novo; but that has been taken out of the code now, you can only get a trial de novo if the court gives leave. It doesn’t have to give leave to have a summary conviction appeal but it has to give leave for a trial de novo.

I understand that with the amendments the Criminal Code has cut down a lot on the number of appeals that have been made from these summary conviction offences. My point is this: If an individual, in principle, has to suffer the consequences of an earlier sentence in appealing, we are undermining the process of appeal; that bothers me somewhat.

Correct me if I’m wrong, but as I understand your comments one would have to pay the fine; secondly, one would lose the points. There may well be some circumstances where he is suffering the consequences of an earlier sentence before he even gets a hearing on the appeal.

Mr. Sterling: The situation is such that on an appeal for any reason the points are still suspended. It is just a question of experience with the system as it now stands; where for example there have been many appeals filed in order to stay points for a period of time, six months or whatever. That, really, has been the only reason for the appeal. Many appeals are abandoned alter that period of time.

Basically, this section just switches the onus more to the convicted defendant to make, we hope, a more rational decision on what he is dealing with.

Mr. Kerr: You are discouraging appeal.

Mr. Sterling: We are trying to discourage him from the use of appeal.

Mr. Roy: Either you give him the right or you don’t.

Mr. Sterling: He has the right, and the section says he pays the fine.

Mr. Roy: And he loses the points.

Mr. Sterling: No, he doesn’t lose the points. He stays the points until the appeal is heard; the points are stayed.

Mr. Roy: The points are stayed?

Mr. Sterling: Yes. He could still get around, or delay, the implementation of the points. But it is more difficult for him to do it, in terms of financial incentive, under this, particular section.

Mr. Roy: Let me pick you up on that. As I understand it, the abuses in the appeals were not so much to avoid payment of the fine as to avoid the consequences of a conviction. That is my experience in the abuses of the appeal program as it then existed. If that is the case, and you are saying basically that the points are stayed -- the imposition of the loss of points is stayed pending the appeal -- then why would he have to pay the fine?

Mr. Kerr: He won’t hire the lawyer twice.

Mr. Roy: What I’m trying to say to you, basically, is this: My experience hasn’t been that people generally appeal just to stay the paying of a fine. Those fines, at that level, are not very big. On an average they are relatively modest. But the whole principle of an appeal process is that you set up a system whereby an individual is free, whatever the decision, to appeal. There should not be a disincentive on the part of certain defendants or accuseds to appeal.

To get back to the point: I think you are trying to curb an abuse; you are not doing it by just attacking the question of a fine. I think that the abuse, if there was any, was in relation -- I can recall, for instance, in impaired cases or driving under or over .08, that those were the type of cases where there were abuses and appeals. What they were doing, in those cases, was delaying the imposition of the loss of his driver’s licence. For instance, he wanted to drive during the Christmas period or something, so you appealed during that period. Six months later the appeal is heard and, come the fall or come summertime, he doesn’t mind losing his licence. There were abuses there.

My concern was that in fact I had not known the experience where people were abusing the appeal process to avoid paying the fine.

Mr. Sterling: I can only reiterate what I said before in terms of trying to discourage the present abuse we are experiencing; and saying further that subsection 2 allows convicted persons to apply to a judge to alleviate any onerous fine which they are unable to pay at that particular time.

Also, under the other sections of the act it is almost automatic that they have time to pay that particular fine anyway. So that there are many other areas of the act which enable them to negotiate with the judge or justice of the peace to make the payment of the fine less onerous than it is now.

Mr. Roy: I just want to correct you again on that last point. The section states very clearly that the fine has to be paid before there is a filing; so whether you have got time or not, I understand --

Mrs. Campbell: In full.

Mr. Roy: In full. So as I understand it that last point you made would not apply, because you have to pay the fine before they will accept your appeal.

Mrs. Campbell: Could I just go back to the type of thing we did in committee, because I felt that all too often we got ourselves off on the wrong foot on traffic matters? In order to involve some of my colleagues: what happens in the case of that very heavy penalty which I understand would apply here under the Abandoned Orchards Act? I must continue to admit I know nothing about it, but I understand it carries a very heavy penalty of several thousand dollars. Is that not correct? If that is the case, how in the world would anybody get to appeal if they had to pay that first?

Mr. Sterling: As I say, the very reason for subsection 2 is to enable the judge to determine whether the fellow is, in fact, legitimate or if he is a rotten apple.

Mrs Campbell: Don’t bring that into the abandoned orchard.

Mr. Sterling: I really do believe that the situation is such that the judge has enough discretion under subsection 2. Again, our experience is that the section is needed at this time.

Mr. Lawlor: We will never get finished with this legislation today, obviously, so I have only one other comment to make. The legislation which has been decriminalized is therefore more onerous on a so-called defendant than the crimes, because by taking an appeal you can put aside for a brief time the consequences of the act; here, you can’t. So you have reached a result which is the direct contrary of what it is that you sought to reach. We did not take any great umbrage with it because this is the kind of legislation that makes opportunists of us all -- I will tell you about it tomorrow.

On motion by Hon. Mr. Welch the committee of the Whole House reported progress.

The House recessed at 6 p.m.